Darrell V. McGraw, Jr., Esq.
Shawn R. Romano, Esq.
Attorney General Daniels Law Firm, P.L.L.C.
Stephen Stockton, Esq. Charleston, West Virginia
Senior Assistant Attorney General Attorney for the Appellee
Charleston, West Virginia
Attorneys for the Appellant
JUSTICE DAVIS delivered the Opinion of the Court.
JUSTICE MAYNARD concurs and reserves the right to file a concurring opinion.
JUSTICES MCGRAW and ALBRIGHT dissent and reserve the right to file dissenting
2. Where the issue on an appeal from the circuit court is clearly a
question of law or involving an interpretation of a statute, we apply a de novo standard of
review. Syllabus point 1, Chrystal R.M. v. Charlie A.L., 194 W. Va. 138, 459 S.E.2d 415
3. Where the language of a statute is clear and without ambiguity the
plain meaning is to be accepted without resorting to the rules of interpretation. Syllabus
point 2, State v. Elder, 152 W. Va. 571, 165 S.E.2d 108 (1968).
4. In the absence of any definition of the intended meaning of words or
terms used in a legislative enactment, they will, in the interpretation of the act, be given
their common, ordinary and accepted meaning in the connection in which they are used.
Syllabus point 1, Miners in General Group v. Hix, 123 W. Va. 637, 17 S.E.2d 810 (1941),
overruled on other grounds by Lee-Norse Co. v. Rutledge, 170 W. Va. 162, 291 S.E.2d 477
5. Where a particular construction of a statute would result in an
absurdity, some other reasonable construction, which will not produce such absurdity, will
be made. Syllabus point 2, Newhart v. Pennybacker, 120 W. Va. 774, 200 S.E. 350 (1938).
6. Pursuant to the plain language of W. Va. Code § 11-15A-10a(a) (1986)
(Repl. Vol. 2002), [a] person is entitled to a credit against the tax imposed . . . on the use
of a particular item of tangible personal property equal to the amount, if any, of sales tax
lawfully paid to another state for the acquisition of that property, where the sales tax paid
and the use tax credit sought both pertain to the same, identical item of tangible personal
The appellant herein and respondent below, the Tax Commissioner of the State of West Virginia [hereinafter referred to as Tax Commissioner], appeals from an order entered July 24, 2002, by the Circuit Court of Mercer County. In that order, the circuit court determined that the appellee herein and petitioner below, Bluestone Paving, Inc. [hereinafter referred to as Bluestone], was entitled to receive a use tax refund pursuant to W. Va. Code § 11-15A-10a(a) (See footnote 1) (1986) (Repl. Vol. 2002). (See footnote 2) On appeal to this Court, the Tax Commissioner states that the circuit court erroneously applied the governing statute to the facts at issue in this case. Upon a review of the parties' arguments, the pertinent authorities, and the record submitted for appellate consideration, we reverse the decision of the Mercer County Circuit Court.
Following the purchase of the gravel, Bluestone transported it back to
Princeton where it was used to manufacture asphalt. This asphalt was then used to pave
roads pursuant to Bluestone's paving contracts with the DOH. Upon the use of the asphalt,
Bluestone was required to pay a use tax to the State of West Virginia in the amount of 6%
of the total value of the asphalt.
(See footnote 6)
The total amount of use tax Bluestone paid to West
Virginia on the asphalt at issue herein is $69,777.99.
In 2001, Bluestone filed a claim for a tax refund, pursuant to W. Va. Code
§ 11-15A-10a(a), seeking to recoup the amount of the sales tax it had paid to Virginia when
it purchased gravel from the Pounding Mills quarry. The Tax Commissioner denied
Bluestone's claim, whereupon Bluestone filed a petition for said refund. By decision
rendered January 17, 2002, the administrative law judge [hereinafter referred to as ALJ]
determined that Bluestone was not entitled to its requested refund. In reaching this
decision, the ALJ concluded that W. Va. Code § 11-15A-10a(a)
(See footnote 7)
allows for a credit against the use tax of a particular item if sales tax on that same property has been paid to another state. In other words, in order to get credit for the sales tax paid to Virginia, the West Virginia use tax must be the Virginia sales tax's mirror image. The Petitioner in this case [Bluestone] may not claim this credit and subsequent refund because the West Virginia purchasers' use tax on asphalt is not the mirror image of the Virginia sales tax on aggregate [gravel]. By the Petitioner's own admission, the Petitioner takes aggregate and uses it to manufacture asphalt. The manufacturing of asphalt at its Princeton manufacturing facility changes the character of the product, the aggregate, for which sales tax has been paid to Virginia. The asphalt on which the Petitioner has paid the six percent (6%) purchasers' use tax to West Virginia is a separate product, which is made from the aggregate for which sales tax was paid. These are two separate taxable transactions that at first appear similar only because one product is used to manufacture another. However, it is this manufacturing (manipulating the product in an activity beyond common use) of a new and more valuable product that creates a separate taxable transaction and prevents W. Va. Code § 11-15A-10a from applying to this situation.
(Emphasis in original).
Bluestone then appealed this ruling to the Circuit Court of Mercer County. By order entered July 24, 2002, the circuit court reversed the ALJ's decision and found Bluestone to be entitled to the requested refund. In rendering its ruling, the circuit court determined that
the intent of West Virginia Code § 11-15A-10a is to prevent the
imposition of double taxation of tangible personal property
brought into the State of West Virginia, through the imposition
of West Virginia's Use Tax, when tax has been levied by
. . . .
The Administrative Law Judge erred in determining that in order to obtain a credit the West Virginia Use Tax must be the Virginia Sales Tax's 'mirror image.'
This Court finds that West Virginia Code § 11-15A-10a makes no such requirement. West Virginia Code § 11-15A-10a only requires that the tangible personal property upon which Use Tax is imposed be the tangible personal property upon which sales tax had been paid.
The Court finds that it is the aggregates [gravel] upon which sales taxes were paid in Virginia, incorporated into asphalt and used by the same taxpayer in a contracting activity upon which Use Taxes were levied by the State of West Virginia. . . .
From this adverse ruling, the Tax Commissioner now appeals to this Court.
[a] person is entitled to a credit against the tax imposed by this article on the use of a particular item of tangible personal property equal to the amount, if any, of sales tax lawfully paid to another state for the acquisition of that property: Provided, That the amount of credit allowed shall not exceed the amount of use tax imposed on the use of the property in this state.
Applying this statutory language to the instant controversy, the circuit court reversed the decision of the administrative law judge and found that Bluestone was, in fact, entitled to the aforementioned credit and resultant refund.
On appeal to this Court, the Tax Commissioner disputes
the circuit court's ruling and argues that the facts of this case do not entitle
Bluestone to a tax credit as contemplated by W. Va. Code § 11-15A-10a(a).
In this regard, the Commissioner contends that gravel and asphalt are not the
same thing because gravel is an aggregate used to make asphalt and is an entirely
different substance from asphalt, i.e., the resultant final product,
with entirely different uses and purposes. Citing Central Paving
Co., Inc. v. Idaho Tax Comm'n, 126 Idaho 174, 879 P.2d 1107 (1994); Buckley
v. Northeastern Paving Corp., 161 Me. 330, 211 A.2d 889 (1965); Bituminous
Roadways, Inc. v. Commissioner of Revenue, 324 N.W.2d 799 (Minn. 1982); Blevins
Asphalt Constr. Co. v. Director of Revenue, 938 S.W.2d 899 (Mo. 1997) (en
banc); People ex rel. Eastern Bermudez Asphalt Paving Co. v.
Morgan, 61 A.D. 373, 70 N.Y.S. 516 (1901); Fritchie Asphalt & Paving Co. v. Bowers, 173
Ohio St. 111, 18 Ohio Op. 2d 359, 180 N.E.2d 154 (1962) (per curiam); Union Paving Co.
v. Commonwealth, 148 Pa. Commw. 358, 611 A.2d 360 (1992). Thus, the Commissioner
states that the taxes Bluestone paid were for two different items and constituted two
separate transactions: the first transaction was Bluestone's purchase of gravel, which was
subject to sales tax in Virginia, and the second transaction was Bluestone's use of asphalt,
which was subject to use tax in West Virginia. Because two separate items were involved
in the two separate transactions, Bluestone is not entitled to the refund it seeks.
By contrast, Bluestone asserts that the circuit court correctly found it to be
entitled to a refund in accordance with W. Va. Code § 11-15A-10a(a). In support of its
argument, Bluestone contends that it has satisfied the statutory criteria enumerated in
W. Va. Code § 11-15A-10a(a), and, therefore, it is entitled to the refund which it seeks.
Bluestone also rejects the Tax Commissioner's characterization of gravel and asphalt as two
distinct items involved in two separate transactions arguing that the asphalt it used to pave
roads in West Virginia was hot mix asphalt, the definition of which specifically
recognizes that it is a mix of various aggregates, such as gravel.
At issue in this case is the manner in which W. Va. Code § 11-15A-10a(a)
should be interpreted and applied to the facts presently before us. When deciding a case
of statutory interpretation, it is first necessary to examine the language employed by the
Legislature. We look first to the statute's language. If the text, given its plain meaning,
answers the interpretive question, the language must prevail and further inquiry is
foreclosed. Appalachian Power Co. v. State Tax Dep't, 195 W. Va. at 587, 466 S.E.2d at
438. Thus, [w]here the language of a statute is clear and without ambiguity the plain
meaning is to be accepted without resorting to the rules of interpretation. Syl. pt. 2, State
v. Elder, 152 W. Va. 571, 165 S.E.2d 108 (1968). Accord Syl. pt. 1, State v. Jarvis, 199
W. Va. 635, 487 S.E.2d 293 (1997) ('A statutory provision which is clear and
unambiguous and plainly expresses the legislative intent will not be interpreted by the
courts but will be given full force and effect.' Syl. Pt. 2, State v. Epperly, 135 W. Va. 877,
65 S.E.2d 488 (1951).). See also Sizemore v. State Farm Gen. Ins. Co., 202 W. Va. 591,
596, 505 S.E.2d 654, 659 (1998) ('A statute is open to construction only where the
language used requires interpretation because of ambiguity which renders it susceptible of
two or more constructions or of such doubtful or obscure meaning that reasonable minds
might be uncertain or disagree as to its meaning.' (quoting Hereford v. Meek, 132 W. Va.
373, 386, 52 S.E.2d 740, 747 (1949))).
On occasion, however, such as the case sub judice, the language used by the
Legislature may be plain but it may have neglected to define a certain word or words used
therein. In the absence of any definition of the intended meaning of words or terms used
in a legislative enactment, they will, in the interpretation of the act, be given their common,
ordinary and accepted meaning in the connection in which they are used. Syl. pt. 1,
Miners in Gen. Group v. Hix, 123 W. Va. 637, 17 S.E.2d 810 (1941), overruled on other
grounds by Lee-Norse Co. v. Rutledge, 170 W. Va. 162, 291 S.E.2d 477 (1982). Accord Syl.
pt. 6, in part, State ex rel. Cohen v. Manchin, 175 W. Va. 525, 336 S.E.2d 171 (1984)
(Undefined words and terms used in a legislative enactment will be given their common,
ordinary and accepted meaning.); Syl. pt. 4, State v. General Daniel Morgan Post No. 548,
V.F.W., 144 W. Va. 137, 107 S.E.2d 353 (1959) (Generally the words of a statute are to
be given their ordinary and familiar significance and meaning, and regard is to be had for
their general and proper use.).
However, when assigning a meaning to an undefined
term, we will not embrace a definition that would produce absurd, inconsistent,
or incongruous results. It is the 'duty of this Court to avoid whenever
possible a construction of a statute which leads to absurd, inconsistent, unjust
or unreasonable results.' Expedited Transp. Sys., Inc. v. Vieweg,
207 W. Va. 90, 98, 529 S.E.2d 110, 118 (2000) (quoting State v. Kerns,
183 W. Va. 130, 135, 394 S.E.2d 532, 537 (1990)) (emphasis omitted). Thus, [w]here
a particular construction of a statute would result in an absurdity, some other
reasonable construction, which will not produce such absurdity, will be made. Syl.
pt. 2, Newhart v. Pennybacker, 120 W. Va. 774, 200 S.E. 350 (1938). Accord Syl.
pt. 2, Conseco Fin. Serv'g Corp. v.
Myers, 211 W. Va. 631, 567 S.E.2d 641 (2002) ('It is the duty of a court to construe a
statute according to its true intent, and give to it such construction as will uphold the law
and further justice. It is as well the duty of a court to disregard a construction, though
apparently warranted by the literal sense of the words in a statute, when such construction
would lead to injustice and absurdity.' Syllabus Point 2, Click v. Click, 98 W. Va. 419, 127
S.E. 194 (1925).).
Upon a review of W. Va. Code § 11-15A-10a(a), it appears that the crux of
the parties' dispute herein is the meaning of the word that as it appears in this statute. In
pertinent part, § 11-15A-10a(a) provides [a] person is entitled to a credit against the tax
imposed by this article on the use of a particular item of tangible personal property equal
to the amount, if any, of sales tax lawfully paid to another state for the acquisition of that
property[.] (Emphasis added). The Tax Commissioner construes this portion as meaning
that the use tax credit is allowed if the use tax is levied on exactly the same property upon
which the taxpayer has previously paid sales tax to another state. On the other hand,
Bluestone understands the phrase as permitting the credit if the previously taxed property
can be identified as comprising a part or component of another type of property.
Based upon our determination of the commonly accepted meaning of the word
that, we agree with the Tax Commissioner's construction of this term. In its most
simplistic and basic form, that is defined as '[t]he same.' XI The Oxford English
Dictionary 252 (1970). That also has been more broadly construed to indicate a person,
place, thing, or degree as indicated, mentioned before, present, or as well-known or
characteristic. Random House Webster's Unabridged Dictionary 1965 (2d ed. 1998).
Accord XI The Oxford English Dictionary 252 (defining adjective that as meaning a
thing . . . either as being actually pointed out or present, or as having just been mentioned
and being thus mentally pointed out); Webster's Ninth New Collegiate Dictionary 1221
(1983) (recognizing adjective form of that signifies being the person, thing, or idea
specified, mentioned, or understood). Thus, it is clear that the word that, as employed
by W. Va. Code § 11-15A-10a(a) to modify the property upon which the taxpayer paid a
sales tax to another state, refers to the exact same, or identical, item of personal property
upon which the taxpayer would otherwise be required to pay a use tax to West Virginia.
Cf. City of Dallas v. Cornerstone Bank, N.A., 879 S.W.2d 264, 271 (Tex. Ct. App. 1994)
(interpreting that property in Tex. Tax Code Ann. § 32.01 (Vernon Supp. 1994) as
collectively referencing the category of property taxed rather than each individual item of
property for tax lien purposes). To construe this term otherwise would result in an
inconsistent meaning in contravention of our prior holding in Syllabus point 2 of Newhart
v. Pennybacker, 120 W. Va. 774, 200 S.E. 350, and its progeny which specifically counsel
against such a result.
Accordingly, we hold that, pursuant to the plain language of W. Va. Code
§ 11-15A-10a(a) (1986) (Repl. Vol. 2002), [a] person is entitled to a credit against the tax
imposed . . . on the use of a particular item of tangible personal property equal to the
amount, if any, of sales tax lawfully paid to another state for the acquisition of that
property, where the sales tax paid and the use tax credit sought both pertain to the same,
identical item of tangible personal property. Applying this decision to the facts of the
instant proceeding, we conclude that Bluestone was not entitled to the use tax credit
provided by W. Va. Code § 11-15A-10a(a) because the item of property upon which it paid
sales tax to the Commonwealth of Virginia, i.e., gravel, was not precisely the same item of
property upon which it was required to pay use tax to this State, i.e., asphalt. Therefore, we
reverse the contrary decision of the Circuit Court of Mercer County.