On August 13, 2020, the Utah Supreme Court agreed to hear a married couple’s direct appeal from a State Tax Commission decision holding that the couple was domiciled in Utah during the 2012 tax year under Utah’s “presumptive domicile” statute. Specifically, the case involves Utah Code Ann. § 59-10-136(2), which provides a rebuttable presumption that an individual is domiciled in the state if the individual or the individual’s spouse claims a residential exemption for property tax purposes for the individual’s or the individual’s spouse’s primary residence.
In a decision dated June 9, 2020, the Utah State Tax Commission held that the couple were domiciled in Utah for the 2012 tax year because the couple’s Utah home received a “primary residence” partial property tax exemption in 2012, which had been “claimed” automatically each year since 2008. The couple attempted to rebut the statutory presumption by offering evidence that they had relocated to Florida in 2011 and that neither the husband nor the wife spent more than 22 days in Utah during the 2012 calendar year. In addition, the taxpayers presented evidence showing they had obtained new Florida driver’s licenses in 2011, registered to vote in Florida in 2011, enrolled their minor children in Florida schools in 2012, and received the majority of their mail at their Florida home during the 2012 calendar year. The Commission based its opinion on an interpretation of the presumptive domicile language in Utah Code Ann. § 59-10-136 to limit the types of evidence that a taxpayer may present in order to rebut the presumption arising from claiming the primary residence property tax exemption. One of the four commissioners authored a dissenting opinion, arguing that the majority opinion failed to give adequate weight to the evidence and arguments presented by the taxpayers.
On appeal to the Utah Supreme Court, the main issue is whether the State Tax Commission properly applied the presumptive domicile statute when it found the taxpayers’ evidence regarding their relocation to another state to have no weight in rebutting the presumption created by claiming the primary residence exemption. Beyond the Utah-specific issue of statutory interpretation, though, there are important constitutional considerations involved, namely whether Utah’s treatment of the couple as residents for the 2012 tax year violates the privileges and immunities clause, the equal protection clause, the commerce clause, and due process. The case has attracted the attention of numerous groups who have filed amicus briefs with the Utah Supreme Court. Briefing has begun in the case but a hearing date has not yet been set. The Eversheds Sutherland SALT team will be following the case as it develops at the Utah Supreme Court. The case is Buck v. Utah State Tax Commission, Dkt. No. 20200531 (petition filed July 6, 2020). The State Tax Commission decision is Appeal No. 18-888 (decided Jun. 9, 2020).