Cunningham v. Testa

French, J.,

dissenting.

{¶ 34} Kent Cunningham demonstrated that he performed the actions R.C. 5747.24(B)(1) requires to raise an irrebuttable presumption that for purposes of Ohio’s income tax, he was not domiciled in Ohio during 2008. Those actions were three in number: (1) he maintained an abode outside the state during the year at issue (here, the house in Tennessee qualified as such an abode), (2) he limited his presence in Ohio to 182 contact periods or fewer, and (3) he timely filed a statement attesting to the foregoing facts while also verifying that he was in fact domiciled outside Ohio during the entire year. Because Cunningham satisfied these three criteria, I would hold that he was entitled to the irrebuttable *49presumption the statute prescribes. Therefore, I respectfully dissent from the majority’s contrary holding.

{¶ 35} The key issue of statutory construction lies in whether the tax commissioner may make a finding that the taxpayer’s verification of out-of-state domicile is false. The majority holds that the commissioner may do so based on other information in his possession. But this interpretation contradicts the irrebuttability of the presumption that arises once a taxpayer has satisfied the three criteria, as Cunningham has done here. A contrary state of the facts can defeat a rebuttable presumption, but not an irrebuttable one. See Black’s Law Dictionary 957, 1377 (10th Ed.2014) (recognizing “irrebuttable presumption” as synonymous with “conclusive presumption,” which is “[a] presumption that cannot be overcome by any additional evidence or argument because it is accepted as irrefutable proof that establishes a fact beyond dispute”).

{¶ 36} I agree with the conclusion of the Board of Tax Appeals (“BTA”) that R.C. 5747.24(B)(1) permits a finding of false statement only with respect to out-of-state abode and number of contact periods as predicate facts. I also concur with the BTA’s trenchant observation that the tax commissioner’s approach “essentially renders the ‘bright-line’ non-residency status established by R.C. 5747.24(B) moot, as the commissioner could always challenge the veracity of the statement that the taxpayer was not domiciled in Ohio.” BTA No. 2011-4641, 2014 WL 1155688, *3 (Mar. 6, 2014).

{¶ 37} Whether a taxpayer is domiciled in Ohio is a finding of ultimate fact that includes a legal conclusion predicated on the underlying basic facts. In my view, the purpose of R.C. 5747.24(B)(1) is to premise the legal conclusion on selected basic facts (namely, out-of-state abode and number of contact periods) to the exclusion of other facts that would be significant under the common-law test. Indeed, the essential purpose of R.C. 5747.24(B)(1)’s irrebuttable presumption is to avoid the wide-ranging and open-ended inquiry into a myriad of domicile facts that occurs under common law.

{¶ 38} In Davis v. Limbach, BTA No. 89-C-267, 1992 WL 275694, *4 (Sept. 25, 1992), the BTA noted that “[tjhere is no bright line test stating exactly which factors are necessary for an individual to effectively change his domicile.” At the next regular legislative session, the General Assembly enacted the first version of R.C. 5747.24. S.B. No. 123, 145 Ohio Laws, Part I, 1113. In doing so, the General Assembly’s stated purpose included “establishing] income tax domicile tests.” Id.; Tyson v. Zaino, BTA No. 2001-B-1327, 2003 WL 22294864, *4 (Oct. 3, 2003). In other words, by enacting R.C. 5747.24, the General Assembly sought to create the very “bright line” that the BTA had acknowledged was missing. The majority’s interpretation defeats this legislative purpose.

Taft, Stettinius & Hollister, L.L.P., and J. Donald Mottley, for appellees. Michael DeWine, Attorney General, and Daniel W. Fausey and Melissa W. Baldwin, Assistant Attorneys General, for appellant.

{¶ 39} Also unpersuasive is the majority’s acquiescence in the view that the Cunninghams’ homestead-exemption application contradicts the verification of non-Ohio domicile under R.C. 5747.24. Majority opinion at ¶ 29. Two different taxes — the state income tax and the local real estate tax — have statutory provisions that create two different tax breaks. It lies well within the authority of the legislature to adopt different domicile standards for two completely different tax provisions, particularly where, as here, the legislature’s actions expand the scope of exemption and restrict the scope of taxation.

{¶ 40} The General Assembly had the authority to, and in my view did, decide to limit the reach of the state income tax as to persons who might otherwise qualify as residents under the common law. Doing so does not impair the General Assembly’s authority to confer a real estate tax benefit based on a broader common-law definition of domicile. And if the law does indeed do what I have described, there is no reason why the taxpayer cannot claim the benefit of both tax breaks.

{¶ 41} For these reasons, I would affirm the decision of the BTA and remand to the tax commissioner for a determination of the amount of Cunningham’s income, which must be removed from the tax assessment. Because the majority concludes otherwise, I dissent.

Kennedy, J., concurs in the foregoing opinion.