Memorial Hospital of Laramie County (hospital) asserts that the trial court erred in dismissing its declaratory judgment action against the Department of Revenue and Taxation (department) for lack of subject matter jurisdiction. We will reverse. Because the hospital’s suit raises substantive issues identical to those raised in
Sublette County School District No. 1 v. State Board of Equalization,
On March 12, 1986, the hospital entered into a construction management agreement with Fru-Con Construction Corporation to build an addition to its facilities. That аgreement established certain procedures for letting bids and purchasing materials which were designed to avoid the costs of sales and use taxes on construction materials. The hospital bеlieved such procedures were consistent with advice received through its previous communications with the department. Accordingly, during the *225 bidding process the hospital and Fru-Con structured certain material acquisitions as direct purchases by the hospital. 1 However, due to the broad authority granted Fru-Con to subcontract for labor on the project, three distinct situations were created with respect to contractors supplying materials: (1) some contractors supplied only materials through a direct contract with the hospital; (2) others supplied both materials and labor thrоugh a single subcontract with Fru-Con; (3) still others supplied materials through a direct contract with the hospital while providing labor relating to those materials through a separate labor subcontract with Fru-Cоn. The hospital advised suppliers in the third class that such transactions for materials were exempt from sales and use taxation.
On January 25, 1988, the department notified one member of this class of suppliers, Kelly Company, Inc. (Kelly), that the materials it had supplied and installed were subject to taxation. The hospital subsequently paid the tax assessed against Kelly under protest. Before payment, hоwever, the hospital filed a claim for injunctive and declaratory relief, alleging that its tax-exempt status precluded such a tax on property purchased for its own use. The hospital further аlleged that it would be contractually required to reimburse all vendors situated similarly to Kelly. At a hearing on June 23, 1988, the trial court dismissed the hospital’s suit for lack of subject matter jurisdiction, characterizing that suit as a challenge to the taxability of the individual suppliers, and indicating that such issues were more properly the province of the administrative agency.
The record does not clearly reveal the basis for the trial court’s conclusion that it lacked subject matter jurisdiction over the hospital’s declaratory judgment action. On the one hand, the trial court may have decided the hosрital failed to exhaust its administrative remedies, and the case demanded the type of specific relief committed initially to an administrative body. See generally
City of Cheyenne v. Sims,
We have held that, in proper circumstances, a plaintiff challenging agency action may maintain a suit for declaratory judgment notwithstanding the filing of a petition for review. The presence of the alternative remedy does not preclude declaratory relief in those circumstances if a justiciable сontroversy is present.
Rocky Mountain Oil and Gas Association v. State,
The department interpreted Wyoming sales and use tax statutes to permit a tax upon contractors who both supplied materials and performed work on those materials. The hospital’s complaint clearly questioned the constitutionality of that statutory interpretation as it applied to the hospital. Had the case required a determination of whethеr particular contractors fell within that taxable class, as the department contends, we would agree with the trial court’s disposition of this case. However, the parties stipulated that some contractors indeed installed materials that they had supplied to the hospital. Since neither the trial court nor the department was required to make that factual determination, the trial court would not have intruded on the agency’s fact-finding or administrative prerogative. Therefore, the trial court erred if it dismissed this declaratory judgment action solely because of the hospital’s failure to exhaust administrative remedies.
The trial court may have alternatively concluded that the hospital could assert no liability to reimburse contractors such as Kelly, and, therefore, could establish no justiciable controversy, in the absence of an agency decision which finally determined the taxability of such contractors. Declaratory relief should be liberally administered if the elements of a justiciable controversy exist to give the trial court jurisdiction.
Brimmer v. Thomson,
A governmental entity like the hospital is protectеd from the burden of sales taxes by the provisions of W.S. 39-6-405 and 39-6-505 (May 1985 Repl.), as noted above. This entity also receives protection from the burden of property taxes under the provisions of Wyo. Const, аrt. 15, § 12, which provides:
The property of the United States, the state, counties, cities, towns, school districts and municipal corporations, when used primarily for a governmental purpose, and public libraries, lots with the buildings thereon used exclusively for religious worship, church parsonages, church schools and public cemeteries, shall be exempt from taxation, and such other property as the legislature may by general law provide.
The hospital purchased construction materials and, after having taken title to those materials, made them available for installation by certain contractors. When contractors providing those materials are taxed by statute or an administrative regulation interpreting that statute, the hospital must eventually bear that additional “tax” cost. That “tax” cost to the hospital is equivalent to the cost it would assume had it been required to pay a sales tax on that material. The tax, as imposed, thereby injures *227 the hospital’s interest in its statutory аnd constitutional tax-exempt status. There is no doubt about the class of contractors which the department intended to tax. As previously noted, the parties have stipulated that contractors such as Kelly were members of that class.
We do not decide whether the hospital was, under the circumstances of this case, immediately obligated to pay the tax assessed against Kelly. We hold, however, that the reasonable threat of such an obligation renders the injury to the hospital sufficiently imminent as to warrant judicial consideration. We note also that the issues raised by this case concerning the apportionment of state revenues are of such public import as to warrant a relaxation of the traditional jurisdictional prerequisites of justiciability. The hospital has рresented a justiciable controversy sufficient to invoke the jurisdiction of the district court.
We reverse and remand for proceedings consistent with our decision in Sublette County School District No. 1 v. Boаrd of Equalization.
Notes
. W.S. 39-6-405 and 39-6-505 (May 1985 Repl.) grant an exemption from sales and use tax liability to direct purchases by political subdivisions of the state.
W.S. 39-6-405 provides, in pertinent part:
(a) The following sales or leases are exempt from thе excise tax' imposed by this article:
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(xi) Sales to the state of Wyoming or its political subdivisions;
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(xv) Sales which the state of Wyoming is prohibited from taxing under the laws or constitutions of the United States or Wyoming.
W.S. 39-6-505 provides, in pertinent part:
(a) The fоllowing purchases or leases are exempt from the excise tax imposed by this article:
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(iii) Purchases which the state of Wyoming is prohibited from taxing under the laws or constitutions of the United States or Wyoming;
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(v) Purchases made by the state of Wyoming or its political subdivisions.