Opinion ID: 6317349
Heading Depth: 2
Heading Rank: 1

Heading: the plain meaning of the domicile provision

Text: BACKS THE BUCKS ¶27 When we interpret a statute, we start with the plain language of the provision, reading ―it in harmony with other statutes in the same chapter and related chapters.‖ Kamoe v. Ridge, 2021 UT 5, ¶ 15, 483 P.3d 720 (citation omitted) (internal quotation marks omitted). ―If, after conducting this plain language review we are left with competing reasonable interpretations, there is statutory ambiguity.‖ Bryner v. Cardon Outreach, LLC, 2018 UT 52, ¶ 10, 428 P.3d 1096. ―However, ‗a statute susceptible to competing interpretations may nevertheless be unambiguous if the text of the act as a whole, in light of related statutory provisions, makes all but one of those meanings implausible.‘‖ Id. (quoting Utah Pub. Emps. Ass’n v. State, 2006 UT 9, ¶ 60, 131 P.3d 208 (Parrish, J., concurring)). ¶28 Bearing these interpretive tenets in mind, we construe the Domicile Provision to make two points clear, leaving no room for ambiguity. First, the presumption of domicile that results from claiming a primary residential property tax exemption is rebuttable. And second, contrary to the Tax Commission‘s overly narrow interpretation, taxpayers are not statutorily barred from having a meaningful opportunity to rebut the presumption. 7 BUCK v. TAX COMMISSION Opinion of the Court ¶29 On the first point, we assume without deciding that the Bucks claimed a residential property exemption on their Utah residence.8 Under the Domicile Provision, such a claim unmistakably creates ―a rebuttable presumption‖ the Bucks ―have domicile in this state.‖ UTAH CODE § 59-10-136(2)(a).9 This much is uncontested. ¶30 What is contested, however, is the second point: whether the Domicile Provision affords the Bucks a meaningful shot at rebutting the presumption. And to get at the answer to this question, we need to properly understand the workings of IITA in general and subsections (1), (2), and (3) of the Domicile Provision in particular. ¶31 As we noted at the outset of this opinion, where an individual is domiciled can have substantial tax consequences. For example, it is ―a well-established principle of interstate . . . taxation . . . that a jurisdiction . . . may tax all the income of its residents, even income earned outside the taxing jurisdiction.‖ Okla. Tax Comm’n v. Chickasaw Nation, 515 U.S. 450, 462–63 (1995) (footnote omitted). ¶32 In line with this ―well-established principle,‖ id., Utah levies a yearly tax on ―the state taxable income‖ of its ―resident individual[s].‖ UTAH CODE § 59-10-104(1). A ―resident individual,‖ in turn, is defined to include one who is ―domiciled in this state.‖ Id. § 59-10-103(1)(q)(i). ¶33 As such, the $400,000 question in this case is whether the Bucks were domiciled in Utah in 2012. Subsections (1), (2), and (3) of the Domicile Provision, taken together, provide the answer. ¶34 When courts refer to domicile, they are referring generally to ―‘[t]he place at which a person has been physically present and that the person regards as home‘ or ‗a person‘s true, fixed, principal, and permanent home, to which that person intends to ___________________________________________________________ 8 In addition to asserting the Tax Commission erred in limiting the evidence of domicile it could consider, the Bucks also argue the Commission wrongly concluded they had claimed a residential property exemption on their Utah residence. 9It is worth noting that ―[i]f an individual is considered to have domicile in this state,‖ then ―the individual‘s spouse‖ is also ―considered to have domicile‖ here. UTAH CODE § 59-10-136(5)(a). 8 Cite as: 2022 UT 11 Opinion of the Court return and remain even though currently residing elsewhere.‘‖ Lilly v. Lilly, 2011 UT App 53, ¶ 13, 250 P.3d 994 (alteration in original) (quoting BLACK‘S LAW DICTIONARY 558 (9th ed. 2009)). And in applying these rather orthodox principles of domicile, courts look to a multiplicity of factors including, but most certainly not limited to, ―the places where the [individual] exercises civil and political rights, pays taxes, owns real and personal property, has driver‘s and other licenses, maintains bank accounts, belongs to clubs and churches, has places of business or employment, and maintains a home for his [or her] family.‖ Coury v. Prot, 85 F.3d 244, 251 (5th Cir. 1996). ―No single factor is determinative.‖ Id. ¶35 Subsection (3) of the Domicile Provision largely reflects these principles and factors. With regard to the principles, we are told in (3)(a) that an ‖individual is considered to have domicile in‖ Utah if: (i) the individual or the individual‘s spouse has a permanent home in this state to which the individual or the individual‘s spouse intends to return after being absent; and (ii) the individual or the individual‘s spouse has voluntarily fixed the individual‘s or the individual‘s spouse‘s habitation in this state, not for a special or temporary purpose, but with the intent of making a permanent home. UTAH CODE § 59-10-136(3)(a). ¶36 With regard to the factors, we are instructed in (3)(b) that the (3)(a) determination of domicile shall be based on the preponderance of the evidence, taking into consideration the totality of the following facts and circumstances: (i) whether the individual or the individual‘s spouse has a driver license in this state; (ii) whether a dependent with respect to whom the individual or the individual‘s spouse claims a personal exemption on the individual‘s or individual‘s spouse‘s federal individual income tax return is a resident student in accordance with [s]ection 53B-8-102 who is enrolled in an institution of higher education described in [s]ection 53B-2-101 in this state; (iii) the nature and quality of the living accommodations that the individual or the individual‘s spouse has in this state as compared to another state; (iv) the presence in this state of a spouse or dependent with respect to whom the 9 BUCK v. TAX COMMISSION Opinion of the Court individual or the individual‘s spouse claims a personal exemption on the individual‘s or individual‘s spouse‘s federal individual income tax return; (v) the physical location in which earned income as defined in [s]ection 32(c)(2), Internal Revenue Code, is earned by the individual or the individual‘s spouse; (vi) the state of registration of a vehicle as defined in [s]ection 59-12-102 owned or leased by the individual or the individual‘s spouse; (vii) whether the individual or the individual‘s spouse is a member of a church, a club, or another similar organization in this state; (viii) whether the individual or the individual‘s spouse lists an address in this state on mail, a telephone listing, a listing in an official government publication, other correspondence, or another similar item; (ix) whether the individual or the individual‘s spouse lists an address in this state on a state or federal tax return; (x) whether the individual or the individual‘s spouse asserts residency in this state on a document, other than an individual income tax return filed under this chapter, filed with or provided to a court or other governmental entity; (xi) the failure of an individual or the individual‘s spouse to obtain a permit or license normally required of a resident of the state for which the individual or the individual‘s spouse asserts to have domicile; or (xii) whether the individual is an individual described in [s]ubsection (1)(b). Id. § 59-10-136(3)(b). ¶37 In addition to, in effect, codifying the conventional approach to domicile, the Domicile Provision lays out situationspecific rules in subsections (1) and (2). Under subsection (1), an individual is ―considered to have domicile‖ in Utah if ―a dependent with respect to whom the individual . . . claims a personal exemption on the individual‘s‖ federal return is enrolled in a public kindergarten, elementary, or secondary ―school in this state‖ or if ―the individual or the individual‘s spouse is a resident student‖ enrolled in certain in-state institutions of higher education. Id. § 59-10-136(1)(a). This is an unbending presumption, meaning, if established, it cannot be rebutted. ¶38 Subsection (2) of the provision expands the list of individuals presumed domiciled here. Under (2)(a), this group 10 Cite as: 2022 UT 11 Opinion of the Court includes those individuals, like the Bucks, who claim ―a residential exemption‖ for their ―primary residence.‖10 Id. § 59-10-136(2)(a). But unlike subsection (1), this presumption is unquestionably ―rebuttable.‖ Id. § 59-10-136(2). ¶39 The Tax Commission would have us cobble these three subsections together to allow them to ―consider only‖ a taxpayer‘s ―actions or inactions related to the residential property tax exemption‖ when applying the presumption under (2)(a). Thus, the Commission‘s position seems to be that the only evidence relevant to rebutting the subsection (2)(a) presumption is evidence that goes to the application of the residential property tax exemption itself. ¶40 For textual support, the Tax Commission relies on the following clause from subsection (3)(a): ―Subject to [s]ubsection (3)(b), if the requirements of [s]ubsection (1) or (2) are not met for an individual to be considered to have domicile in this state, the individual is considered to have domicile in this state if‖ subsections (3)(a)(i) and (3)(a)(ii) are satisfied. Id. § 59-10-136(3)(a). In the Commission‘s eyes, the first if clause requires that it ―first determine whether [t]axpayers are domiciled in Utah under sections 136(1) or (2) before considering any domicile factors listed in section 136(3).‖ Furthermore, according to the Commission, allowing taxpayers to use evidence beyond that tied to ―their actions or inactions regarding their residential exemption‖ to rebut ―the presumption of domicile under section 136(2)(a)‖ would eviscerate the first if clause. ¶41 We struggle to see the Commission‘s point. When it comes to rebutting the subsection (2)(a) presumption of domicile, the Tax Commission‘s interpretation confines taxpayers to evidence of their actions or inactions regarding the residential exemption itself. This is not rebuttal evidence; rather, this is evidence of whether the presumption even applies. Consider a hypothetical rule that says, ―there is a rebuttable presumption that an individual who holds title to a vehicle was driving it at the time of any accident ___________________________________________________________ 10 Although not relevant to this case, this group also includes those who are registered to vote in Utah (subsection (2)(b)) and those who ―assert[] residency in this state for purposes of filing an individual income tax return‖ (subsection (2)(c)). UTAH CODE § 5910-136(2)(b)–(c). 11 BUCK v. TAX COMMISSION Opinion of the Court involving the vehicle.‖ Under the Commission‘s approach, the only evidence a vehicle owner could put on to establish they were not behind the wheel at the time of an accident is evidence of their actions or inactions regarding title to the vehicle. This view is fundamentally and fatally flawed because it confuses evidence establishing a presumption with evidence relevant to overcoming,
¶42 One of our well-established contextual canons of statutory construction—the surplusage canon—helps illuminate the problem with the Tax Commission‘s view. Under the Commission‘s approach, the ―rebuttable presumption‖ provision in subsection (2) carries no water. Scrap it altogether, and taxpayers could still put on evidence of their action or inaction regarding the residential exemption. In other words, taxpayers could still put on evidence indicating they did not ―claim[] a residential exemption.‖ UTAH CODE § 59-10-136(2)(a). This outcome puts subsection (2) on the same footing with subsection (1), which creates a ―categorical‖ or non-rebuttable presumption, as the Tax Commission concedes.11 Such an interpretation violates the surplusage canon and, under our jurisprudence, is anathema. See ANTONIN SCALIA & BRYAN A. GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 174 (2012) (―If possible, every word and every provision is to be given effect . . . . None should needlessly be given an interpretation that causes it . . . to have no consequence‖). ¶43 We think it inconceivable that the Utah Legislature labored to create a rebuttable presumption that, in effect, is irrebuttable. Hence, we conclude that Tax Commission‘s interpretation is not reasonable, and we reject it. ¶44 The Bucks, on the other hand, read subsections (1), (2), and (3) together in a common-sense way that gives meaning to each section of the Domicile Provision. In the Bucks‘ view, the Tax Commission would first determine if an individual or the individual‘s spouse or dependent is enrolled in an educational ___________________________________________________________ 11 Even though the subsection (1) presumption is categorical, there is no doubt that taxpayers could put on evidence they are not subject to it. For example, taxpayers could introduce facts showing their dependents were not ―enrolled in a public kindergarten . . . in this state‖ during the tax year in question. UTAH CODE § 59-10136(1)(a)(i). 12 Cite as: 2022 UT 11 Opinion of the Court institution in this state in a way that triggers subsection (1). See supra ¶ 37. If so, and absent application of subsection (4), which has no perch in this case, the individual is domiciled in Utah for purposes of IITA. Full stop. ¶45 If subsection (1) does not apply, the Tax Commission would turn to subsection (2) and determine if the individual claimed the residential exemption or otherwise triggered the application of this subsection. See supra ¶ 38. Unlike under subsection (1), however, the individual may rebut this presumption. ¶46 Subsection (3), in the Bucks‘ view, serves as IITA‘s catchall domicile provision. Pursuant to this subsection, individuals not subject to the situation-specific rules of subsections (1) and (2) may still be considered domiciled in Utah if, after ―taking into consideration the totality of the . . . facts and circumstances‖ set forth in subsection (3)(b), the ―preponderance of the evidence‖ weighs in favor of domicile. See supra ¶¶ 35–36. And these so happen to be many of the same facts and circumstances the Bucks presented evidence on before the Tax Commission in their bid to overcome the subsection (2) presumption. ¶47 With the benefit of hindsight and focused briefing, it is often the case that we perceive ways in which statutory language could be improved. Section 136 is no exception: The legislature could have explicitly said taxpayers are not barred from relying on some or all of the subsection (3) factors in overcoming the subsection (2) presumption. But clairvoyance and perfection have never been the benchmarks by which we measure ambiguity. No, we focus on if, in reading the relevant provisions together, there are competing reasonable interpretations. Here, there are not. For the reasons we have expressed, only the Bucks‘ take survives our reasonableness inquiry. ¶48 What is more, even if we were to stretch and credit the Commission‘s interpretation as a reasonable one, resulting in an ambiguity, the Commission would still lose. As the Bucks and amicus curiae the American College of Tax Counsel ably point out, the Commission‘s interpretation raises several constitutional issues.12 And the Attorney General‘s decision not to offer a defense ___________________________________________________________ The Bucks contend the Tax Commission‘s application of the 12 Domicile Provision (1) denies them due process because ―it doesn‘t (continued . . .) 13 BUCK v. TAX COMMISSION Opinion of the Court of the statute in light of this briefing provides us with a sufficient basis to conclude that there are serious problems attendant to the Commission‘s view. Accordingly, one of our prime expectedmeaning canons—the constitutional-doubt canon—would heavily favor the Bucks‘ read of the Domicile Provision and cause us to reject the Commission‘s position.