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Wyodak Resources Development Corp. v. State Board Of Equalization8/14/2000
W.R.A.P. 12.09(b) Certification from the District Court of Laramie County The Honorable Edward L. Grant, Judge
Appellant Wyodak Resources Development Corp. (Wyodak) appealed to the State Board of Equalization from the Department of Audit's findings that were adopted by Appellee Wyoming Department of Revenue. The audit involved Wyodak's coal mining operations at its Campbell County mine from 1990 through 1992 and resulted in an increased taxable value of coal production for ad valorem tax purposes for the period. The State Board of Equalization affirmed, and Wyodak appealed to the district court. The district court certified the case to the Wyoming Supreme Court pursuant to W.R.A.P. 12.09(b).
We affirm.
ISSUES
Wyodak presents a single issue for our review:
I. Did the Wyoming State Board of Equalization err in affirming the Department of Revenue determination that Petitioner's road move expenses incurred during coal production years 1990-1992 were direct mining costs rather than indirect costs for purposes of valuing Petitioner's coal production during those same years under Wyo. Stat. § 39-2-209(d)?
FACTS
Wyodak operated a surface coal mine near Gillette. In 1951, it granted a right-of-way to the State of Wyoming across a portion of its property to be used as a section of State Highway 51. Under the terms of the agreement, Wyodak reserved the right to mine the coal located under and around the right-of-way so long as it provided an adequate detour satisfactory to the state at its own expense.
In 1988, Wyodak became interested in mining the coal under and around the right-of-way, and it entered into an agreement with the State Highway Commission of Wyoming to relocate the highway. The highway was moved, and, in 1989, Wyodak reported $687,975 of indirect costs associated with this relocation in valuing its coal production for tax purposes.
In its 1990 production year, Wyodak reported an additional $54,525 of expenses that were associated with this relocation and again classified them as indirect costs. In 1991,
Wyodak accrued $750,839 in expenses that it intended to use to fund and construct the permanent replacement of the highway, which actually would not occur until sometime in the future. Wyodak classified these accrued amounts as indirect costs.
In December of 1991, Wyodak sent a letter to the Wyoming Highway Department wherein it explained that it planned to begin hauling overburden on State Highway 51 across the first temporary relocation. Wyodak requested approval for a second temporary relocation of the highway so that it could "maximize the removal of coal affected by State Highway 51" pursuant to the 1988 agreement. The Wyoming Transportation Commission denied Wyodak's proposed temporary detour but suggested an alternative detour, which Wyodak accepted and constructed in 1992. In 1992, Wyodak reported $586,026 in indirect mining costs for the expenses related to this second temporary relocation.
In 1995, the Department of Audit audited Wyodak's operations for the period of 1990 through 1992. On the basis of Wyo. Stat. Ann. § 39-2-209(d)(ii) (Michie 1997) (repealed & recreated at § 39-14-103(b)(vii)(B) in 1998), the Department of Audit disagreed with Wyodak's classification of the 1990, 1991, and 1992 costs associated with the relocation of State Highway 51 as indirect mining costs and reclassified them as direct costs for the purpose of production tax valuation. The Department of Audit's findings resulted in increased severance taxes for the years 1990 through 1992, and the Department of Revenue issued a final assessment notice for the s
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