Olson v. Department of Revenue

Decision Date24 October 1986
Docket NumberNo. 85-489,85-489
PartiesJohn K. OLSON and Cathryn W. Olson, Plaintiffs and Appellants, v. DEPARTMENT OF REVENUE, an agency of the State of Montana, John Lafaver, Director; Margaret Monical, Clerk and Recorder for County of Park, a political subdivision of the State of Montana; and the State of Montana, by Michael T. Greely Attorney General for the State of Montana, Defendants and Respondents.
CourtMontana Supreme Court

Roger Tippy, argued, Helena, for plaintiffs and appellants.

Mike Greely, Atty. Gen., Judy Browning, argued, Asst. Atty. Gen., R. Bruce McGinnis, argued, Dept. of Revenue, Helena, Jack Yardley, Deputy Co. Atty., Livingston, for defendants and respondents.

TURNAGE, Chief Justice.

On October 2, 1981, John and Cathryn Olson filed a complaint for declaratory judgment in the First Judicial District, in and for the County of Lewis and Clark. They alleged primarily that Sec. 15-30-103, MCA, is unconstitutional as applied to them because the State of Montana has denied them equal protection of the laws. On January 6, 1984, the Olsons filed a motion for summary judgment. After extensive briefing and a hearing on the matter, the District Court entered its judgment granting plaintiffs' motion for partial summary judgment on the issue of voting rights and denying their motion on the issue of income taxation. The Olsons have appealed from both orders in the judgment. We affirm.

The Organic Act of the Territory of Montana, as enacted in 1864, defined part of the southern boundary as running due west on the 45th degree of latitude to a point formed by its intersection with the 34th degree of longitude west from Washington. 13 Stat. 85. By act of Congress, Yellowstone National Park (Yellowstone) was established in 1872. The northern boundary of Yellowstone was defined as the latitude of the junction of the Yellowstone and Gardiner Rivers, which is about three miles north of the 45th parallel. 16 U.S.C. Sec. 21. Consequently, there is a strip of land in the northern part of Yellowstone, approximately three miles in width, that is within the State of Montana. These boundaries have remained unchanged to the present day.

Appellants live in that portion of Yellowstone which is north of the 45th parallel--specifically, between Gardiner, Montana, and the community of Mammoth Hot Springs. Although they reside within the boundaries of Montana, they do not reside within the boundaries of any county. Because of their "county-less" status, appellants' right to vote was limited.

Section 13-1-111(1)(c), MCA, requires that, in order to vote in elections, a person must be a resident of the State of Montana and of the county in which he offers to vote for at least thirty days. Pursuant to this statute, the Clerk and Recorder of Park County, Montana, created a special register of electors for persons residing in that strip of Yellowstone between the 45th parallel and the northern boundary of the Park. This special register was for a ballot limited to elections for federal offices; therefore, appellants, and others similarly situated, could not vote in any state or local elections. However, persons living in this area were given an opportunity to become annexed to Park County by elections held November 7, 1978. Although the voters of Park County approved the proposed annexation, the residents of that part of Yellowstone which is in Montana unanimously rejected it. Thus, no annexation occurred.

Appellants are employed by TWA Services, Inc., a concessionnaire of the National Park Service at Mammoth Hot Springs, which is within the boundaries of the State of Wyoming. All of appellants' job duties are performed outside of Montana.

Beginning in 1975, the Department of Revenue (DOR) required appellants' employer to withhold from appellants' wages a certain amount of money for the state income tax, pursuant to Secs. 15-30-103 and 15-30-202, MCA. Appellants filed timely returns claiming no income taxes were due the State because they resided on a federal area, and they applied for a refund of all taxes previously withheld. DOR granted a refund to appellants for the taxable years ending December 31, 1974, and December 31, 1975. However, DOR subsequently reversed itself and demanded payment of the sums refunded. When appellants refused, DOR issued warrants for distraint for the return of the refunds. DOR has kept the amounts withheld from appellants' wages since the beginning of 1977 and has claimed that additional taxes are due. It began proceedings in September 1981 to garnish appellants' wages.

On October 2, 1981, appellants filed a complaint for declaratory judgment. In their complaint, appellants alleged that Sec. 15-30-103, MCA, is unconstitutional as applied to them because the State is denying them equal protection of the laws. They based this assertion on the fact that they were not allowed to vote in state and local elections. Additionally, they claimed that Sec. 13-1-111(1)(c), MCA, is unconstitutional as applied to them. Appellants requested the District Court to issue a restraining order prohibiting DOR from garnishing their wages and to order a stay of execution of any DOR judgments against them for back taxes. In the alternative, appellants asked the court to find that they are not subject to state income taxes or to find that they may vote in national, state and local elections.

On January 6, 1984, appellants moved for summary judgment. The court denied their motion as it related to the issue of the income tax but reserved judgment on the issue of voting rights until further briefing. Appellants subsequently moved the court to enter a partial summary judgment that Sec. 13-1-111(1)(c) is unconstitutional as applied to them. In its response, the State agreed that appellants could not constitutionally be denied the right to vote in state and local elections. The District Court entered a final judgment on August 23, 1985, granting appellants' motion for partial summary judgment on the issue of voting rights and denying their motion on the issue of income taxation.

Appellants raise three issues for review:

1. Whether the declaratory judgment of the District Court is responsive to the pleadings and issues raised regarding the constitutionality of the county residency requirement for voter registration and other benefits provided by county residency?

2. Whether the State of Montana has generally denied appellants equal protection of the laws?

3. Whether the legislature must take some formal action to accept retrocession of taxing jurisdiction by the federal government before an income tax can be lawfully assessed on appellants?

I

Appellants first contend that the District Court's judgment is not responsive to their motion for summary judgment because it did not specifically declare that Sec. 13-1-111(1)(c) was unconstitutional. In its Opinion, Memorandum and Order the court stated:

[P]laintiffs' Motion for Partial Summary Judgment is granted on this issue. The Court finds, declares and concludes that plaintiffs and plaintiff-intervenor, who are residents of that portion of Yellowstone National Park which is located within the exterior boundaries of the State of Montana, but not within any county of the state, must be permitted to vote in state and county elections ... The franchise of state residents who have a substantial interest in the state's electoral decisions but do not live in a county should not be conditioned upon residency within a county for a period of thirty says [sic] as is required by Section 13-1-111(1)(c), MCA. The Park County Clerk and Recorder should, upon request, permit those plaintiffs ... to register and vote in state and local elections.

Although the court did not specifically state that Sec. 13-1-111(1)(c) is unconstitutional, the judgment had the same effect. Appellants' motion was granted, and there is no uncertainty that they can now register and vote in state and local elections.

We find no error in the court's judgment. In Evans v. Cornman (1970), 398 U.S. 419, 90 S.Ct. 1752, 26 L.Ed.2d 370, the United States Supreme Court held that a state cannot constitutionally prohibit residents of a federal enclave located within that state from voting in state and local elections unless the state can demonstrate that those residents are not substantially interested in electoral decisions made within that state. In this case, the State has made no attempt to demonstrate the requisite lack of interest of appellants in electoral decisions; in fact, the State has agreed that appellants cannot constitutionally be prohibited from voting in state and local elections. Therefore, so that there is no doubt concerning appellants' right to fully participate in the electoral process, we hold that Sec. 13-1-111(1)(c) is unconstitutional insofar as it acts to deny those who live in the Montana portion of Yellowstone from voting in state and local elections. Since the District Court's judgment achieved this same result, we find no reason to require the court to amend it.

Appellants also contend that the court's judgment was silent as to certain collateral issues which were raised below; for example, whether appellants and their neighbors are residents for hunting or fishing license purposes. For the reasons set forth below, this contention need not be addressed.

II

Appellants claim that the State has generally denied them equal protection of the laws because of their "county-less" status. They assert that because they do not reside in a county, they cannot run for county office, they cannot obtain a hunting or fishing license, and they do not have a county domicile for civil litigation venue purposes. Appellants contend that these statutes which require county residence before certain benefits can attach are unconstitutional as applied to them.

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