QUINN M. MATHEWS FROM A                   )         Docket No. 2004-139







Quinn N. Mathews, Pro Se (Petitioner).

Cathleen D. Parker, Senior Assistant Attorney General, for the Department of Revenue (Department).


Upon application of any person adversely affected, the Board is mandated to review final Department actions concerning state excise taxes and to “[h]old hearings after due notice in the manner and form provided in the Wyoming Administrative Procedure Act and its own rules and regulations of practice and procedure.” Wyo. Stat. Ann. § 39-11-102.1(c)(iv). 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, in accordance with the rules, regulations, orders and instructions prescribed by the department.” Wyo. Stat. Ann. § 39-11-102.1(c)(viii). The rules of practice and procedure for appeals before the Board involving tax matters contemplate appeals from final administrative decisions of the Department. Rules, Wyoming State Board of Equalization, Chapter 2, § 3. The rules require that appeals be filed with the Board within thirty days of any final administrative decision. Rules, Wyoming State Board of Equalization, Chapter 2, § 5(e). The Department issued a letter ruling on October 18, 2004 and the Petitioner appealed that ruling on November 10, 2004. Therefore, the Board has jurisdiction to decide this matter.

The Board, comprised of Alan B. Minier, Chairman, Thomas R. Satterfield, Vice Chairman, and Thomas D. Roberts, Board Member, heard this matter on June 8, 2005.


The Petitioner provides vacuum cleaning services. He sought a letter ruling from the Department, arguing that cleaning of upholstered furniture and area rugs was not subject to sales tax. The Department ruled that such cleaning services were improvements to tangible personal property within the meaning of Wyoming Statutes section 39-15-103(a)(i)(J). Petitioner appealed. We affirm the ruling of the Department.


By the time of the hearing, the parties agreed that this case presents a single issue. Is the service of cleaning upholstered furniture and area rugs a service performed for the improvement of tangible personal property within the meaning of Wyoming Statutes section 39-15-103(a)(i)(J)?


1.        Petitioner operates a vacuum cleaning business, using equipment mounted in a truck. [Tape recording of hearing]. He devotes the majority of his time and effort to cleaning the carpeting of commercial customers. [Tape recording of hearing]. He is not obliged to collect sales tax for these services, because they are performed on real property. [Tape recording of hearing]. However, he occasionally cleans furniture and area rugs. [Tape recording of hearing]. This smaller portion of his business is the subject of this dispute. [Tape recording of hearing]. The Department has consistently collected sales tax on the service of cleaning personal property. [Tape recording of hearing].

2.        The Department issued Petitioner a sales tax license on January 14, 2000. [Tape recording of hearing]. When the Department changed its administration of the sales tax in 2003 to require quarterly reporting from all sales tax licensees, Petitioner failed to file a number of quarterly reports. [Tape recording of hearing]. At length, on June 30, 2004, the Department created a Best Information Assessment for Petitioner. [Department Record, p. A-6].

3.        Based on the outstanding delinquency in Petitioner’s account, on July 19, 2004 the Department notified the Petitioner by mail that a lien would be placed on his real and personal property until the outstanding amount on his account was paid. [Department Record, p. A-6]. The Department’s notice perfected a lien that was created by statute. Wyo. Stat. Ann. § 39-15-108(d)(i). Petitioner subsequently paid all amounts owing, and the lien was released. [Tape recording of hearing]. He did not file any appeal of the lien or of the assessments. [Tape recording of hearing].

4.        Petitioner was nonetheless prompted by his experience with the lien to consider whether the Wyoming statutes truly levied a tax on the services which gave rise to the lien. [Tape recording of hearing]. The pertinent statute levies a sales tax on the “sales price paid for services performed for the repair, alteration or improvement of tangible personal property.” Wyo. Stat. Ann. § 39-15-103(a)(i)(J).

5.        On September 14, 2004, Petitioner sought a ruling from the Department concerning the taxability of cleaning upholstered furniture and area rugs. [Exhibit 100]. His principal argument was that his cleaning activity was properly and fairly characterized as maintenance, rather than improvement. [Exhibit 100; Tape recording of hearing]. At the hearing of this matter, Petitioner stressed that he views the purpose of his activity as the prevention of decline in the object being cleaned, a purpose which falls under definitions of maintenance, rather than improvement. [Tape recording of hearing]. When cross-examined about his view of the common definition of “improve,” Petitioner stated that to improve generally meant to make something worth more money. [Tape recording of hearing].

6.        The Board encouraged Petitioner to discuss various ancillary issues at the time of the hearing, so that the Board would have a complete understanding of the background of the case and all facets of the positions of the parties. However, by the close of the hearing the parties agreed that the principal issue before us is whether Petitioner’s cleaning activity is an improvement within the meaning of the statute. [Tape recording of hearing]. In particular, the parties agreed that upholstery and area rugs are tangible personal property. [Tape recording of hearing].

7.        The Department issued a letter ruling on October 18, 2004. [Exhibit 500]. In pertinent part, the Department relied on a definition of the word “improve”: “To meliorate, make better, to increase the value or good qualities of, mend, repair.” [Exhibit 500]. In the Department’s view, cleaning falls under this definition because it makes the object cleaned better, and because cleaning increases the value or good qualities of the object cleaned. [Exhibit 500]. At the hearing of this matter, Dan Noble, Administrator of the Department’s Excise Tax Division, testified that another definition of the word “improve” is “to increase the value of enhance the appearance of something.” Black’s Law Dictionary, 7th Edition (1999), p. 761; [Tape recording of hearing]. Noble stated that cleaning enhances the appearance of something, and makes it more valuable or salable. [Tape recording of hearing].

8.        As an alternative basis for its ruling, the Department also stated that the statutory word “alteration” might apply to Petitioner’s cleaning activity. [Exhibit 500]. However, having heard testimony about the nature of Petitioner’s business, the Department conceded that it was relying on the word “improvement.” [Tape recording of hearing]. The parties agree that the word “repair” does not apply in this case. [Tape recording of hearing].

9.        Noble testified that cleaning may be characterized as maintenance, but it may also be characterized as improvement. [Tape recording of hearing]. In the Department’s view, establishing that an activity is maintenance does not preclude the conclusion that it is also improvement. [Tape recording of hearing]. Noble disagreed with Petitioner’s contention that the Department was overreaching, but instead asserted that the Department was relying on the plain language of the statute. [Tape recording of hearing].

10.      Petitioner believed that the Department’s interpretation of the statute unduly stretched the meaning of “improvement,” and timely filed this appeal on November 10, 2004. [Notice of Appeal]. Among other things, he argued that the Department has ignored other aspects of accepted definitions of “improvement,” including the definition that includes additions to real property. [Notice of Appeal]. In his view, this means that maintenance is the only defensible characterization of the service of cleaning. [Notice of Appeal].


11.      Taxable event. The following shall apply:


(i) Except as provided by W. S. 39-15-105, there is levied an excise tax upon:

* * *


(J) The sales price paid for services performed for the repair, alteration or improvement of tangible personal property;

Wyo. Stat. Ann. § 39-15-103(a)(i)(J).

12.      “‘Tangible personal property’” means any property not real or intangible . . ..” Wyo. Stat. Ann. § 39-15-101(a)(ix). It includes “[p]ersonal property which may be seen, weighed, measured, felt, touched, or which is in any other manner perceptible to the senses.” Rules, Wyoming Department of Revenue, Chapter 2, § 3(rr).


13.      “Real property” means land and appurtenances, including structures affixed thereto. An article shall be considered real property if:


(A) It is buried or embedded; or

(B) It is physically or constructively annexed to real property; and

(C) It is adapted to the use of the real property; and

(D) Considering the purpose for which the annexation was made, one can reasonably infer that it was the intent of the annexing party to make the article a permanent part of the real property.


Wyo. Stat. Ann. § 39-15-101(a)(ix).


14.      The Board must look to the intent of the legislature when enforcing or construing statutes, and legislative intent must be ascertained initially and primarily from the words used in the statute. Allied-Signal, Inc. v. Wyoming State Board of Equalization, 813 P.2d 214, 219 (Wyo. 1991). A statute must be construed 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 Land & Cattle Company v. Wyoming Game and Fish Commission, 845 P.2d 1040, 1042 (Wyo. 1993).


15.      The Board’s Rules describe a petitioner’s burden of going forward, and his burden of persuasion:


Except as specifically provided by law or in this section, the 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, Chapter 2, § 20.

16.      The role of this Board, in appeals from final determinations of the Department, 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 Petitioner and the Department, and nothing more.


17.      The central question in this case is whether Petitioner’s cleaning activity falls within the meaning of the words found in the statute. The fact that his activity might be described by other words, or might even be better described by other words, can have no bearing on our decision. We are concerned only with whether the language chosen by the legislature applies to the facts in this case.

18.      This case can be resolved by reference to the plain language of the statute. “Improvement” means, among other things, “(1) an improving or being improved; esp. a) betterment b) an increase in value or in excellence of quality or condition .... (2) a) an addition or change that improves something . . ..” Webster’s New World College Dictionary (4th Edition 2001), p. 718. The root verb “improve” means “1. To increase the value or enhance the appearance of something . . ..” Black’s Law Dictionary (Seventh Edition 1999), p. 761. We note that these definitions are consistent with Petitioner’s own definition of “improve,” which was to make something worth more money.

19.      We conclude that these definitions fairly characterize the functional results of Petitioner’s cleaning service, which include betterment; an increase in excellence of quality or condition; a change that improves; an increase in value; enhanced appearance. We accordingly find for the Department.

20.      We note that Petitioner has directed our attention to an alternative meaning of improvement, which is, “[a]n addition to real property, whether permanent or not; esp., one that increases its value or utility or enhances its appearance . . ..” Black’s Law Dictionary (Seventh Edition 1999), p. 761. However, this definition makes no sense in the context of a statute imposing a tax on services related to tangible personal property, when the statute does not impose a tax on services related real property. Words often have alternative definitions that cannot be reasonably applied in the context of a specific statute.


WHEREFORE, IT IS HEREBY ORDERED THAT the Department’s final decision that the service of cleaning upholstery and area rugs is an improvement to tangible personal property within the meaning of Wyoming Statutes section 39-15-103(a)(i)(J) is hereby affirmed.


Pursuant to Wyoming Statutes 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 ______ day of June, 2005.

                                                                      STATE BOARD OF EQUALIZATION


Alan B. Minier, Chairman



Thomas R. Satterfield, Vice-Chairman



Thomas D. Roberts, Board Member



Wendy J. Soto, Executive Secretary