Buck v. Utah State Tax Comm'n
| Decision Date | 24 February 2022 |
| Docket Number | 20200531 |
| Citation | 506 P.3d 584 |
| Parties | Johnathan BUCK and Brooke Buck, Petitioners, v. UTAH STATE TAX COMMISSION, Respondent. |
| Court | Utah Supreme Court |
Attorneys:1
Samuel A. Lambert, Salt Lake City, for petitioners
Sean D. Reyes, Att‘y Gen., Stanford E. Purser, Deputy Solic. Gen., John McCarrey, Asst. Att‘y Gen., Michelle Lombardi, Asst. Att‘y Gen., Salt Lake City, for respondent
¶1 We "should have a tax system that looks like someone designed it on purpose."2
Petitioners, John and Brooke Buck, offer a plain-meaning interpretation of section 136—the Domicile Provision—of the Utah Individual Income Tax Act, UTAH CODE §§ 59-10-101 to 59-10-1405 (IITA),3 that suits this obvious and sensible statement. Respondent, the Utah State Tax Commission, not so much.
¶2 Where an individual is domiciled can have huge income tax consequences. In this case, the Tax Commission determined the Bucks "were domiciled in Utah for the 2012 tax year" and, therefore, owed nearly $400,000 in back taxes and interest.
¶3 The Bucks dispute the Tax Commission‘s determination. They maintain they were domiciled not in Utah but Florida in 2012, and they argue the Commission‘s decision suffers from significant interpretive and constitutional defects. On the interpretive side, the Bucks contend that the Commission stumbled in construing IITA to mean that they had claimed a residential property exemption on their Utah residence, triggering the rebuttable presumption of domicile under section 59-10-136(2)(a). The Bucks further contend that the Commission compounded this error by reading section 136 as barring consideration of "virtually all" evidence relevant to the Bucks‘ ability to rebut the presumption. On the constitutional side, the Bucks take the position that section 136, "as interpreted and applied by the Commission," unconstitutionally deprived them of due process and other constitutional rights.
¶4 We agree with the Bucks on their second point: The Tax Commission erred as a matter of law in interpreting section 136 to effectively preclude them from being able to overcome the rebuttable presumption of domicile. In addition, the stipulated facts, which the Commission basically adopted, decisively demonstrate that the Bucks were not domiciled in Utah in 2012 for income tax purposes. Accordingly, we reverse the Commission‘s decision on this basis alone. And because we need not, we do not reach either the question of whether the Bucks had claimed the residential property exemption or the question of whether the Commission‘s interpretation of the Domicile Provision would render it unconstitutional.4
¶5 John Buck is one of the blessed few talented enough to make a living playing baseball, America‘s pastime. He started his career in 1998. He and Brooke married the following year.5
¶6 In 2004, John was traded to the Kansas City Royals. That same year, the Bucks purchased a house in Arizona, where the Royals hold spring training.
¶7 In 2007, the Bucks purchased a house in Bluffdale, Utah, to have a place close to Brooke‘s mother—Brooke was pregnant with twins at the time. The house received a primary residential property tax exemption from 2008 through 2013. The Bucks, however, took no action to request this exemption.
¶8 Testifying before the Tax Commission, Brooke spoke to the nature and quality of the Bucks‘ living accommodations in Utah. According to Brooke, the Bluffdale house "was among the first in a new development and was surrounded by" many bank-owned lots following the Great Recession.6 Also according to Brooke, the resultant lack of neighbors led to a sense of isolation and a lack of community. She further testified that these "feelings of isolation" were "deepened" by "one of the major streets that would link" the house "to neighboring areas" being gated. Similarly, she testified that "yet another impediment to a sense of community" was the "sporadic" or "lack of" snow removal near the house.
¶9 In November 2010, John signed a three-year contract with the Florida Marlins. A few months later, the Bucks moved to Florida.
¶10 The Bucks first attempted to buy a place in Pembroke Pines, Florida. When the deal fell through, they rented a house in Davie, Florida. The term of the lease was April 2011 through March 2012.
¶11 In December 2011, the Bucks entered into an agreement to lease a home in Plantation, Florida, from February 2012 through January 2013. The agreement provided for an additional writing that would allow the Bucks to buy the home during the lease term for $1,550,000. The record suggests that the Bucks took possession in April 2012.
¶12 From 2008, shortly after the Bucks purchased the Bluffdale house, to 2012, the relevant tax year, the assessed value of the house, per Salt Lake County, had fallen from $712,290 to $548,090. Given the precipitous drop in value, the Bucks, quite understandably, did not think the Utah real estate market favorable in 2011 or 2012 and elected not to try to sell the house at that time. They also thought it convenient to have a place to stay when they were visiting Utah. In keeping with this thinking, in 2012, John spent eleven or so full or partial days, and Brooke spent twenty-two full or partial days, in Utah visiting relatives.
¶13 John‘s baseball career was not the only reason the Bucks moved to Florida. They also moved to give one of their sons, who, at the time, was suffering from a severe developmental delay and little language ability, access to superior doctors and educational programs. To this end, the Bucks enrolled their son in the Broward Early Steps program at the Children‘s Treatment & Diagnostic Center in Fort Lauderdale, Florida, in early 2011, the Indian Trace Elementary special needs and early intervention preschool program in Weston, Florida, from August 2011 through June 2012, and the preschool at Temple Beth Emet in Plantation, Florida, from June 2012 through June 2013.
¶14 The Bucks enrolled their other son in Cambridge School in Weston, Florida, from August 2011 to June 2012, and then summer school and preschool at Temple Beth Emet in Plantation, Florida, from June 2012 through June 2013.
¶15 Both Buck children participated in karate and soccer during the 2012 school year. And a Florida pediatric group provided the children with all of their routine medical care.
¶16 In the 2011 to 2013 time period, the Bucks arranged their lives around their Florida residence. They belonged to a Florida church congregation, where Brooke volunteered to teach children‘s classes; they joined the Weston YMCA (in 2011); they held a gym membership in Weston (in 2011 and 2012); and they took part in the 2012 Dan Marino Walkabout Autism
event in Florida. In addition, John volunteered with Camp Shriver in Miami, which is associated with Special Olympics Miami Dade County, and Brooke served as a room mother at Indian Trace Elementary and Temple Beth Emet.
¶17 The Bucks‘ pets were also part of the move to Florida, receiving their care from a Florida veterinarian throughout 2011, 2012, and into 2013. In actual fact, the Bucks became the poster family in Florida for public service messages urging pet adoption. And Brooke served as a campaign leader to reduce animal killings in Miami-Dade County.
¶18 John and Brooke obtained Florida driver licenses in September 2011. They also registered to vote in Florida in September 2011 and remained registered to vote there in 2012. John acquired a nonresident Utah hunting license in 2012 (mailed to him in Florida).
¶19 The Bucks registered two vehicles in Utah in the 2011 to 2013 timeframe: a 2010 Ford F250 truck, which they gave to Brooke‘s father to use, and a 2007 Acura MDX, which they gave to her mother. A commercial trailer was also registered in the Bucks‘ name in Utah, beginning May 2012. The trailer was purchased by Brooke‘s father to be used in a business the Bucks partly owned but that was operated by the father. They registered the rest of their vehicles during the relevant timeframe in Florida. These vehicles include a Jeep Wrangler, Toyota Sequoia, BMW, and Ford Expedition.7
¶20 Brooke testified that in 2012 she and John received the bulk of their mail at their Florida address. The Bucks continued to get a lesser amount of their mail at the Bluffdale address, and that mail largely related to the Bluffdale property itself. Furthermore, for that mail, the Bucks arranged to have Brooke‘s mother send it to them in Florida.
¶21 In terms of taxes and tax filings, the Bucks filed a Utah form TC-40B averring they were only part-time Utah residents in 2011. The Bucks had no income from a Utah source in 2012 and filed no Utah tax return for that year; they instead filed state tax returns in California, Missouri, Ohio, and Wisconsin in 2011 and 2012, indicating on all of those returns that they were residents of Florida. The tax returns were all filed using an address in New Jersey, the location of their accountant.
¶22 The record suggests the Bucks returned to Utah sometime in 2013. At that time, they moved into their Bluffdale house, which required significant renovations to bring it up to the standards the Bucks enjoyed in Florida.
¶23 In 2018, the Tax Commission‘s Auditing Division concluded that the Bucks were domiciled in Utah in 2012. The Bucks filed a petition for redetermination to the Commission. The Commission held a formal hearing in 2019, and issued its findings of fact, conclusions of law, and final decision in 2020, finding the Bucks to have been domiciled in Utah in 2012 and putting them on the hook for almost $400,000 in taxes and interest. The Bucks filed a petition for review.
¶24 This matter comes before us on appeal from a final decision of the Tax Commission following a formal hearing. As such, we exercise jurisdiction...
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