Blue Yonder, LLC v. State Tax Assessor
17 A.3d 667
| Me. | 2011Background
- Blue Yonder, LLC, a Massachusetts-organized LLC, purchased a Cirrus aircraft in Minnesota in 2002; it was owned by Stephen Kahn and Janet Pendleton and never registered in Maine.
- Kahn flew the aircraft from Minnesota to Massachusetts where it was registered; it was used to deliver ill or injured patients through Angel Flight; it was not registered in Maine.
- The aircraft was present in Maine for at least 21 full days during the first twelve months of ownership, with as many as 25 dates involved.
- Maine Revenue Service assessed a use tax of $17,313.06 and interest of $8,005.77 against Blue Yonder, total $25,318.83, around June 29, 2007; the Assessor denied Blue Yonder’s reconsideration request.
- Blue Yonder appealed for de novo review under 36 M.R.S. § 151; the Superior Court granted summary judgment for the Assessor; Blue Yonder then appealed.
- The court ultimately concluded the use tax exemptions applied and vacated the judgment, remanding for reversal of the use tax and interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do exemptions in 1760(23-C) and 1760(82) apply to use tax? | Blue Yonder asserts these exemptions apply to in-state purchases; aircraft here was purchased out of state. | State argues these exemptions apply only to in-state sales, not use tax. | Exemptions apply only to in-state purchases; not applicable to use tax. |
| Does subsection 1760(45)(B) exempt Blue Yonder's aircraft given its out-of-state use in the first year? | Blue Yonder argues the aircraft was used outside Maine sufficiently to qualify. | Assessor contends use outside Maine did not meet exemption requirements. | Exemption applies where out-of-state use was substantial in the first year (about 94%), warranting relief. |
| Is the 45(B) interpretation ambiguous and should the court adopt a substantiality requirement? | Ambiguity exists; court should adopt a narrow interpretation. | Court should avoid broad, absurd results and apply reasonable interpretation. | Court rejected a bright-line rule; found exemption applicable given substantial out-of-state use. |
Key Cases Cited
- Brent Leasing Co. v. State Tax Assessor, 2001 ME 90 (Me. 2001) (use tax purpose to prevent unfair intrastate competition; not to overextend exemptions)
- John Swenson Granite, Inc. v. State Tax Assessor, 685 A.2d 425 (Me. 1996) (de novo review, not deference to assessor in tax statutes)
- Enerquin Air, Inc. v. State Tax Assessor, 670 A.2d 926 (Me. 1996) (statutory interpretation de novo; use tax exemptions context)
- Stromberg-Carlson Corp. v. State Tax Assessor, 2001 ME 11, 765 A.2d 566 (Me. 2001) (interpretation avoids absurd results; give statute language effect)