BLUE YONDER, LLC v. STATE TAX ASSESSOR
17 A.3d 667 (2011)
2011 ME 49
BLUE YONDER, LLC
STATE TAX ASSESSOR.
Supreme Judicial Court of Maine.
Argued: September 14, 2010.
Decided: April 26, 2011.
Janet T. Mills, Attorney General, Pamela W. Waite, Asst. Atty. Gen., Scott W. Boak, Asst. Atty. Gen., (orally), Office of the Attorney General, Augusta, ME, for the State Tax Assessor.
Panel: SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, and GORMAN, JJ.
Majority: SAUFLEY, C.J., and ALEXANDER, SILVER, and GORMAN, JJ.
Dissent: LEVY, and MEAD, JJ.
[¶ 1] This appeal requires us to address the purposes of Maine's use tax as a complement to the sales tax. Based on the statutes in effect at the time of taxation, we conclude that an aircraft that was used briefly in Maine was exempt from the use tax when the aircraft was purchased and delivered outside of Maine, was owned by an out-of-state entity, had never been registered in Maine, and was in Maine for approximately twenty-one full days during its first year of use. Because we conclude that an exemption applied, we vacate the judgment entered on the Business and Consumer Docket (Humphrey, C.J.), in which the court concluded that a use tax was properly imposed on the aircraft.
[¶ 2] The aircraft's owner, Blue Yonder, LLC, appeals from the summary judgment entered by the court upon de novo determination whether the use tax was properly imposed. See 36 M.R.S. § 151 (2010). Blue Yonder argues that the use tax should not have been imposed because three use tax exemptions apply, 36 M.R.S.A. § 1760(23-C)(C), (45)(B), (82) I. BACKGROUND
(Supp.2002),1 and because the imposition of the tax violates the Commerce Clause. Blue Yonder also challenges the imposition of interest pursuant to 36 M.R.S.A. § 186 (Supp.2002).2 We agree with Blue Yonder that the tax was assessed improperly, and we vacate the judgment.
[¶ 3] The following facts are undisputed. Blue Yonder is a limited liability company that was organized in 2002 in Massachusetts. The company is owned jointly by Stephen Kahn and his wife, Janet Pendleton. Blue Yonder purchased an aircraft from Cirrus Design Corporation on November 4, 2002, in Minnesota. Kahn flew the aircraft from Minnesota to Massachusetts, where it was registered. The aircraft has never been registered in Maine. No sales or use tax has been paid on the aircraft in any jurisdiction.
[¶ 4] Kahn rented the aircraft from Blue Yonder for his personal and business use as well as for the humanitarian purpose of delivering ill or injured patients to Massachusetts through the Angel Flight Program; he was the only person to operate the aircraft in 2002 and 2003. During those years, Kahn owned properties in Maine, which he visited using the aircraft. The aircraft was not used exclusively outside of Maine during the first twelve months of ownership; it was present in Maine for at least twenty-one full days during that twelve-month period.3
[¶ 5] Maine Revenue Service assessed a use tax of $17,313.06 and interest of $8,005.77, for a total assessment of $25,318.83, on or about June 29, 2007, and the State Tax Assessor upheld the imposition of the tax and interest upon reconsideration on December 21, 2007. Blue Yonder appealed from the Assessor's decision to the Superior Court and sought a de novo determination. See 36 M.R.S. § 151; M.R. Civ. P. 80C. Upon Blue Yonder's motion, the court entered summary judgment for the Assessor. Blue Yonder appealed.