                                        No. 116,005

             IN THE COURT OF APPEALS OF THE STATE OF KANSAS

                 In the Matter of the Appeal of REEVE CATTLE CO., INC.
                  for the Year 2013 and 2014 in Finney County, Kansas.


                              SYLLABUS BY THE COURT

1.
       The burden of proving the invalidity of a Board of Tax Appeal's (BOTA) action is
on the party asserting its invalidity. The general rule is that statutes imposing a tax must
be interpreted strictly in favor of the taxpayer. However, tax exemption statutes are
interpreted strictly in favor of imposing the tax and against allowing an exemption for
one who does not clearly qualify.


2.
       An appellate court is not required to defer to BOTA's interpretation of a tax
statute.


3.
       The most fundamental rule of statutory construction is that the intent of the
legislature governs if that intent can be ascertained. An appellate court must first attempt
to ascertain legislative intent through the statutory language enacted, giving common
words their ordinary meaning.


4.
       When a statute is plain and unambiguous, an appellate court should not speculate
about the legislative intent behind that clear language, and it should refrain from reading
something into the statute that is not readily found in its words. Where there is no
ambiguity, the court need not resort to statutory construction. Only if the statute's

                                              1
language or text is unclear or ambiguous does the court use canons of construction or
legislative history to construe the legislature's intent.


5.
        Under the facts of this case, BOTA did not err in finding that the taxpayer's mixer-
feeder trucks are exempt from taxation as farm machinery and equipment under K.S.A.
2015 Supp. 79-201j.


        Appeal from Board of Tax Appeals. Opinion filed March 17, 2017. Affirmed.


        Michael A. Montoya, of Michael A. Montoya, P.A., of Salina, for appellant Board of County
Commissioners of Finney County.


        S. Lucky DeFries and Jeffrey A. Wietharn, of Coffman, DeFries & Nothern, a Professional
Association, of Topeka, for appellee Reeve Cattle Co., Inc.


        Tucker A. Stewart, associate counsel, of The Kansas Livestock Association, Terry Holdren,
CEO/general counsel, of The Kansas Farm Bureau, and Randy Stookey, general counsel, vice president,
of The Kansas Agribusiness Retailers Association, amici curiae.


        Jeffrey A. Chanay, chief deputy attorney general, Dwight R. Carswell and Bryan C. Clark,
assistant solicitors general, and Derek Schmidt, attorney general, for amicus curiae State of Kansas, and
Wendee Grady, of Kansas Department of Agriculture, for amicus curiae Kansas Department of
Agriculture.


Before MCANANY, P.J., MALONE, J., and STUTZMAN, S.J.


        MALONE, J.: This is an appeal from a decision of the State Board of Tax Appeals
(BOTA) addressing whether certain personal property owned by Reeve Cattle Company,
Inc. (Reeve Cattle) is exempt from taxation. The property at issue is the cab and chassis
of several mixer-feeder trucks which are used to mix cattle feed ingredients and haul the


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feed to cattle within the feedlot. BOTA determined the mixer-feeder trucks are exempt
from taxation under the farm machinery and equipment exemption at K.S.A. 2015 Supp.
79-201j. The Board of County Commissioners of Finney County (the County) appeals,
arguing that the mixer-feeder trucks are not exempt because they are trucks, which are
expressly excluded from the farm machinery and equipment exemption. For the reasons
stated herein, we reject the County's argument and affirm BOTA's decision.


                       FACTUAL AND PROCEDURAL BACKGROUND

       Reeve Cattle, which is located in Finney County, Kansas, owns several mixer-
feeder trucks. Mixer-feeder trucks are used to mix feed ingredients and then haul the feed
to cattle within the feedlot. The trucks are equipped with augers that blend the feed
ingredients as well as a hydraulic system that operates the augers. Although mixer-feeder
trucks bear some resemblance to regular trucks, they are only capable of maximum
speeds of 17 mph while mixing feed and 20 mph while not mixing feed; if the governor is
removed, however, the trucks can go up to 45 mph.


       Mixer-feeder trucks are 106 inches wide, while the legal limit for road travel is
102 inches. Although the trucks almost always stay within the feedlot, occasionally they
are driven on public roads when specialized maintenance is required. However, when the
mixer-feeder trucks require off-site maintenance, they usually are loaded onto a trailer
and transported off-site, rather than driven on the road due to the difficulty in removing
the governor and the vehicle's slow maximum speed even without the governor.


       In 2015, the Finney County Appraiser assessed an escaped property tax penalty on
Reeve Cattle for failing to pay taxes on its mixer-feeder trucks for the 2013 and 2014 tax
years. Reeve Cattle paid the penalties under protest and filed an appeal with BOTA
claiming the mixer-feeder trucks were exempt from taxation under the farm machinery
and equipment exemption at K.S.A. 2015 Supp. 79-201j.

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       Before BOTA, Reeve Cattle argued that K.S.A. 2015 Supp. 79-201j exempts all
farm machinery and equipment from taxation save for a few itemized exceptions—
including trucks as defined in K.S.A. 2015 Supp. 8-126. Reeve Cattle argued that the
mixer-feeder trucks do not meet the definition of truck found in K.S.A. 2015 Supp. 8-
126(nn); instead, K.S.A. 2015 Supp. 8-126(p)(5) classifies mixer-feeder trucks as
implements of husbandry. Therefore, Reeve Cattle claimed that because the mixer-feeder
trucks are not trucks as defined in K.S.A. 2015 Supp. 8-126, they are exempt from
taxation under K.S.A. 2015 Supp. 79-201j. The County, on the other hand, argued that
the definitions in K.S.A. 2015 Supp. 8-126(p)(5) and (nn) are not mutually exclusive and
a mixer-feeder truck could be both a truck and an implement of husbandry. Therefore, the
County argued that because the mixer-feeder trucks meet the definition of truck under
K.S.A. 2015 Supp. 8-126(nn), they are expressly excluded from the farm machinery and
equipment exemption at K.S.A. 2015 Supp. 79-201j.


       BOTA held a hearing on April 22, 2016. At the hearing, Keith Bryant, a manager
for Reeve Cattle, testified that the mixer-feeder trucks are used to mix raw ingredients of
cattle feed and deliver it to cattle within the Reeve Cattle feedlots. He also testified that
the ingredients that the mixer-feeder trucks combine are partially grown onsite, and any
ingredients not grown onsite are brought in by regular trucks. The mixer-feeder trucks,
however, do not deliver any raw ingredients; instead, Bryant explained, the ingredients
are loaded into the truck at the feed mill located on the feedlot, the truck mixes and
combines the feed ingredients, and then the truck travels to any cattle needing to be fed.
Bryant testified that the mixer-feeder trucks are rarely driven off the feedlot and are used
exclusively for agricultural purposes. Finally, Bryant testified that the mixer-feeder trucks
do not carry more than 10 passengers.


       Clayton Husemann, executive director of the Kansas Livestock Association, also
testified for Reeve Cattle. Husemann confirmed that the use of the mixer-feeder truck

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was to mix feed and deliver it to cattle within the Reeve Cattle feedlots. Husemann
further testified that, from time to time, the mixer-feeder trucks would need to go down
the highway for service even though a majority of their work was onsite. Finally, Cheryl
Sonnenberg, from the Finney County Appraiser's Office, testified very briefly for the
County. Sonnenberg conclusively testified that her office was required to tax all motor
vehicles and the mixer-feeders "are trucks, I mean, they need to be taxed."


       After hearing the evidence and reviewing briefs submitted by the parties, BOTA
issued its summary decision. BOTA determined that mixer-feeder trucks are farm
machinery and equipment exempt from taxation under K.S.A. 2015 Supp. 79-201j.
Although trucks as defined by K.S.A. 2015 Supp. 8-126(nn) are not exempt from
taxation, BOTA determined that the mixer-feeders in question do not meet the definition
of truck contained therein. Specifically, BOTA found that the mixer-feeder trucks are not
utilized for the transportation or delivery of freight and merchandise, nor are they used
for transporting 10 or more passengers. BOTA concluded that mixer-feeder trucks are
implements of husbandry as defined in K.S.A. 2015 Supp. 8-126(p)(5) that are actually
and regularly used in a farming operation; thus, they are exempt from taxation under
K.S.A. 2015 Supp. 79-201j.


       The County disagreed with BOTA's summary decision and filed a petition for
reconsideration. The County argued that mixer-feeder trucks are motor vehicles as
defined in K.S.A. 2015 Supp. 8-126(u); a motor vehicle can only fall into one of two
categories: truck or passenger vehicle. Therefore, as BOTA found that a mixer-feeder
truck is not a truck, it must then be a passenger vehicle, which is also not subject to the
farm machinery and equipment exemption. After reviewing written arguments submitted
by the parties, BOTA denied the County's petition for reconsideration. The County filed a
petition for judicial review with this court asking that we set aside BOTA's decision.




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                                        ANALYSIS

       On appeal, the County does not contest BOTA's determination that the mixer-
feeder trucks are actually and regularly used in a farming operation. Instead, the County
takes issue with BOTA's conclusion that the mixer-feeder trucks do not fall under K.S.A.
2015 Supp. 79-201j's exception for trucks. The County argues that BOTA's focus on the
classification of mixer-feeder trucks as an "implement of husbandry" at K.S.A. 2015
Supp. 8-126(p)(5) was misplaced because that statutory subsection governs vehicle
registration, not taxation. The County argues that mixer-feeder trucks meet the definition
of truck contained in K.S.A. 2015 Supp. 8-126(nn) because mixer-feeder trucks deliver
freight and merchandise—namely, cattle feed. Finally, the County stresses that had the
legislature intended to exempt mixer-feeder trucks from taxation, it would have expressly
done so in K.S.A. 2015 Supp. 79-201j.


       Reeve Cattle asserts that the definitions in K.S.A. 2015 Supp. 8-126(p)(5) and (nn)
are mutually exclusive, so because the legislature defined a mixer-feeder truck as an
implement of husbandry, it cannot also be classified as a truck. Furthermore, even if the
definitions are not mutually exclusive, Reeve Cattle argues that a mixer-feeder truck does
not meet the definition of truck contained in K.S.A. 2015 Supp. 8-126(nn) because it does
not deliver freight and merchandise nor does it carry 10 or more passengers. Finally,
Reeve Cattle claims that even if the mixer-feeder trucks are not exempt under K.S.A.
2015 Supp. 79-201j, they are still exempt from taxation pursuant to Article 11, § 1 (b)(2)
of the Kansas Constitution which provides a broad exemption from taxation for farm
machinery and equipment.


       Appellate review of a BOTA decision is governed by K.S.A. 2015 Supp. 77-621
which provides in part:



                                            6
               "(c) The court shall grant relief only if it determines any one or more of the
       following:
               ....
               (4) the agency has erroneously interpreted or applied the law;
               ....
               (7) the agency action is based on a determination of fact, made or implied by the
       agency, that is not supported to the appropriate standard of proof by evidence that is
       substantial when viewed in light of the record as a whole . . . ; or
               (8) the agency action is otherwise unreasonable, arbitrary or capricious." K.S.A.
       2015 Supp. 77-621(c).


       The burden of proving the invalidity of BOTA's action is on the party asserting
invalidity—here, the County. See K.S.A. 2015 Supp. 77-621(a); Board of Saline County
Comm'rs v. Jensen, 32 Kan. App. 2d 730, 732, 88 P.3d 242, rev. denied 278 Kan. 843
(2004). The general rule is that statutes imposing a tax must be interpreted strictly in
favor of the taxpayer. However, tax exemption statutes are interpreted strictly in favor of
imposing the tax and against allowing an exemption for one who does not clearly qualify.
In re Tax Appeal of LaFarge Midwest, 293 Kan. 1039, 1045, 271 P.3d 732 (2012).


       Resolution of the issue before this court turns on statutory interpretation which is a
question of law subject to unlimited review. Neighbor v. Westar Energy, Inc., 301 Kan.
916, 918, 349 P.3d 469 (2015). Previously, Kansas courts deferred to BOTA's
interpretation of tax statutes due to BOTA's specialized expertise in the area of taxation.
However, Kansas courts "have clearly eschewed the concept that an agency is better
equipped to interpret a statute than an appellate court." LaFarge Midwest, 293 Kan. at
1044. Thus, this court is not required to adopt BOTA's interpretation of a tax statute. See
Douglas v. Ad Astra Information Systems, 296 Kan. 552, 559, 293 P.3d 723 (2013); see
also LaFarge Midwest, 293 Kan. at 1044.




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       The most fundamental rule of statutory construction is that the intent of the
legislature governs if that intent can be ascertained. State ex rel. Schmidt v. City of
Wichita, 303 Kan. 650, 659, 367 P.3d 282 (2016). An appellate court must first attempt to
ascertain legislative intent through the statutory language enacted, giving common words
their ordinary meaning. Ullery v. Othick, 304 Kan. 405, 409, 372 P.3d 1135 (2016).
When a statute is plain and unambiguous, an appellate court should not speculate about
the legislative intent behind that clear language, and it should refrain from reading
something into the statute that is not readily found in its words. 304 Kan. at 409. Where
there is no ambiguity, the court need not resort to statutory construction. Only if the
statute's language or text is unclear or ambiguous does the court use canons of
construction or legislative history to construe the legislature's intent. 304 Kan. at 409.


       BOTA determined the mixer-feeder trucks are exempt from taxation under K.S.A.
2015 Supp. 79-201j. This statute provides an exemption from taxation for:


               "(a) All farm machinery and equipment. The term 'farm machinery and
       equipment' means that personal property actually and regularly used in any farming or
       ranching operation. . . . The term 'farming or ranching operation' shall include the
       operation of a feedlot, the performing of farm or ranch work for hire and the planting,
       cultivating and harvesting of nursery or greenhouse products, or both, for sale or resale.
       The term 'farm machinery and equipment' shall not include any passenger vehicle, truck,
       truck tractor, trailer, semitrailer or pole trailer, other than a farm trailer, as the terms are
       defined by K.S.A. 8-126, and amendments thereto."


       The County argues that a mixer-feeder truck is a truck; as such, it is expressly
excluded from the farm machinery and equipment exemption at K.S.A. 2015 Supp. 79-
201j. Truck is defined as "a motor vehicle which is used for the transportation or delivery
of freight and merchandise or more than 10 passengers." K.S.A. 2015 Supp. 8-126(nn).




                                                       8
        Before BOTA, the County claimed that a mixer-feeder truck could also meet the
definition of passenger vehicle, which is "every motor vehicle . . . which is designed
primarily to carry 10 or fewer passengers, and which is not used as a truck." K.S.A. 2015
Supp. 8-126(dd). However, nowhere in its brief before this court does the County argue
that a mixer-feeder truck qualifies as a passenger vehicle, and instead it asserts that "[t]his
court must find that the subject property is a truck and is specifically excluded as exempt
property pursuant to K.S.A. [2015 Supp.] 79-201j." An issue not argued or briefed by the
appellant is deemed waived or abandoned. Superior Boiler Works, Inc. v. Kimball, 292
Kan. 885, 889, 259 P.3d 676 (2011).


        As argued by Reeve Cattle and as found by BOTA, K.S.A. 2015 Supp. 8-
126(p)(5) specifically classifies mixer-feeder trucks as implements of husbandry. Reeve
Cattle asserts that the definitions in K.S.A. 2015 Supp. 8-126(p)(5) and (nn) are mutually
exclusive, so because the legislature defined a mixer-feeder truck as an implement of
husbandry, it cannot also be classified as a truck. This appeal can be resolved without
deciding whether the definitions in K.S.A. 2015 Supp. 8-126(p)(5) and (nn) are mutually
exclusive. Regardless of whether the definitions are mutually exclusive, if a mixer-feeder
truck does not meet the statutory definition of truck in K.S.A. 2015 Supp. 8-126(nn), it is
exempt from taxation as farm machinery and equipment under K.S.A. 2015 Supp. 79-
201j.


        BOTA found that a mixer-feeder truck "does not meet the definition of 'truck' as
defined in K.S.A. [2015 Supp.] 8-126[nn] as it is not utilized for the transportation or
delivery of freight and merchandise or more than 10 passengers." Thus, BOTA concluded
that Reeve Cattle's mixer-feeder trucks are not trucks according to K.S.A. 2015 Supp. 8-
126 and therefore qualified for the farm machinery and equipment exemption in K.S.A.
2015 Supp. 79-201j. As discussed above, this court can overturn BOTA's decision if it
has erroneously interpreted the law, its decision was based on factual findings that are not
supported by substantial evidence, or its decision is otherwise arbitrary, unreasonable, or

                                              9
capricious. In re Equalization Appeal of Johnson County Appraiser, 47 Kan. App. 2d
1074, 1084-85, 283 P.3d 823 (2012).


       Previously, when reviewing BOTA's factual findings for substantial evidence,
appellate courts were to look at the evidence in the light most favorable to the agency's
ruling and were to disregard any conflicting evidence or other inferences which might be
drawn therefrom. However, now appellate courts are to determine whether the evidence
supporting BOTA's factual findings is substantial when considered in light of the record
as a whole, taking into account both supporting and detracting evidence. Sierra Club v.
Moser, 298 Kan. 22, 62, 310 P.3d 360 (2013).


       BOTA's factual findings that the mixer-feeder trucks are not used to transport or
deliver freight and merchandise or more than 10 passengers are supported by substantial
evidence when viewing the record as a whole. At the hearing, Bryant testified that the
mixer-feeder trucks are used to mix raw ingredients of cattle feed and deliver it to cattle
within the Reeve Cattle feedlots. He also testified that the ingredients that the mixer-
feeder trucks combine are partially grown onsite, and any ingredients not grown onsite
are brought in by regular trucks. Bryant explained that the ingredients are loaded into the
truck at the feed mill located on the feedlot, the truck mixes and combines the feed
ingredients, and then the truck travels to any cattle needing to be fed. He testified that
mixer-feeder trucks are rarely driven off the feedlot and are used exclusively for
agricultural purposes. Finally, Bryant testified that the mixer-feeder trucks do not carry
10 or more passengers.


       Bryant's testimony, which essentially was uncontroverted at the hearing before
BOTA, supports a determination that the subject property does not meet the definition of
"truck" contained in K.S.A. 2015 Supp. 8-126(nn). The key testimony was that the mixer-
feeder trucks are used to mix raw ingredients of cattle feed and deliver it to cattle within
the feedlots. The mixer-feeder trucks are rarely driven off the feedlot and clearly do not

                                              10
carry more than 10 passengers. Thus, considering the evidence in light of the record as a
whole, we conclude that BOTA did not err in finding that the subject property does not
meet the definition of "truck" contained in K.S.A. 2015 Supp. 8-126(nn).


       The County also argues that BOTA's finding that the mixer-feeder trucks do not
deliver freight and merchandise was incorrect because the mixer-feeder trucks deliver
feed, which is either freight or merchandise, to the cattle. If this argument was correct,
then essentially any motor vehicle capable of carrying any object could be defined as a
truck. When construing a statute, common words are given their ordinary meanings.
Ullery, 304 Kan. at 409. Webster's II New College Dictionary 701-02 (3d ed. 2005)
defines "merchandise" as "goods or commodities that may be bought or sold." Cattle feed
is not merchandise, at least not when it is in a mixer-feeder truck as it is not a good or
commodity to be bought or sold; it is food being prepared for and delivered to cattle.
Similarly, cattle feed is not freight because freight is defined as "goods transported as
cargo by a commercial carrier." Webster's II New College Dictionary 455 (3d ed. 2005).
Again, the cattle feed in the mixer-feeder trucks is not freight as it is not cargo and a
mixer-feeder truck is not a commercial carrier.


       Because BOTA properly concluded that the mixer-feeder trucks do not meet the
definition of "truck" contained in K.S.A. 2015 Supp. 8-126(nn), we do not need to
address BOTA's alternative finding that the mixer-feeder trucks are properly classified as
implements of husbandry under K.S.A. 2015 Supp. 8-126(p)(5). In turn, we do not need
to address the County's corresponding argument on appeal that BOTA erred by
classifying the mixer-feeder trucks as implements of husbandry under K.S.A. 2015 Supp.
8-126(p)(5) because that subsection governs vehicle registration, not taxation.


       Finally, the County argues that had the legislature intended to exempt mixer-
feeder trucks from taxation, it would have specifically done so in K.S.A. 2015 Supp. 79-
201j, as it did when it specifically stated all trailers other than farm trailers are taxable.

                                               11
This argument is unpersuasive. K.S.A. 2015 Supp. 79-201j contains a broad exemption
for farm machinery and equipment and only lists a few itemized exceptions to the
exemption, including trucks, passenger vehicles, and trailers other than farm trailers. The
legislature had to explicitly state that farm trailers were exempt because K.S.A. 2015
Supp. 8-126(l) defines "farm trailer" as "every trailer and semitrailer as those terms are
defined this section, designed and used primarily as a farm vehicle." K.S.A. 2015 Supp.
8-126(ll) defines "trailer" as "every vehicle without motive power designed to carry
property or passengers wholly on its own structure and to be drawn by a motor vehicle."
A farm trailer clearly falls within the definition of trailer, which is explicitly not exempt.
Thus, the legislature had to make clear that a farm trailer is exempt from taxation because
otherwise it would be taxable as it is a trailer.


       In sum, BOTA's factual findings that the mixer-feeder trucks do not transport or
deliver freight and merchandise or more than 10 passengers are supported by substantial
competent evidence when viewing the record as a whole. Accepting BOTA's factual
findings, we agree with BOTA's interpretation that a mixer-feeder does not meet the
definition of truck contained in K.S.A. 2015 Supp. 8-126(nn). Because the mixer-feeders
are not trucks as defined in K.S.A. 2015 Supp. 8-126(nn) and because the County does
not dispute that the subject property is actually and regularly used in a farming or
ranching operation, BOTA did not err in finding that the subject property is exempt from
taxation as farm machinery and equipment under K.S.A. 2015 Supp. 79-201j. Based on
our determination that Reeve Cattle is entitled to the statutory exemption, we do not need
to address its separate claim that the property is also exempt pursuant to Article 11, § 1
(b)(2) of the Kansas Constitution.


       Affirmed.




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