DeWitt v. McFarland

• Decision Date: 26 June 1975
• Docket Number: No. 11679,11679
• Citation: DeWitt v. McFarland, 537 P.2d 20, 112 Ariz. 33 (Ariz. 1975)
• Parties: Waldo L. DeWITT, John M. Hazelett and Bob Kennedy, Commissioners of the State Tax Commission of Arizona, Appellants, v. Gene L. McFARLAND and Marilyn A. McFarland, his wife, Appellees.
• Court: Arizona Supreme Court

Page 20

537 P.2d 20

112 Ariz. 33

Waldo L. DeWITT, John M. Hazelett and Bob Kennedy, Commissioners of the State Tax Commission of Arizona, Appellants, v. Gene L. McFARLAND and Marilyn A. McFarland, his wife, Appellees.

No. 11679.

Supreme Court of Arizona, In Division.

June 26, 1975.

N. Warner Lee, Atty. Gen. by Mary Z. Chandler, Asst. Atty. Gen., Phoenix, for appellants.

Hill & Savoy by Kenneth I. Todd, Cheryl K. Hendrix, Phoenix, for appellees.

STRUCKMEYER, Vice Chief Justice.

This is an appeal by the State Tax Commission from a summary judgment exempting appellee, Gene McFarland, from Arizona income taxes for the years 1966 through 1969.

A.R.S. § 43--102 in its relevant parts provides:

'There shall be levied, collected, and paid for each taxable year upon the entire net income * * * of every resident of this state * * * taxes in the following amount * * *.'

A resident is defined by § 43--101 as:

'(p)(2). Every individual domiciled in thisstate who is outside the state for a temporary or transitory purpose.'

Hence, by statute, every resident of Arizona is subject to state income taxes and 'resident' means a person domiciled in Arizona.

Appellee was born and lived in Arizona until he left on the 31st day of May, 1966, to accept employment with an American corporation doing construction work in the Republic of Vietnam. At the time of his birth he acquired an Arizona domicile, Restatement of Law 2d, Conflict of Laws, § 14. Since from the time of acquisition of domicile at birth one is never without a domicile somewhere, Ness v. Commissioner of Corporations and Taxation, 279 Mass. 369, 181 N.E. 178, 82 A.L.R. 977 (1932), appellee's domicile continued in Arizona at least until he went to Vietnam. Intent must coincide with physical presence to effect a change of domicile Kauzlarich v. Board of Trustees, etc., 78 Ariz. 267, 278 P.2d 888 (1955). To acquire a domicile of choice, a person must intend to make that place his home for the time at least. Restatement of Law 2d, Conflict of Laws, § 18. We take it therefore that appellee's intent must have been to make Vietnam his home, at least for the time that he was there.

Appellants point to certain indicia which they argue disclose an intent by appellee to retain Arizona as his domicile. These include (1) that appellee had only a temporary visa to Vietnam; (2) that he deposited part of his salary in an Arizona bank; (3) that he maintained a membership in a local union in Phoenix, Arizona; (4) that he renewed his Arizona driver's license when he returned on a visit to Arizona; (5) that he stored personal property in Arizona; (6) that he filed Arizona income tax returns on resident forms; and (7) that he eventually returned to Arizona.

Some of the items are of dubious significance in the determination of the question of appellee's domicile after he left Arizona. His employment contract, for example, required that he deposit 85% Of his salary in an American bank. The choice of an Arizona bank is not of particular significance in the light of the fact that there was no reason to select a bank in another state. Appellee's membership in an international union in Phoenix was a non-active membership of $1.50 per month, paid to avoid the necessity of having to re-join should be ever be employed again in the United States. His renewal of his Arizona driver's license when he visited Arizona for two weeks was because Vietnam would not issue a driver's license to an American citizen without a valid license from a state in the United States. Appellee's Arizona license expired while he was in Vietnam, necessitating its renewal in order to keep a Vietnamese license. While appellee filed Arizona tax returns on a resident's form, this was done pursuant to the directions of an accountant in Arizona who prepared the forms.

That appellee eventually returned to Arizona, that he had only a temporary visa in Vietnam, and that some personal effects were stored in Arizona during his absence do not compel the conclusion that he was domiciled in Arizona, for even if we assume that his stay in Vietnam was intended to be only temporary, it clearly was of indefinite duration.

As the court said in Heater v. Heater (D.C.Mun.App.), 155 A.2d 523 (1959):

'There are two requisites for establishing a domicile here, (1) physical presence, and (2) an intent to abandon the former domicile and remain here for An indefinite period of time; a new domicile comes into being when the two elements coexist. A person may be domiciled here without an affirmative intent to remain here Permanently; the test of intent is generally spelled out in terms indicating something less than permanent Habitation, i.e., an intent to remain for an Indefinite future time.' 155 A.2d at 524.

In Gallagher v. Philadelphia Transp. Co., 3 Cir., 185 F.2d 543 (1950), the court said:

'It is enough to intend to make the new state one's home. Restatement, Conflict of Laws (1934) §§ 19, 20; Chicago & Northwestern Ry. Co. v. Ohle, 1885, 117 U.S. 123, 6 S.Ct. 632, 29 L.Ed. 837. It is not important if there is within contemplation a vague possibility of eventually going elsewhere, or even of returning whence one came. Goodrich, Handbook of the Conflict of Laws (3rd ed. 1949) § 28; see Gilbert v. David, supra, 235 U.S. (561) at page 569, 35 S.Ct. (164) at page 166 (59 L.Ed. 360). If the new state is to be one's home for An indefinite period of time, he has acquired a new domicile. Mid-Continent Pipe...