*1 CORPORATION, APACHE

Protestant/Appellant, Oklahoma, ex rel. OKLA

STATE COMMISSION,

HOMA TAX

Respondent/Appellee. 97,907.

No.

Supreme of Oklahoma. Court 15, 2004.

June Oct.

Rehearing Denied

1062

February 2000. The refund was divided amounts, $439,506.77 into two attributable to purchases before November made $329,269.63 purchases and to attributable Hart, Philip Dudley Hyde, D. James Jenni- made on or after November 1998. The Callahan, Taft, fer Henderson McAfee & relevant statutes were amended effective No- OK, City, Petitioner/Appellant. Oklahoma for They vember were also amended in Alien, Counsel, Marjo- Douglas B. General Welch, Counsel, Deputy rie L. First General City, Oklahoma Tax 13 In Dolese Bros. v. State ex rel. Okla Respondent/Appellee. for OK, homa Tax 2003 64 P.3d that, rule, general we a "[als EDMONDSON,J. statutes and amendments will be Corporation, Apache producer of oil operating prospectively construed as unless gas, purchased equipment and and other by express necessary implica declaration or oil, produce that it at its items wells to language Legislature tion from the used the hydrocarbons. gas, Apache and related Cor- clearly contrary demonstrates intent." Id. (1) poration (Apache) claims that: It paid ¶ 8, 2003 OK at Nothing purchases; taxes on these A sales sales suggests before us the 1998 and 2003 manufacturers; exemption provided tax is apply amendments all Apache's sales (8) Apache is a manufacturer and enti- paid taxes between 1997 and 2000. We must tled to a refund from the Tax for Commission Apache's light examine refund in therefore purchases. Specifically, Apache the these the 1997 and 1998 versions of the Oklahoma gas compression, dehydration, claims that they paid Sales Code as to taxes processes occurring at the well- other when each version was in effect.1 We first a manufacturing process, head amount to apply the 1998 statutes. any expenditures manufacturing made as a process exempt are entitled be from a f 4 Apache exemption claimed the sales tax sales tax. The Commission claims that provided wares, goods, for the "[slales not "processing" field in a man- merehandise, tangible personal property, ma sense, ufacturing Apache and that is not chinery equipment to a manufacturer any entitled to refund. use in a manufacturing operation." 1359(1). O.S.Supp.1998§ Apache sought Apache's request for refund relates to purchases made between March exemption upon 1997 and alleged based status as a .§ point Relevant 1352 and amendments and ends at the where a finished 1359 state as follows. manufacturing "Manufacturing leaves site. does administration, operation" (10): O.$.Supp.2003 § & 1352(9) sales, distribution, site construc- transportation, "Manufacturing" means and includes the tion, or site maintenance. Extractive activities activity converting conditioning tangible or and field shall not be deemed to be a personal property by changing compo- part manufacturing operation of a even when sition, of character of some performed by engaged otherwise including or materials, re- manufacturing; sources, by procedures commonly regarded by 1359(1): 0.8.Supp.:2003§ average person manufacturing, com- Exemptions-Manufacturers. pounding, processing assembling, into a mate- hereby specifically exempted There are rial or materials with a different form or use. seq. the tax levied "Manufacturing" Section 1350 et of this title: does not include extractive in- mining, dustrial quarrying, log- goods, tangi- activities such as wares, 1. Sales of merchandise, personal property, equipment ble ging, drilling gas water, nor oil manufacturing processes, manufacturer for use in a pressure such as natural Goods, wares, merchandise, operation. proper- heating, reduction, mechanical cool- separation, ing, dehydration ty, machinery compression; used in a nonman- ufacturing activity 10. "Manufacturing operation" as set forth in means the de- signing, manufacturing, paragraph compounding, process- 9 of Section 1352 of this title shall not ing, assembling, eligible warehousing, preparing provided in this tangible articles personal property. for sale as subsection virtue of the manufacturing operation begins being performed conjunction integrat- with or where the manufacturing operation; materials enter the site ed into a clearly Apache's application first shows that for a The Tax Commission manufacturer. prop- permit Apache did not follow the would have been denied. claimed that argument permit assumes obtaining exemption. this procedure er remedy an administrative to obtain the man- created, {5 a new statute was In 1998 exemption. ufacturer's The Tax Commission 1859.2, requires O.S.Supp.1998 *3 obtain, failure to asserts "manufacturer ex- to obtain a manufacturer obtain, attempt permit least to bars the exemp- "qualify for the emption permit" to exemption paid for a refund of taxes on or paragraph 1 of section tion authorized 1, after November 1359. ..." qualify exemp- A. In order to 17 Exhaustion of administrative rem paragraph 1 authorized in Section tion of required not edies is when those remedies Statutes, Title 68 the Oklahoma 1359 of of inadequate, are ineffective unavailable. sale, person to whom the at the time of Dewey Firefighters v. State ex rel. Oklahoma made, purchaser a provided sale is System, Pension and Retirement 2001 OK state, required to resident this shall be ¶ of 40, 14, 539, 546; McCarthy 28 P.3d v. Ma proof eligibility the vendor 140, 146-149, 1081, of 112 furnish digan, 503 U.S. S.Ct. by this exemption required section. explained 117 L.Ed.2d 291 have We proof eligi- of All vendors shall honor the inadequacy, insufficiency, futility of an exemption bility for sales tax as authorized remedy remedy administrative when did section, under this and sales provide parties opportunity not with an proof exempt shall from providing such be fairly present all claims and have them seq. 1850 et of the tax levied Section Helicopters, Lone Star Inc. v. adjudicated. Title 68 of the Oklahoma Statutes. State, 111, 235, (agen 1990 OK 800 P.2d 237 wish- B. Each resident monufacturer cy authority adjudicate had no breach-of- exemption ing claim the authorized in claim); Group v. contract Walker Health Title paragraph 1 Section 1359 68 of of of Services, Inc., 2, ¶ 39, 749, required to Statutes shall be Oklahoma (Board damages 762 could not award for bad Tax Commis- secure contract). faith of an insurance breach Cf. exemption permit, sion a manufacturer Billings Bank v. Yel Montana National of pre- design of which shall be the size County, 276 48 S.Ct. lowstone U.S. per- Tax This scribed Commission. 333, (1928), 331, (taxpayer 72 L.Ed. 673 seek proof eligibility of mit shall constitute required to exhaust refund was exemption provided in 1 of paragraph entity powerless grant any where tax Section 1859 of Title 68 of the Oklahoma relief). appropriate Each such manufacturer shall Statutes. of Apache T8 asks that our definition applica- an file with the Commission remedy" circum an "ineffective exemption permit, setting forth tion for an un party stances where a would have been as the Tax Commission such information proceeding. successful in an administrative may require. application shall be certainty courts have stated that Some signed by the owner business may make administrative decision adverse representative entity of the business Chapter, exhaustion futile UDC Chairs and, in the case of a person, as a natural University v. American Ass'n legally constituted officer corporation, as Professors University Board Trustees District thereof. Columbia, (D.C.Cir.1995); 1469,1475 56 F.3d 1859.2(A) (B), (empha & O.S.Supp.1998 v. Randolph-Sheppard Vendors America added). sis (D.0.Cir.1986). 105, 90, Weinberger, F.2d Apache argues that it should not be However, of an adverse the mere likelihood required permit because it to obtain a failure to decision is not sufficient to excuse during litigation this that even if it learned Conservancy, Mammal exhaust. Marine timely sought permit, had Commis- Agriculture, F.3d Department v. Inc. application. sion would have denied its (D.C.Cir.1998). 409,413 Apache exemption permit on did 2000, exception to the ex- applied this April days We several after v. doctrine in Board for which it seeks a refund. The record haustion Bankoff Adjustment Wagoner County, tory exemption tax for certain manufactur- where we party said that a ers, and must thus follow available statuto- ry procedures required was not to seek a zoning to obtain that exemption. variance previously when it had been denied a condi provides Section 1359.2 procedure permit. tional use We that the law "in qualify order to exemption," and a require does not one to do a vain useless manufacturer desiring exemption "shall thing perform or to an unnecessary act to required to secure from the Oklahoma Tax obtain relief. Id. 1994 OK at n. 875 Commission a manufacturer per State, P.2d at Corp. Orion 103 mit." The term "shall" is often Cf. used in a (the (1985), Wash.2d statute as of a mandatory command or a futility exception to the duty. exhaustion doctrine County TuLsa Budget Bd. v. Tulsa premised upon Bd., County rationale that courts Excise n. *4 acts). require 662, 671; will not vain and useless P.3d How State ex rel. Independent ever, Apache's argument School Dist. 1 fails because the No. County Oklahoma v. of Barnes, 70, 921, 1988 OK 762 requirement to obtain a per manufacturer's itWhile is true required by equity mit is that law statute. will not require performance of a vain or useless requirement T10 The to exhaust act, Dewey v. State ex rel. Oklahoma Fire prudential administrative remedies is a rule fighters Pension and System, Retirement when exhaustion is not required by statute. 589, 2001 OK 546, n. 28 P.3d Apache's Conmections, Waste Inc. v. Dept. futility assertion of in the result of an admin Quality, 94, ¶ 8, Environmental 2002 OK of is, remedy istrative essence, an equitable 61 P.3d 219. The doctrine of exhaustion of defense to application mandatory of a remedies, prudential as a rule administrative procedural statute used to obtain a tax exe created, judicially does not apply when the mption.2 This previously Court has de Legislature requires remedy exhaustion of a clined interpose equity to block the re obtaining a tax refund. examining When quirements mandatory of procedural tax statutory remedy payments, recover tax Tway, statutes. R.R. Inc. v. Oklahoma Tax "[glenerally, we have said that when a stat 129, 1995 972, 978; right ute creates both a remedy for its Whig Syndicate, Keyes, Inc. v. 95, enforcement remedy is exclusive." 1283, 1288.3 We agree thus Tway, R. R. Inc. v. Oklahoma Tax the Commission Apache's that claim for a 129, 972, refund paid for taxes between November exemptions and deductions are matters February 1998 and by is barred legislative grace. In Apache's failure to follow 68 O.S.Supp.1998 today, Id. our case § right Apache 1359.24 seeks to enforce is a statu- explanation application 766-767, For of the maxim 95 S.Ct. 45 L.Ed.2d 522 compels that the law no one to do suggestion vain or useless No by parties has been made Maxims, things, Legal (R. see Broom's 169 Kers the Tax Commission is vested with discretion to ed.1939); ley Case, Anthony 10th Sir Main's statutorily required 3 waive permit. b, a, Rep. (K.B. Co. Eng. Rep. 77 1596); (4th Dictionary, Black's Law 1056-1057 4. Because we affirm the denial of a refund for ed.1951), (definition corresponding Latin taxes on or after November paid 1, 1998, we cogit ). maxim Zexneminem ad vana seu inutilia need not Apache qualified address whether exemption pursuant to the 1998 version of § 1352(9) (10): § That statute states at & High It is true that the Court has allowed the requirement exhaustion to be met adminis "Manufacturing" means stating trative particular official that a claim converting conditioning tangible personal would be denied in hearing. an administrative property by changing composition, Diaz, Mathews v. 426 U.S. 67, 76, 96 S.Ct. character of some material or (1976), 48 L.Ed.2d (stipulation materials, of official by procedures commonly regarded as was tantamount manufacturing, compounding, processing or as- denying appli decision cation and as a ments). However, require waiver sembling, exhaustion into a material or materials with a dif- particular pos official ferent "Manufacturing" form or does not use. sessed discretion to determine the extent include exiractive industrial activities such as which exhaustion of remedy mining, quarrying, administrative logging, drilling water, Weinberger but required. 422 U.S. subse- Salfi, (material 1859(3), O.S.Supp.1997 omit claim for a examine I We now ted). March paid taxes between refund for general exemp- 1998. The November Manufacturing as: was defined stated: for manufacturers tion (D) "Manufacturing" means and includes every operation commencing with the first Exemptions. Manufacturers. stage any tangible production article hereby specifically exempted There are ending personal property and with the tax levied this article: tangible personal completion property merchandise, (1) Goods, wares, having physical properties which it has purpose of be- property purchased for when transferred the manufacturer process or consumed used another. compounding, processing, manufacturing, 1352(D). 0.S.Supp.1997$ a fin- preparing for sale assembling, {13 Apache argues purchased wares, goods, such mer- ished article and being property purpose chandise, integral property become changed hy an unsaleable manufactured, compounded, parts of the product. Apache drocarbon into a saleable assembled, prepared prod- processed, hy after the argues occurs consumed ucts or are by- These drocarbons reach the surface. processing, manufacturing, compounding, dehydrated, compressed, drocarbons are *5 for re- assembling, preparing products pipes the sur through flow located on "manufacturing plants" The term sale. Apache at the well site. stated face primarily mean those establishments shall marketable at hydrocarbons raw are not processing manufacturing engaged in surface, they reach the the moment generally recognized as operations, buy all processing required is that field such; gas. Apache stated ers of oil and 1859(1). 0.S.Supp.1997 equipment performed the normal processing. processing This occurred exemption for manufacturers stat- Another through hydrocarbons passing prior to the ed: the well.5 Ac the sales meter located machinery equipment Sale on the cording Apache, equipment by persons establish- purchased and used It exemption. to the seeks site is entitled manufacturing plants Okla- new sepa purchase to the a refund related homa, machinery pur- equipment rators, parts, compressors, com separator on site and equipment chased or built lines, dehydra pressor parts and flow operation of manu- persons heater-treaters, tors, parts, dehydrator already facturing plants established storage tanks parts, water oil and ap- exemption shall not Oklahoma. This stock tanks. ply unless such meaning in, into, parties The discuss directly used incorporated is the Commission "processing," the term manufacturing property for not occur at the well "manufacturing asserting that such does term sale or The resale. asserting opposite. Apache establishments site plants" shall mean those stating upon a treatise manufacturing relies engaged in or Commission primarily hydrocarbons at a well happens to generally ree- that what processing operations, and however, the material does processing; is ognized as such.... product point at the where the finished quent result in a and ends to extraction if such "Manufacturing manufacturing extract- site. or use of the material leaves the of the form administration, operation" does not ed; (10) "Manufacturing operation'" the de- means construc- site sales, distribution, transportation, process- signing, manufacturing, compounding, maintenance; tion, or site assembling, warehousing, preparing ing, by Apache compressors purchased are not tangible personal property. 5. The articles for sale as hydro- transportation, prepare the point but to manufacturing operation begins used for through manufacturing passing the sales meter. carbons for enter the site where the materials Oil, not discuss in the context of the In Schulte where we held that Apache Oklahoma Sales Code. relies pipe remanufacture used oilfield consti upon testimony distinguishing extraction of manufacturing, tutes we said Cain's Cof hydrocarbons manipulation from Machinery and Tulsa [Co. v. Oklahoma fee hydrocarbons they pos- are after reduced to 208 Okl. session at the surface. (1953)]:

I 15 In Dolese Bros. v. State ex rel. "The salient in each of Okla these cases homa Tax 2003 OK 64 product changed is that a into one opinion that became marketable or more usable. we our in Cain's Company City Muskogee, 1935 Here, rebuilding damaged Coffee 450,44 P.2d 50: pipe virtually oilfield transforms a unus- being applicable statutory There no defini- product able and nonmarketable into manufacturing tion effect at serviceable and saleable merchandise. time, guidance the court looked for While it is true that after the remanufac- jurisdictions adopted cases from other turing process accomplished is the end following Supreme from the Illinois pipe, still used oilfield Court: remanufactured article is nonetheless word "[The 'manufacture' is not to be new and different from the form of the given its meaning. technical The Cen- making material used in it. tury Dictionary pro- defines it as 'the Although natural and blended sand duction of articles for use from raw or properties, are both sand in their essential prepared by giving materials these ma- procedures applied by Dolese to the forms, qualities, properties, terials new natural form produce tangi- of the material combinations, whether hand labor personal property-blended ble sand-that or machine."" substantially new and different significance . The of Cain's Coffee is originally that which existed. Natural defined terms of *6 virtually sand is "a unusable and nonmark- activity's upon transformative effect product" today's etable in in- construction prepared raw or in materials the course of dustry. sand, although composed Blended producing a new article for use. sand, of the same materials as natural is at ¶ Bros., 4, 16, Dolese at "nonetheless new and different (note omitted). 1100, and material form of the material in making used it." We then that the definition for ¶¶ Bros., 29-30, Dolese 64 P.3d at 1104. manufacturing found in the 1998 of version person then We said with knowl "[al 1852, version, the same as in the 1997 edge place of what production takes concept continued with equating manu today blended sand recognize op would facturing with a where one or more occurring production erations at a sand facili physical properties original of the of the raw ¶ ty manufacturing." 31, as Id. at 64 P.3d at Id., changed process. materials were ¶ 20, Apache's 64 P.3d at 1101. evidence Refining hydrocarbons 1 17 a in and convert physical properties by shows Apache's is, ing machinery; them into products transforma various marketable tion of raw unmarketable materials to a mar long Pennsylvania has been considered in product. ketable type manufacturing. Appeal Atlantic Co., Refining 398 Pa. 156 A.2d argues 1 16 The partic- Commission that a Company, citing, Commonwealth v. National Oil activity may ular be considered as manufac- ited, 157 Pa. 27 A. turing purpose exemption only for the Lim Although by Apache is if or generally recog- when is processing, opposed described as field manufacturing. nized as production Is the refining plant, the nature of both recognized as manufacturing? We changing have the common characteristic of addressed this issue in Dolese when we de- plants product physical termined whether raw into a engaged sand were different form manufacturing that is marketable for an intended use that is LAVENDER, HARGRAVE, 1 19 product. of the raw from the use different KAUGER,WINCHESTER, only that considers not the state JJ., EDMONDSON, changed product is Concur. unmarketable whether an one, a raw and whether into a marketable WATT, C.J., OPALA,V.C.J.), (Joins 1 20 product.6 altered to a consumer product V.C.J., C.J.), OPALA, (joinsWATT knowl that a are convinced We BOUDREAU, WATT, C.J.), (joins HODGES place in the processing that takes edge of the WATT, C.J.), JJ., (joins Dissent. gas a marketable from raw production of V.C.J., OPALA, WATT, C.J., with whom hydrocarbons unmarketable combination joins, dissenting. recognize process as manufactur would accordingly hold that evi ing. We [ opinion 1 The court's holds that the lan to show that it was a dence was sufficient guage of the 2003 amendment1 cannot be to the manufacturer and entitled interpreting considered in the earlier version March between disagree. I of the statute. It is a funda November mental rule of construction that amendatory language clarify am intended to (18 opinion of the Court of Civil biguous text earlier statute is to be Tax The Order of the Appeals is vacated. having treated as retroactive effect.2 affirmed in and reversed Commission is leg- the matter is remanded to the Both the Commission. and the part, amendment) proceedings (in for further con- Tax Commission islature afterenacted question treat the taxable event here opinion. sistent with this separation, heating, cooling, dehydration cal Co., Oil Inc. v. Oklahoma See, Schulte compression; 65, 72-73, (a) (manufacturing production "Manufacturing operation" includes both means the (b) raw the "remanufac- of new and designing, manufacturing, compounding, pro- commercially turing" of used and valueless ma cessing, assembling, warehousing, prepar- machinery, application labor and terial tangible personal of articles for sale as skill transforms it into a marketable com which property. manufacturing operation begins modity); Warrior, Inc., In re American 30 Kan. point at the where the materials enter (2002), (process App.2d site and ends at splitting unmarketable natural into market where a finished leaves the manufac- nitrogen, helium, able and marketable "Manufacturing operation" turing site. does gas); Department Revenue ex rel. Luckett v. administration, sales, distribution, not include Service, Inc., Allied Drum 561 S.W.2d 325- construction, main- site site transportation, (a manufacturing process (Ky.1978), is one process- tenance. Extractive activities and field having *7 value where material no commercial for es shall not be deemed to be a a manu- processing apprecia its intended use before has performed by facturing operation even when ble value for its use after commercial intended manufacturing; engaged in otherwise processing); Assessors Boston v. Commissioner added). {emphasis Taxation, and 323 Mass. Corporations 1359(1) Supp.2003 § O.S. are: The terms of 68 129, 137, (raw (1949), unfit for N.E.2d material Exemptions-Manufacturers consumption a consumer transformed to hereby exempted specifically There are consumption). fit for by seq. the tax Section 1350 et of this levied title: 1352(9) Supp.2003 § 1. The terms of 68 O.S. and goods, wares, merchandise, (10)are: 1. Sales machinery tangible personal property, and "Manufacturing" 9. means and includes equipment a man- to a manufacturer for use in activity converting conditioning tangi- the or ufacturing Goods, wares, merchan- operation. personal property by changing the ble dise, property, and composition, some or of character of nonmanufacturing activity set in a including materials, natu- paragraph this title in Section 1352 resources, commonly by procedures re- forth ral eligible exemption provided shall not be garded by average person as manufactur- by virtue of the for in this subsection assembling, ing, compounding, processing or conjunction process being performed in a material or materials with a different into manufacturing operation; integrated into a "Manufacturing" does not in- form or use. added). (emphasis clude extractive industrial activities such drilling mining, quarrying, logging, and 11, ¶ 5, gas Dawson, 2. Cox v. water, nor oil processes, reduction, as natural mechani- such pressure very aseriptions practices same manner. The 2008 amend- as well as to agen of an cy charged plainly ment is clear. Its terms show that with the law's execution. There why is no legislature never intended for the manu- reason this court should not do the same here.6 facturing exemption process- to to field legislature's ing. It is also clear that usually T4 participate Administrators in passing intent the 2003 amendment was law-making process espe change clarify not to the law but rather to cially legislative well informed of intent.7 it. ongoing Because there is an intéraction of legislators agency administrators with (and Subsequent amendments can be frequent officials are afforded contact with are) clarify legislative often used to intent law-making process culminates longstanding the earlier-enacted law3 A law, statutory the enactment of we must agency interpreting ambigu construction an give agency deference to construction.8 ous or uncertain statute will not be disturbed cogent without reason.4 Some of these inter proof T5 There is here support record pretive agency devices constitute the contem Commission's construction of the poraneous taxing question. construction text ageney statute main- has in long where the statute been use.5 tains that taxpayer activities of the do give weight meaning qualify Courts considerable regulations, do not have the ...

3. Letteer v. District No. Conservancy force effect of 218, ¶ 9, give agency's interpretations practices we weight they considerable where involve the con- University 4. Oral Roberts v. Oklahoma Tax Com- temporaneous construction of a statute mission, they long (Emphasis where have been in use." although the court held that Here administra- added). agency generally flexibility has tive to correct arguments traditionally Two have been offered law, its own erroneous of the interpretation upholding longstanding agency interpreta- previous agency construction is entitled to the longstanding interpretation tion. Deference to courts", "highest respect especially (1) provides certainty predictability per- definitely when that construction settled and (2) interpretations sons affected en- uniformly applied years. a number Id. at courages the lawmakers to make better laws. added). (Emphasis The court concluded "Interpreting See Cass R. Sunstein. Statutes in agency-imparted meaning the earlier will State," Regulatory 103 Harv. L.Rev. (a) ques- not be disturbed unless the tax law in (1989). 457-59 subject to than tion is more one construction or (b) interpretation very cogent there exist (from 6. All the taxable events March 1997 to reasons for construction. 1998) October for which the court's pro- approves today payer's 'nouncement a tax refund States, Davis v. United 495 U.S. 472, 484, 110 during period precise occurred in which the S.Ct. 109 L.Ed.2d 457 Davis impact "manufacturing exemption" upon suggests agency's] ruling that [an is accorded post-lifting entirely on-site remained (1) weight" "considerable if it was issued con- by legislative unconcretized either amendments temporaneously with the statute that is con- jurisprudence. this court's It is this un- (2) long strued, has existed for a time, applicable concretized state of the law's norms the statute's reenactment retains agency that allowed the restrictive construction, language agen- that was earlier construed amendment, adopted by carry later the 2003 cy. *8 Davis, day. supra the note 5 at 133. Supreme early U.S. The Court declared as 1827 that the construction of doubtful and "[in 7. Davis, note 5 at 133. Professor Davis supra law, ambiguous contemporaneous the construc longer regulations adds "... [tlhe the have that upon tion of those who were called to act under outstanding been the more reluctant a court law, appointed carry provi the and were its be to ... [and][sluch them upset effect, specific very great sions into is entitled to re interpretation established administrative spect." (12 Darby, Edwards' Lessee v. 25 U.S. statute is valid and 'should not be overruled Wheat.) 206, 210, (1827). 6 L.Ed. 603 Kenneth except weighty reasons."" Davis, § Law, Administrative 5.04 at 133 Culp (3d ed.1972). Professor Davis continues at 133 Galler, by adding "Emerging thai 8. Linda "the Court follows Standards For Judi [this] idea today way whenever the forces the other are not Rulings", cial Review Of IRS Revenue strong." too recently (1992). More in Davis B.U.L.Rev. 876-77 See National S.Ct. although the Court stated that "the Dealers Ass'n v. U.S., 440 U.S. Muffler [Internal rulings Revenue] Service's S.Ct. 1304, 1307, 59 L.Ed.2d interpretive breakers, rators, desilting equip emulsion govern- state of the law pre-2008 the under ment, 2008 amendment exemption. gathering The lines and "all other ing that field be met in or- three conditions requires that oil preparation activities in the exempt: lability to be items of der up shipment pro to the (1) compo- change the activity must ducing property," are considered as Oil character of some sition Extraction, which is classified as Gas (2) by pro- material; change must occur manufacturing." 'mining'-NOT manufactur- commonly regarded as cedures quoted quintessence The order's text is assembling; compounding, processing ing, pre-2003 of the Tax Commission's con- resulting must have a struction. clearly record form or use. As the different reveals, activities purely extractive on-site SUMMARY exemption. qualify do not pronouncement does not T8 The Court's all the urges that T6 The Tax Commission rule accord with the law. well-established activity upon the claims are which well-site exempting teaches that statutes one recognized as manu- generally is not based strictly against taxation are to be construed § meaning of facturing within the nei exemption.11 There had been here exemption from sales tax provides an which precedential pro ther an antecedent court "purchased machinery legislative amendment al nouncement nor establishing manu- by persons new and used Oklahoma, uninterrupted facturing plants tering in the Tax Commission's equipment built equipment purchased or applying own administrative course of its operation in by persons on site and used legislature's The 2003 amend construction. already established manufacturing plants longstanding expressly ment follows "manufacturing phrase The Oklahoma." by providing that "ex agency construction primari- plants" means "those establishments processes and field shall tractive activities processing ly engaged part of a manufactur not be deemed recognized generally operations, and performed ing operation even when such." manufacturing." person engaged in position Tax Commission takes 7 The hence Appeals' opinion should Court of Civil taxpayer at well- activities of the undisturbed. be left manufac- commonly regarded as sites are not rather as extractive turing but V.C.J., WATT, C.J., OPALA, whom (a lifting operations), part of the in nature BOUDREAU, join, JJ. HODGES and, by § exempt 1859. To therefore as dissenting: the Tax Commission support this contention May No.2000-05-083- 2000 Order issued OPINION DISSENTING 016 which states: legislature amended 68 In itself, industry process "Field Within provide expressly Supp.2008 0.8. es, normally place take on or near which "Extractive activities and lease, pressure reduc such as a manu- deemed to be a shall not be tion, heating, cool separation, mechanical performed when facturing operation even compression are ing, dehydration, This, manufacturing." person engaged processing." And under considered NOT course, Apache was precisely what system industry classification devel majority opinion holds doing. The internationally published oped cannot be language of the 2003 amendment Management Office United States interpreting earlier versions sepa- operating considered Budget, activities such as *9 Com'n, Corp. Meyers, v. Oklahoma J. Oil 11. McDonald's 9. Howard R. Williams & Charles 635; added). (1998) (emphasis Road 563 P.2d Bert Smith and Gas Law 831 1977 OK Com'n, Machinery v. Oklahoma Tax Co. 641; Village, Square Inc. v. London Management Budget, North Office of Bd., County Equalization Excise System-United Industry Classification American added). P.2d 1224. (emphasis 1976 OK States disagree I the statute. because funda- 2004 OK 53 mental rule of construction MAGNUSSON, E. James amendatory language given will be retroac- Plaintiff/Appellant, clarify language tive effect order ambigu- earlier version of a statute that was ous. KFOR, NEW YORK TIMES CO. d/b/a Edwards, and Brad Defen- Where, here, prior enactment was dants/Appellees. ambiguous, presumed "it 97,703. No. clearly made amendment was to more ex legislative previously press the intention in Supreme Court of Oklahoma. definitely expressed." Magnolia Pipe Line Co. v. Oklahoma Tax June ¶ 11, 888, quoted Rehearing Sept. Denied approval County Irrigation Texas Sept. As Corrected Water Resources Ass'n v. Oklahoma Water Board, Resources clearly This matter such a case so applied amendment

the 2003 should be retro Thus,

actively. opinion's I think that

reliance on Dolese Bros. v. Oklahoma Tax 2003 OK 64 misplaced.

basis for its refusal to do so is To reasoning

apply the of Dolese in the face of language of

the clear the 2003 amendment agnostic me,

appears likely as it seems legislature's the amendment was the

response to Dolese. Allowing the refund for the 1997-98 require reaching would the conclusion legislature intended to

law, it, simply clarify passed when it But, given timing

2003 amendment. amendment, subsequent

Dolese

passed legislative in the first session after decided, legis-

Dolese was it is clear that the

lature never intended for the

gas, or other minerals extracted from the Accordingly,

earth. I would let stand have opinion Appeals. Court of Civil respectfully

"I4 I dissent.