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Delcon Partners LLC v. Wyoming Department of Revenue

Supreme Court of Wyoming

October 21, 2019

DELCON PARTNERS LLC, Appellant (Petitioner),
v.
WYOMING DEPARTMENT OF REVENUE, Appellee (Respondent).

          W.R.A.P. 12.09(b) Certification from the District Court of Teton County The Honorable Timothy C. Day, Judge.

          Representing Appellant: Matthew Kim-Miller, Holland & Hart LLP, Jackson, Wyoming. Argument by Mr. Kim-Miller.

          Representing Appellee: Bridget Hill, Attorney General; Brandi Monger, Deputy Attorney General; Karl Anderson, Senior Assistant Attorney General; Andrew Kuhlmann, Senior Assistant Attorney General. Argument by Mr. Anderson.

          Before DAVIS, C.J., and FOX, KAUTZ, BOOMGAARDEN, and GRAY, JJ.

          Fox, Justice.

         [¶1] Delcon Partners, LLC (Delcon) purchased 28% of Delcon, Inc.'s [1] (Seller's) tangible and intangible assets. The Department of Revenue (Department) determined the transaction was not exempt from sales tax because Delcon did not purchase at least 80% of the total value of Seller's assets, which included cash and accounts receivable. Delcon appealed to the Wyoming Board of Equalization (Board), arguing that it made no sense to transfer cash and accounts receivable in a business purchase. The Board affirmed the Department's determination, and the district court certified the case to this Court. We affirm.

         ISSUE

         [¶2] Is Delcon's purchase of less than 80% of Seller's assets excluded from the definition of "sale" under Wyo. Stat. Ann. § 39-15-101(a)(vii)(N) and, thus, exempt from sales tax?

         FACTS

         [¶3] Delcon purchased assets valued at $1, 150, 000 from Seller, an HVAC services business. Delcon did not purchase any of Seller's cash, checking and savings accounts, accounts receivable, promissory notes, "or other amounts owing to Seller" for work done prior to the closing. The total value of cash and accounts receivable excluded from the sale was $3, 010, 602. The parties agreed that Delcon purchased 28% of Seller's "assets" and "intangible value."

         [¶4] Delcon requested that the Department review the transaction to determine whether Wyo. Stat. Ann. § 39-15-101(a)(vii)(N) excluded it from the definition of sale, exempting it from sales tax. The section excludes from the definition of "sale":

(a)(vii) . . . an exchange or transfer of tangible personal property upon which the seller . . . has directly or indirectly paid sales or use tax incidental to:
(N) The sale of a business entity when sold to a purchaser of all or not less than eighty percent (80%) of the value of all of the assets which are located in this state of the business entity when the purchaser continues to use the tangible personal property in the operation of an ongoing business entity in this state. . . .

Wyo. Stat. Ann. § 39-15-101(a)(vii)(N) (LexisNexis 2019). The Department determined Wyo. Stat. Ann. § 39-15-101(a)(vii)(N) only applies where at least 80% "of the value of all of the assets [of the business entity] which are located in this state" are purchased. Because Delcon had only purchased 28% of Seller's assets, the ...


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