17 A.3d 1237
Me.2011Background
- Victor Bravo Aviation, LLC purchased an aircraft outside Maine; possession occurred in May 2005 after arrival from Connecticut.
- The aircraft was present in Maine on 156 days and in Maine overnight 121 times during the first year of ownership.
- Victor Bravo never registered the aircraft in Maine and paid use tax on another aircraft in Maine but not on this one.
- Three entities—Saddle Ridge Holdings, Cleary Benefits Group, Inc., and Danbury Powersports—rented the aircraft from Victor Bravo for trips, potentially affecting use attribution.
- Maine Revenue Services assessed use tax of $120,850 plus interest and penalties; Victor Bravo appealed, seeking de novo review.
- The Superior Court entered summary judgment for the Assessor on the tax and interest but granted penalty waiver; the Assessor cross-appealed on penalties and interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the aircraft was used in Maine by Victor Bravo | Bravo: use occurred in Maine via ownership rights and rentals. | Assessor: use included rental-related activity in Maine by Victor Bravo. | Yes; the aircraft was used in Maine, supporting the use tax. |
| Do exemptions 23-C and 82 apply to this aircraft | Bravo: exemptions apply to nonresident purchases or out-of-state deliveries. | Assessor: exemptions do not apply because aircraft was not purchased in Maine and 82 concerns delivery outside Maine. | Exemptions 23-C and 82 do not apply to this aircraft. |
| Does exemption 45(B) apply for property purchased outside Maine | Bravo: substantial use outside Maine qualifies for exemption. | Assessor: use outside Maine was not substantial enough to qualify. | Exemption 45(B) does not apply; use tax remains applicable. |
| Should penalties be waived or abated | Bravo: substantial authority justified waiver/abatement of penalties. | Assessor: no basis to waive penalties absent substantial authority. | Penalties abated; substantial authority supported waiver. |
| Should interest be abated or waived | Bravo: interest should be abated consistent with other relief. | Assessor: discretionary denial of interest abatement upheld. | Remanded for de novo consideration of interest abatement; not resolved on the record. |
Key Cases Cited
- Blue Yonder, LLC v. State Tax Assessor, 2011 ME 49 (Me. 2011) (an aircraft use tax exemptions analysis guiding substantial use outside Maine)
- Brent Leasing Co. v. State Tax Assessor, 2001 ME 90 (Me. 2001) (use tax concept and intrastate vs interstate competition)
- Realco Servs., Inc. v. Halperin, 355 A.2d 743 (Me. 1976) (definition of 'located in this State' and transient presence)
- Stewart Title Guar. Co. v. State Tax Assessor, 2009 ME 8 (Me. 2009) (de novo standard of review for use tax decisions)