In Wyoming Department of Revenue v. PacifiCorp and Merit Energy Company, LLC, the Wyoming Supreme Court held that Merit Energy, an oil and gas producer, did not qualify for a sales tax exemption intended for transportation companies.
The case began when the Department of Revenue (DOR) denied Merit’s request for a refund of sales tax paid on electricity purchased between March 2020 and March 2023. Merit argued that these electricity purchases were exempt because it was engaged in the “transportation business.” Merit appealed the denial to the Wyoming State Board of Equalization. The Board concluded that a portion of Merit’s electricity purchases from PacifiCorp qualified for exemption under Wyo. Stat. Ann. § 39‑15‑105(a)(iii)(E) (2023). The DOR then sought judicial review in the district court. Merit moved to certify the case directly to the Wyoming Supreme Court under W.R.A.P. 12.09(b), and the Department joined the motion. The Supreme Court accepted certification and ultimately reversed the Board’s decision.
In reaching its conclusion, the Court evaluated whether the relevant statutes were unambiguous. It then reviewed the Board’s reasoning, including its reliance on the Groetzinger test, which is used to determine whether a taxpayer is “engaged in a trade of business” based on whether or not the taxpayer is 1) “involved in the activity with continuity and regularity;” and 2) “the taxpayer’s primary purpose for engaging in the activity must be for income or profit.”
The Court determined that the Board erred on two accounts. First, the Board did not consider what “transportation” means within the context of the statute or apply that definition to Merit’s activities. Second, by applying Groetzinger without first determining what qualifies as transportation, the Board broadened the statute beyond its intended scope.
Because Merit is undisputedly engaged in oil and gas production, not primarily in the transportation business, it did not qualify for the exemption. The Court further noted that even if Merit were considered a transportation business, the exemption still would not apply because the electricity at issue was consumed for production, not transportation, purposes. This case underscores the importance of statutory language and the necessity of applying definitions and analytical tests within their proper context (Wyoming Supreme Court decision in Wyoming Department of Revenue v. PacifiCorp and Merit Energy Co., issued Dec. 2, 2025, Case No. S‑25‑0006).