Jayo Development, Inc. v. Ada County Board of Equalization
158 Idaho 148
| Idaho | 2015Background
- Jayo Construction made site improvements (roads, utilities, sidewalks, curbs) to 41 parcels in 2008. Those parcels were later conveyed through a series of reorganizations to Jayo Development, a separate corporate entity wholly owned by the same individual, Douglas Jayo.
- In 2012 Jayo Development applied for a site-improvement business inventory tax exemption under Idaho Code § 63-602W(4) (2012), which exempted site improvements on real property "held by the land developer" until title was conveyed from the land developer.
- The Ada County Assessor denied the exemption, the County Board of Equalization affirmed, and the Board of Tax Appeals (BTA) upheld the denial, concluding the entity that performed the improvements (Jayo Construction) was not the same as the claimant (Jayo Development).
- The Ada County district court granted summary judgment to the BOE, holding the 2012 statute’s plain language limited the exemption to the developer who made the improvements and that conveyance from that developer terminated the exemption.
- Jayo Development argued the 2012 statute’s wording covered it because it was a land developer holding the improved property; it also argued the 2013 amendment clarified legislative intent to preserve exemptions across transfers within commonly owned entities.
- The Idaho Supreme Court affirmed the district court, holding the 2012 statute unambiguous and denying retroactive effect of the 2013 amendment to the 2012 tax year; it awarded attorney fees to the BOE.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Jayo Development qualifies for the §63-602W(4) site-improvement exemption for 2012 | Jayo Dev.: statute exempts site improvements "held by the land developer" and Jayo Development is a land developer holding the parcels | BOE: statute refers to "the land developer" who made the improvements; exemption ended when title was conveyed away from the developer who made the improvements | Held: Exemption applies only to the specific developer who made the improvements; Jayo Development not entitled because improvements were made by a different entity (Jayo Construction) and title was conveyed away in 2008. |
| Whether agency temporary rule (IDAPA Rule 620) should control interpretation | Jayo Dev.: district court erred relying on expired temporary rule | BOE: agency interpretation supported limiting exemption to the developer who made improvements | Held: Court resolved matter under unambiguous statutory language and did not rely on the rule; rule issue not determinative. |
| Whether the 2013 amendment clarifies the 2012 statute and applies retroactively to 2012 | Jayo Dev.: 2013 amendment merely clarifies intent to preserve exemption when transfers occur among commonly owned entities | BOE: 2013 amendment does not change meaning of 2012 statute for 2012 tax year; amendment was retroactive only to 2013 | Held: 2012 statute unambiguous; 2013 amendment does not apply to 2012 tax year and cannot alter the plain meaning of the 2012 law. |
| Whether BOE is entitled to attorney fees on appeal | Jayo Dev.: sought fees | BOE: prevailing party and appeal lacked reasonable basis in law | Held: BOE prevailing; appeal was unreasonable given disregard for plain statutory language; fees awarded to BOE under Idaho Code §12-117(1). |
Key Cases Cited
- Ada Cnty. Bd. of Equalization v. Highlands, Inc., 108 P.3d 349 (Idaho 2005) (tax exemptions strictly construed; questions of statutory construction are legal)
- Idaho Youth Ranch, Inc. v. Ada Cnty. Bd. of Equalization, 335 P.3d 25 (Idaho 2014) (statutory interpretation begins with the statute's plain language)
- Farmers Nat. Bank v. Green River Dairy, LLC, 318 P.3d 622 (Idaho 2014) (definition of statutory ambiguity)
- BHA Invs., Inc. v. City of Boise, 63 P.3d 482 (Idaho 2003) (on statutory ambiguity and interpretation)
- Wash. Fed. Sav. v. Van Engelen, 289 P.3d 50 (Idaho 2012) (separate legal entities and shareholders/members are distinct)
- Lane Ranch P’ship v. City of Sun Valley, 175 P.3d 776 (Idaho 2007) (where language is unambiguous, courts give it effect)
- Verska v. Saint Alphonsus Reg’l Med. Ctr., 265 P.3d 502 (Idaho 2011) (legislative purpose cannot modify plain meaning)
- Rowley v. Ada Cnty. Highway Dist., 322 P.3d 1008 (Idaho 2014) (attorney fees under §12-117 require nonprevailing party acted without reasonable basis)
- Idaho Wool Growers Ass’n, Inc. v. State, 302 P.3d 341 (Idaho 2013) (appeals disregarding plain language may be unreasonable)
- Fischer v. City of Ketchum, 109 P.3d 1091 (Idaho 2005) (similar guidance on frivolous appeals and fee awards)