[No. 35883-2-II. Division Two. May 20, 2008.]
[1] Statutes — Construction — Review — Standard of Review. A trial court's interpretation of a statute is reviewed by an appellate court de novo. [2] Statutes — Construction — Legislative Intent — In General. A court's objective in construing a statute is to ascertain and carry out the legislature's intent. [3] Statutes — Construction — Plain Meaning — Determination. When a statute's meaning is plain on its face, a court will apply that meaning. Plain meaning is discerned not only from the statutory language but also from the context surrounding the statute, related provisions, and the statutory scheme as a whole. Only if a provision remains susceptible to more than one reasonable interpretation will a court employ tools of statutory construction to discern the provision's meaning. [4] Statutes — Construction — Meaning of Words — Statutory Definition — Effect. Courts must apply statutory definitions of statutory terms. [5] Statutes — Construction — Meaning of Words — Statutory Definition — Incorporation by Other Statute — "Insofar as Applicable" — What Constitutes. When one chapter of the Revised Code of Washington provides a series of statutory definitions and another chapter of the code incorporates those definitions "insofar as applicable," the phrase "insofar as applicable" means that the statutory definition does not apply if another statute precludes its use in that context. [6] Statutes — Construction — Amendment — Judicial Amendment — Additional Language. A court may not add language to an unambiguous statute, even if it believes the legislature intended something other than what it expressed. [7] Municipal Corporations — Taxation — Local Tax — Natural Gas Use Tax — "Use" — What Constitutes — First Exercise of Dominion and Control. Under RCW 82.14.020(9) (formerly RCW 82.14.020(7) (1983)), which provides that "[t]he meaning ascribed to words and phrases in chapter[ ] 81.12 RCW, . . . insofar as applicable, shall have full force and effect with respect to taxes imposed under the authority of [chapter 82.14 RCW]," the definition of "use," "used," "using," or "put to use" set forth in RCW 82.12.010(5)(a) (formerly RCW 82.12.010(2) (1994)) applies to RCW 82.14.230(1), which authorizes cities to levy "a use tax for the privilege of using natural gas . . . in the city as a consumer." Under the statutory definition, a person "uses" natural gas at such place or location where the person first takes dominion and control over the gas in Washington. Where a person takes dominion and control of natural gas in one city in Washington and then consumes the gas in another city, the person "uses" the gas in the first city and may not be taxed for the use by the second city. HUNT, J., concurs by separate opinion. Nature of Action: A corporation that purchases natural gas in one city in Washington and then consumes the gas in another city sought a refund of natural gas use taxes paid to the city where the gas was consumed. Superior Court: The Superior Court for Thurston County, No. 03-2-02349-1, Richard A. Strophy, J., on January 26, 2007, entered a judgment denying a refund. Court of Appeals: Holding that the corporation did not "use" the natural gas in the city where the gas was consumed because it did not take dominion and control over the gas in that city, the court reverses the judgment and remands the case for entry of a judgment in favor of the corporation. Franklin G. Dinces- (of The Dinces Law Firm), for appellant. Robert M. McKenna-, Attorney General, and Peter B. Gonick-, Assistant, for respondent. ¶1 ARMSTRONG, J. — G-P Gypsum Corporation appeals the trial court's decision denying it a refund of Tacoma city use taxes it paid for its use of natural gas in Tacoma. It argues that the statutory definition of "use" limits Tacoma's tax to situations where the taxpayer first exercises its dominion or control over the gas in Tacoma. Gypsum reasons that because it first exercised dominion over its natural gas in Washington outside Tacoma, it did not "use" the gas in Tacoma and the local tax does not apply. Because the only statutory definition of "use" supports Gypsum's argument, we reverse and remand for entry of judgment granting Gypsum the refund requested. FACTS ¶2 At trial, the parties stipulated to the following facts. Gypsum manufactures wall board in Tacoma, Washington, consuming natural gas in the process. During the time in question, Gypsum purchased natural gas at stations in Sumas and Sumner, both cities in Washington, then transported the gas to its Tacoma plant. Gypsum paid the city of Tacoma a total of $853,722.55 for the natural gas it consumed in Tacoma from January 1, 1996, to December 31, 2000. ¶3 Gypsum sought a refund of the entire amount. After exhausting its remedies with the Department of Revenue (Department), Gypsum sued for a refund in Thurston County Superior Court. Gypsum alleged that it owed no Tacoma natural gas use taxes because it did not first take possession, dominion, or control of the gas in Tacoma. ¶4 The trial court denied Gypsum's request for a refund of the Tacoma natural gas use taxes, finding that even though Gypsum took dominion and control over its natural gas at the Sumas or Sumner stations where it purchased the gas, the Tacoma tax still applied because a "harmonious reading of RCW 82.14 and corresponding statutes leads to only one reasonable conclusion - that the natural gas use tax of RCW 82.14.230(1) is imposed upon the first use or the first exercise of dominion and control over natural gas within a city." Clerk's Papers (CP) at 179. ¶5 The issue is whether Gypsum is subject to Tacoma's local use tax for natural gas under RCW 82.14.230 even though its first act of dominion or control over the gas in Washington occurred outside the city. ANALYSIS ¶6 Gypsum argues that local natural gas use taxes, just like any other use tax, may be imposed only at the place of first use within Washington, not on any subsequent use elsewhere. Thus, according to Gypsum, because it first exercised dominion or control over its natural gas in Washington outside of Tacoma, Tacoma's tax does not apply to it. Gypsum relies on the statutory definition of "use" in former RCW 82.12.010(2) (1994), various judicial and administrative decisions limiting other use taxes to "the first act" of dominion and control in Washington and not "any subsequent act," and the Department's alleged administrative practice of imposing the state and local use taxes simultaneously. It also argues that if the meaning of "use" is ambiguous, that ambiguity must be resolved in favor of the taxpayer. A. Statutory Background ¶8 This case concerns the interplay between two chapters of Washington's revenue code, chapters ¶9 chapter 82.12 RCW concerns state use taxes. RCW 82.12.022(1) levies "a use tax for the privilege of using natural gas . . . within this state as a consumer." Former RCW 82.12.010(2) ¶10 chapter 82.14 RCW authorizes local use taxes. RCW 82.14.230(1) authorizes cities to levy "a use tax for the privilege of using natural gas . . . in the city as a consumer." The term "use" is not defined, but former RCW 82.14.020(7) (1983) B. Application 1. "Insofar as Applicable" ¶13 Gypsum argues that the plain language of former RCW 82.14.020(7) applies the statutory definition of "use" to the local natural gas tax, notwithstanding the phrase "insofar as applicable," because neither the state nor local natural gas use tax statute precludes the definition from applying. Therefore, the definition must apply equivalently to the same "use" event as for any other use tax: the first taking of dominion and control in Washington. ¶14 The Department relies on St. Paul & Tacoma Lumber Co. v. State, 40 Wn.2d 347, 353, 243 P.2d 474 (1952), for the proposition that a court may use the phrase "insofar as applicable" to reject a statutory definition and use the "generally understood meaning" of a term when the statutory definition "does not make sense" in that context. Br. of Resp't at 14. In St. Paul & Tacoma Lumber Co., as here, one title of the revenue code provided a series of statutory definitions, and another title incorporated those definitions " 'in so far as applicable.' " St. Paul & Tacoma Lumber Co., 40 Wn.2d at 353 (quoting Rem. Rev. Stat. § 8370-35(e) Supp. 1949). But St. Paul & Tacoma Lumber Co. differed from this case in one critical respect: the definition statute itself stated that it applied " 'unless otherwise required by the context.' " St. Paul & Tacoma Lumber Co., 40 Wn.2d at 352 (quoting LAWS OF 1949, ch. 228, § 2). The court held that the statutory definition was therefore not "applicable" when a different definition was "required by the context" because "by its express terms, the statutory definition does not govern." St. Paul & Tacoma Lumber Co., 40 Wn.2d at 353. ¶15 Here, by contrast, no statute precludes the definition of "use" in RCW 82.12.010 from applying to the local gas use tax authorized by chapter 82.14 RCW. The Department sets out in some detail the legislature's intent in creating the tax—to replace the local utility tax revenue cities collected from local distributors who sold to consumers like Gypsum. But we do not resort to extrinsic sources in interpreting a statute unless we find more than one reasonable interpretation of the statutory language. See Tingey, 2. "Ordinary Meaning" ¶16 The concurrence discusses the presence of the "ordinary meaning" language in former RCW 82.12.010(2), noting that the "ordinary meaning" of the term "use" would be "consumption." See concurrence at 8. But the concurrence's resort to a dictionary definition is premature where the statute specifically defines "use" as "the first act [of] dominion or control." See Dahl-Smyth, Inc. v. City of Walla Walla, 148 Wn.2d 835, 842-43, 64 P.3d 15 (2003) (only where no statutory definition is provided does the court refer to a word's common meaning in the dictionary); see also State v. Lilyblad, 163 Wn.2d 1, 9, 177 P.3d 686 (2008) ("All words must be read in the context of the statute in which they appear, not in isolation or subject to all possible meanings found in a dictionary."). The meaning of words in a statute may be indicated or controlled by those with which they are associated. Lilyblad, 163 Wn.2d at 9 (quoting State v. Roggenkamp, 153 Wn.2d 614, 623, 106 P.3d 196 (2005)); see also City of Seattle v. Dep't of Labor & Indus., 136 Wn.2d 693, 699, 965 P.2d 619 (1998) (rule of ejusdem generis provides that specific terms modify or restrict the application of general terms where both are used in sequence). We also note that because use taxes are imposed only once, a precise rather than "expansive" definition of the triggering event is required. Concurrence at 9; see WAC 458-20-178(3). Under these circumstances, we have no choice but to apply the legislature's explicit definition over its vague reference to "ordinary meaning." 3. "First Act within This City" ¶17 The Department argues finally that the appropriate definition for "use" as it pertains to the local tax is the consumer's first use in the city; thus, when Gypsum transports the gas into the city, it owes the city tax. Such an interpretation is contrary to the language of former RCW 82.12.010(2), which defined "use" as the "first act within this state by which the taxpayer takes or assumes dominion or control." (Emphasis added.) Moreover, the Department's interpretation would make the gas taxable in every city through which Gypsum transports it, a result that runs counter to the legislature's mandate that state and local sales and use taxes are to be uniform and collected at the same time and place. ¶18 In conclusion, we find no ambiguity in chapters ¶19 We reverse and remand for entry of judgment granting Gypsum the refund requested. BRIDGEWATER, J., concurs. ¶20 HUNT, J. (concurring) — I agree with my colleagues that Tacoma improperly taxed Gypsum. But I write separately to clarify the statutory definition of "use" in former RCW 82.12.010(2) (1994). ¶21 The version of former RCW 82.12.010(2) in effect during the period of contested taxation here, January 1, 1996, to December 31, 2000, provided the following definition of "use": "Use," "used," "using," or "put to use" shall have their ordinary meaning, and shall mean the first act within this state by which the taxpayer takes or assumes dominion or control over the article of tangible personal property (as a consumer), and include installation, storage, withdrawal from storage, or any other act preparatory to subsequent actual use or consumption within this state. (Emphasis added.) Definitions—Where retail sale occurs . . . . . . . . The meaning ascribed to words and phrases in [chapter 82.12 RCW] insofar as applicable, shall have full force and effect with respect to taxes imposed under authority of this chapter. (Recodified as RCW 82.14.020(9).) ¶22 In essence, the majority adopts Gypsum's argument and holds that for purposes of imposing a use tax on natural gas, the legislature limited former RCW 82.12.010(2)'s definition of "use" to mean only "the first taking of dominion and control in Washington." Majority at 4. In my view, the majority's narrow reading of former RCW 82.12.010(2)'s definition is contrary to the statute's plain language because it ignores the preceding "ordinary meaning" of "use" in the first clause of the statute. In contrast, the plain language of the statute provides a more expansive definition, including as a means of taking or assuming "dominion and control" that "use . . . shall have [its] ordinary meaning." Former RCW 82.12.010(2). I. STATUTORY CONSTRUCTION ¶23 When interpreting statutory language, our goal is to carry out the legislature's intent. Simpson Inv. Co. v. Dep't of Revenue, 141 Wn.2d 139, 148, 3 P.3d 741 (2000). If a statute is clear on its face, we derive the legislature's intent from the plain language and ordinary meaning of the statute alone. Berrocal v. Fernandez, 155 Wn.2d 585, 590, 121 P.3d 82 (2005). II. PLAIN LANGUAGE "Ordinary Meaning" ¶24 The plain language of the first clause of former RCW 82.12.010(2) expressly encompasses the ordinary meaning of the word "use": " 'Use,' 'used,' 'using,' or 'put to use' shall have their ordinary meaning." Where, as here, the legislature "has not specifically defined" the "ordinary meaning" of "use," ¶25 Thus, the legislature has not restricted former RCW 82.12.010(2)'s definition of "use" to occur only when a party establishes "dominion and control" over natural gas. Rather, "use" can also occur, for example, when a customer "consumes" natural gas, which may in retail customer circumstances also constitute that customer's first exercise of "dominion and control" over the gas. ¶26 Here, however, regardless of the applicable definition of "use," I agree with the majority that Gypsum "used" the natural gas at issue when it first exercised dominion and control over the gas after it entered the state near Sumas. Intent—1989 c 384: "Due to a change in the federal regulations governing the sale of brokered natural gas, cities have lost significant revenues from the utility tax on natural gas. It is therefore the intent of the legislature to adjust the utility and use tax authority of the state and cities to maintain this revenue source for the municipalities and provide equality of taxation between intrastate and interstate transactions." [1989 c 384 §1.] Thus, it appears, for example, that if Northwest Pipelines had taken control over the natural gas at Sumas and piped it directly to Gypsum's Tacoma plant, the city of Tacoma could have taxed Gypsum's first use of and exercise of control over the natural gas because it occurred within city limits. Otherwise, however, Tacoma cannot take advantage of this ameliorating statute. As Tacoma contends, however, the legislature may have intended to create two taxable events under the circumstances present here—the first event, subject to the state use tax, when Gypsum first exercised dominion and control over the gas at Sumas; and the second event, subject to a municipal use tax, when Gypsum consumed the gas at its Tacoma plant. But if this was the legislature's intent in enacting the ameliorating use tax statute for municipalities, then it is for the legislature, not the court, to amend the statutory scheme to allow cities to impose and to collect such natural gas use taxes. ¶27 Accordingly, I concur in the majority's holding that Tacoma improperly collected a use tax from Gypsum and that Tacoma must refund this tax to Gypsum.