Acklie v. Neb. Dep't of Revenue
| Decision Date | 09 December 2022 |
| Docket Number | S-21-985. |
| Citation | 313 Neb. 28,982 N.W.2d 228 |
| Parties | Phyllis ACKLIE, individually and as Personal Representative of the Estate of Duane Acklie, deceased, appellant, v. NEBRASKA DEPARTMENT OF REVENUE, a Nebraska administrative agency, and Tony Fulton, in his capacity as the State Tax Commissioner for the State of Nebraska, appellees. |
| Court | Nebraska Supreme Court |
Timothy L. Moll, Lincoln, of Rembolt Ludtke, L.L.P., for appellant.
Douglas J. Peterson, Attorney General, and L. Jay Bartel, Lincoln, for appellees.
The primary issue in this Administrative Procedure Act appeal is whether the taxpayers proved that they abandoned their domicile in Nebraska and acquired a domicile in Florida. The Tax Commissioner and the district court concluded that the taxpayers failed to meet their burden of proof. Because competent evidence supported the district court's factual findings and its decision conformed to the law, we affirm its judgment.
This appeal involves the Nebraska income tax returns of Duane Acklie and Phyllis Acklie for the period beginning on January 1, 2010, and continuing through December 31, 2014 (the audit period). In other words, the audit period covered five calendar-year tax years: 2010, 2011, 2012, 2013, and 2014. The Acklies were married at all times during the audit period and filed income tax returns as married filing jointly.
The Acklies filed Nebraska income tax returns as residents of Nebraska for tax years prior to 2008. But for tax years 2008 through 2014, the Acklies filed Nebraska income tax returns claiming status as nonresidents of Nebraska. The Nebraska Department of Revenue (Department) did not audit the Acklies for the 2008 or 2009 tax years, and no adjustments were made to those returns.
The Department sent the Acklies notices of proposed deficiency determinations for each tax year of the audit period. The notices all stated that the Acklies "are Nebraska residents." Some of the notices added that the Acklies "maintained a permanent place of abode," while others cited the statute defining "[r]esident individual."1
The Acklies filed petitions for a redetermination. They protested the entire amount of the tax, interest, and penalties proposed by the Department for each of the tax years. The Acklies claimed that they were not domiciled in Nebraska during the relevant years and that they did not spend more than 6 months in Nebraska.
A hearing officer for the Department conducted a hearing on behalf of the Tax Commissioner. For purposes of the hearing, the parties stipulated to a number of facts. They also stipulated to the amount of tax owed if both of the Acklies were Nebraska residents for the entire audit period and to the Acklies’ having no tax due if they were not residents of the state. In this opinion, we have omitted the property valuations shown in the record.
The evidence established that each of the Acklies was born in Nebraska in the 1930s. In 1971, the Acklies acquired Crete Carrier Corporation—a large trucking company based in Lincoln, Nebraska. During the audit period, the Acklies each possessed approximately a 1-percent ownership interest in Crete Carrier Corporation. Also during the audit period, each of the Acklies served as a director of the corporation and received compensation. During the 2010 to 2012 tax years, the corporation listed the Acklies as salaried Nebraska employees for purposes of filings with the Department in order to meet requirements to qualify for a "Nebraska Tax Incentive Program LB 775." For purposes of the incentive program, the Department determined that the Acklies were nonresidents for the fiscal years September 30, 2008, through September 30, 2012. This determination was based in part on the Acklies’ filing "a Form 12N, which is the Nebraska nonresident income tax agreement."
Each of the Acklies owned a residence in Lincoln during the entirety of the audit period. They used the residence owned by Phyllis for residential purposes when they were in Lincoln. The Acklies did not use the residence owned by Duane for personal residential purposes; instead, they made it available to others for recreational use.
The parties owned several investment properties in Lancaster County, Nebraska, which they leased for payments of cash rent. In 2011, Phyllis purchased a 516.75-acre farm. In 2012, she purchased a 135.93-acre farm. The Acklies owned a 25.03-acre commercial property until they transferred it to Crete Carrier Corporation in December 2013 as part of a like-kind exchange for property in Madison County, Nebraska. While the Acklies owned the property, they held it for investment purposes and leased the property to Crete Carrier Corporation in exchange for payments of cash rent.
The Acklies owned 10 farm properties in Madison County. They held the properties for investment purposes and leased them to third-party tenants in exchange for payments of cash rent. The property tax statements for the properties were mailed to a post office box in Lincoln.
The Acklies owned property in other states, too. In 1993, they purchased a residence in Colorado, which they used for residential purposes. In 1997, the Acklies purchased a residence in Florida, which they used for residential purposes. The Acklies acquired two farm properties in Minnesota during the audit period. They held the properties for investment purposes and leased them to third-party tenants in exchange for payments of cash rent. The property tax statements for the Minnesota properties were mailed to a post office box in Lincoln.
In 2008, the Acklies took a number of important actions in Florida. They moved "additional personal property" from their residence in Nebraska to their residence in Florida, though the record reveals no further information about the contents of this property. They obtained Florida driver's licenses. They registered vehicles in their names. They registered to vote and exercised the right to vote in Florida elections. Phyllis completed paperwork and was approved to obtain a Florida homestead exemption for the Florida residence. In the proof-of-residence section of the application, Phyllis stated that she "last became a permanent resident of Florida" on December 25, 2007. Phyllis’ signature on the application appeared beneath a statement in which she declared, under penalties of perjury, that she was a permanent resident of Florida.
The Acklies had other ties to Florida. They became members of various organizations based in Florida, including a church and a country club. They maintained personal bank accounts with a bank in Florida and had statements mailed to their Florida residence. They established professional and business relationships in Florida during the relevant period, including a relationship with an attorney. In 2012, the Acklies obtained updated passports, which identified them as residents of Florida. If called to testify, Phyllis would testify that the Acklies intended to change their domicile from Nebraska to Florida.
The Acklies retained connections to Nebraska. Their two living daughters resided in Lincoln. During the audit period, they maintained a senior golf membership at a country club in Lincoln. The Acklies had vehicles, a jet ski, a boat, and a boat trailer registered in Nebraska. During the audit period, Duane made 44 political contributions (approximately 15 percent of the total dollar amount of political contributions) to Nebraska entities or candidates where the receipt listed a Nebraska address, 5 contributions (approximately 5 percent) to national political entities where the receipt listed his Florida address, and 34 contributions (approximately 80 percent) to national political entities or to entities or candidates outside Nebraska and Florida where the receipt listed a Nebraska address. Political contributions by Phyllis all listed her Nebraska residence on the receipt. The Acklies also served as directors, honorary board members, or trustees for several Nebraska entities during the audit period. Some of these positions paid director fees. In 2015, an entity named Duane "Nebraskan of the Year," though there was no requirement that the recipient be a current resident of Nebraska in order to receive the award.
In 2010, Duane executed a will in Nebraska that was prepared by a law firm in Nebraska. In 2013, Duane executed in Florida a codicil to his will; the codicil stated that he was "now of Collier County, Florida." In the codicil, Duane "revoke[d] and delete[d] all references to Nebraska and the laws of that state and insert[ed] in lieu thereof references to Florida and the laws of that state." Duane died in 2016. His remains were interred in a Nebraska cemetery. His obituary was published in newspapers in Nebraska and Florida. In 2017, Phyllis filed a petition for determination of inheritance tax and an inheritance tax worksheet in Madison County. The petition and worksheet reported Duane's domicile as being in Florida.
The parties stipulated that the Department issued a Nebraska Individual Income Tax Booklet for each year in the audit period. The booklets for 2010, 2011, and 2012 defined "[r]esident" as "[a]n individual who is domiciled in Nebraska or who maintained a permanent place of abode and resided in Nebraska for six months or more during [the tax year]." The booklets for 2013—published in January 2014—and 2014—published in January 2015—expanded the definition of "resident," which included language stating:
If an individual maintains a permanent place of abode in Nebraska and is present in Nebraska for at least 183 days during the tax year, that individual is a Nebraska resident even if living in another state. For this purpose, Nebraska considers any part of a day spent in Nebraska as a full day spent in the state.
The hearing officer received a "Location Summary" for each of the Acklies...
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