BEFORE THE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
RME PETROLEUM COMPANY )
FROM A PRODUCTION TAX AUDIT ) Docket No. 2002-52
ASSESSMENT BY THE MINERAL TAX )
DIVISION OF THE DEPARTMENT OF )
REVENUE (Production Years 1996-1997) )
________________________________________________________________________
FINDINGS OF FACT, CONCLUSIONS OF LAW, DECISION AND ORDER
________________________________________________________________________
APPEARANCES
Russell W. Miller, Assistant General Counsel, for RME Petroleum Company, formerly known as Union Pacific Resources Company, Petitioner (RME).
Martin L. Hardsocg, Senior Assistant Attorney General, and Karl D. Anderson, Senior Assistant Attorney General, Office of the Wyoming Attorney General, for the Respondent Wyoming Department of Revenue (Department).
DIGEST
Following an audit by the Department of Audit, the Department of Revenue revalued RME’s 1996 and 1997 oil and gas production from the Brady Unit located in Sweetwater County, Wyoming. In revaluing RME’s production, the Department included both production taxes and royalties as “direct costs of producing” in the direct cost ratio of the proportionate profits method. The Department’s decision to include production taxes and royalties in the direct cost ratio was based on the State Board of Equalization decision In the Matter of the Appeal of Amoco Production Company, Docket No. 96-216, 2001 WL 1150220 (Order on Reconsideration, Sept. 24, 2001) (hereinafter “Amoco 96-216"). RME appealed the Department’s decision to the Wyoming State Board of Equalization (Board).
The parties entered into a stipulation of facts, knowingly and voluntarily waived their rights to a contested case hearing and requested that the matter be considered by the Board as a expedited case pursuant to the Board’s rules. [Joint Motion to Assign Case to Expedited Docket]. The Board, Roberta A. Coates, Chairman, Alan B. Minier, Vice Chairman, and Thomas R. Satterfield, granted the request and this appeal was considered on the Board record, the Parties’ Stipulations of Legal Issues and Facts and the parties’ briefs.
JURISDICTION
The Board shall review final decisions of the Department on application of any interested person adversely affected. Wyo. Stat. Ann. § 39-11-102.1(c). Taxpayers are specifically authorized to appeal final decisions of the Department concerning oil and gas valuation amendments. Wyo. Stat. Ann. § 39-14-209(b)(v). The taxpayer’s appeal must be filed with the Board within thirty days of the Department’s final decision. Wyo. Stat. Ann. § 39-14-209(b)(iv); Rules, Wyoming State Board of Equalization, Chapter 2, § 5(a). This case arises from the Department’s assessment of additional severance taxes on and increase in taxable value of Petitioner’s gas production based on an audit by the Department of Audit. Wyo. Stat. Ann. § 39-14-208(b).
DISCUSSION
On appeal, RME asks that we reconsider our decision on the following issue addressed in Amoco 96-216, supra:
Are production taxes and royalties direct production costs in the direct cost ratio of the proportionate profits formula?
[Parties’ Stipulation of Legal Issues and Facts].
RME advances six arguments in support of its position that our decision in Amoco 96-216, supra, was erroneous:
1) Factually production taxes and royalties are not direct costs of producing oil and natural gas;
2) The Legislature did not enact a legal fiction that “deems” production taxes and royalties to be “direct costs” of producing either oil or natural gas;
3) The Department, in its formally promulgated rules, does not ordain the legal fiction that royalties and production taxes are “direct costs” of producing either oil or natural gas;
4) The Board’s prior ruling that taxes and royalties are “direct costs of producing” is contrary to the Wyoming Supreme Court’s holding in Powder River Coal Co. v. Wyo. State Board of Equalization, 2002 WY 5, 38 P.3d 423 (Wyo.2002);
5) As a tax statute, Wyo. Stat. Ann. § 39-14-203 must be strictly construed against the State and all ambiguities must be resolved in the taxpayer’s favor; and
6) The Board may not legislate.
For the reasons set forth below, we affirm the Department’s inclusion of royalties and production taxes in the direct cost ratio of the proportionate profits formula used to calculate the taxable value of RME’s 1996 and 1997 production. We conclude that RME has failed to meet its ultimate burden of persuasion and, therefore, decline RME’s invitation to overturn our decision in Amoco 96-216, supra.
FINDINGS OF FACT
1. RME was the operator of the Brady Unit during the 1996 through 1997 production years at issue in this appeal. [Parties’ Stipulation of Legal Issues and Facts, ¶ 1].
2. The Brady Unit is located in Sweetwater County, Wyoming. [Parties’ Stipulation of Legal Issues and Facts, ¶ 2].
3. The production at issue in this case was reported by RME and valued by the Department under the proportionate profits methodology. Wyo. Stat. Ann. § 39-2-208(d)(iv) (Michie 1997). [Parties’ Stipulation of Legal Issues and Facts, ¶ 3].
4. In reporting its Brady Unit production to the Department, RME did not classify production taxes and royalty expenses as “direct production costs” in calculating its direct cost ratio under Wyo. Stat. Ann. § 39-2-208(d)(iv) (Michie 1997). [Parties’ Stipulation of Legal Issues and Facts, ¶ 4].
5. Following the completion of an audit of production at the Brady Unit during the 1996 through 1997 production years, the Department issued a final determination letter to RME assessing additional severance taxes. [Parties’ Stipulation of Legal Issues and Facts, ¶ 5].
6. The Department issued its final determination letter to RME on May 2, 2002. [Board Record].
7. In its final determination letter, the Department included production taxes and royalties as “direct production costs” in the direct cost ratio of the proportionate profits formula. The Department included both production taxes and royalties based on the Board’s opinion in Amoco 96-216, supra. The Board’s decision in Amoco 96-216 is currently on appeal to the Wyoming Supreme Court. The Supreme Court heard arguments in that case on March 19, 2003. [Parties’ Stipulation of Legal Issues and Facts, ¶ 6].
8. The Parties have resolved all other assessment issues with the sole exception of the stipulated legal issue regarding whether production taxes and royalties are direct production costs in the direct cost ratio of the proportionate profits formula. [Parties’ Stipulation of Legal Issues and Facts, ¶ 7].
9. Attached to and incorporated in the parties’ stipulation is “Attachment A”. This stipulated attachment details the taxable value (for both severance and gross products) and the severance taxes due under the two different situations: one in which production taxes and royalties are included in the direct cost ratio, and the other in which production taxes and royalties are not included in the ratio. The Parties agree that depending upon the Board’s response to the single stipulated legal issue, the taxable value and severance taxes due are contained within Attachment A. [Parties’ Stipulation of Legal Issues and Facts, ¶ 8].
10. The parties agreed that no testimony from any witness for RME or the Department is necessary for the Board’s resolution of this case. [Parties’ Stipulation of Legal Issues and Facts, ¶ 9].
11. RME filed its notice of appeal of the Department’s final determination letter with the Board on May 30, 2002, within thirty days after the Department’s final administrative decision. [Board Record].
12. Any Conclusion of Law set forth below which includes a Finding of Fact may also be considered a finding of fact and, therefore, is incorporated herein by reference.
CONCLUSIONS OF LAW
13. RME’s notice of appeal was timely filed within thirty days after the Department’s final administrative decision. Rules, Wyoming State Board of Equalization, Chapter 2, § 5(e). The Board has jurisdiction to determine this matter. Wyo. Stat. Ann. § 39-11-102.1(c) (LexisNexis 2001); Wyo. Stat. Ann. § 39-14-209(b) (LexisNexis 2001); Antelope Valley Imp. v. State Bd. of Equalization for State of Wyo., 992 P.2d 563 (Wyo. 1999).
14. When a final decision of the Department is appealed, the role of this Board is strictly adjudicatory:
It is only by either approving the determination of the Department, or by disapproving the determination and remanding the matter to the Department, that the issues brought before the Board can be resolved successfully without invading the statutory prerogatives of the Department.
Amoco Production Company v. Wyoming State Board of Equalization, 12 P.2d 668, 674 (Wyo. 2000). The Board’s duty is to adjudicate the dispute between the taxpayer and the Department.
15. In performing its adjudicatory role, the Board is required to “[d]ecide all questions that may arise with reference to the construction of any statute affecting the assessment, levy and collection of taxes, . . .." Wyo. Stat. Ann. § 39-11-102.1(c)(iv) (LexisNexis 2001).
16. “The burden of proof is on the party asserting an improper valuation.” Amoco Production Company v. Wyoming State Board of Equalization, 899 P. 2d 855, 858 (Wyo. 1995); Teton Valley Ranch v. State Board of Equalization, 735 P. 2d 107, 113 (Wyo. 1987). The Board’s rules provide that:
[T]he Petitioner shall have the burden of going forward and the ultimate burden of persuasion, which burden shall be met by a preponderance of the evidence. If Petitioner provides sufficient evidence to suggest the Department determination is incorrect, the burden shifts to the Department to defend its action....
Rules, Wyoming State Board of Equalization, Chap. 2, § 20.
17. The Department is required to annually value oil and gas at fair cash market value. Wyo. Stat. Ann. § 39-2-208(a) (Michie 1997) (currently Wyo. Stat. Ann. § 39-14-202(a)(i) (LexisNexis 2003)).
18. The proportionate profits method is one of four statutory methods the Department was authorized to use to determine the fair cash market value for oil and gas during the applicable time frame. A fifth method is available if the Department and taxpayer agree that none of the four statutory methods produce a representative fair market value. Wyo. Stat. Ann. § 39-2-208(c) & (d) (Michie 1997) (currently Wyo. Stat. Ann. § 39-14-203(b)(vi) & (vii) (LexisNexis 2003)).
19. Using the proportionate profits method, fair cash market value is calculated as follows:
(A)The total amount received from the sale of the minerals minus exempt royalties, nonexempt royalties and production taxes times the quotient of the direct cost of producing the minerals divided by the direct cost of producing, processing and transporting the minerals; plus
(B)Nonexempt royalties and production taxes.
Wyo. Stat. Ann. § 39-2-208(d)(iv) (Michie 1997) (currently Wyo. Stat. Ann. § 39-14-203(b)(vi)(D) (LexisNexis 2003)).
20. The “quotient of the direct cost of producing the minerals divided by the direct cost of producing, processing and transporting the minerals,” Id., is commonly referred to as the “direct cost ratio.”
21. The Department included production taxes and royalties as “direct costs of producing” in the direct cost ratio of the proportionate profits methodology used to value RME’s oil and gas production from the Brady Unit. [Finding of Fact ¶¶ 3, 6]. Wyo. Stat. Ann. § 39-2-208(d)(iv) (Michie 1997) (currently Wyo. Stat. Ann. § 39-14-203(b)(vi)(D) (LexisNexis 2003)).
22. We first considered the issue raised in this appeal in Amoco 96-216, supra. We held that production taxes and royalties were direct costs of producing and, therefore, must be included in calculating the direct cost ratio of the proportionate profits method. Amoco 96-216, supra at ¶¶ 87 through 106.
23. Petitioner first argues, without supporting authority, that since the taxable value of its production is determined after the production process is complete, production taxes cannot be a cost of producing. RME characterizes the inclusion of production taxes in the direct cost ratio as circular.
24. However, what the Petitioner characterizes as circular is nothing more than a simultaneous equation where each equation is used together in the same problem having a common solution. See: definition of “simultaneous equations”, Webster’s New World College Dictionary, 4th ed. (2002) at p. 1337. The Petitioner and the Department have agreed that a value can be calculated for Petitioner’s production including royalties and production taxes in the direct cost ratio. That value is set out in Exhibit A of the Parties’ Stipulation of Legal Issues and Facts. [Finding of Fact ¶ 8]. Therefore, we conclude that Petitioner’s first argument, unsupported by authority, is without merit.
25. Petitioner also contends that a royalty is an ownership interest so it cannot be a cost of producing.
26. Royalty is defined for the purpose of property appraisal and assessment as a “payment made periodically or at irregular intervals to the owner of an interest in mineral land for the privilege of exploring for, and/or mining and disposing of, mineral deposits.” Glossary of Property Appraisal and Assessment, International Association of Assessing Officers (1997).
27. A royalty has been recognized by the Wyoming Supreme Court as a direct cost of mineral production.
It is thus apparent that royalty must be paid for the privilege of mining, not processing, and as has been indicated above, the value of the coal at the mine must be sufficient to pay both the costs of mining and royalty. We affirm the ruling of the district court upholding the decision of the Board that royalty is a full component of the value of the coal at the mine, and is not to be apportioned between mining and processing as indirect costs may be. (Emphasis added.)
Hillard v. Big Horn Coal Co., 549 P.2d 293, 301-302 (Wyo.1976).
28. Additionally, both production taxes and royalties are treated as direct costs of production within the field of oil and gas accounting. Council of Petroleum Accountants Societies, Inc., Bulletins 4 and 16. We conclude that “factually” production taxes and royalties are direct costs of producing and, therefore, reject Petitioner’s first argument.
29. Petitioner’s second argument is that the payment of royalties and taxes are not part of the process of “producing” and therefore should not be included as costs of production.
30. Production taxes include severance tax, “an excise tax [on] . . . the value of the gross product extracted upon the privilege of severing or extracting . . .” a mineral. Wyo. Stat. Ann § 39-6-302 (a) (Michie 1997), and ad valorem tax, a tax based on the fair market value of the product, after the mining or production process is complete. Wyo. Stat. Ann. § 39-2-208(a) (Michie 1997). Both taxes are imposed on the value of the extracted mineral with no deduction for expenses incurred by the producer prior to the point of valuation. Wyo. Stat. Ann. §§ 39-2-208(a) and 39-6-302(a) (Michie 1997). (Currently Wyo. Stat. Ann. § 39-14-203(a)(i) and (b)(ii)). The privilege of extracting the mineral is taxed on the basis of the value of the extracted mineral by the severance tax. The mineral extracted is taxed based on its value by the ad valorem tax. Both production taxes are imposed on and are directly related to the producing of the mineral.
30. As noted above, supra at ¶ 27, royalties are a component of the value of the mineral produced. They are direct costs associated with the production of the mineral, not indirect costs. Hillard, 549 P.2d at 301-302.
31. Petitioner also argues that the payment of royalties and production taxes are not a part of the process of extracting, gathering, separating, injecting, dehydrating or storing crude oil or natural gas or associated with any other activity that occurs before delivery to a crude oil storage tank or the outlet of the initial natural gas dehydrator. Wyo. Stat. Ann. § 39-14-203(b)(iii) (LexisNexis 2001). These terms define the point where oil and gas is to be valued. However, it does not follow from the legislature’s definition of where the physical production process ends that there are no other direct costs associated with the production of oil and gas. The production of oil and gas brings with it the liability for payment of both royalties and production taxes. Both production taxes and royalties are direct costs of producing oil and gas. As we noted in Amoco 96-216 at paragraph 97:
Both royalties and production taxes are necessary costs to mine. Both case law, Amax v. State Board of Equalization, 819 P.2d 825 (Wyo. 1991), Hillard v. Big Horn Coal Co., 549 P.2d 293 (Wyo. 1976), Enron Oil and Gas v. Dept. of Revenue, 820 P.2d 977 (Wyo. 1991) and the Wyoming Attorney General’s advice support this conclusion. [Exhibit. 501].
32. Additional support for the inclusion of royalties and production taxes as direct costs of producing comes from the Wyoming State Legislature’s actions following the issuance of our decision in Amoco 96-216, supra. Senate File 69, introduced during the 2002 Legislative session, provided in pertinent part for the following amendment to Wyo. Stat. Ann. § 39-14-203(b)(iv)(D)(II) (Wyo.Stat.Ann § 39-2-208(d)(iv) as recodified):
(II) Nonexempt royalties and production taxes. Exempt and nonexempt royalties, ad valorem production taxes, severance taxes, conservation taxes and indirect costs shall not be included in the computation of the quotient set forth in subdivision (I) of this subparagraph. Indirect costs include, but are not limited to, allocations of corporate overhead, data processing costs, accounting, legal and clerical costs and other general and administrative costs which cannot be specifically attributed to an operation function without allocation. . . .
For the first time, Senate File 69 evidenced an intent by the Legislature to exclude production taxes and royalties from the direct cost ratio used in the proportionate profits valuation method for oil and gas. The bill did not pass during the 2002 Legislative session.
33. Legislative inaction following a contemporaneous and practical interpretation is evidence that the legislature intends to adopt such an interpretation. “Where action upon a statute or practical and contemporaneous interpretation has been called to the legislature’s attention, there is more reason to regard the failure of the legislature to change the interpretation as presumptive evidence of its correctness.” 2B Singer, Sutherland Statutory Construction, § 49:10, pp. 117-118, fn. 6 (6th ed.). We conclude the Legislature’s failure to enact Senate File 69 is presumptive evidence of the correctness of our interpretation reflected in Amoco 96-216, supra. We note that the amendment itself is consistent with our decision that the statutory definition of indirect costs did not include royalties and production taxes.
34. Petitioner’s third argument is that the Department’s rules defining “‘direct costs of producing” do not include specific reference to royalties and taxes. Chapter 6, § 4(b) of the Department of Revenue’s Rules an Regulations mirrors the legislative definition of “direct mining costs” in the coal valuation statute. Compare: Rules, Wyoming Department of Revenue Chapter 6, § 4(b) with Wyo. Stat. Ann. § 39-2-209(d)(ii) (Michie 1990). Since these are the same sort of costs listed by the legislature for coal, we cannot conclude that there was a specific intent to exclude other recognized direct costs of production. Our analysis of the significance of the legislature’s failure to specifically exclude production taxes and royalties for oil and gas while doing so for coal applies here.
89.In determining whether royalties and production taxes are to be included as direct production costs in calculating the direct cost ratio, we consider the omission of certain words intentional on the part of the legislature, and we may not add omitted words. Parker v. Artery, 889 P.2d 520 (Wyo. 1995); Fullmer v. Wyoming Employment Security Comm’n., 858 P.2d 1122 (Wyo. 1993). Particularly, when the language appears in one section of a statute but not another, we will not read the omitted language into the section where it is absent. Matter of Voss’ Adoption, 550 P.2d 481 (Wyo. 1976). Wyoming Statute §39-2-208(d)(iv) is clear and unambiguous. It does not require statutory interpretation to understand that royalties and production taxes are not specifically excluded as a direct cost. The legislative intent is clear. Considering that inclusion of royalties and production costs in the direct cost formula reaches the closest calculation to what are actual costs, the clear reading of the statute is the most realistic result and there is no need to resort to legislative intent.
90.The legislature specifically excluded royalties and production taxes from the definition of direct costs to be used for purposes of the direct cost ratio used in valuing coal under the proportionate profits methodology. Wyo. Stat. § 39-2-209(d)(iv). Likewise, the legislature specifically excluded royalties and production taxes as direct costs to be used in the formula calculation for valuation of bentonite. Wyo. Stat. § 39-2-211(d)(i)(c). By excluding these costs in the other mineral valuation statutes, the legislature clearly evidenced its understanding that royalties and production taxes are direct costs of production. Because the legislature did not exclude royalties and production taxes from the direct cost of production of oil and gas, we conclude they must be included.
Amoco 96-216, supra at ¶¶ 89-90.
35. RME’s fourth argument is based on the decision of the Wyoming Supreme Court in Powder River Coal Co. v. Wyo. State Board of Equalization, 2002 WY 5, 38 P.3d 423 (Wyo. 2002). In that case, the Wyoming Supreme Court held that federal lease bonus payments were not to be included as direct costs of mining in the proportionate profits calculation for coal. Applying the doctrine of ejusdem generis, the Court concluded the federal lease bonus payments were indirect mining costs. Id. at ¶ 19.
36. Petitioner’s analysis of the applicability of Powder River Coal to royalties is flawed. Before addressing whether or not lease bonus payments were indirect costs, the Wyoming Supreme Court first addressed the question of whether or not lease bonus payments could be characterized as royalties. The court clearly concluded that the lease bonus payment was not a royalty. Powder River Coal, id. at ¶¶ 11-17.
37. In determining what meaning the legislature intended by the use of the term royalty, the Court concluded:
We assume the legislature was well aware of the accepted legal definition and usage of the term royalty and cannot conclude it intended anything other than the well accepted meaning of the term royalty when it provided for federal royalties to be deducted as exempt royalties for the sales value of coal mined within the this state.
Powder River Coal Co., Id. at ¶ 17.
38. Unlike the situation in Powder River Coal Co., Id., where there was no statutory reference to federal lease bonus payments, the legislature has recognized production taxes and royalties as direct costs of production. Wyo. Stat. Ann. §§ 39-2-209(d)(iv); 39-2-211(d)(i)(c) (Michie 1997); See: Amoco 96-216, supra. Therefore, it is not necessary to resort to an intrinsic aid such as ejusdem generis to resolve an issue of statutory construction. 2A Norman J. Singer, Statutes and Statutory Construction § 47.22 (6th ed., 2000 Revision). As the Wyoming Supreme Court recognized:
When a statute is sufficiently clear and unambiguous, we give effect to the plain and ordinary meaning of the words and do not resort to the rules of statutory construction. Tietema v. State, 926 P.2d 952, 954 (Wyo.1996); Butts v. State Board of Architects, 911 P.2d 1062, 1065 (Wyo.1996). Instead, our inquiry revolves around the ordinary and obvious meaning of the words employed according to their arrangement and connection. In doing so, we view the statute as a whole in order to ascertain its intent and general purpose and also the meaning of each part. “We give effect to every word, clause and sentence and construe all components of a statute in pari materia.’ Parker, 845 P.2d at 1042.” Murphy v. State Canvassing Bd., 12 P.3d 677, 679 (Wyo. 2000) (quoting Campbell County School Dist. v. Catchpole, 6 P.3d 1275, 1284 (Wyo. 2000)).
BP America Production Co. v. Madsen, 2002 WY 135 ¶ 4, 53 P.3d 1088, 1090-1091 (Wyo. 2002).
39. As we concluded in Amoco 96-216, supra, the legislature knew the definition of the terms royalties and ad valorem production taxes when it chose to exclude them as direct costs of production for coal and bentonite but not for oil and gas. Wyo. Stat. §§ 39-2-209(d)(iv); 39-2-211(d)(i)(c); 39-2-208(d)(iv). Therefore, they must be included as direct costs of production in valuing oil and gas using the proportionate profits method. Amoco 96-216, supra; See: ¶ 34, supra.
40. Petitioner’s fifth argument is that the statute in question must be strictly construed against the state and all ambiguities must be resolved in the taxpayer’s favor. While a correct statement of the law, the argument fails in light of our analysis in Amoco 96-216, supra. As we have said:
By excluding these costs [royalties and production taxes] in the other mineral valuation statutes, the legislature clearly evidenced its understanding that royalties and production taxes are direct costs of production. Because the legislature did not exclude royalties and production taxes from the direct cost of production of oil and gas, we conclude they must be included.
Amoco 96-216, supra at ¶ 90.
41. Finally, RME argues that our decision in Amoco 96-216, supra, constituted legislation citing to Amoco Production Company v. State Board of Equalization, 12 P.3d 668 (Wyo. 2000). In that case the Wyoming Supreme Court stated:
The only way to harmonize the various descriptions of the review or appeal function of the Board is to hold that the Board is limited to an adjudicatory decision making its review on the record. It is only by either approving the determination of the Department, or by disapproving the determination and remanding the matter to the Department, that the issues brought before the Board for review can be resolved successfully without invading the statutory prerogatives of the Department. The statutory mandate to the Board is not to maximize revenue or to punish nettlesome taxpayers, but to assure the equality of taxation and fairly adjudicate disputes brought before it. It is from this premise that we offer some guidance with respect to issues likely to arise in the new hearing before the Board.
Id.
at 674.
42. Within our limited powers we have the clear obligation, or duty, to interpret the applicable Wyoming statutes. Wyo. Stat. Ann. § 39-11-102.1(c)(iv) (LexisNexis 2003).
43. Consistent with our obligation to adjudicate the disputes brought before us recognized by the Wyoming Supreme Court and our statutory obligation to interpret applicable Wyoming statutes, we decided the issue raised in Amoco 96-216, supra, concerning the inclusion of royalties and production taxes as direct costs of production in the proportionate profits method. That is what we have been called to do in this case and that is what we have done. We conclude Petitioner’s claim that we have exceeded our authority is without merit.
44. Petitioner has failed to meet its ultimate burden of proof in this matter. Amoco Production Company v. Wyoming State Board of Equalization, 899 P. 2d 855, 858 (Wyo. 1995); Teton Valley Ranch v. State Board of Equalization, 735 P. 2d 107, 113 (Wyo. 1987).
45. We conclude that royalties are direct costs of producing which must be included in calculating the direct cost ratio of the proportionate profits methodology set out in Wyo. Stat. Ann. § 39-2-208(d)(iv).
46. We further conclude that production taxes are direct costs of producing which must be included in calculating the direct cost ratio of the proportionate profits methodology set out in Wyo. Stat. Ann. § 39-2-208(d)(iv).
THIS SPACE INTENTIONALLY LEFT BLANK.
ORDER
IT IS THEREFORE HEREBY ORDERED that the Department’s decision to include royalties and production taxes as direct costs of producing in the direct cost ratio of the proportionate profits method used to determine the value of RME Petroleum Company’s 1996 and 1997 oil and gas production from the Brady Unit in Sweetwater County, Wyoming, is affirmed.
IT IS FURTHER HEREBY ORDERED that this matter is remanded to the Department of Revenue for collection of additional severance taxes and certification of additional gross products taxable value to Sweetwater County, Wyoming, consistent with the column titled “INCLUDING Taxes and Royalties in DCR” of Exhibit A to the Parties’ Stipulations of Legal Issues and Facts and this decision.
Pursuant to Wyoming Statute Section 16-3-114 and Rule 12, Wyoming Rules of Appellate Procedure, any person aggrieved or adversely affected in fact by this decision may seek judicial review in the appropriate district court by filing a petition for review within 30 days of the date of this decision.
Dated this 20th day of November, 2003.
STATE BOARD OF EQUALIZATION
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Roberta A. Coates, Chairman
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Alan B. Minier, Vice Chairman
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Thomas R. Satterfield, Member
ATTEST:
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Wendy J. Soto, Executive Secretary