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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. United Parcel Service Company v. State, Dept. of Revenue (4/7/00) sp-5257

United Parcel Service Company v. State, Dept. of Revenue (4/7/00) sp-5257

     Notice:  This opinion is subject to correction before publication in
the Pacific Reporter.  Readers are requested to bring errors to the attention of the
Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone (907)
264-0608, fax (907) 264-0878.


             THE SUPREME COURT OF THE STATE OF ALASKA


UNITED PARCEL SERVICE COMPANY,)    
                              )    Supreme Court No. S-8561
               Appellant,     )
                              )    Superior Court No.
          v.                  )    3AN-96-8549 CI
                              )
STATE OF ALASKA, DEPARTMENT   ) 
OF REVENUE,                   )    O P I N I O N
                              )
               Appellee.      )    [No. 5257 - April 7, 2000]
______________________________)


          Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
                 Sigurd E. Murphy, Judge pro tem.


          Appearances:  Richard D. Birns and Madeleine
Sann, Philadelphia, Pennsylvania, and Joseph R.D. Loescher, Hughes
Thorsness Powell Huddleston & Bauman LLC, Anchorage, for Appellant. 
Stephen C. Slotnick, Assistant Attorney General and Bruce M.
Botelho, Attorney General, Juneau, for Appellee. 


          Before:  Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.


          BRYNER, Justice.
                                
I.   INTRODUCTION
          United Parcel Service Company, an air carrier, used
17,611,870 gallons of jet fuel on domestic flights departing
Anchorage but filed Alaska tax returns reporting only 2,159,721
gallons as taxable -- the fuel that its flights consumed in Alaska. 
The state assessed taxes for the total fuel used.  Appealing this
assessment, UPS insists that Alaska's Motor Fuel Tax Act [Fn. 1]
taxes only "fuel consumed."  Since "consumed" ordinarily means
"burned,"  UPS argues that it owes taxes only for fuel actually
burned in Alaska.  We affirm, holding that although the act taxes
jet fuel "consumed," it measures consumption at the pump, not in
the plane.
II.  FACTS AND PROCEEDINGS
          This case arises on stipulated facts.  United Parcel
Service does business in Alaska as a direct air carrier.  From
December 1, 1991, through March 31, 1993, UPS operated flights from
Anchorage to both foreign and domestic destinations.  The company
bought 34,227,324 gallons of jet fuel in Anchorage during this
period, storing it in bulk tanks until it was needed for use in
departing UPS aircraft.  UPS burned 17,611,870 gallons of this fuel
in domestic flights and 16,615,454 gallons in international
flights. 
          Under Alaska's Motor Fuel Tax Act, jet fuel sold in
Alaska is ordinarily taxed upon transfer. [Fn. 2]  But the act
exempts jet fuel sold for use on direct foreign flights. [Fn. 3] 
Because UPS bought fuel in bulk for both foreign and domestic
flights, the company paid no tax at the time of purchase.  It
eventually reported as taxable 2,159,721 gallons of fuel, a figure
representing the estimated amount of fuel actually consumed by UPS
domestic flights in airspace over Alaska. 
          In June 1993 the Alaska Department of Revenue, Income and
Excise Audit Division, audited UPS and assessed additional taxes
totaling $385,250.36, plus interest of $39,788.19.  The assessment
was for the 15,452,149 gallons of fuel that UPS loaded into its
domestic flights but did not count as being consumed in Alaska. 
UPS appealed this assessment.  Following a hearing, the department
affirmed the division's assessment, concluding that UPS was subject
to tax as a purchaser under AS 43.40.010(a) for all of the fuel
that it purchased for use on its domestic flights.  UPS appealed to
the superior court, which affirmed the department's assessment,
ruling that UPS was subject to the added tax both as a purchaser
under AS 43.40.010(a) and as a user under AS 43.40.010(b).  
          UPS appeals, claiming that it is not subject to the added
tax as either a purchaser or user. 
III. DISCUSSION
     A.   Standard of Review 
          We do not defer to a decision of the superior court
acting as an intermediate court of appeal. [Fn. 4]  Instead, we
independently and directly review the merits of the underlying
administrative determination. [Fn. 5]  When a case concerns
"statutory interpretation or other analysis of legal relationships
about which courts have specialized knowledge and experience," we
substitute our judgment for that of the agency, [Fn. 6] "adopt[ing]
the rule of law that is most persuasive in light of precedent,
reason, and policy." [Fn. 7]  But we review deferentially an
agency's interpretation of its own regulations. [Fn. 8]  
     B.   UPS Is Liable for Taxes on All of the Fuel It Loaded into
Aircraft Departing Anchorage for Domestic Destinations. 
          1.   Applicable law and the department's decision
          Alaska's Motor Fuel Tax Act taxes "all motor fuel sold"
[Fn. 9] and "all motor fuel consumed by a user." [Fn. 10]  The
version of the act in force during the period at issue here taxed
the sale or use of jet fuel at two and one-half cents a gallon [Fn.
11] but exempted jet fuel sold for use in flights to foreign
countries. [Fn. 12]  The act ordinarily required dealers to collect
all sales tax at the time of transfer and required users to remit
use taxes on a monthly basis. [Fn. 13]  But dealers were not
responsible for collecting tax for sales to buyers who certified
that the fuel was not intended for a taxable use. [Fn. 14]  The act
distinguished a taxable sale from a taxable use by defining "user"
to include any "person consuming or using motor fuel, who . . .
purchases or receives fuel in the state that is not taxed at the
time of purchase or receipt." [Fn. 15]  Thus, a buyer who avoided
taxation by certifying that fuel was not intended for a taxable use
but later consumed it for a taxable use became subject to tax as a
user.
          This tax scheme created a complication for air carriers
like UPS, who bought bulk jet fuel intended for use in both foreign
and domestic flights -- that is, fuel intended for both exempt and
non-exempt uses.  Because these companies could not predict the
exact portion of the bulk fuel that they eventually would use on
exempt foreign flights, the state insisted that fuel dealers
collect tax on the entire bulk sale, requiring buyers to apply for
refunds later, based on actual use of the fuel in exempt flights to
foreign countries.
          The Department of Revenue addressed this situation in
1984 by revising its regulations.  Responding to complaints that
the refund process caused air carriers cash flow problems and was
"a waste of administrative resources by both the airlines and the
Department of Revenue," the department promulgated 15 AAC
40.020(b).  For most bulk sales of fuel, subsection .020(b)
preserved the existing system of full taxation upon sale subject to
later refund based on actual exempt use.  But the regulation made
an exception for mixed-purpose bulk sales of jet fuel to air
carriers who had direct foreign flights, expressly exempting these
transactions at the time of the sale:  
               Bulk sales of fuel to a person who uses a
common storage tank servicing both taxable and nontaxable uses,
except bulk sales of jet fuel to a person who flies directly from
the state to a foreign country, are subject to the motor fuel tax
under AS 43.40.010 - AS 43.40.100, but the portion actually used
for nontaxable purposes is eligible for a tax refund upon
application to the department.  A dealer who makes bulk sales of
motor fuel shall collect and remit the tax in accordance with this
chapter, except that if the sale is a sale of jet fuel to a person
who flies directly from the state to a foreign country the tax may
not be collected.[ [Fn. 16]]
          In challenging the department's tax assessment, UPS
invoked this regulation to support its claim that the company only
owed taxes for the jet fuel that it actually burned on domestic
flights in Alaska air space.  Pointing out that the Motor Fuel Tax
Act defines a motor fuel "user" to include any person who buys fuel
"that is not taxed at the time of purchase," [Fn. 17] UPS reasoned
that 15 AAC 40.020(b) made UPS a "user" because it prohibited
collection of tax at the time of UPS's bulk purchases of jet fuel. 
Thus, according to UPS, the company was liable for tax as a user
under the act's use tax provision, [Fn. 18] rather than as a buyer
under the act's sales tax provision. [Fn. 19]  Emphasizing that the
use tax provision levies tax on motor fuel "consumed by a user,"
[Fn. 20] UPS insisted that it should only have to pay for jet fuel
that its aircraft actually burned in Alaska.
          Senior Revenue Hearing Examiner Diane Colvin rejected
UPS's position and affirmed the department's assessment, observing
that
          [UPS] apparently believes in magic.  It is not
transformed from a purchaser to a user through the wizardry of an
exception created by regulation for purchasers of certain bulk
fuels.  15 AAC 40.020(b) addresses collection and refund of the
motor fuel tax for certain nontaxable purchases.  It does not grant
an exemption from the incidence of the tax.

          After reviewing relevant legislative history and the
circumstances surrounding the department's promulgation and
enforcement of 15 AAC 40.020(b), the hearing officer found it
"apparent that the legislature did not intend to exempt bulk
aviation fuel sold for use in domestic flights," and that "[i]t was
obviously the intent of the legislature that fuel purchased for use
in domestic flights be taxed."  The hearing officer concluded that
"15 AAC 40.020(b) relieves purchasers from the need to seek tax
refunds, and dealers from the collection requirement, in bulk sales
of aviation jet fuel, but it does not exempt purchasers from the
tax levied on purchasers by AS 43.40.010(a)."  She therefore ruled
that UPS was liable for sales tax on all of the jet fuel it
purchased for use in its domestic flights.  The department adopted
this ruling.
          2.   Regardless of whether UPS is taxed as a purchaser
or as a user, it is liable for tax on all jet fuel used in its
domestic flights. 

          On appeal, UPS again contends that it must be taxed as a
user under AS 43.40.010(b) and that, as a user, it should pay only
for the actual fuel "consumed" by its domestic flights within
Alaska.  We find partial merit in these contentions. 
Subsection .020(b) barred the state from collecting tax from UPS at
the time of the company's bulk purchases, expressly providing that
"if the sale is a sale of jet fuel to a person who flies directly
from the state to a foreign country the tax may not be collected." 
Because UPS was exempt from paying tax upon purchase, it
necessarily became subject to taxation as a user, since the act and
the department's regulations alike define "user" to include any
person who purchases motor fuel in the state "that is not taxed at
the time of purchase." [Fn. 21]  
          We nonetheless agree in substance with the department's
decision that this regulation "does not grant an exemption from the
incidence of the tax" imposed as a result of UPS's bulk purchase.
As the hearing officer's decision correctly points out, the
circumstances surrounding the department's adoption of
subsection .020(b) provide compelling evidence that "both the
airlines and the Division viewed deferral [of the sales tax imposed
under AS 43.40.010(a)] as a means of solving the problems caused by
the requirement imposed on airlines to pay the entire tax due and
then seek refunds for their bulk purchases of exempt motor fuel."
The hearing officer thus justifiably found that, in promulgating
subsection .020(b), the department merely intended to "relieve[]
purchasers from the need to seek tax refunds, and dealers from the
collection requirement" -- that it did not mean to "exempt
purchasers from the tax levied on purchasers by AS 43.40.010(a)."
And as the hearing officer also observed, the department has always
enforced this regulation in accordance with this intended meaning.
The department's interpretation of its own regulations deserves
considerable deference. [Fn. 22]
          UPS nevertheless maintains that it is not claiming an
exemption under subsection .020(b); it insists that the only claim
it raises is one involving statutory interpretation: "What is at
issue . . . is whether the statute imposes tax on [UPS] in the
first place, not whether [UPS] can claim an exemption."  UPS
contends that, in the absence of a taxable sale under
AS 43.40.100(a), it became subject to tax as a user under
AS 43.40.100(b).  Since AS 43.40.100(b) taxes only fuel "consumed
by a user," UPS argues that, as a user of the jet fuel loaded into
its aircraft, it was liable for tax only to the extent that its
fuel was "consumed" in Alaska.  And because "consumed" commonly
means "burned," UPS contends that fuel loaded into its aircraft but
not actually burned over Alaska was not "consumed" in Alaska. [Fn.
23]
          UPS essentially maintains that the plain meaning of the
use tax statute must prevail over the intended meaning of the
department's regulation -- 15 AAC 40.020(b).  But UPS's attempt to
trump the regulation with plain statutory meaning is unconvincing
for three reasons.  First, UPS overlooks that the regulation
explains why the company must now be taxed as a user.  Both the
plain meaning of the act and the history of its enforcement by the
department establish that, before the department adopted subsection
.020(b), bulk sales of jet fuel for storage in tanks serving
taxable and nontaxable uses were taxable sales under
AS 43.40.010(a).  Hence, UPS must rely on the regulation's
exemption from the sales tax in order to claim its current status
as a "user" -- without it, the company would have been required to
pay tax upon purchase.
          Second, UPS's insistence on interpreting the use tax
based on the plain meanings of "consumed by a user" and "consumed"
ignores the legislative history of the definition of "user."  As
earlier indicated, AS 43.40.100(4)(C) defines "user" to include "a
person consuming or using motor fuel who . . . purchases or
receives fuel in the state that is not taxed at the time of
purchase or receipt."  The legislature enacted this definition in
1982. [Fn. 24]  The legislative history of the provision
establishes that it was enacted to plug a loophole that had
prevented the state from collecting taxes from persons who
originally bought fuel tax-free because they intended to use it for
an exempt purpose, but who later used it for a taxable purpose.
[Fn. 25]  The underlying purpose of the definition thus strongly
suggests a legislative intent to subject purchasers and users to
equivalent motor fuel taxes. 
          Last, neither the plain meaning of "consumed" nor the
act's use of that word in the phrase "consumed by a user" conflicts
with the department's interpretation of 15 AAC 40.020(b) or
suggests a legislative intent to subject a "user" like UPS to
taxation under a qualitatively different standard than a buyer. 
UPS's insistence on equating the common meaning of "consume" with
"burn" confuses the nature of the activity taxed by the act's user
provision -- the activity of "consuming" or, as UPS would have it,
"burning" -- with the manner in which the act measures that
activity for purposes of imposing tax liability.  
          While it is certainly reasonable to assume that the
legislature intended to adopt the plain meaning of "consume" in the
statutory phrase "consumed by users," this assumption hardly
establishes the legislature's intent to fix tax liability for users
at the exact time of consumption.  Neither law nor logic would
support the conclusion that the precise moment of jet fuel
combustion is the only permissible moment for triggering tax
liability based on consumption.  Rather, in choosing how to tax
users for consuming motor fuel, the legislature could base tax
liability on any convenient measure of consumption that it deemed
reasonably related to actual consumption.  Since fuel consumption
is commonly and conveniently measured at the pump, [Fn. 26] we find
no reason to presume that the legislature intended to adopt a less
common and less sensible measure -- moment of actual combustion.
          That measuring actual jet fuel burned in Alaska airspace
would be impractical cannot seriously be doubted.  As the hearing
officer aptly noted, "the legislature provided no discrete formula
for taxing fuel used in domestic flights.  [UPS] was forced to
create its own, concluding that only the fuel burned over Alaska is
taxed."  And UPS calculated its in-state consumption from estimates
rather than actual measurement.
          Moreover, the provisions of the act that relate to
consumption by users provide no textual support for UPS's self-
serving conclusion that "only the fuel burned in Alaska is taxed." 
While the act's definition of "user" requires purchase or receipt
of fuel "in the state," it imposes no like requirement on
consumption, stating only that "'user' means a person consuming or
using" such locally purchased fuel. [Fn. 27]  In addition, the act
repeatedly refers to "use" and "consumption" interchangeably.  For
example, the definition of "user" contains both words, speaking of
"a person consuming or using;" [Fn. 28] the definition of "motor
fuel" excludes "fuel sold for use" in flights to foreign countries
(not fuel sold for "consumption" or "combustion" in such flights);
[Fn. 29] and elsewhere the act holds dealers responsible for
failing to collect tax on fuel sold for a nontaxable use if the
department subsequently learns that the fuel "was put to a use"
that was taxable (not that the fuel "was consumed" for such a use).
[Fn. 30]  
          In fact, even the act's provision establishing the motor
fuel use tax speaks loosely of both "use" and "consumption":  
               (b)  There is levied a tax of eight cents
a gallon on all motor fuel consumed by a user, except that

               (1)  the tax on aviation gasoline
          consumed is four cents a gallon;

               (2)  the tax on motor fuel used in and on
watercraft of all descriptions is five cents a gallon;

               (3)  the tax on all aviation fuel other
than gasoline is two and one-half cents a gallon.[ [Fn. 31]]

          As can readily be seen, this language seems to ascribe no
particular significance to the precise words that it employs to
describe the use tax.  It imposes the use-tax rates of eight and
four cents a gallon for "consumption"; it applies the five-cent per
gallon rate for "use"; and, without specifying any particular form
of use, it simply says that the two-and-one-half-cent tax "is"
imposed.  
          The act's indiscriminate reliance on "use" and
"consumption" thus belies any legislative intent to seize upon
actual combustion of jet fuel within Alaska's borders as a measure
of actual use.  In contrast, both the legislative history of the
act's definition of "user" and the administrative history of the
regulation exempting mixed-purpose bulk sales of jet fuel provide
strong support for the conclusion that, as applied to jet fuel, the
act's use and sales taxes are meant to be coextensive.  This, in
turn, suggests a legislative intent to measure "consumption" by a
standard that takes into account the entire portion of fuel in an
untaxed bulk sale that is eventually applied to the originally
intended taxable use -- in other words, all of the bulk sale jet
fuel that is eventually loaded into a domestic flight.
          However, UPS warns that taxing out-of-state consumption
would be impermissible.  It invokes "a fundamental constitutional
rule . . . that a state tax can apply only to . . . a transaction,
or to some other event that is located or takes place in the taxing
state." [Fn. 32]  But this rule poses no obstacle to taxation here,
since the act measures consumption at the pump -- a transaction
that takes place within Alaska -- and since UPS expressly
stipulated that it has paid no taxes on the disputed fuel to any
other state.  We thus find no danger of an unconstitutional result.
[Fn. 33] 
IV.  CONCLUSION 
          For these reasons, we conclude that under 15 AAC
40.020(b) and AS 43.40.010(b) UPS was subject to tax as a user to
the same extent that it would have been subject to tax as a
purchaser under AS 43.40.010(a) had 15 AAC 40.020(b) not barred
collection of a sales tax.  Our conclusion accords with the
substance of the department's decision, if not with its precise
legal theory.  We therefore AFFIRM the assessment of taxes for all
jet fuel that UPS loaded into the tanks of its aircraft making
domestic flights from Anchorage.


                            FOOTNOTES


Footnote 1:

     AS 43.40.010 - 43.40.100.     


Footnote 2:

     See AS 43.40.010(a); AS 43.40.015. 


Footnote 3:

     See AS 43.40.100(2)(B).


Footnote 4:

     See Handley v. State, Dep't of Revenue, 838 P.2d 1231, 1233
(Alaska 1992).


Footnote 5:

     See id.; see also Tesoro Alaska Petroleum Co. v. Kenai Pipe
Line Co., 746 P.2d 896, 903 (Alaska 1987).


Footnote 6:

     Kelly v. Zamarello, 486 P.2d 906, 916 (Alaska 1971).


Footnote 7:

     Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).


Footnote 8:

     See State, Bd. of Marine Pilots v. Renwick, 936 P.2d 526, 530
(Alaska 1997). 


Footnote 9:

     Former AS 43.40.010(a) (1982).  At all relevant times,
subsection .010(a) provided:

               (a)  There is levied a tax of eight cents
a gallon on all motor fuel sold or otherwise transferred within the
state, except that

               (1)  the tax on aviation gasoline is four
cents a gallon,

               (2)  the tax on motor fuel used in and on
watercraft of all descriptions is five cents a gallon,

               (3)  the tax on all aviation fuel other
than gasoline is two and one-half cents a gallon. 


Footnote 10:

     Former AS 43.40.010(b) (1982).  At all relevant times,
subsection .010(b) provided: 

               (b)  There is levied a tax of eight cents
a gallon on all motor fuel consumed by a user, except that

               (1)  the tax on aviation gasoline
consumed is four cents a gallon;

               (2)  the tax on motor fuel used in and on
watercraft of all descriptions is five cents a gallon;

               (3)  the tax on all aviation fuel other
than gasoline is two and one-half cents a gallon.


Footnote 11:

     Under the version of AS 43.40.010(a)(3) and (b)(3) in effect
in 1991-1993, jet fuel fell into the category of "aviation fuel
other than gasoline."  See supra notes 9, 10.


Footnote 12:

     Former AS 43.40.100(2)(B) (1982) provided that "'motor fuel'
does not include . . . fuel sold for use in jet propulsion aircraft
operating in flights to foreign countries."


Footnote 13:

     AS 43.40.010(c) provides:

               Every dealer who sells or otherwise
transfers motor fuel in the state shall collect the tax at the time
of sale, and remit the total tax collected during each calendar
month of each year to the department by the last day of each
succeeding month.  Every user shall likewise remit the tax accrued
on motor fuel actually used by the user during each month.  If the
monthly tax return is timely filed, one percent of the total
monthly tax due, limited to a maximum of $100, may be deducted and
retained to cover the expense of accounting and filing the monthly
tax return.  At the time the remittance is made, each dealer or
user shall submit a statement to the department showing all fuel
which the dealer or user has distributed or used during the month.


Footnote 14:

     AS 43.40.015 provides: 

               (a)  A dealer who has a reasonable belief
at the time of sale or transfer that fuel that is sold or
transferred is not to be used as motor fuel need not collect the
motor fuel tax. . . .

               (b)  . . . [I]f the motor fuel tax is not
collected, the dealer shall obtain a certificate of use from the
buyer or transferee at the time of the first sale or transfer of
the fuel stating that the fuel that has been or will be purchased
or received is not intended for use as motor fuel. . . .


Footnote 15:

     AS 43.40.100(4)(C).  AS 43.40.100(4) provides: 

               (4)  "user" means a person consuming or
using motor fuel, who either
     
               (A)  purchases the fuel out of the state
and ships it into the state for personal use in the state;

               (B)  manufactures the fuel in the state; 
or

               (C)  purchases or receives fuel in the
state that is not taxed at the time of purchase or receipt or is
taxed at a rate that is less than the rate prescribed by  AS
43.40.010.

This definition is mirrored in 15 Alaska Administrative Code (AAC)
40.900(6) (1999), which provides:

          "user" means a person consuming or using motor
fuel who purchases the fuel out of state or ships it into the state
for personal use in the state, who manufactures the fuel in the
state, or who purchases or receives in the state fuel that is not
taxed at the time of purchase or receipt or is taxed at a rate that
is less than the rate prescribed by AS 43.40.010[.]


Footnote 16:

     15 AAC 40.020(b).  Subsection (b) of 15 AAC 40.020 goes on to
provide:

          However, if a portion of that jet fuel is used
on a foreign flight that makes more than one stop in this state or
makes a stop in another state, the user shall file a return as
required by 15 AAC 40.010 and remit the amount of tax due for the
jet fuel actually consumed over Alaska.

Since the parties have stipulated that all of UPS's international
flights during the relevant period traveled directly from Anchorage
to foreign destinations and made no intermediate stops in the
United States, this provision has no direct bearing here, and we
express no opinion concerning its meaning. 


Footnote 17:

     AS 43.40.100(4)(C) and 15 AAC 40.900(6) (both quoted supra
note 15).


Footnote 18:

     See former AS 43.40.010(b) (1982) (quoted supra note 10).


Footnote 19:

     See former AS 43.40.010(a) (quoted supra note 9).


Footnote 20:

     Former AS 43.40.010(b) (quoted supra note 10).


Footnote 21:

     AS 43.40.100(4)(C); 15 AAC 40.900(6) (both quoted supra note
15). 


Footnote 22:

     See State, Bd. of Marine Pilots v. Renwick, 936 P.2d 526, 530
(Alaska 1997).  As the state correctly notes, moreover, it would be
legally problematic to construe 15 AAC 40.020(b) to subject UPS to
a lower tax obligation as a user than it would have paid as a
purchaser.  See Vail v. Coffman Eng'rs, Inc., 778 P.2d 211, 214
(Alaska 1989) (a regulation must be consistent with the statute
that it interprets or implements).   


Footnote 23:

     UPS additionally contends that the state should be foreclosed
from claiming that the company was not subject to taxation as a
purchaser, since the superior court ruled against the state on that
point and the state failed to file a cross-appeal. Although our
decision upholding the department's assessment as a use tax rather
than as a sales tax renders this issue academic, we note that a
prevailing party may generally argue for affirmance on appeal on
any legal theory.  See Sea Lion Corp. v. Air Logistics of Alaska,
Inc., 787 P.2d 109, 116 (Alaska 1990).  UPS's reliance on Andersen
v. Edwards, 625 P.2d 282, 285 (Alaska 1981), as authority for the
proposition that a cross-appeal was necessary here is unavailing,
since that case stands for the narrow proposition that a cross-
appeal is necessary to preserve a point upon which the trial court
has formally entered a directed verdict against the prevailing
party.  We further note, in any event, that in an administrative
appeal from the superior court, we do not review the superior
court's decision; rather we directly review the decision of the
agency.  See Handley v. State, Dep't of Revenue, 838 P.2d 1231,
1233 (Alaska 1992); Tesoro Alaska Petroleum Co. v. Kenai Pipe Line
Co., 746 P.2d 896, 903 (Alaska 1987).


Footnote 24:

     See ch. 82, sec. 11, SLA 1982.  


Footnote 25:

     See March 9, 1982, Memorandum from Robert Kessel to R.D.
Stevenson, Department of Revenue, regarding C.S.H.B. 37/C.S.H.B.
101 (Rules); see also Sectional Analysis C.S.H.B. 101, sec. 13. 


Footnote 26:

     See, e.g., United Air Lines, Inc. v. Mahin, 410 U.S. 623, 626
(1973) (referring to an Illinois tax creating a taxable use "when
the fuel is taken out of storage facilities and is placed into the
tank of the airplane").  


Footnote 27:

     AS 43.40.100(4)(C) (quoted supra note 15).


Footnote 28:

     Id.


Footnote 29:

     AS 43.40.100(2)(B).


Footnote 30:

     AS 43.40.015(a).


Footnote 31:

     Former AS 43.40.010(b) (1982) (emphasis added).


Footnote 32:

     In support of this rule, UPS cites Oklahoma Tax Commission v.
Jefferson Lines, Inc., 514 U.S. 175, 183 (1995).  The state
contests UPS's reading of the case and vigorously argues that it
would be inapplicable here.  Given our conclusion that UPS stands
in no danger of double-taxation, we need not resolve this dispute. 



Footnote 33:

     Cf. Kenai Peninsula Borough v. Arndt, 958 P.2d 1101, 1105-06
(Alaska 1998) (apportionment of property tax unnecessary to avoid
unconstitutional taking where property owner fails to allege or
show circumstances indicating any actual danger of multiple
taxation).