Envirocare v. Tax Comm

1 In 2003, the Radioactive Waste Disposal, Processing, and
Recycling Facility Tax, section 59-24-103.5, was adopted. This
tax applies from July 1, 2003, to the present. In 2003, section
59-24-103, Tax Imposed on Radioactive Waste, was amended to apply
between April 1, 2001, to June 30, 2003. The tax imposed by
section 59-24-103 is at issue in this case.
2009 UT 1
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
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Envirocare of Utah, Inc., No. 20080175
Plaintiff and Appellant,
v. F I L E D
Utah State Tax Commission,
Defendant and Appellee. January 16, 2009
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Third District, Salt Lake
The Honorable John Paul Kennedy
No. 070904941
Attorneys: Mark K. Buchi, Steven P. Young, Salt Lake City,
for plaintiff
Mark L. Shurtleff, Att’y Gen., Clark L. Snelson,
Asst. Att’y Gen., Salt Lake City, for defendant
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DURHAM, Chief Justice:
¶1 Envirocare of Utah appeals from a ruling by the
district court affirming a final decision of the Utah State Tax
Commission. The district court granted summary judgment to the
Commission based on stipulated facts. We affirm.
BACKGROUND
¶2 At issue in this case is the proper calculation of
Envirocare’s tax base for purposes of the Radioactive Waste
Facility Tax (Waste Tax) imposed by Utah Code sections 59-24-101
to -109, adopted by the legislature in 2001, and amended in 2003.
Utah Code Ann. §§ 59-24-101 to -109 (2006).1 The statute imposes
a tax on Envirocare’s gross receipts for disposal of waste,
defined as “all consideration an owner or operator of a
radioactive waste facility receives for the disposal of
radioactive waste in the state, without any deduction or expense
paid or accrued related to the disposal of the radioactive
waste.” Utah Code Ann. § 59-24-102(5)(a). Envirocare argues

2 The definition of what gross receipts does not include,
found in section 59-24-102(5)(b), was amended in 2003. In 2001,
gross receipts did not include “fees collected under Section 19-
3-106.” In 2003, exclusions of gross receipts was amended to
read “fees collected under Section 19-3-106 or any other taxes
collected for a state or federal governmental entity.” Compare
Utah Code Ann. § 59-24-102(5)(b) (Supp. 2001) with Utah Code Ann.
§ 59-24-102(5)(b) (2006). We cite to the 2001 version of this
(continued...)
No. 20080175 2
that it is entitled to exclude two items from its calculation of
gross receipts for taxes imposed between April 1, 2001, to June
30, 2003: (1) the amount it calculates on every transaction for
the Waste Tax, which it bills separately to the customer and
which it claims should be treated as a pass-through tax for which
it is only the collector, and (2) payments it makes to Tooele
County pursuant to a contract (the Clive Repository Agreement,
hereafter the Agreement). The Agreement was entered into in 1987
by Envirocare’s predecessor in interest and assigned to
Envirocare on October 4, 1988. Pursuant to the Agreement, Tooele
County purchased property from the state for resale to Envirocare
for the purpose of operating a radioactive waste facility. In
return, Envirocare was obligated to pay a “tippage fee” to the
county for all radioactive waste stored or disposed on its
property equal to a percentage of its gross revenues. Envirocare
argues that these payments constitute a tax that must be excluded
from its gross receipts.
ANALYSIS
¶3 The determination of the meaning of gross receipts
under Utah Code section 59-24-102(5) is a question of law, which
we review for correctness. Sill v. Hart, 2007 UT 45, ¶ 5, 162
P.3d 1099. The plain language application of contract provisions
is also a question of law which we review for correctness.
Hoggan v. Hoggan, 2007 UT 78, ¶ 7, 169 P.3d 750. We will discuss
Envirocare’s claimed exemptions separately.
I. ENVIROCARE MAY NOT PROPERLY DEDUCT WASTE TAXES
BILLED TO ITS CUSTOMERS FROM ITS GROSS RECEIPTS
UNDER THE 2001 VERSION OF
THE WASTE TAX STATUTE
¶4 As indicated above, section 59-24-102(5)(a) defines
gross receipts as “all consideration an owner or operator of a
radioactive waste facility receives for the disposal of
radioactive waste in the state, without any deduction or expense
paid or accrued related to the disposal of the radioactive
waste.” Utah Code Ann. § 59-24-102(5)(a) (2006). Subsection (b)
specifically excludes from gross receipts fees collected under
section 19-3-106. Utah Code Ann. § 59-24-102(5)(b) (Supp.
2001).2 Envirocare argues that the Waste Tax is a tax on the

2 (...continued)
subsection as it applies to the taxing period at issue.
3 No. 20080175
waste deposit transaction, that it merely collects the tax from
the customer and passes it through to the state, and that to
include the amount of that tax in its taxable gross receipts
creates a “tax on a tax” not permitted by law. Envirocare argues
that the language in section 59-24-103, which states, “there is
imposed a tax on radioactive waste received at a radioactive
waste facility,” means the tax is being imposed on its customers
and not on Envirocare. Utah Code Ann. § 59-24-103 (2006). We
disagree.
¶5 The language of section 59-24-103 is clear and
unambiguous. It does not impose a tax on the customer of a waste
disposal facility, nor on the waste itself. It imposes a tax on
the facility, a fact clarified when the Act was renamed in 2003
from the “Radioactive Waste Tax Act” to the “Radioactive Waste
Facility Tax Act.” Id. § 59-24-101. Even prior to the
clarification in the name of the Act, however, its language was
always clear in imposing the tax on the facility itself; the tax
is essentially on the privilege of doing business as a waste
storage enterprise. No tax liability exists for the generation
and depositing of the waste under this Act, and Envirocare cannot
create such liability merely by the use of a separate invoice
item it labels as “waste tax” and requires its customers to pay.
When a term is not defined by statute, we look to its common
usage to define it. Zoll & Branch, P.C. v. Asay, 932 P.2d 592,
594 (Utah 1997). “All consideration” as used in the statute
simply means all payments received by Envirocare, regardless of
how those payments are described in its billing process.
¶6 The statute specifically precludes the deduction from
gross receipts of any of Envirocare’s expenses related to the
receipt and disposal of radioactive waste. Utah Code Ann. § 59-
24-102(5)(a) (2006). The payment of the Waste Tax is one of
those expenses. The legislature clearly knew how to identify
items that could be excluded from the tax base, as illustrated by
subparagraph (b), which excludes “fees collected under Section
19-3-106.” Utah Code Ann. § 59-24-102(5)(b) (Supp. 2001).
Section 19-3-106 provides: “An owner or operator of a commercial
radioactive waste treatment or disposal facility that receives
radioactive waste shall collect a fee from the generator of the
waste as provided in Subsection (1)(b).” Utah Code Ann. § 19-3-
106 (Supp. 2001). Thus, with respect to the fees identified in
these provisions, Envirocare is the agent of the state in
collecting amounts for which the generator of the waste is liable
and on which Envirocare cannot be taxed. With respect to the
Waste Tax, by contrast, Envirocare is not the agent of the state
for collecting taxes owed by a third party, but is itself the
entity liable for the tax.

No. 20080175 4
¶7 Envirocare’s argument that this result creates “tax
pyramiding” depends on its notion that the customers of
Envirocare are actually paying a tax, a position we have
rejected. Envirocare is entitled to charge its customers what
the market will bear, including amounts it intends to use for
meeting its own Waste Tax liability. It may also label those
amounts as it chooses in its invoices, but the labels do not
result in a government imposed tax on a tax. The Waste Tax is a
tax on the economic activity of commercial waste facilities--the
receipt and disposal of radioactive waste. It is not a tax on
the generation of the waste or the waste itself.
II. ENVIROCARE MAY NOT DEDUCT FROM ITS GROSS RECEIPTS AMOUNTS
PAID TO TOOELE COUNTY UNDER THE AGREEMENT
¶8 Envirocare’s arguments with respect to its payments to
Tooele County are essentially the same as those regarding the
Waste Tax. It apparently calculates and “passes on” to its
customers the amounts it is contractually obligated to pay to
Tooele County under the Agreement, and it asserts that these
payments are merely pass-through collections on behalf of the
County and therefore not part of its gross receipts. The Waste
Tax argument discussed above failed because Envirocare is not an
agent of the state in collecting a tax from a third party.
Envirocare’s argument with respect to the Agreement fails because
the payments are not even a tax. The Agreement is a contract for
the acquisition of Envirocare’s property. The amounts Envirocare
is contractually obligated to pay to the County are consideration
for the acquisition of the land. Tooele County has no authority
under state law to levy any sort of tax on the disposal of
radioactive waste. Therefore, Envirocare’s contractual payments
cannot be considered anything but part of its expenses in the
commercial waste disposal business, and they may not be excluded
from gross receipts.
CONCLUSION
¶9 The Radioactive Waste Tax Act and its amended version,
the Radioactive Waste Facility Tax Act, are unambiguous in
requiring the inclusion of all payments received by Envirocare
for the receipt and disposal of radioactive waste in its gross
receipts for tax purposes. The statute does not permit
Envirocare to deduct from its gross receipts amounts it bills
customers for use either in paying its Waste Tax or in meeting
its contractual obligations to Tooele County. The judgment of
the trial court is affirmed.
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¶10 Associate Chief Justice Durrant, Justice Wilkins,
Justice Parrish, and Justice Nehring concur in Chief Justice
Durham’s opinion.