Mauer v. Commissioner of Revenue

ANDERSON, G. BARRY, Justice

(dissenting).

Because I conclude that Kenneth B. Mauer properly established Florida as his state of domicile, I respectfully dissent.

I agree that the majority has correctly set out the prevailing law regarding change of domicile and also agree, as the majority states, that the burden is on the taxpayer to establish a change of domicile. In my view, the record demonstrates that he has done just that, but both the tax court and the majority here have gotten lost in the detail of the 26-factor “test” (more about that later), while ignoring major events experienced by Mauer that demonstrate that he changed his domicile.

First, it is striking that here Mauer was released from home confinement on the federal conviction on June 30, 2003, and he was on a plane to Florida the next day. Two days later, he signed a purchase agreement to buy a home in Florida and, over the next several weeks, he took actions consistent with a change of domicile — relinquishing his Minnesota homestead exemption, applying for a Florida homestead exemption, applying for a Florida driver’s license, registering to vote in Florida, documenting his change of domicile with his employer in several different ways, and moving his personal belongings to his new home in Florida.

But second, and more importantly, this domicile dispute features something rarely seen in our case law: Mauer was engaged in a long-running, and noisy, argument with his employer about his decision to live in Florida. In fact, the issue escalated to threats from the NBA to fine Mauer, suspend Mauer, or even terminate Mauer’s employment, yet he continued to insist that he was domiciled in Florida, not Minnesota, notwithstanding the potential employment-related consequences.

I agree with the majority that actions matter, and Mauer’s actions here in moving to Florida immediately after home confinement and his willingness to do battle with his employer on the residence issue lead me to “a definite and firm conviction that a mistake has been committed” by the tax court in rejecting Mauer’s change-of-domicile claim. Kmart Corp. v. Cnty. of Becker, 709 N.W.2d 238, 241 (Minn.2006) (citation omitted) (internal quotation marks omitted). I would reverse the tax court for these two reasons alone.

A word needs to be said about factor W, which purports to measure residency time in both states and on which the majority *78relies heavily in affirming the tax court. The majority correctly reports the data, which supports the claim that a plurality of Mauer’s time during the disputed tax periods was spent in Minnesota, but it does not acknowledge that Mauer has consistently said that he does not intend to reside in Florida in the summer. It is also worth noting that Mauer’s unusual occupation requires extensive travel that undercuts the traditional approach of simply adding up the number of days in any one location. These unique circumstances do not invalidate factor W, and Mauer admits that this factor weighs against him. But given those unique circumstances, this factor is of limited relevance here, at least if we are serious about our oft-repeated assertion that no one factor is controlling in domicile decisions.

Finally, and more broadly and more important than Mauer’s specific circumstances, a 26-factor domicile test is no test at all. It is not clear that the result here makes the problem worse for other taxpayers, but the current approach to domicile by the Commissioner is hardly “common sense,” as the Commissioner has suggested. Accord State v. Enyeart, 676 N.W.2d 311, 321 (Minn.App.2004) (stating that application of the domicile rule is governed by “common sense”). Taxpayers in Minnesota enter the domicile swamp at their own peril.

The Commissioner’s interpretative practices as applied to the domicile rule can only be described as arbitrary. Here, the Commissioner minimizes documentary declarations of domicile, such as the address on a driver’s license, because Mauer is in compliance with that factor; in other cases, the Commissioner emphasizes a failure to change a driver’s license address as evidence of no change in domicile. E.g., Syfco v. Comm’r of Revenue, No. 4624, 1987 WL 5138, at *6 (Minn. T.C. Feb. 11, 1987). Similarly, the Commissioner dismisses Florida homestead status as an easily met requirement. But if the taxpayer has not changed his or her homestead status, unlike here, then that failure is treated by the Commissioner as evidence of no change in domicile. Page v. Comm’r of Revenue, No. 4011, 1986 WL 15695, at *7 (Minn. T.C. Mar. 12, 1986).

I recognize we give substantial deference to the tax court on fact-intensive issues like domiciliary status. But where, as here, the unique circumstances of Mauer’s employment and his life experiences demonstrate his intent to change his domicile, I conclude that the tax court erred in rejecting Mauer’s claim of Florida domicile and the tax court should be reversed.

For these reasons, I respectfully dissent.