Griffith v. FRONTIER WEST VIRGINIA, INC.
719 S.E.2d 747
W. Va.2011Background
- West Virginia imposes a Telecommunications Tax on the gross income of telecom providers, with exempt competition services defined by PSC lists.
- W. Va. Code § 11-13B-2(b)(5) requires the PSC to identify exempt services by year and provides that such a list is a conclusive determination for defining gross income.
- W. Va. C.S.R. § 110-13B-2.6 (1988) purports to clarify the statute by stating the PSC’s exempt list applies to the next succeeding calendar year.
- PSC issued its 2004 exempt services list on December 23, 2004, labeling services as competitive for the 2004 tax year.
- Frontier West Virginia filed a May 31, 2005 refund claim seeking $9,359,083.60 for 2004 overpayment based on the 2004 PSC list; the Tax Commissioner denied the claim, asserting the list applies to the following year.
- OTA affirmed the denial in 2007; Frontier appealed, leading to Berkeley County Circuit Court reversal in 2010; this Court granted review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Year to which PSC exempt list applies | Frontier: list applies to the year issued (2004) | Griffith: list applies to the next calendar year | Statute plain; PSC list applies to next calendar year (2005) |
| Validity and role of W. Va.C.S.R. § 110-13B-2.6 | Rule invalid; conflicts with statute's conclusive effect | Rule valid; fills legislative silence | Rule valid; PSC list governs the next calendar year (2005) |
| Effect of PSC’s conclusive determination | PSC list is conclusive for defining gross income | Statute silent on year; rule clarifies | PSC’s list defines gross income for the next calendar year after issuance |
Key Cases Cited
- Appalachian Power Co. v. State Tax Dep't of West Virginia, 195 W.Va. 573 (1995) (establishes deference to agency interpretation when statute is silent or ambiguous)
- Syl. pt. 3, Boone Mem'l Hosp. v. West Virginia Civil Service Commission, 196 W.Va. 326, 472 S.E.2d 411 (1988) (legislative rules have force of statute and must reflect the statute’s language)
- Kincaid v. Mangum, 189 W.Va. 404, 432 S.E.2d 74 (1993) (omnibus bill validation; legislative rules may have binding effect)
- Syl. pt. 1, Appalachian Power Co. v. State Tax Dep't of West Virginia, 195 W.Va. 573, 466 S.E.2d 424 (1995) (statutory interpretation standard for agency rulemaking)
- Syl. pt. 4, Maikotter v. University of West Virginia Board of Trustees/West Virginia University, 206 W.Va. 691, 527 S.E.2d 802 (1999) (rules must reflect unambiguous statutory language)