State Bar of Wisconsin Return to Wisconsin Tax Appeals Commission





6292 Lacy Road

Verona, WI 53593,




P.O. Box 8907

Madison, WI 53708


DOCKET NO. 00-S-89



This case comes before the Commission for decision following a trial on May 22-24, 2002 and post-trial briefs by both parties. At the trial, a partial stipulation of facts, filed April 30, 2001 ("April 2001 stipulation"), was entered into the record.

Petitioner, Hammersley Stone Company, Inc. ("petitioner"), is represented by Attorney William A. Abbott, of Bell, Gierhart & Moore, S.C., of Madison, Wisconsin. Respondent, Wisconsin Department of Revenue ("Department"), is represented by Attorney Linda M. Mintener.

Having considered the entire record, including the parties' briefs, the Commission finds, concludes, and orders as follows:


The Commission bases many of its Findings of Fact on the parties' April 2001 stipulation, making non-substantive (except as noted) format and reorganization changes and deleting references to exhibits. Additional Findings of Fact are based on testimony at the three-day trial.

Stipulated Jurisdictional Facts

1. Under date of April 29, 1999, the Department issued a sales/use tax assessment to petitioner covering the calendar years 1994 through 1997 ("period under review")(1) for $54,448.99, consisting of tax, interest, and penalty.

2. Under date of June 24, 1999, petitioner filed a petition for redetermination with the Department. Subsequently, petitioner submitted a payment of $13,009.54 for a portion of the assessment that it was not contesting.

3. Under date of March 23, 2000, the Department denied the petition for redetermination and asserted that $44,354.64 was due, consisting of tax, interest, and penalty.

4. Petitioner filed a timely petition for review with this commission. Petitioner does not contest any of the assessed sales tax and does not dispute the calculations or the computation of the assessed use tax. Petitioner does contest its liability for the use tax and related interest on amounts it paid for stone crushing.

Additional Stipulated Facts

5. Petitioner, organized under the laws of Wisconsin in 1957, filed an S corporation election effective for its taxable year beginning February 1, 1991 and for subsequent years. Petitioner's principal place of business is 6292 Lacy Road, Verona, Wisconsin. Its corporate officers were: Keith Hammersley, president; James Wolfe, vice president; and Nancy Hammersley, secretary. Keith Hammersley owned 73% of the outstanding stock, and James Wolfe owned the remaining 27% of the stock. Petitioner performed all of its business activities in Wisconsin.

6. Petitioner operated two quarries(2) on leased property, and manufactured sand, stone, and gravel. It extracted stone from the banks of its quarries. Then, at one site, it crushed, or had crushed, the stone into smaller particles of many types, including gravel, sand, pea gravel, and limestone.

7. Petitioner was also in the business of real property construction contracting, in which it acted as a general contractor or a subcontractor on construction projects.

8. Petitioner's construction activities included excavation, moving earth, compaction, pipe laying, installation of underground utilities, site grading, and the construction of roads, streets, driveways, playgrounds, and parking lots. Petitioner performed these activities for private parties, the Wisconsin Department of Transportation, and municipalities.

9. Petitioner has held a Wisconsin sales tax permit since 1970.

10. Petitioner made payments to Yahara Materials, Inc. ("Yahara"), related to the crushing of the stone which petitioner had extracted(3) from its quarry and on which petitioner performed additional services before applying most of the resulting crushed stone products in its construction activities. Petitioner also sold some of its stone products, and charged and collected sales tax on sales for which no exemption certificates were on file. No adjustments are in dispute in this case relating to the stone which petitioner sold to third parties or which petitioner did not use in its construction activities. Also not at issue here are crushing services performed on petitioner's stone products that it sold to third parties.

11. Petitioner owned the stones which were crushed at the site of one of petitioner's two quarries. At the point of crushing completion, the stone was not a usable or saleable product.(4) (The purpose of crushing was to make the stone useable for petitioner in its construction projects.) In order to make the stone ready for use after the crushing was performed, petitioner sorted the stone by size and ran each size through a screening process to separate out the "fines."(5) Petitioner delivered the stone to the construction sites; applied or spread it on roadways, driveways, playgrounds, parking lots, and other places; used it for underlayment for roads and pipe bedding; or otherwise incorporated it into construction projects.

12. Petitioner did not collect or pay to the Department any sales or use tax related to the stone crushing. Petitioner did not provide Yahara with a resale certificate for the crushing.

13. Petitioner included its crushing costs when billing for its construction services in which its crushed stone was incorporated, but did not itemize the costs separately.

14. Petitioner neither charged, collected, nor paid any sales or use tax on its sales of crushed stone that it used in its construction activities. Prior to commencement of the audit under review, petitioner did not pay or report any use tax to the Department.

15. Prior to 1990, petitioner's employees did the stone crushing using petitioner's machinery and equipment. However, petitioner found this too expensive and sold its crushing equipment.

16. Since 1991, several companies, including Yahara and Wingra Stone Co. ("Wingra"), have been crushing stone for petitioner. During the period under review, petitioner obtained its stone crushing almost entirely from Yahara.

17. Petitioner does not know the identity of the employees it leased from Yahara for stone crushing, because neither petitioner nor Yahara kept records of who they were. Yahara alone determined how much to pay the employees, and Yahara paid them. Yahara was solely responsible for recruiting the employees; providing them with life, medical, and dental insurance, paid vacation, family leave, and sick leave; paying unemployment insurance and FICA related to them; and withholding and paying to the Department the employees' withholding taxes.

18. Yahara's stone crushing plant was portable. Yahara paid for its transportation, its setup and dismantling, and all other costs. With the stone crushing plant, petitioner obtained a primary and secondary (and sometimes a third) stone crusher, one or two end loaders or wheel loaders, a conveyor system, and two or three employees. Yahara's invoices did not itemize the cost of leasing the various pieces of equipment or the employees.

19. The end loaders removed stone from the banks of the quarry and dumped it into the primary crusher, which did the initial crushing to the size of approximately 3-4 inches. The secondary "cone" crusher crushed the stone to the size of approximately 1 inch. When used, the third crusher crushed the stone into sand size. The conveyor moved the crushed stone from one crusher to the other and from the crushers to where the crushed stone was stockpiled.

20. Yahara's stone crushing plant and its operators remained at petitioner's quarry until petitioner's crushing job was completed, generally 2-3 weeks at a time. Yahara then moved the crushing plant to the site of another customer.

21. Yahara had 6 primary crushers, 6 secondary crushers, and finish crushers. Petitioner does not know which specific pieces of equipment it rented from Yahara, because neither petitioner nor Yahara kept records of the equipment petitioner leased from Yahara.

22. Petitioner paid Yahara with one check monthly (or quarterly in off-season) for the stone crushing. Petitioner did not issue separate checks to pay for the equipment and the employees. Petitioner's checks and its slips calculating each payment were based on the tonnage and type of material crushed.

23. Petitioner recorded its payments to Yahara for stone crushing in its journal entries entitled "Crush Exp Drill, Blast, Crush." Entries for the crushing are referred to in the journal entries as "Yahara Exp."

24. Yahara recorded its payments from petitioner for stone crushing as "cash receipts," and recorded them as "Hammersley Stone C., Inc. CRUSH" in its cash receipts journal.

Non-stipulated Additional Facts

25. At the time the two companies began doing business with each other, petitioner and Yahara entered into two oral lease agreements for Yahara to crush stone. One agreement was for the lease of Yahara's stone crushing machinery; the other was to lease Yahara's employees to operate this equipment.(6) The agreements were subsequently drafted by Nancy Hammersley in the fall of 1998. Neither of the two signed agreements in the record is dated. The equipment lease agreement provides that it became effective, retroactively, in January 1994; the employee lease agreement stated no effective date.(7) Yahara signed the agreements at petitioner's request.

26. Petitioner separates rock from quarry walls by first removing the dirt ("overburden") on top of the rock. Holes are then drilled in the rock to set off charges and break the rock loose from the wall of a quarry. Typically, an area of 100' by 30' is drill blasted in this way. The removal of the overburden and the blast removes shot rock from the quarry walls, which falls onto the quarry floor. The shot rock then is lifted from the quarry floor by an end loader and transported to, and placed into, the primary stone crusher. The gravel is then crushed to different sizes, taken to machines which remove the fines, and then transported to a construction site.(8)

27. When a sample of gravel was produced for a construction project, petitioner hired testing engineers to determine if the gravel met industry standards for the project. When Wingra and Yahara personnel did the crushing, petitioner paid for the testing. If gravel did not meet industry standards (i.e., was a "bad batch"), gravel meeting industry standards had to be manufactured.

28. Prior to the period under review, when Wingra provided petitioner with equipment and personnel to crush stone, a Wingra employee supervised the personnel. If a "bad batch" of gravel was produced, Wingra personnel crushed another batch at no additional cost to petitioner.

29. During the period under review, when Yahara leased machinery and personnel to petitioner, either Keith Hammersley or Mr. Robin Loger (petitioner's operations manager) supervised the personnel in their crushing activities. Petitioner's personnel did not operate Yahara's equipment. Keith Hammersley would tell Yahara personnel the type and amount of gravel required. The cost of producing a "bad batch" of gravel was borne by petitioner. Keith Hammersley determined the starting and ending times of Yahara's personnel who petitioner leased.

30. Petitioner owns some of the same type of equipment that it leased from Yahara. This includes a crusher smaller than Yahara's, an end loader, and a screener. This equipment is sometimes used in one of petitioner's quarries, and only petitioner's personnel, not Yahara's, operate them.

31. The end loader that petitioner leased from Yahara picked up stones which were on the quarry floor after they were blasted. Some stones were located close to, or piled up by, the quarry wall. The end loader picked these up; it did not dig into the quarry wall to dislodge stones from the quarry wall which were not blasted free.

32. The auditor stated that if a written lease agreement existed prior to the audit period or at the beginning of the audit, he may have reconsidered whether the stone crushing activities were subject to use tax,(9) and would not have imposed the use tax on the crushing activities.(10) However, if the stone crushing activities were considered mining, use tax would have applied.(11)


Issue: Are petitioner's payments to Yahara for stone crushing subject to the use tax?(12) Conclusion of law: No.


77.54 General exemptions. There are exempted from the taxes imposed by this subchapter:

* * *

(6) The gross receipts from the sale of and the storage, use or other consumption of:

(a) Machines and specific processing equipment and repair parts or replacements thereof, exclusively and directly used by a manufacturer in manufacturing tangible personal property and safety attachments for those machines and equipment.

* * *

(6m) For purposes of sub. (6)(a) "manufacturing" is the production by machinery of a new article with a different form, use and name from existing materials by a process popularly regarded as manufacturing. "Manufacturing" includes but is not limited to:

(a) Crushing, washing, grading and blending sand, rock, gravel and other minerals. [Emphasis added.]

* * *


Issue Preclusion

A case between the same parties was litigated before the Commission almost 5 years ago. See, Hammersley Stone Co., Inc. v. Wisconsin Department of Revenue, Wis. Tax Rptr. (CCH) ¶ 400-383 (WTAC 1998); petition for review to the Dane County Circuit Court dismissed for late filing (Dec. 21, 1998). In that case, the Commission held that petitioner was properly assessed use tax, under Wis. Stat. §§ 77.53 and 77.52(2)(a)10, for stone crushing services it purchased from independent contractors who crushed stones furnished by petitioner.

That case and the one currently before the Commission have many similarities. The parties are the same. The stone crushing procedures on which the

Department imposed the use tax are largely the same. Petitioner's procedures of removing stone from a quarry for use in its real property construction activities are the same.

There are also dissimilarities. The periods under review are different (1990 through 1993 vs. 1994 through 1997). Most significantly, in the current case petitioner is claiming an exemption under Wis. Stat. § 77.54(6)(a); this was not in dispute in the prior case. In addition, in the earlier case, the stone crushing activities were performed by independent contractors; in the current case, petitioner asserts that the services were performed with machinery and equipment, as well as operating personnel, which petitioner "leases" from Yahara under oral "lease agreements." These critical facts were not involved in the earlier case.

The Department questions whether there were valid lease agreements during the period under review. Petitioner asserts that it had oral leases with Yahara all during that period. Petitioner also claims that, at the suggestion of the Department's auditor, these oral leases were formalized in two undated, written lease agreements. According to petitioner, these agreements were entered into during the fall of 1998, about nine months after the period under review. Significantly, one provision of the equipment lease agreement provides that it has been effective retroactively back to January 1994, and, therefore, that it was in effect during the period under review. The lease agreement covering machine operators was also oral but specified no effective date.

The Department argues that the doctrine of issue preclusion (formerly called "collateral estoppel") requires this case to be dismissed because the Commission ruled for the Department in the prior Hammersley decision involving the same parties, facts, and issues.

As the Commission has recently observed:

Issue preclusion forecloses relitigation of an issue of law or fact that has actually been decided in an earlier action. Northern States Power Co. v. Bugher, 189 Wis. 2d 541, 550 (1995); Michelle T. v. Crozier, 173 Wis. 2d 681, 687 (1993). In applying the doctrine of issue preclusion, we must weigh the goals of judicial efficiency and finality, protection against repetitious litigation, versus the right to a hearing on claims raised. Crozier, 173 Wis. 2d at 688. The Commission may consider five factors in determining whether to apply issue preclusion in this matter. Id. at 689. . . .

Arthur A. and Betty L. Van Aman, Wis. Tax Rptr. (CCH) ¶400-201 (WTAC 1999).

One of the five factors is: "are matters of public policy and individual circumstances involved that would render the application of [issue preclusion] fundamentally unfair . . .?" See Crozier, supra, at 689.

In the prior Hammersley decision, the Commission based its conclusions on petitioner's purchase of stone crushing services from independent contractors. Here, each party raises significant new facts and theories (the exemption under Wis. Stat. § 77.54(6)(a), oral leases and mining) which were not addressed in the prior Hammersley decision. We hold that this case is not "mere relitigation" of the prior case. Further, depriving the parties of the opportunity of developing these facts and their legal significance makes issue preclusion improper here. Ignoring these new matters would be "fundamentally unfair" to the parties. Crozier, supra, at 689. Therefore, this case is not concluded on the basis of issue preclusion.

"Stipulated" Facts

About a year prior to the trial, each party filed a motion for summary judgment based on the April 2001 stipulation. In a January 24, 2002 Ruling and Order, the Commission denied both summary judgment motions because two key stipulated facts (Facts 21 and 23) in the April 2001 stipulation were material and disputed. Those facts pertain to the asserted lease agreements between petitioner and Yahara, and both stipulated facts begin "Petitioner claims . . . ." The issue of the lease agreements' validity was critical to both the summary judgment motions and to the case before us now. That issue was not resolved by stipulation, and testimony was necessary to fully explore the agreements.

The Department now contends that the stipulated facts "are the best established facts of this case. The language and meaning of these stipulated facts cannot now be changed . . . ."(13) Understandably, petitioner vigorously disagrees.(14) However, in its brief, the Department also states that the "parties have entered into a partial Stipulation of Issues and Facts. . . ." [Emphasis added.](15)

At the trial, the presiding Commissioner stated:

. . . the stipulation of facts constitutes part of the record right now and [both parties] can have witnesses amplify the meaning of terms or explain some of the background of some of the facts, but they're

accepted into the record as the facts upon which this Commission will make its decision.(16)

This ruling authorized the presentation and consideration of testimony clarifying the background and meaning of several stipulated facts, especially information about the two oral contracts. It also allowed testimony regarding whether petitioner's blasting and removal of stone from its quarry constituted "mining". This was necessary because the stipulation was equivocal on whether petitioner operated a mine or a quarry. Trial testimony amplified the meaning and provided the background necessary for the Commission to fulfill its statutory obligation to "be the final authority for the hearing and determination of all questions of law and fact . . . ." [Emphasis added.] See Wis. Stat. § 73.01(4)(a).

Therefore, this case will not be decided exclusively on the April 2001 stipulation.

Manufacturing vs. Mining

The activities of blasting shot rock from quarry walls, gathering it with end loaders, and crushing shot rock into gravel is "manufacturing." It is not "mining."

Section 77.54(6m), which defines "manufacturing," also describes petitioner's rock crushing activities before us. In the statute's language, "manufacturing is . . ."

"the production by machinery of" Machines remove overburden, exposing rock to be blasted out. End loaders, crushers, and fine machines produce gravel of varying sizes from shot rock.(17)

. . . "a new article" The crusher crushes the shot rock, and the fine machine makes the gravel into smaller pieces of various sizes of gravel.

"with a different form," A crusher and fine machine make shot rock into smaller, different sizes of gravel.

" use" Different small sizes of rock are made to suit specifications of a construction project.

"and name . . ." The ground shot rock is called "gravel." The fine machine produces the gravel into different sizes of gravel which have names familiar to the rock crushing community, such as "inch and a half minus," "three-quarter inch minus", and "one inch minus."(18)

"by a process popularly regarded as manufacturing". The need for an expert witness to testify that this process is popularly regarded as manufacturing is obviated by the statutes, which define manufacturing to include "crushing, washing, grading . . . rock, gravel . . . ." § 77.54(6m)(a). In addition, the Department has adopted an administrative rule adopting this exact language. See Wis. Admin. Code Tax § 11.39(3)(ze).

The Department argues that petitioner's stone crushing activities constitute mining, not manufacturing. This argument is not persuasive.

First, it matters not whether any of the activities at issue constitute mining. The statute defines "manufacturing" and does not include the proviso "but not mining." If an activity falls within the definition of manufacturing, it is manufacturing, notwithstanding how it might otherwise be described in common parlance.

Even if mining was excluded from the definition of manufacturing, the record does not support the Department's argument. The Department's position is based on piecing together fragments in the record, including: (1) the words "extract" and "mine" are used in the April 2001 stipulation; (2) an April 30, 2002 form letter issued by the Wisconsin Department of Commerce relating to required safety training begins "Dear Owners/Operators of Mines, Pits and Quarries"(19); (3) end loaders appeared(20) to be digging into the quarry wall when they were lifting blasted rock from a pile; and (4) testimony by an unemployment compensation expert that petitioner, not Yahara, should have paid unemployment insurance on the operators of Yahara's rock crushing machinery.

On the issue of mining or not mining, Department Resolution Officer Alex A. Probst gave conflicting testimony. On direct examination, he stated that Yahara's machinery dug into the quarry to extract materials and severed rock from the quarry wall.(21) On cross-examination, he was less clear when he stated that the end loader drove forward, then dug and lifted stone from a pile.(22) He then testified that the stone "was not on its own sitting there. It was actually with everything else all compiled together and they had to actually [be] extracted."(23) The Commission concludes, semantics aside, that stone was blasted from the quarry wall; that while some stone was still touching the undisturbed quarry wall, none of the stone removed was part of the undisturbed quarry wall, nor was it in the same location prior to removal of the overburden and blasting. The Commission further concludes that this activity did not constitute mining.

The factors relied on by the Department do not outweigh the overwhelming testimony and exhibits in the record demonstrating that the rock crushing activities under review constitute "manufacturing," both in fact and in law.

Oral and Written Contracts

Petitioner and Yahara orally agreed that petitioner would pay Yahara for the use of Yahara's heavy stone crushing equipment and equipment operators. Petitioner asserts that these oral agreements were reduced to writing by Nancy Hammersley in the fall of 1998, at the request of the Department's auditor.

Not so, counters the Department, asserting that the existence of two oral leases followed by two written leases "was a desperate attempt to avoid the tax [petitioner] knew, from its prior audit, it owed."(24)

Contracts may be written, oral or demonstrated by the conduct of the parties. The Court of Appeals has recognized this by stating the following(25):

Contracts may be formed by conduct as well as by words. See Restatement (Second) of Contracts sec. 19 comment a (1981):

Words are not the only medium of expression. Conduct may often convey as clearly as words a promise or an assent to a proposed promise. Where no particular requirement of form is made by the law a condition of the validity or enforceability of a contract, there is no distinction in the effect of the promise whether it is expressed in writing, or orally, or in acts, or partly in one of these ways and partly in others. (Citations omitted.)

In another case, the Court of Appeals stated that the elements of a contract are the following:

According to hornbook law, a contract consists of an offer, an acceptance and consideration. . . . An offer and acceptance exist when mutual expressions of assent are present. (Citations omitted).(26)

The Court of Appeals has also stated:

It is hornbook law that "offer," "acceptance" and "consideration" are elements of an enforceable contract. See 1 ARTHUR LINTON CORBIN, CORBIN ON CONTRACTS §§ 11, 112 (1963). The existence of an offer and acceptance are mutual expressions of assent, and consideration is evidence of the intent to be bound to the contract.(27)

The Commission concludes that petitioner and Yahara formed and acted under contracts which were oral, written, and demonstrated by their conduct.

Petitioner and Yahara entered into two oral contracts for Yahara to lease to petitioner stone crushing machinery and equipment, as well as equipment operators to do the crushing. In contract terms, Yahara "offered" to lease the equipment and operators; petitioner "accepted" the offer by its conduct in directing the equipment and operators to crush its stones several times during the period under review; and petitioner paid Yahara amounts of "consideration" based on the sizes and weights of the stones crushed.

Oral leases are a customary way of petitioner's doing business. Petitioner has also leased trucks by oral agreement.(28) As Yahara's owner Larry Burcalow stated, "you may not believe it, but things are still done on a handshake and the person's integrity and honor."(29)

The two oral agreements between petitioner and Yahara were reduced to writing in the fall of 1998. Nancy Hammersley typed them when, during a meeting with the Department's auditor who conducted the audit under review here, she believed that she "was requested by the Department of Revenue to produce a written lease which I did . . . ."(30) She typed the provision making the written lease for equipment effective in January 1994 because that was the audit period for which the request for a written lease was made. Nancy Hammersley prepared the documents, rather than having petitioner's attorneys do it, so petitioner would not have to pay attorneys' fees for them.

During direct examination, however, the auditor testified that he did not know why petitioner felt it necessary to put the leases in writing.(31) Under cross- examination, the auditor stated that his note in the audit implied that a "major factor" was that the written agreements were not signed, and that he declined to put into writing that if there was a written lease, the leasing of equipment and their operators would not be taxable.(32)

After observing the demeanor and testimony of Keith and Nancy Hammersley, the presiding commissioner concludes that they were credible witnesses who answered all questions honestly and to the best of their ability. Their testimony that there were oral contracts during the period under review, which were reduced to writing in the autumn of 1998, was credible and persuasive.

Not only were the contracts between petitioner and Yahara oral and, later, written, the contracts were also evidenced by the conduct of the parties, as well as their words.(33) The parties' commercial interactions were consistent and evidenced their acknowledgement of and compliance with understood contracts between them. For example, several times when petitioner needed crushed stone of various sizes, it contacted Yahara; Yahara provided appropriate equipment and operators, who petitioner or its employees supervised; the stone was crushed and weighed; and petitioner paid Yahara based on the tonnage and type of stone crushed.

Petitioner raised several additional arguments to support its position that no tax is due on its payments to Yahara for stone crushing. These include (1) administrative construction, fairness, and the Wisconsin Constitution(34); (2) the tax statutes "should not be construed to discriminate against the small operator which cannot afford its own end loaders and/or crushers by, in effect, putting them out of the business of crushing their own shot rock and forcing them to sell shot rock to the larger operators . . . which can afford to purchase and maintain their own crushers and end loaders"(35); and (3) the "Department is attempting to unconstitutionally subject Petitioner to double and/or triple tax on the manufacturing that it is performing with leased equipment and leased employees, even though the State has made a policy decision to exempt from use tax manufacturing processes and leases where the lessee is responsible for the final outcome of the product and of the process."(36)

Because of the Commission's conclusion of law, it is not necessary to address these assertions. At least one of them (number (2) above) appears to be a policy argument which the legislature, not the Commission, should more properly address.


Respondent's action on petitioner's petition for redetermination is reversed.

Dated at Madison, Wisconsin, this August, 2003 13th .



Don M. Millis, Chairperson


Thomas M. Boykoff, Commissioner


September 12, 2003 Appealed to Dane County Circuit Court(03CV2712)

1 The facts relate to the period under review unless otherwise stated.

2 Paragraph 8 of the April 2001 stipulation (upon which Finding of Fact no. 6 here is based) employs the phrase "mines or quarries." In paragraph 11 of the same stipulation (upon which Finding of Fact no. 10 here is based), the parties framed the issue in this case by referring to the crushing of stone "mined from [petitioner's] quarry." At best, the stipulation is equivocal about whether petitioner operated a mine or a quarry on its property. However, the testimony at trial made it clear that petitioner did not operate a mine. Because the stipulation was equivocal on this point, the Commission's finding that petitioner operated two quarries does not contradict the April 2001 Stipulation.

3 See supra, note 2.

4 Testimony at the trial appears to contradict this stipulated sentence. Mr. Hammersley testified that both shot rock and crushed stone are usable and saleable. It may be that this stipulated sentence was intended to point out that the crushed stone was not usable until its elements were separated. The testimony is more logical, in light of all of the testimony on point. However, resolving this inconsistency is not necessary to deciding this case. May 22, 2002 transcript, pp. 36-37 and 40-41. "Shot rock" is possibly the large chunks of rock separated from a quarry wall. Supra at p. 36.

5 "Fines" are dirt, sand, and finer material which commonly blows in the wind. Testimony of Keith Hammersley, May 22, 2002 transcript, p. 32. What has been called a "fine machine" has also been called a "screener." Supra, pp 43-44.

6 In the April 2001 stipulation, Facts 21, 23, 30, and 31 state that petitioner "claims" to have entered into oral lease agreements with Yahara; that petitioner "claims" that both agreements were made retroactive to January 1994; and that petitioner does not know the employees and did not determine the pay of employees it "claims" to have leased from Yahara. The use of the term "claims" made these stipulated facts equivocal. However, these "claims" were largely proven to the Commission's satisfaction at trial.

7 During the trial, the parties appeared to believe that both written documents had a retroactive date provision. For example, see May 22, 2002 transcript, p. 50, lines 5-7.

8 May 22, 2003 transcript, pp. 31-32 and 35-36.

9 May 23, 2002 transcript, pp. 125-126.

10 May 23, 2002 transcript, p. 133.

11 May 23, 2002 transcript, pp. 133-134.

12 This restates the issue set forth in the April 2001 stipulation as follows: "11. What is in question here is use tax that Respondent assessed on the payments that Petitioner made to Yahara Materials, Inc. (Yahara), related to the crushing of Petitioner's stone, which Petitioner had mined from its quarry, and on which Petitioner performed additional services before applying the resulting crushed stone products in its real property construction activities."

13 Department's Brief, p. 14, filed December 20, 2002.

14 Petitioner's Reply brief, pp. 2-5, filed March 5, 2003.

15 Department's Brief, p. 2; see also p. 12. The presiding Commissioner admits surprise to hear at the trial that the stipulated facts did not pertain merely to the summary judgment motions. However, the stipulation was received into the record in the interests of litigation economy.

16 May 22, 2002 Transcript p. 11.

17 There is a non-machine element in this process (blasting). Although it is not explicitly stated in the record, it appears to be a de minimis step in terms of cost.

18 May 22, 2002 transcript, p. 38.

19 Exhibit U.

20 As indicated in Finding 26 and our discussion below, the Commission disagrees with the Department's contention that the end loaders dug into the undisturbed quarry wall.

21 May 23, 2002 transcript, pp. 172-173.

22 May 23, 2002 transcript, pp. 181-183.

23 May 23, 2002 transcript, p. 183.

24 Department's Brief, p. 52. Also, in his notes attached to the assessment, the Department's auditor expressed the opinion that he did not believe an oral lease existed during the audit period. May 23, 2002 transcript, p. 125. It must be observed that the parties' thorough briefs have left no stone unturned. Petitioner's initial brief covered 29 pages, the Department's brief covered 103 pages, and petitioner's reply brief was 80 pages long.

25 Fuller v. Riedel, 159 Wis. 2d 323, 332 (Ct. App. 1990).

26 Gustafson v. Physicians Ins. Co., 223 Wis. 2d 164, 173 (Ct. App. 1998).

27 NBZ, Inc. v. Pilarski, 185 Wis. 2d 827, 837 (Ct. App. 1994).

28 May 23, 2002 transcript, Testimony of Nancy Hammersley, p. 70.

29 May 22, 2002 transcript, pp. 209-210. The Commission also has recently recognized the validity of an oral lease in Paul Bugar Trucking, Inc. v. Dep't of Revenue, WTAC Docket No. 01-S-175 (April 10, 2003), at slip op. p. 2.

30 May 23, 2002 transcript, pp. 68-69.

31 Id., pp. 90-91.

32 Id., pp. 126-128.

33 See the quotation from Fuller v. Riedel, p. 18.

34 Petitioner's Initial Brief, pp. 21-22.

35 Petitioner's Initial Brief, pp. 22.

36 Petitioner's Initial Brief, p. 23.