BLUE YONDER, LLC v. STATE TAX ASSESSOR
Supreme Judicial Court of Maine
April 26, 2011
2011 ME 49 | 17 A.3d 667
Argued: Sept. 14, 2010. Decided: April 26, 2011.
The entry is:
Judgment vacated. Remanded to the Superior Court for proceedings consistent with this opinion.
Jonathan A. Block, Esq., (orally), Robert A. Creamer, Esq., Pierce Atwood LLP, Portland, ME, for Blue Yonder, LLC.
Panel: SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, and GORMAN, JJ.
Majority: SAUFLEY, C.J., and ALEXANDER, SILVER, and GORMAN, JJ.
Dissent: LEVY, and MEAD, JJ.
SAUFLEY, C.J.
[¶1] This appeal requires us to address the purposes of Maine‘s use tax as a complement to the sales tax. Based on the statutes in effect at the time of taxation, we conclude that an aircraft that was used briefly in Maine was exempt from the use tax when the aircraft was purchased and delivered outside of Maine, was owned by an out-of-state entity, hаd never been registered in Maine, and was in Maine for approximately twenty-one full days during its first year of use. Because we conclude that an exemption applied, we vacate the judgment entered on the Business and Consumer Docket (Humphrey, C.J.), in which the court concluded that a use tax was properly imposed on the aircraft.
[¶2] The aircraft‘s owner, Blue Yonder, LLC, appeals from the summary judgment entered by the court upon de novo determination whether the use tax was properly imposed. See
I. BACKGROUND
[¶3] The following facts are undisputed. Blue Yonder is a limited liаbility company that was organized in 2002 in Massachusetts. The company is owned jointly by Stephen Kahn and his wife, Janet Pendleton. Blue Yonder purchased an aircraft from Cirrus Design Corporation on November 4, 2002, in Minnesota. Kahn flew the aircraft from Minnesota to Massachusetts, where it was registered. The aircraft has never been registered in Maine. No sales or use tax has been paid on the aircraft in any jurisdiction.
[¶5] Maine Revenue Service assessеd a use tax of $17,313.06 and interest of $8,005.77, for a total assessment of $25,318.83, on or about June 29, 2007, and the State Tax Assessor upheld the imposition of the tax and interest upon reconsideration on December 21, 2007. Blue Yonder appealed from the Assessor‘s decision to the Superior Court and sought a de novo determination. See
II. DISCUSSION
A. Decision on Appeal and Standard of Review
[¶6] When a party seeks review in the Superiоr Court of a decision issued by the Assessor upon reconsideration, the court must “make a de novo determination of the merits of the case” and “shall make its own determination as to all questions of fact or law, regardless of whether the questions of fact or law were raised during the reconsideration period.”
[¶7] Because this case comes to us upon the entry of a summary judgment in favor of the Assessor, we review whether the court properly determined that there was no genuine issue of material fact and that the Assessor was entitled to judgment as a matter of law. See
B. Interpretation and Application of the Use Tax Statutes
[¶8] The purpose of the Maine use tax is to diminish the incentive to purchase goods for use in Maine at out-of-state locations where there are lower, or no, sales taxes. Brent Leasing Co. v. State Tax Assessor, 2001 ME 90, ¶ 11, 773 A.2d 457, 460-61. It is a tax that serves “to minimize unfair competition between intrastate and interstate sales of tangible per-
[¶9] The applicability of the use tax and exemptions from that tax to the Blue Yonder aircraft requires a review of the statutes that were in place at the time that the taxes were imposed, in light of the purpose of the use tax to reduce “unfair competition between intrastate and interstate sales of tangible personal property.” Brent Leasing Co., 2001 ME 90, ¶ 11, 773 A.2d at 460 (quotation marks omitted).
[¶10] When we interpret a tax statute, the plain meaning of the statute controls if the statute is unambiguous. See Stromberg-Carlson Corp. v. State Tax Assessor, 2001 ME 11, ¶ 9, 765 A.2d 566, 569. To resolve any ambiguity, we look to the legislative history of the statute to determine its meaning. See Schaefer v. State Tax Assessor, 2008 ME 148, ¶ 16, 956 A.2d 710, 713. In our interpretation, we seek to avоid “absurd, illogical or inconsistent results.” Stromberg-Carlson Corp., 2001 ME 11, ¶ 9, 765 A.2d at 569. Words in a statute “must be given meaning and not treated as meaningless and superfluous.” Id. We will not read additional language into a statute. Id. As noted above, because the Superior Court is directed by statute to rule on questions of law de novo, we do not accord any heightened deference to the Assessor in interpreting the tax statutes. See Enerquin Air, Inc., 670 A.2d at 928-29.
[¶11] With these rules of construction in mind, we first examine the two exemptions asserted by Blue Yonder that governed in-state purchases followed by delivery or transport outside of Maine. See
1. Exemptions from Sales Tax for Certain Purchases in Maine
[¶12] Blue Yonder contends that subsections (23-C) and (82) applied equally to sales and use taxation. It bases its argument on the introductory language of section 1760, which stated, “Subject to the provisions of section 1760-C, no tax on sales, storage or use may be collected upon or in connection with” the enumerated exemptions.
[¶13] We agree with the Superior Court that we must not interpret the statutes in a manner that would render some of the language superfluous and meaningless. See Stromberg-Carlson Corp., 2001 ME 11, ¶ 9, 765 A.2d at 569; see also S. Portland Civil Serv. Comm‘n v. City of S. Portland, 667 A.2d 599, 601 (Me.1995) (stating that a more specific statute takes precedence over a more general one). Applying these principles, we read the two exemptions pursuant to their plain language and conclude that they applied only to in-state sales, nоtwithstanding the prefatory language of section 1760. See
[¶14] The exemption set forth in section 1760(23-C)(C) applied when an aircraft was “purchased by a nonresident and intended to be driven or transported outside the State immediately upon delivery.”
[¶15] Similarly, section 1760(82) exempted from taxation “[s]ales of tangible personal property when the seller delivers the property to a location outside this State.” This exemption eliminated sales taxation of property purchased in Maine but delivered to a location outside of Maine. An interpretation of subsection (82) that made it applicable to any property purchased and delivered outside of Maine would entirely thwart the purpose of the use tax. As did the Superior Court, we avoid this absurd result by reading the statute to apply only when the property has been purchased in-state and delivered outside the state. See Stromberg-Carlson Corp., 2001 ME 11, ¶ 9, 765 A.2d at 569.
2. Exemption for Certain Property Purchased Outside of Maine
[¶16] Ultimately, the only exemption cited by Blue Yonder that could exempt the aircraft at issue here from use taxation was set forth in section 1760(45)(B), which exempted from taxation “[s]ales of property purchased and used by the present owner outside the State . . . [f]or more than 12 months.”
[¶17] The tax exemption articulated in subsection (45)(B) was inherently ambiguous. Evidently in recognition of this lack of clarity, the exemption was recently amended to provide guidаnce on the issue that we must resolve in this appeal. See P.L.2005, ch. 519, § EE-1 (effective Jan. 1, 2007) (codified as subsequently amended at
[¶18] The ambiguous language of the statute could be read to indicate either of two extremes: that the exemption would apply (1) if the aircraft was used outside the state at any time during the first twelve months, or (2) only when the aircraft was used exclusively outside the state for the first twelve months.
[¶19] It would be absurd to interpret the statute to exempt property from use taxation based on any use of the property outside of Maine within the first twelve months after purchase. See Stromberg-Carlson Corp., 2001 ME 11, ¶ 9, 765 A.2d at 569. Such a reading would permit avoidance of the use tax simply by transporting property outside of Maine once within twelve months after its out-of-state purchase.
[¶20] It would be equally illogical to conclude that the Legislature intended for the tax exemption to apply only if the aircraft was used exclusively outside of Maine during the first twelve months. See id. The Legislature cannot have intended, for instance, to impose a use tax on any aircraft that landed in Maine briefly for refueling or a single, short visit. Such taxation would be inconsistent with the purpose of a use tax to serve as a сomplement to the sales tax, see John Swenson Granite, Inc., 685 A.2d at 428.
[¶21] Further, when we examine the statutory context of subsection (45)(B), see Stromberg-Carlson Corp., 2001 ME 11, ¶ 9, 765 A.2d at 569, we observe that, in other portions of section 1760, the Legislature explicitly authorized exemptions for items that were intended to be used exclusively in certain ways. See
[¶22] Having rejected the two interpretations at the extremes, we must determine how to construe the statute in a reasonable manner that avoids absurd results. See id. In the absence of legislative guidance, and taking into account the purpose of usе taxation, we conclude that the subsection (45)(B) exemption from the use tax applied if the use of the aircraft outside of Maine was sufficiently substantial to make unjust the imposition of a use tax in Maine. Although the parties seek a more categorical determination from us, we decline to establish any bright line. Determining whether the use outside of Maine was substantial will require a careful examination of the unique facts of each case.
[¶23] Here, the Assessor does not dispute that the aircraft at issue was purchased outside of Maine and was registered in Massachusetts. The record reflects that the plane was present in Maine for at least twenty-one full days in the twelve-month period after purchase and for as many as twenty-five dates, including partial days. Those Maine trips included flights for the delivery of ill or injured patients to Massachusetts through the Angel Flight Program. Thus, the aircraft was within Maine for six or seven percent of its first twelve months.
The entry is:
Judgment vacated. Remanded to the Business and Consumer Docket for remand to the State Tax Assessor with instructions to reverse all use tax and interest assessed on Blue Yonder for the Cirrus aircraft purchased in 2002.
LEVY, J., with whom MEAD, J., joins, dissenting.
[¶25] I agree with the Court‘s analysis with respect to the exemptions from the use tax contained in
[¶26] Section (45)(B) exempts from use taxation “[s]ales of property purchased and used by the present owner outside the State . . . [f]or more than 12 months[.]” To construe the statute, I look to the Legislature‘s general definition of the word “use” in
[¶28] The Legislature amended subsection (45) effective January 1, 2007, to specify that, as applied to aircraft, the exemption is available when the aircraft is present in this State for no more than twenty days during the first twelve months of ownership. P.L.2005, ch. 519, § EE-1 (effective Jan. 1, 2007) (codified and subsequently amended at
[¶29] I would affirm the judgment of the Superior Court.
Notes
Subject to the provisions of section 1760-C, no tax on sales, storage or use may be collected upon or in connection with:
. . . .
23-C Certain vehicles purchased by nonresidents. Sales of the following vehicles purchased by a nonresident and intended to be driven or transported outside the State immediately upon delivery by the seller:
A. Motor vehicles, except all-terrain vehicles as defined in Title 12, section 7851 and snowmobiles as defined in title 12, section 7821;
B. Semitrailers;
C. Aircraft;
D. Truck bodies and trailers manufactured in the State; and
E. Camper trailers, including truck campers.
If the vehicles are registered for use in the State within 12 months of the date of purchase, the person seeking registration is liable for use tax on the basis of the original purchase price.
Notwithstanding section 1752-A, for purposes of this subsection, the term “nonresident” may include an individual, an association, a society, a club, a general partnership, a limited partnership, a domestic or foreign limited liability company, a trust, an estate, a domestic or foreign corporation and any other legal entity.
. . . .
45. Certain property purchased outside the State. Sales of property purchased and used by the present owner outside the State:
A. If the property is an automobile, as defined in Title 29-A, section 101, subsection 7, and if the owner was, at the time of purchase, a resident of the othеr state and either employed or registered to vote there;
A-1. If the property is a watercraft or all-terrain vehicle that is registered outside the State by an owner who at the time of purchase was a resident of another state and the watercraft or all-terrain vehicle is present in the State not more than 30 days during the 12 months following its purchase for a purpose other than temporary storage; or
B. For more than 12 months in all other cases.
For purposes of this subsection, “use” does not include storage, but means actual utilization of the property for a purpose consistent with its design. Property, other than automobiles, watercraft and all-terrain vehicles, that is required to be registered for use in this State does not qualify for exemption unless it was registered by its present owner outside this State more than 12 months prior to its registration in this State.
. . . .
82. Sales of property delivered outside this State. Sales of tangible personal property when the seller delivers the property to a locatiоn outside this State or to the United States Postal Service, a common carrier or a contract carrier hired by the seller for delivery to a location outside this State, regardless of whether the property is purchased F.O.B. shipping point or other point in this State and regardless of whether passage of title occurs in this State.
the aircraft is present in this State not more than 20 days during the 12 months following its purchase, exclusive of days during which the aircraft is in this State for the purpose of undergoing “major alterations,” “major repаirs” or “preventive maintenance” as those terms are described in 14 Code of Federal Regulations, Appendix A to Part 43, as in effect on January 1, 2005. . . . For the purposes of this paragraph, the location of an aircraft on the ground in the State at any time during a day is considered presence in the State for that entire day, and a day must be disregarded if at any time during that day the aircraft is used to provide free emergency or compassionate air trаnsportation arranged by an incorporated nonprofit organization providing free air transportation in private aircraft by volunteer pilots so children and adults may access life-saving medical care.