Richland Aviation, Inc. v. State, Department of Revenue
2017 MT 122
| Mont. | 2017Background
- Richland Aviation, based in Sidney, Montana, provides on-demand, contract air transport using small piston twin aircraft and does not publish flights or sell tickets to the general public.
- Richland had a routine contract with UPS to pick up/deliver freight at set times/locations determined by UPS; flights under that contract were reserved exclusively for UPS freight.
- Richland registered its aircraft under Montana’s aircraft-registration provisions (Title 67), which impose a registration fee in lieu of property tax; the aircraft were not centrally assessed.
- In 2013 the Montana Department of Revenue (DOR) sent questionnaires and later determined Richland performed “regularly scheduled flights” for UPS and therefore should be centrally assessed as a “scheduled airline.”
- Richland challenged that determination in the Seventh Judicial District Court; the district court granted summary judgment for Richland, concluding it was not a “scheduled airline.” DOR appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Richland Aviation is a "scheduled airline" subject to central assessment under Montana law | Richland: its flights are on-demand/contractual; the schedule is set by the customer (UPS), not the carrier; therefore flights are not "regularly scheduled flights." | DOR: Richland provides services for hire to the public and performs routine flights for UPS under a contract, so it should be treated as a scheduled airline and centrally assessed. | Court affirmed: Richland is not a scheduled airline because it does not operate flights according to timetables and locations predefined by the carrier; UPS (the customer) set the schedule. |
Key Cases Cited
- Montana Dep’t of Revenue v. Alpine Aviation, 384 P.3d 1035 (Mont. 2016) (defines "regularly scheduled flights" as those following timetables and locations predefined by the carrier and flying regardless of whether passengers or freight are carried)
- Powder River Cnty. v. Mont. Dep’t of Revenue, 60 P.3d 357 (Mont. 2002) (tax statutes must be specifically authorized and are construed strictly in favor of the taxpayer)
- Omimex Can., Ltd. v. Mont. Dep’t of Revenue, 201 P.3d 3 (Mont. 2008) (tax statutes construed against taxing authority and for taxpayer)
- W. Energy Co. v. Mont. Dep’t of Revenue, 990 P.2d 767 (Mont. 1999) (standard of reviewing district court conclusions of law)
- Connick v. Judge, 538 P.2d 1024 (Mont. 1975) (principle that nothing is taxable unless clearly authorized by statute)