Yeargin v. Tax Comm'n

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Yeargin v. Tax Comm'n, Case No. 981342-CA, Filed May 3, 2001 IN THE UTAH COURT OF APPEALS


Yeargin, Inc.,


State Tax Commission,
Auditing Division,

(Not for Official Publication)

Case No. 981342-CA

May 3, 2001 2001 UT App 146 -----

Original Proceeding in this Court

Robert A. Peterson, Salt Lake City, for Petitioner
Mark L. Shurtleff and Gale K. Francis, Salt Lake City, for Respondent -----

Before Judges Greenwood, Jackson, and Billings.

JACKSON, Associate Presiding Judge:

The present case, between Yeargin, Inc. (Yeargin) and the Auditing Division of the State Tax Commission (the Division), is before this court on remand from the supreme court. Two years ago, we affirmed the Tax Commission's ruling that Yeargin was liable for the sales tax assessment as a real property contractor who purchased tangible personal property and affixed it to real property. See Yeargin, Inc. v. Tax Comm'n, 1999 UT App 94,¶25, 977 P.2d 527 (Yeargin I). In our prior opinion, we did not reach the alternate theories for imposing taxes on Yeargin that were argued in the Division's briefing. On certiorari, the supreme court reversed our "real property contractor" ruling. It concluded that a stipulation between the parties stood "for the fact that Yeargin did not own or purchase any materials for the facility." Yeargin, Inc. v. Auditing Div. of the State Tax Comm'n, 2001 UT 11,¶47, 414 Utah Adv. Rep. 27 (Yeargin II). Thus, "Yeargin cannot be considered a real property contractor for the purposes of sales tax liability." Id. The supreme court then remanded for us to consider the two other theories under which Yeargin might be liable for taxes: first, "as a vendor [and, second,] as a retail consumer." Id. at ¶48. We reject both arguments.

The Division did not preserve its argument that Yeargin is liable for taxes as a "vendor" before the Tax Commission, thus it is waived. See US Xpress, Inc. v. Utah State Tax Comm'n, 886 P.2d 1115, 1119 (Utah Ct. App. 1994) ("[I]ssues cannot be raised for the first time on appeal."). Further, the supreme court's ruling in Yeargin II forecloses the argument. The supreme court concluded that "Yeargin did not own or purchase any materials for the facility, [thus,] evidence cannot be admitted to contradict that fact."(1) Yeargin II, 2001 UT 11 at ¶47. Moreover, the Tax Commission did not make any finding that Yeargin was involved in the sale of materials to the building owner. Since Yeargin was not involved in the purchase, ownership, or sale of any of the materials under the Division's scrutiny, Yeargin cannot be liable as a vendor. See Utah Code Ann. § 59-12-102(27)(a)(i) (1996) (defining vendor as "any person receiving any payment or consideration upon a sale of tangible personal property or any other taxable item or service" (emphasis added)).

Finally, the Division's argument that Yeargin is liable for taxes as a "retail consumer" under Utah Code Ann. § 59-12-107 (1996) was not mentioned in any document submitted or argument presented to the tax commission. The Division asserted tax liability only under Utah Code Ann. § 51-12-103 (1996) before the Tax Commission. Thus, the Tax Commission did not hear or rule on section 59-12-107 as a basis for liability. Accordingly, the issue was not preserved for appeal. "It is well settled that, absent extraordinary circumstances or plain error, issues cannot be raised for the first time on appeal." US Xpress Inc., 886 P.2d at 1119. "[T]he final settlement of controversies[] requires that a party must present [its] entire case and [its] . . . theories of recovery to the trial court; and having done so, [it] cannot thereafter change to some different theory and thus attempt to keep in motion a merry-go-round of litigation." Bundy v. Century Equip. Co., 692 P.2d 754, 758 (Utah 1984) (citation omitted). Further, the Division has not claimed, and we do not find, plain error or extraordinary circumstances. Thus, we cannot consider the Division's retail consumer theory. See id.

In Yeargin II, the supreme court held that Yeargin was not liable for sales tax as a real property contractor. On remand, we hold that Yeargin is not liable for taxes as either a vendor or consumer. Accordingly, we reverse the Tax Commission's order ruling that Yeargin is liable for the taxes assessed.

Norman H. Jackson,
Associate Presiding Judge -----


Pamela T. Greenwood,
Presiding Judge

Judith M. Billings, Judge

1. "The express ruling by [the supreme court] on all issues raised by prior appeal becomes the law of the case and is binding upon the parties, the trial court[, the court of appeals,] and [the supreme court]." C & J Indus. v. Bailey, 669 P.2d 855, 856 (Utah 1983).