Wyodak Resources Development Corp. v. Wyoming Department of Revenue
2017 WY 6
Wyo.2017Background
- Wyodak, a Wyoming surface coal mine operator, historically reported coal value at the mouth of the mine (point where coal reaches the surface) and used a permanent conveyor that carries coal under I-90 to a nearby power complex.
- For production years 2009–2011 Wyodak amended returns using a consultant’s method to place the mine mouth closer to the coal face (as if trucks and a hypothetical ramp were used), reducing reported direct mining costs and taxes.
- The Department of Revenue rejected the amended returns, treating the conveyor costs as pre-mouth (direct mining) costs because the mine mouth is where the coal reaches surface/top of the ramp, and assessed additional tax.
- The Board of Equalization upheld the Department on the point-of-valuation and rejected Wyodak’s reclassification of environmental and government-imposed costs, but noted those cost issues were under audit and not finally resolved.
- Wyodak sought judicial review; the Wyoming Supreme Court reviewed statutory interpretation de novo and factual findings for substantial evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Location of mouth of the mine / point of valuation | Wyodak: mouth = end of “active pit” near coal face; conveyor should be ignored; calculated hypothetical ramp mouth is proper | Dept: mouth = point where mineral is brought to surface/top of ramp where conveying system leaves pit; actual surface point governs | Court: statutory language unambiguous; mouth is where coal reaches surface/top of ramp; Wyodak’s hypothetical mouths rejected |
| Uniformity/equal taxation under state constitution | Wyodak: fixed conveyor mouth causes non-uniform tax burden vs. truck-haul mines that can move ramps | Dept: statute applied consistently to all mines; Wyodak’s permanent mouth is result of its business choice | Court: no constitutional violation; consistent statutory application is required; Wyodak’s business decision produced its tax consequence |
| Classification of environmental and government-imposed costs (direct vs indirect) & ripeness | Wyodak: these costs should be indirect and excluded from direct cost ratio | Dept: costs are related to direct mining functions and not like listed indirect costs; Department reserved right to re-evaluate after audit | Court: Board’s ruling on classification not final; issue not ripe for review because audit was ongoing and record incomplete; remand/administrative process appropriate |
Key Cases Cited
- RME Petroleum Co. v. Dep’t of Revenue, 150 P.3d 673 (Wyo. 2007) (discusses proportionate profits valuation method and statutory interpretation)
- Powder River Coal Co. v. Wyo. State Bd. of Equalization, 38 P.3d 423 (Wyo. 2002) (explains proportionate profits valuation application)
- Hillard v. Big Horn Coal Co., 549 P.2d 293 (Wyo. 1976) (valuation must reflect taxpayer’s actual circumstances)
- Monolith Portland Midwest Co. v. State Bd. of Equalization, 574 P.2d 757 (Wyo. 1978) (rejects use of hypothetical transportation costs in valuation)
- Amax Coal West, Inc. v. State Bd. of Equalization, 896 P.2d 1329 (Wyo. 1995) (pre-mine-mouth transportation is not deductible; mouth located at surface)
- Merit Energy Co. v. Dep’t of Revenue, 313 P.3d 1257 (Wyo. 2013) (finality of agency actions and appealability)