Petition for Writ of Certiorari — Enyeart v. Minnesota
Supreme Court brief2004
Ask Donna
What actually matters in this document.
Text
Supreme Court, U.S.
() FILED
No. 210 AUG 1 1 2004
QPRICE OF THE CLERK
In The
Supreme Court of the United States
RANDALL WAYNE ENYEART,
Petitioner,
STATE OF MINNESOTA,
Respondent.
On Petition For Writ of Certiorari to the
Court of Appeals for the State of Minnesota
PETITION FOR WRIT OF CERTIORARI
Marlyn Soren Jensen
2225 Robin Street
Osceola, Iowa 50213-8208
641-342-3530
Attorney for Petitioner
QUESTIONS PRESENTED FOR REVIEW
1) Whether federal law, 49 U.S.C. § 40116(f), preempts
2)
3)
4)
Minnesota from filing felony charges relating to the
imposition of its tax laws against a person present there
because of his employment as a flight instructor and
commercial airline pilot.
Whether federal Due Process allows Minnesota in a
criminal proceeding to present conflicting theories of
either his being a domiciled Minnesota resident
(intentional evasion) or his being a non-domiciled
resident present in Minnesota for more than half the year
(inadvertence) and in not requiring a unanimous verdict
on one or the other.
Whether Minnesota law concerning a “domiciled
resident” is so impermissibly vague and indefinite that it
denies Due Process guarantees.
Whether Minnesota denied Due Process guarantees of a
criminal defendant by allowing written substantive
evidence to the Jury that he bore the affirmative duty to
maintain and produce records sufficient to prove that he
was not a resident, thereby impermissibly shifting the
burden of proof.
i
TABLE OF CONTENTS
QUESTIONS PRESENTED FOR REVIEW ........................ i
Pee COE FU COE OD 0k sa rantrnschsntvcassaxcenceniebavasnnen vi
PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES SUPREME COURT ................ l
FPN MTT sc ecduissasdincisoindsndagieskinoaeeebeien l
STATEMENT OF THE BASIS
TNA GRDEIMs WHITE Knvunsnkvasakevinhconeusrenhelensneecen l
CONSTITUTIONAL PROVISIONS INVOLVED ............... 1
FEDERAL PROVISIONS INVOLVED ...................cce eee eens 2
STATE PROVESIING BOVOR. VEE? osccscscsecscvsarcncsesseveseses 2
EAL COEUR GIF EEUU SAU sninancsedusnnsensiaebantaeadauaiee 2
A. Basis for Federal Review
i i FE I. oa sees stance 2
. PUOROUIIEG TRY cdc cicsacicecveaticcenaeeeeeeeae 2
C. Seambomment OF NEGMITIGE FRCRB ociscscciscicccdcccccecsces: 3
REASONS FOR GRANTING THE WRIT OF CERTIORARI 7
PUPRENS Bl sasssixeusascnsnsesenaseeandevennekkmaeneeenne ae nannnes 7
IN REVIEWING A_ STATE FELONY
CONVICTION THE MINNESOTA COURT OF
APPEALS HAS DECIDED AN IMPORTANT
FEDERAL QUESTION IN A WAY WHICH
CONFLICTS WITH 49 US.C. § 40116(f)
WHICH PREEMPTIVELY RESTRICTS THE
MANNER IN WHICH THE COMPENSATION
OF INTERSTATE AIRLINE EMPLOYEES
MAY BE TAXED
Le ST ae ey em
ill
The federal statute expressly
addresses tax treatment by the
States of airline employee pay
Federal regulation of air space
and air transportation is pervasive,
far-reaching and exclusive
The legislative history is clear
that Congress intended to
limit State taxing es 10
Violation of Section 40] 16 is a federal crime .... 12
Prior to this prosecution Minnesota had
publicly held out a contrary position .............. 13
Minnesota’s application of its |
Rule against Enyeart is in direct conflict |
with preemptive federal laws ............0.0 15
The application of the Minnesota law
here thwarts and is a direct interference
with the federal mission ....................0... 20
Federal law creates a sphere of
personal activities for airline employees
which the application of the Minnesota
Rule encroaches 2.00.0... 00... ececcceceeeccec 22
Application of the Minnesota law and
Rule was both relevant to his conviction
and highly prejudicial ................... Seapine
IV
TT TP: nis canes usaaiats widadesbanis piace aeeneacecokuarsciaian 24
IN REVIEWING A _ STATE ~~ FELONY
CONVICTION THE MINNESOTA COURT OF
APPEALS HAS DECIDED AN IMPORTANT
FEDERAL QUESTION IN A WAY WHICH
DENIES FEDERAL DUE PROCESS’ BY
ALLOWING MINNESOTA TO PROCEED
AGAINST HIM ON CONFLICTING THEORIES
THAT HE WAS A DOMICILED RESIDENT, OR
THAT HE WAS NON-DOMICILED- BUT
PRESENT MORE THAN 183 DAYS, AND BY
NOT REQUIRING THE JURORS~ TO
UNANIMOUSLY AGREE ON ONE THEORY
A. There is no commonality in the two
theories presented and the Jury was not
required to agree unanimously on one .............. 25
IE Sch ensalcnie dhs Aid dhxh nh Aceatialaadaneuirenienntneen 26
IN REVIEWING A_ STATE _ FELONY
CONVICTION THE MINNESOTA COURT OF
APPEALS HAS DECIDED AN IMPORTANT
FEDERAL QUESTION IN A WAY WHICH
DENIES FEDERAL DUE PROCESS BY HOLDING
THAT MINNESOTA - LAW DEFINING
“DOMICILED RESIDENT” IS NOT :
IMPERMISSIBLY VAGUE AND INDEFINITE
Cb lind ata At Ace ina ditti AN oe RRA nO IOE ta hthanti rial te og awe
A. The Minnesota law concerning domicile
and non- domiciliary residence is vague
IEEE kxducancanucadtucceusucucietsiieassavaeuwace 27
REASON IV
IN REVIEWING A_ STATE FELONY
CONVICTION THE MINNESOTA COURT OF
APPEALS HAS DECIDED AN IMPORTANT
FEDERAL QUESTION IN A WAY WHICH
DENIES FEDERAL DUE PROCESS’ BY
ALLOWING SUBSTANTIVE EVIDENCE TO THE
JURY STATING THAT ENYEART HAD THE
DUTY TO MAINTAIN AND PRODUCE
RECORDS TO PROVE THAT HE WAS NOT A
RESIDENT, THEREBY IMPERMISSIBLY
PLACING THE BURDEN OF PROOF UPON HIM
AS A CRIMINAL DEFENDANT
A. Evidence suggesting that he must prove
non-residence violates federal
Due Process
Vi
TABLE OF AUTHORITIES
U.S. SUPREME COURT
Aloha Airlines v. Director of Taxation ............. 15, 16, 17
of Hawaii, 464 U.S. 7 (1983)
Cipollone v. Liggett Group, Inc.,
ER SU RUUD, scneeicdisicinrcsansaiannascontnas 15
City of Burbank v. Lockheed Air
Terminal, Inc., 411 U.S. 624 (1973) ...........0.0000 9
Crosby v. National Foreign Trade Council,
als De ERED dsivikasccsmacnieninnen 15, 19
Florida Lime & Avocado Growers, Inc v. Paul,
Te SA Re CE UED. vnxecsncianeanncenenbhebehases 15, 18
Francis v. Franklin, 471 U.S 307 (1985) .................0 24
Hicks v. Oklahoma 447 U.S. 343 (1980) ................08 28
Hines v. Davidowitz, 312 U.S. 52 (1941) ............... 15, 18
BS WHORE, F5T UD. SIO IGT) os sccsssccceccrassesncnnee 29
Kolender v. Lawson, 461 U.S.352 (1983) ................... 27
Retail Clerks v. Schermerhorn,
SF es TUNED ina chenenccdeasadlonckccuaueiwennin 15
mavens. ¥. JONG, 225 U.S. SOT CIDEZ) wns csnscsvcscevasennes 19
Vii
Schad v. Arizona, 501 U.S. 624 ie | i 25, 26
FEDERAL CASES
United States v. Mallas, 762 F.2d 361 (CA 4 1985) ....... 28
STATE CASES
State v. Merrill, 450 N.W.2d 318 (Minn ROO Miuiicerneck 28
| STATUTES
tn ae WAMU. passchaurncasecccayuni ee ee 1
49 U.S.C. §§ 40101 et Sq. oeeeeeeeeccsceseeeeceecceccc 8
49 U.S.C § 40101(a)(7) ooo. lee ccccecesececeeeceeccc 8
ae I so cnstscucsenackscsen ah 8
OF See WUNNIE wicicdsnkssuncivcuticanieete eae 8,9
oe NE ideitindlvrne eee ee oe 9
49 U.S.C. § 40102(a)(37(E) oo. eececcecccccccc cece. 8
BENE BO esate caraenitiia shel een ae 9
Fes TD sistema 9
a a in ke TT AM Sly ERIN Sul 9
Vill
ey ENE us snc va ienisenidnnacninks needeucinn tcuguceie 9
ee IE cn cicncpnuphas snares suanueacakenveeasaxebass 12
ee I os iannanicancuaddenkedbatesetekssnauhenecsueys 12
Airport Development Acceleration Act of 1973,
Section 7(a) [49 U.S.C. § 1513(a)] ................ 16
Income Taxation — Carriers Act, Public Law
91-569, 84 Stat. 1499, [Title XI
of the Federal Aviation Act
of 1958, Section 4(a) [Section 1112] .......... 11,18
50 U.S.C.App. §§ 501, et Seq. .eeececceeeeceeeeeececereeeee 23 :
MAI ichntes ccna adel atad rica ens otis 13 |
i Se Oe IE ki vecencdwnceinnsaansnabecinuncecunanaee 4,27
SN I EE cccsceecdacdessccscesausiasineahommenne ie 4
|
U.S. CONSTITUTION
Article VI, second unnumbered paragraph .................. 15 |
|
TI ois cach ws nse cdsdin snes canncenna eee 25 |
)
—— OTHER ;
Minnesota Rule S001 .O300 ........scccccccssecensss re ee ef
—
iX
Legislative History, Senate, P.L. 91-569,
1970 U.S.C.C. A.N. 5039 (1970)
Legislative History, Senate, P.L. 91-569,
1970 U.S.C.C. A.N. 5041 (1970) .........
Legislative History, Senate, P.L. 91-569,
1970 U.S.C.C. A.N. 5043 (1970) ........
Letter of Minnesota Department
of Revenue to Northwest Airlines, Inc.
eet eeee
PETITION FOR WRIT OF CERTIORAI
TO THE UNITED STATES SUPREME COURT
Mr. Randall Wayne Enyeart respectfully requests that
the Honorable Justices of the Supreme Court grant a Writ of
Certiorari to review the judgment of the Court of Appeals for
the State of Minnesota rendered on March 23, 2004. In
support of his request, Mr. Enyeart sets forth the following:
OPINIONS BELOW
The opinion of the Court of Appeals for the State of
Minnesota which is the subject of this Petition is State v.
Enyeart, 676 NW2d 311 (Minn. App. 2004) and is set forth
as Appendix A. The Supreme Court of Minnesota denied
Mr. Enyeart’s Petition for Discretionary Review of the Court
of Appeals on May 18, 2004, set forth as Appendix B.
STATEMENT OF BASIS FOR JURISDICTION
The opinion of the Court of Appeals for the State of
Minnesota affirming Mr. Enyeart’s conviction was entered
on March 23, 2004. Order refusing to review that decision
was entered by the Supreme Court of Minnesota on May 18,
2004. Jurisdiction to review the decision of the Minnesota
Court of Appeals is granted by 28 U.S.C. § 1257(a).
CONSTITUTIONAL PROVISIONS
Article VI: “This Constitution, and the Laws of the
United States which shall be made in Pursuance thereof; . . .
shall be the supreme Law of the Land; and the Judges in
every State shall be bound thereby, any Thing in the
Constitution or Laws of any State to the Contrary
notwithstanding.”
U.S. Constitution, Fourteenth Amendment.
FEDERAL PROVISIONS INVOLVED
49 U.S.C. § 40116 entitled “State Taxation” App C
49 USCS § 46301 “Civil penalties” App D
49 USCS § 46316. “General criminal penalty” App E
Income Taxation — Interstate Carriers and Employees
Public Law 91-569; 84 STAT. 1499 App F
18 U.S.C. § 3571 (Sentence of fine) App J
STATE PROVISIONS INVOLVED
Minn. Stat. § 290.01 (Definitions) Subd. 7 App G
Minn. Stat. § 289A.63 (Criminal penalties) App H
Minn. Rule 8001.0300 (Resident and domicile) App I
¥RERES
STATEMENT OF THE CASE
A. Basis for Federal Review in the First Instance.
In this case believed to be of first impression, the issue is
raised concerning whether federal law preempts Minnesota
taxation of Mr. Enyeart while based in Minnesota as a pilot-
flight instructor employed by Northwest Airlines, Inc. Mr.
Enyeart was convicted in a Minnesota district court and his
case has timely proceeded through the appellate courts of
Minnesota established to hear such appeals.
B. Procedural History.
Mr. Enyeart, a pilot and flight instructor for Northwest
Airlines, based in Minnesota and Michigan, was charged
with knowingly filing fraudulent state tax returns, willfully
evading income taxes, and intentionally evading motor-
vehicle taxes on the theories that he sought to avoid
Minnesota taxation by claiming to be a domiciliary of Alaska
or that he was a domiciliary of Alaska residing in Minnesota
more than 183 days maintaining an abode there. He defended
by asserting that federal law preempted the state from
imposing such taxes and made other defenses predicated
from federal law. A jury returned a verdict of guilty and
sentence was imposed. He sought reversal in the Minnesota
Court of Appeals which was denied on March 23, 2004. He
sought discretionary review with the Supreme Court of
Minnesota, which on May 18, 2004, denied relief. He now
seeks issuance of a Writ of Certiorari.
C. Statement of Material Facts.
Randall Enyeart began working for Northwest in 1979.
He married, had two children and moved to Minnetonka,
Minnesota. In 1997, he and his wife separated. He moved to
Alaska. The marital residence was immediately put up for
sale but his ex-wife lived there until June of 1998. He
claimed Minnesota residency on his federal and state income
tax returns from 1993 until 1997. During his employment as a
pilot with Northwest he flew out of four different bases:
Seattle, Minnesota, New York and Detroit. His last base
transfer was to Detroit in September of 1999 when he
became a Boeing 747-400 captain.
Enyeart completed payroll residency forms and listed his
residency as Minnesota on January 1, 1993. He changed this
to Anchorage effective September 30, 1997 (T. 217-242). He
filed income tax forms with Minnesota through 1998. He did
not file with Minnesota in 1999 and 2000 because his state of
residency was Alaska. (T411-32) His employment records of
Northwest showed him to be a resident of Alaska from such
time. Minnesota did not challenge such employment records,
administratively or otherwise.
Enyeart was a registered voter in Alaska, had an Alaska
driver’s license, received mail in Alaska, registered his cars
in Alaska, received relative-homestead and non-resident tax
treatment on the Minnesota house. He filed Minnesota
income taxes as a non-resident prepared by a Minnesota
accountant.
Criminal charges were brought under Minn. Stat..§
289A.63. Issues here involve Minn. Stat. § 290.01 Subd. 7
regarding the Minnesota definition of “resident” and its
implementing Rule, 8001.0300 [App p 33].
Minnesota Rule 8001.0300, subpart 1, A & B. defines the
term “resident” as “any individual person who is domiciled
in Minnesota’’. The Rule lists 26 factors to be considered in
determining whether someone is domiciled in Minnesota.
The Court instructed on 27 factors [App p 13], adding as a
factor where someone’s family is domiciled — treating that as
a presumption. Factor W of the Minnesota factors relating to
residency reads:
“W. percentage of time (not counting hours of
employment) that the person is physically present in
Minnesota and the percentage of time (not counting
hours of employment) that the person is physically
present in each jurisdiction other than Minnesota.”
The State’s theories were in the alternative. One was that
Enyeart was a Minnesota domiciliary and not an Alaska
domiciliary as he had claimed. The other was that he was a
domiciliary of Alaska present in Minnesota as a non-
domiciliary who owned an abode in Minnesota and who had
spent 183 days or more in the State. The Jurors were allowed
to find guilt under either theory.
Under the State’s calculations, in order for it to prove
that Enyeart was in the State 183 days or more it was
necessary to include partial days that he was in the State
solely as a pilot for Northwest, i.e., days in which he flew
into or out of Minnesota on a scheduled flight, and there was
no evidence that he subsequently left the State after the -
flight. (T. 903) To make a showing that he was present more
than 183 days in 2000 the State included days that he was
required to be in Minnesota as a flight instructor (four
months out of the year). Also included were times that he
was in transit and made ATM transactions in Minnesota. '
On January 3, 1996, John Haugen, an attorney
representing the Minnesota Department of Revenue, sent a
letter to John W. Windhorst, Jr., an attorney representing
Northwest Airlines. That letter represented that non-resident
pilots were not subject to taxation when they are present in
Minnesota for their duties as flight instructors.
Enyeart asserted that the federal statute shields income
eared by him while a pilot flying into, out of, or over a state;
this prohibited Minnesota from counting such days to
establish presence in Minnesota based upon his status of
being a non-domiciled resident. It was not disputed that
Minnesota could not establish that Enyeart had spent more
' 240 ATM events over 3 years average 80 per year. [App 6] All large
commercial aircraft have 2 “jump seats” on the flight deck, reserved for
non-ticketed off-duty flight crew in transit. Prior to 9/11 no record of its
occupant was kept, as opposed to the regular flight crew and passengers.
Enyeart was frustrated throughout the trial that when he flew into and out
of Northwest’s Minnesota hub many times in the jump seat that it was
wrongfully portrayed that he spent a day in Minnesota because he used an
ATM [App 6]. In many of those events he generally spent only a short
time at or near the airport before flying out again in the jump seat, but no
record was made of his merely passing through Minnesota.
s
than 183 days in Minnesota without counting such days. The
Court denied his motion and his requested instructions.
Instead, the Court instructed that such days could be counted.
In so instructing, the Court applied law that is in conflict
with federal law. Enyeart asserts that while acting as a pilot,
he was entitled to a modified application of Minnesota law.
Because the jury was permitted to apply either theory
including the one applying the incorrect counting of days
spent in Minnesota, the incorrect standard was prejudicial.
Enyeart purchased a new 2000 vehicle. Enyeart was
convicted of failure to pay motor vehicle tax. Because
Minnesota law exempts non-residents from that tax Enyeart
and the State agreed that the jury instruction relating to this
would be the same as that concerning the income tax counts
— that the State must prove that Enyeart was a resident of
Minnesota. Thus, this issue is coterminous with other counts
and subject to the same arguments concerning residence.
To rationalize sustension of the verdict, the Court of
Appeals recited incorrect facts which it urged supported
culpability. Page constraints herein prohibit specific rebuttal.
Enyeart does here address them generally. He submits that
some are totally irrelevant to the issue that Minnesota is
navigating in waters denied to it by federal preemption.
Some melt away in the light of the recognition that Enyeart
was in fact a bona fide Alaska domiciliary. Some of them
are resurrections of assertions made to the trial court and
totally rejected by that lower court as unfounded. He submits
that Minnesota Courts were also mistaken when they relied
upon presumptions in a criminal case that are in conflict with
the federal statute. The usual Minnesota presumption that
one’s domicile is where he lives [App p 13] is repugnant to
49 U.S.C. § 40116 if applied to an airline employee.
REASONS FOR GRANTING
THE WRIT OF CERTIORARI
REASON I
IN REVIEWING A STATE FELONY CONVICTION
THE MINNESOTA COURT OF APPEALS HAS
DECIDED AN IMPORTANT FEDERAL QUESTION IN
A WAY WHICH CONFLICTS WITH 49 U.S.C.
SECTION 40116(f) WHICH PREEMPTIVELY
RESTRICTS THE MANNER IN WHICH THE
COMPENSATION OF INTERSTATE AIRLINE
EMPLOYEES MAY BE TAXED.
Enyeart raised this to the trial court by motion to dismiss
prior to trial (T. 3-42), which was denied, and again by
objecting to instructions given (T. 1475). [App pp 17-22]
A. The federal statute expressly addresses tax
treatment by the States of airline employee pay.
The federal statute concerned is 49 U.S.C. § 40116
entitled “State Taxation”. Subsection (f) speaks directly to
state taxation of air carrier employees. It provides that:
(f) Pay of air carrier employees.
(1) In this subsection —
(A) “pay” means money received by an
employee for services.
(B) “State” means a State of the United
States, the District of Columbia, and a
territory or possession of the United
States.
(C) an employee is deemed to have earned
50 percent of the employee’s pay in a
At Nt ll a A Clings tet Fie a Ol ig AOE Rly gle aN Re Ti
H
.
State or political subdivision of a State in
which the scheduled flight time of the
employee in the State or subdivision is
more than 50 percent of the total
scheduled flight time of the employee
when employed during the calendar year.
(2) The pay of an employee of an air carrier having
regularly assigned duties on aircraft in at least 2
states is subject to the income tax laws of only
the following:
(A) the State or political subdivision of the
State that is the residence of the employee.
(B) the State or political subdivision of the
State in which the employee earns more
than 50 percent of the pay received by the
employee from the carrier.
B. Federal regulation of air space and air —
transportation is pervasive, far-reaching and exclusive.
Congress enacted 49 U.S.C. §§ 40101 et seq. to develop
a regulatory system to provide for the needs of (A) the
commerce of the United States, (B) the United States Postal
Service; and (C) the national defense. Sections 40101(a)(7);
40102(a)(37)(E).
Because of international importance, the Secretaries of
State, Transportation and Defense are all involved. Section
40101(d) gives emphasis that security, safety and national
defense are of highest priority. Governmental interests such
as carrying the mail and national defense are a factor. A goal
in passing the Act was to provide to the nation and the world
pilots of the highest quality training.
Northwest invites pilots from all over the world to its
facility for training. That facility is the largest of its kind in
the world. It trains pilots of many airlines, not merely those
of Northwest. To conduct such training Northwest brings
flight instructors regarded by those in the industry as being
the highest and most proficient in their profession, the créme
de creme. Enyeart was a flight instructor so employed.
Federal regulation of the airline industry is pervasive. 49
U.S.C.§ 40102. Federal policies are stated in 49 U.S.C. §
40101. Regulation of airspace and its management is
exclusively federal, 49 U.S.C. § 40103. Control of air
navigation facilities is exclusively federal. Control of air
safety is exclusively federal. As it relates to national defense,
it is exclusively federal. As it is involved in mail delivery, it
is exclusively federal. Pilot functioning is exclusively
federal. Control of pilot training is federal. Pilot training is
federal. 49 U.S.C. § 40111(3); See also, 49 U.S.C. § 42112
(pilot compensation).
In City of Burbank v. Lockheed Air Terminal, Inc., 411
U.S. 624 (1973) this Court held that federal law had
preempted the state police power to control aircraft noise.
Virtually all activities relating to the industry are exclusively
federal. Even airline records are involved. 49 U.S.C. §
40115. To escape the broad scope of federal pervasiveness
one must affirmatively seek exemption from it. 49 U.S.C. §
40109.
Those working for interstate and international commerce
and in national defense are personally within the federal
jurisdiction. Choices in their personal lives are implicated.
Because of the nature of their employment, like those in the
armed forces, they are often required to work and reside in
10
multiple places. They may call one state “home’”’, be based in
another, fly into, out of and over several others.
Congress found that transportation employees were being
personally subjected to multiple-State claims for withholding
and taxation. Testimony taken in hearings showed claims
sometimes aggregated to more than earnings. Pilots and
others were being interfered with in their personal lives to |
the extent that it was directly interfering with the industry |
itself, thus the necessity for enactment of the legislation.
C. The legislative history is clear that Congress
intended to limit State taxing capabilities.
The Legislative History for the Senate is found at P.L.
91-569, 1970 U.S.C.C. A.N. 5039 (1970). Congress found,
“. . commerce is unreasonably burdened by certain income
taxation policies of some states insofar as such policies affect
interstate carrier employee’s income.” [Emphasis added]
The Committee noted that 38 states impose a personal
income tax upon individuals and that 31 of those states
require withholding concerning residents and nonresidents.
Id. at 5041.
Fl RT EE TT NT TE i TET
The Committee concluded that legislation in this area
would be incomplete if it did not address the very basic
problem of multiple state tax liability along with the problem
of multi-state withholding and/or reporting for taxation
purposes. See, Id. at 5041.
SS an! Brine Ga dew EO
“The Committee Bill reserves to the individual
states the present practice of taxing substantial
compensation which is earned by a non-resident.
However, it would limit that practice in accordance
with the recommendation of the multi-state
FED INS FUT tae aoe a
eee
1]
commission to states wherein more than 50 percent
of the nonresident interstate carrier employee’s
compensation is earned. The Bill does not eliminate
entirely the problem of double taxation although it
does reduce the number of states which may assert
the right to tax compensation paid to employees of
interstate carriers to two.” Id. at 5043.
The legislative history makes clear that state interference
of exactly this kind is what was intended to be addressed by
the legislation. The Senate Report accompanying the Bill
plainly states the legislative intent — to limit a state’s taxing
authority over the income of pilots to two carefully
circumscribed States: (1) The State of the pilot’s residence;
and, (2) The State in which the pilot earns greater than 50%
of his income measured by scheduled flight time. Congress
clearly intended that no other state have taxing authority over
a pilot’s income.
The intent of Congress was to preclude a state such as
Minnesota from taxing an individual such as Enyeart unless
Minnesota was his residence or he flew more than 50% of his
scheduled flight time within its borders. Congress left no
room for a third taxing state, a state where a pilot has an
abode and is present more than 50% of his time if such time
is reached only by adding time flying into, out of or over the
State. Indeed, it is probable that Congress envisioned a
scenario of just this kind involving transient airline
employees when it correlated the prospective taxing state’s
interests to “scheduled flight time” and not mere presence.
Subsection (f) must be read in conjunction with another
federal statute in whose light it was enacted, Income
Taxation — Carriers Act, Public Law 91-569, 84 Stat. 1499,
Section 4(a) [Section 1112(a)]. That Act provided that state
12
of residence of a transportation employee is to be determined
by the “employee’s residence, as shown on the employment
records of any such carrier”. [Emphasis supplied]. ”
49 U.S.C. § 40116(f)(2)(A) mandates that an employee
of an interstate air carrier having regularly assigned duties on
aircraft in at least two states is subject to the income tax laws
of only the State of residence. That State of residence
referred to in subsection (A) is confined to what is shown on
the records of the employer carrier. The proper recourse of a
State that wishes to challenge such records is to initiate an
administrative or civil action in regard to such records.
D. Violation of Section 40116 is a federal crime.
When Enyeart was targeted by the State of Minnesota
for prosecution it was well-covered in the press. One
columnist publicly wondered why the Administrator of the
FAA did not intervene. The following indicates the answer:
49 U.S.C. § 46301 imposes civil penalties for the
violation of parts of the Act and places jurisdiction with the
Administrator. However, that section specifically excludes
Section 40116. 49 U.S.C. § 46316(a) provides a general
criminal penalty for persons violating Section 40101 et seq.
subject to a fine under Title 18. Subsection (b) provides that
? If Minnesota had reason to believe that Enyeart’s employment records
were incorrect regarding residency, the fair and reasonable procedure
would have been to adjudicate the question in a civil forum. There it
could have properly utilized its 26+ factors in Minnesota Rule 8001.0300
[App 11-14; App 35-37] as modified by federal law. If found to be a
“resident”, Minnesota could then seek order that he change those records.
Such procedure would have been consistent with the Carriers Act. It
would respect 49 U.S.C. § 40116.
13
subsection (a) shall not apply to Section 40101 et seq., except
..-40116.... [See, App pp 28-29; 43]
Such sections remove a violation of Section 40116 from
the civil jurisdiction of the Administrator and place it with
the United States Department of Justice. Each violation and
penalty separately occurs on each day that it continues.
E. Prior to this prosecution Minnesota had publicly
held out a contrary position.
On January 3, 1996, the Minnesota Department of
Revenue acting through John Haugen, its attorney, sent a
letter to Northwest Airlines. That letter expressly excluded
non-resident pilots from income taxation when they are
present in Minnesota for their duties as flight instructors.
That official letter speaking for the Minnesota Department of
Revenue states that:
“Pursuant to your letter of September 29,
1995, and our meeting in December of 1995
concerning Minnesota individual income taxation
of nonresident pilots of Northwest Airlines who
perform service in Minnesota as _ flight
instructors, it is the Department of Revenue’s
position that the pilots would be under the
protection of 49 USC 40116(f) and would not be
subject to Minnesota individual income [tax] on
their pay from Northwest Airlines for a given
month, if at least once during the given month,
the pilot flies a plane or does inflight evaluations
for Northwest Airlines either as part of the flight
training, on a reserve pilot basis, or a regularly
assigned flight.
14
For calendar months after February of 1996,
Minnesota will take the _ position — the
nonresidential pilots who provide services as
flight trainers in Minnesota and do not meet the
above one flight per month criterion will be
subject to Minnesota individual income tax on
the pay from Northwest Airlines for that month.
For calendar months before March of 1996,
the Department will consider all pilots who had
duties in Minnesota as a flight trainer, to be
covered under the federal provision regardless of
whether they met the one flight per month ruling;
and thus will not be subject to Minnesota tax on
their pay if they were a non-resident. . . .” (T.
961-963).
For the year 2000, the record shows that Enyeart was
present in Minnesota fulfilling his duties as a flight instructor
for 57 days. (T. 1368-69). Excluding those days, Enyeart
was present in the State far less than the requisite 183 days
which the State represented to the Jury. Without those
federally-forbidden days Enyeart could not be convicted. He
had a right to rely on that official pronouncement.
Minnesota officials did not preface their adverse
criminal actions against Enyeart and other pilots similarly
situated with any civil or administrative proceedings to
determine whether they fell within the federal preemption.
Instead, without first exhausting civil remedies, and in fact
acting contrary to the announced official position of non-
taxation by the Department of Revenue, State officials leapt
to initiate criminal felony charges. Enyeart was forced to
defend in a forum where discovery and other civil trial aids
are denied. He was forced to face such charges knowing that
15
an adverse decision would remove him from the industry in
which he had devoted his working lifetime.
F. Minnesota’s application of its Rule against
Enyeart is in direct conflict with preemptive federal laws.
The Constitution provides that “Congress has the power
to preempt state law.” Crosby v. National Foreign Trade
Council, 530 U.S. 363, 372 (2000). This preemption occurs
in part by application of the supremacy clause of Article VI
requiring that state judges are bound by federal laws made in
pursuance of the Federal Constitution. Federal preemption
may occur in three ways: expressly, impliedly or by a direct
conflict. Express preemption occurs when Congress declares
federal legislation to have preemptive effect. Cipollone v.
Liggett Group, Inc., 505 U.S. 504, 516-17 (1992).
Direct conflict preemption invalidates any state law
which in fact conflicts with the superior federal law. It arises,
absent an express or implied declaration of Congress or an
agency’s intent, when “compliance with both federal and
state regulations is a physical impossibility,” Florida Lime &
Avocado Growers, Inc v. Paul, 373 U.S. 132, 142-43 (1963),
or when state law “stands as an obstacle to the
accomplishment and execution of the full purposes and
objectives of Congress.” Hines v. Davidowitz, 312 U.S. 52,
67 (1941).
Both the plain language of the federal statute and an
understanding of the Congressional purpose supporting the
statute are vital to a preemption determination. The “purpose
of Congress is the ultimate touchstone” in express
preemption cases. Retail Clerks v. Schermerhorn, 375 U.S.
96, 103 (1963).
16
In Aloha Airlines v. Director of Taxation of Hawaii, 464
U.S. 7 (1983), this Court was called upon to determine
whether a Hawaii statute which imposed a property tax on
the annual gross income of airlines was preempted by
Section 7(a) of the Airport Development Acceleration Act of
1973. The federal statute prohibited a state from levying a
tax, “directly or indirectly, on persons traveling in air
commerce or on the carnage of persons traveling in air
commerce or on the sale of air transportation or on the gross
receipts derived therefrom, but provides that property taxes
are not included in this prohibition.” Aloha, 464 U.S. at 7.
This Court determined that the federal statute preempted
the state statute because the former proscribed the imposition
of a particular kind of tax on an industry and Hawaii had in
effect imposed just such a tax. Id. at 11-12. Moreover, the
legislative history of the federal statute contained multiple
references to the fact that the law was intended to prohibit the
levying of State or local taxes. Id. at 13.
This case shows stnking similarities to Aloha. In Aloha
the federal statute prohibited certain state taxation of air
carriers. Here, the federal statute limits the abilities of a
‘State to double-tax the income of employees of the carriers.
It is difficult to imagine how the federal statute could more
clearly have preemptive effect: it is expressly entitled “State
Taxation” and sets out the exclusive circumstances under
which a state may tax the earnings of an airline pilot:
=
a-
“The pay of an employee of an air carrier having
regularly assigned duties on aircraft in at least 2
states 1s subject to the income tax laws of only
the following: (A) the State or political
subdivision of the State that is the residence of
the employee. (B) the State or political
eee
17
subdivision of the State in which the employee
earns more than 50 percent of the pay received
by the employee from the carrier.” [Emphasis
added]
Only two states may claim state taxing authority over a
pilot such as Enyeart. The federal definition precludes
counting any time spent within Minnesota by a non-
domiciled pilot when that time is attributable to his flying
into, out of, or over the state. Enyeart moved to preclude
prosecution. It was denied. He objected to Jury instructions.
His objection was overruled. Instead, the Court held that the
Minnesota definition of “resident” prevailed. [App pp 18-27]
In effect, state law preempted federal law! Because the
federal statute also uses the term “state of residence” and
because the Court refused to acknowledge the differences in
the definitions, it found no conflict. Hawaii unsuccessfully
attempted a similar maneuver in Aloha.
In Aloha, the Hawaii legislature drafted a “property tax”
bill measured by gross revenue. Hawaii then argued to the
Court that this was permitted by the federal statute which
specifically permitted “property taxes”. 464 U.S. at 13-14.
The federal statute precluded gross receipts taxes. This Court
rejected Hawaii’s argument holding that the “manner in
which the state legislature has described and categorized [the
tax identified by state statute] cannot mask the fact that the
purpose and effect of the provision is to impose a levy upon
the gross receipts of airlines.” Aloha, 464 U.S. at 13.
Similarly, the fact that Minnesota undertakes to
predicate “residency” from physical presence cannot mask
the reality that the effect of that law is to permit taxation of a
class of persons who could not otherwise be taxed: to wit, a
18
commercial pilot whose presence within the state for more
than 183 days stems solely from his having flown into, out
of, or over the state.
It ignores that sole specific pro ration allowed by the
preemptive federal statute predicated from where income is
earned. Simply put, if the pilot resides within the state or if
his “scheduled flight time” within the state is greater than
50%, then the state has taxing authority. If not, taxing
authority is prohibited.
In determining the “state of residence” of the pilot, we
must look to Income Taxation — Carriers Act, Public Law 91-
569, 84 Stat. 1499, Section 1112(a). That act provides that
the state of residence of a transportation employee is to be
determined by the “employee’s residence, as shown on the
employment records of any such carrier”.
Minnesota’s Rule defining “resident” as one who is
present in the state more than 183 days (no matter the cause)
and maintains an abode is entirely incongruous with the
command of Congress. It ignores the Congressional term,
“earns”. Minnesota’s law stands as an obstacle to the
accomplishment of the federal purpose. It is preempted by
direct conflict.
Direct conflict arises when “compliance with both
federal and state regulations is a physical impossibility,”
Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S.
132, 142-43 (1963), or when state law “stands as an obstacle
to the accomplishment and execution of the fu// purposes and
objectives of Congress.” Hines v. Davidowitz, 312 U.S. 52,
67 (1941). [Emphasis added]
———
19
What constitutes an “obstacle” is a “matter of judgment,
to be informed by examining the federal statute as a whole
and identifying its purpose and intended effects”. Crosby v.
National Foreign Trade Council, 530 U.S. 363 (2000). This
Court succinctly put it as such:
“For when the question is whether a Federal act
Overrides a state law, the entire scheme of the
Statute must of course be considered and that
which needs be implied is of no less force than
that which is expressed. If the purpose of the act
cannot otherwise be accomplished - if its
operation within its chosen field else must be
frustrated and its provisions be refused their
natural effect — the state law must yield to the
regulation of Congress within the sphere of its
delegated power.” Id. at 373, quoting, Savage v.
Jones, 225 U.S. 501, 533 (1912).
The application of Minnesota’s non-domiciliary law
frustrates the purpose of the federal statute. First, the federal
Statute was specifically designed to insulate a certain class of
individuals who travel in interstate commerce from multi-
state withholding and reporting. Enyeart is within that class.
Secondly, Minnesota undertakes to tax Enyeart as a non-
domiciliary because of his physical presence within the state
more than 183 days when that presence is directly caused in
part by the requirements of his employment that he be in the
state to take off, land, or fly over. The federal statute was
specifically designed to preclude states such as Minnesota
from taxing income unless it was earned from flight time
scheduled within the state which exceeded 50%. Congress
anticipated that a pilot had to live somewhere in a state in
which he was based, and that he might even own property
20
there when he was called upon by his employment to spend
more than 183 days. Congress denied taxing authority on |
that basis. Congress confined it to earnings within the state.
Application of Minnesota’s law increased to three the
number of states that may claim taxes due from Enyeart. That |
directly conflicts with the federal statute’s stated effect — that
there may be only two. And importantly, without counting
Enyeart’s presence for work (his Northwest Airline base for
most of the years in question), the State did not have taxing
authority without counting days he was present for training
others. Minnesota could not adduce evidence that he was
present in the state for more than 183 days under that test.
[See, Minn, Dept. of Revenue letter, supra at 13-14]
Minnesota law. Under the federal statute, Enyeart’s presence
in any state, other than the state in which he resides, does not
permit that state to tax his income unless his scheduled flight
time there is greater than 50%. The Minnesota rule, by its
terms, provides that any presence, even work-occasioned, on
the part of Enyeart — for any part of a day — constitutes a full
day spent in Minnesota. This violates the clear mandate of
the federal statute. [Minn. Rule, App p 38, see, subp. 4;
compare to 49 U.S.C. § 40116(f) App 26]
|
|
|
|
This presents the most obvious conflict with the |
!
|
|
G. The application of the Minnesota law here thwarts
and is a direct interference with the federal mission.
The Minnesota law, as applied to Enyeart, created an
obstacle to federal goals. That interference is much magnified
when contemplating its detrimental effect upon the federal
mission. A stated purpose of the Act is to provide for and
enhance the public safety. Pilots must be competently
trained. Accordingly, pilots and flight instructors of the
sceiataseereee teats
21
highest capabilities are brought together in Minnesota for
training purposes.
That contemplates free access and a friendly acceptance.
State actions adverse, or perceived as adverse, to the personal
interests of those considering participation describes a hostile
atmosphere which each potential participant will reasonably
consider. Perceptions of wrongful collections of taxes and
felony prosecutions which might remove them from the very
industry for which they are training will likely cause some
instructors and pilots not to come to Minnesota. Their not
coming, or even that chilling effect and resulting hesitation,
constitute a direct State interference with federal goals. The
logical result is that some commercial aircraft will likely be
flown by pilots not trained to be the very best.
By virtue of federal regulation concerning terrorism,
pilots may not fly commercial aircrafts if convicted of a
felony. Because of this, Enyeart is banned for his lifetime
from flying commercial aircraft or training other pilots.
Although regarded as one of the most proficient in his
profession and once sought out by those in the industry as
one most capable to train other pilots, actions of Minnesota
have taken from the industry, the public and him this
capability.”
The legislative history of the federal Act demonstrates
that potential multiple claims, civil in nature, made by
various States imposed an undue burden on the industry and
those employed in it. Congress deemed it necessary to
Enyeart recently applied with Air India to train its pilots. He was
selected from 7 semi-final world applicants for the job. He now awaits
security clearance by Air India and fears the Minnesota felony conviction
will eliminate him.
22
constrain those civil interferences. If Congress deemed those
civil claims to constitute an undue burden, then the
commencement of criminal proceedings with the resulting
removal of those pilots from the industry itself must be
deemed outrageous.
Prosecution of State felonies calculated to remove pilots
and flight instructors from their employment for the obvious
purpose of coercing others with fear into immediate
withholding and reporting of asserted taxes is a direct
interference with federal interests. It is a prohibited
encroachment. This is greatly aggravated by the State’s
failure to provide any prior notice. It is rendered egregious
when there is no opportunity afforded to first exhaust such
issues by administrative or civil means. And it is additionally
so when such actions are undertaken in the face of previous
official representations to the contrary.
H. Federal law creates a sphere of personal activities
for airline employees which the application of the
Minnesota Rule encroaches.
Enyeart submits that superior federal law creates a
sphere or zone of federally-protected activity, privilege, |
immunity or exemption for the industry, those in the
industry, and him personally in his private life, intended to
protect him from certain state encroachments. That includes |
distinct federal limitations on claims for certain state taxes,
and especially in the means and manner adopted by
Minnesota.
Stated otherwise, federal law guarantees to him certain
personal choices as to where his “home” is and concerning
his personal residence for purposes of taxation, voting,
driver’s license, etc., similar to those created by the Soldier’s
a
23
and Sailor’s Relief Act of 1940, as amended, 50 U.S.C. App.
§§ 501, et seq. In preserving those personal choices, that
federal guarantee supercedes any ability claimed by the State
to make those choices for him or to usurp them from him.
I. The Minnesota Courts reflected bias.
To justify taxation the Court of Appeals alludes to
Minnesota’s “legitimate interest” in taxing a pilot present,
“enjoying the services and protection the state affords.” [App
p 22] This reflects an incorrect bias that Enyeart experienced
in the press and the Minnesota courts. They represent pilots
present as persons who are abusing Minnesota by having
residence in states which do not have income taxes.
Prosecutors were quoted in the press as targeting pilots from
states having no income taxes, who were portrayed as
shirkers. What those critics conceal is that the governments
of those states are sometimes, such as Alaska, supported at a
rate per capita higher than in Minnesota. Those states
merely utilize means other than taxes on income to support
their governments.
Minnesota is required to pro rate income taxes with other
states by allowing credits for income taxes paid them. It
allows none for other taxes paid. Minnesota’s claims upon
such pilots should be more correctly viewed as unequally and
unfairly doubling their tax burdens. Because there is no
foreign income tax credit it must honor, Minnesota claims to
unfairly usurp for itself al] those taxes upon income which
those states could have imposed had they opted to use that
method of taxation but chose not to. In effect Minnesota is
saying, “They don’t tax it so we'll grab theirs too”. By
targeting pilots residing in states with no income taxes it is
Minnesota, not the pilots, that schemes for unjust enrichment.
This prosecution was calculated to foster that scheme.
i
B
i
:
;
4
:
24 ee
J. Application of the Minnesota law and Rule was
both relevant to his conviction and highly prejudicial.
The application of the Minnesota law to Enyeart as
inappropriately embodied in the instructions to the Jury
cannot be regarded as harmless. As this Court stated in
Francis v. Franklin, 471 U.S 307, 324 (1985) “. . .where there
exists a reasonable possibility that the jury relied upon an
unconstitutional understanding of the law in reaching a guilty
verdict, that verdict must be set aside.” Here, error was not
merely possible. It was a certainty.
* * *
REASON II
IN REVIEWING A STATE FELONY CONVICTION
THE MINNESOTA COURT OF APPEALS HAS
DECIDED AN IMPORTANT FEDERAL QUESTION IN
A WAY WHICH DENIES FEDERAL DUE PROCESS
BY ALLOWING MINNESOTA TO PROCEED
AGAINST HIM ON CONFLICTING THEORIES THAT
HE WAS A DOMICILED RESIDENT, OR THAT HE :
WAS NON-DOMICILED BUT PRESENT MORE |
THAN 183 DAYS, AND BY NOT REQUIRING THE _ - |
JURORS TO UNANIMOUSLY AGREE ON ONE
THEORY. |
Enyeart requested an instruction that the jury be required
to unanimously agree on which theory of residency it found
the State had proven. (T. 43-48). This was denied and the
Jurors were instructed that they could find under either
theory. [See also, App pp 17-18 (beginning at IT)]
eee
25
A. There is no commonality in the two theories
presented and the Jury was not required to agree
unanimously on one.
Allowing the Jury members to independently arrive at a
verdict of guilty under two conflicting theories and not
requiring them to agree unanimously upon one violates the
fundamental fairness and the rationality guaranteed by
Fourteenth Amendment Due Process as described in Schad v.
Arizona, 501 U.S. 624 (1991).
In Schad this Court found no error when Jury members
were allowed to arrive at a first degree murder conviction
under either a premeditated or felony murder theory. The
underlying reason for allowing such independent theories
was that there was a mens rea element common to both. |
Here concerning Enyeart, two conflicting theories were
submitted to the Jury:
1. That he was always a domiciliary of Minnesota
and set out with intent to evade Minnesota taxes by
claiming to be a resident of Alaska.
2. That although he was a bona fide domiciliary of
Alaska, he was present in Minnesota more than
183 days and therefore is deemed by Minnesota to
be a resident.
The first theory presupposes an evil intent — an intent to
purposely evade Minnesota taxation. This requires a showing
that his claim of being an Alaska domiciliary was not in good
faith, untrue and done solely from bad motives, that is, to
evade Minnesota taxation.
26
The second theory assumes that he was a bona fide
domiciliary of Alaska whose resident status in Minnesota
arises merely from his being present there more than 183
days. It requires no evil intent. It may innocuously stem
solely from mistake, inadvertence or employer cause.
The elements are totally different. The first involves evil
intent. The second element involves non-evil acts or
omissions. There is no commonality of wrongful design as
this Court found in Schad. To lump these conflicting theories
together and allow some Jurors to find one and others to find
another amounts to little more than advising the Jury that
they may convict if they believe the defendant might have
committed some serious crime and should be punished!
REASON III
IN REVIEWING A STATE FELONY CONVICTION
THE MINNESOTA COURT OF APPEALS HAS
DECIDED AN IMPORTANT FEDERAL QUESTION IN
A WAY WHICH DENIES FEDERAL DUE PROCESS
BY HOLDING THAT MINNESOTA LAW DEFINING
“DOMICILED RESIDENT” IS NOT IMPERMISSIBLY
VAGUE AND INDEFINITE.
Enyeart timely made this objection to the admission of
Exhibit 40 which was a copy of the Minnesota Domiciled
Resident Rule 8001.0300 (T. 1370-1373). [App pp 8-17;
33]
27
A. The Minnesota law concerning domicile and non-
domiciliary residence is vague and indefinite.
Enyeart was charged with violating Minn. Stat. §
289A.63. That statute contains no definition of “domiciled
resident”. The State had to rely upon Minn. R. 8001.0300 to
supply that definition. Enyeart objects that the statute, and
even the statute when augmented by the Rule, does not meet
Due Process requirements relating to standardless
enforcement and adequate notice due to its being vague and
indefinite. Kolender v. Lawson, 461 U.S.352 (1983).
Agent Clancy, an avowed expert on the Rule, effectively
testified that the law, Rule, Regulations and Department of
Revenue are replete with vagaries. They provide, inter alia,
no guidelines to situations where a person is registered to
vote in one state but does not vote anywhere, what
constitutes location of employment for an airline pilot, what
to do when a vehicle is registered in one state and located in
another, what to do when a person regularly receives mail in
more than one state, whether location of schools and children
is relevant when a person is divorced without primary
custody and what to do when the indicia are ambiguous. [T.
81-98] [See also, App pp 35-37 and App p 31]
Agent Clancy offered that 2 of the 27 factors would be
sufficient to establish residency, but acknowledged that the
regulations provide no suggestion on how to weigh the
factors where, as here, some indicated both ways.
Astonishingly (and contrary to the very backbone of our
criminal justice system), Agent Clancy suggested that,
although there were no state publications or guidance on how
to apply the 26 factors, it was the duty of each taxpayer to
apply his “common sense and intelligence” to personally
28
determine whether he is in compliance! The State’s leading
expert witness was unable to reasonably explain the
distinction between an “act” and a “declaration”. (T. 136-
138)
Minnesota courts have ruled that “Minnesota is a code
state, that is, the legislature has exclusive province to define
by statute what acts constitute a crime”. State v. Merrill, 450
N.W.2d 318, 321 (Minn. 1990). This prosecution did not
meet that standard. The statute is incomplete without the
Rule. The statute fails to provide that which Minnesota itself
says is due. Hicks v. Oklahoma, 447 U.S. 343 (1980). As in
United States v. Mallas, 762 F.2d 361, 363 (CA 4 1985), the
court should have refused to impose the “grave penalties”
that would rest upon the government’s “unsubstantiated
theory of tax law.”
REASON IV
IN REVIEWING A STATE FELONY CONVICTION
THE MINNESOTA COURT OF APPEALS HAS
DECIDED AN IMPORTANT FEDERAL QUESTION IN
A WAY WHICH DENIES FEDERAL DUE PROCESS
BY ALLOWING SUBSTANTIVE EVIDENCE TO THE
JURY STATING THAT ENYEART HAD THE DUTY
TO MAINTAIN AND PRODUCE RECORDS TO
PROVE THAT HE WAS NOT A _ RESIDENT,
THEREBY IMPERMISSIBLY PLACING THE
BURDEN OF PROOF UPON HIM AS A CRIMINAL
DEFENDANT
a —
29
Enyeart made timely objection to the admission of
Exhibit 40 and particularly subparagraph 5. (T. 370-73, 390).
That document recites that a non-domiciled resident taxpayer
is required to maintain records that he can produce to prove
that he spent more than 183 days outside of Minnesota. The
prosecutor argued to the Jury about the absence of records.
(T. 494). [App pp 22-23]
A. Evidence suggesting that he must prove non-
residence violates federal Due Process.
A Minnesota Rule reciting that Enyeart had the duty to
maintain records of non-residence was allowed to the jury.
This was a denial of Due Process. It served to impermissibly
remove: from, lessen or cloud that onus upon the State to
prove guilt beyond a reasonable doubt. It purports to shift the
ultimate risk of persuasion to the criminal defendant. In_re
Winship, 397 U.S. 358 (1970).
Such error was not harmless. Mere statements of counsel
in closing argument cannot be reasonably expected to
outweigh introduction of a written Official Rule. Without
counting federally-prohibited days, other evidence was not
“overwhelming” as found by the Court of Appeals.
* * *
30
CONCLUSION AND PRAYER
The decision of the Court of Appeals for the State of
Minnesota, and the decision of the Supreme Court of
Minnesota in refusing to review and correct it, conflict with
superior federal law and decisions of this Court. Therefore,
Randall Wayne Enyeart respectfully prays that this Court
grant the Petition of Writ of Certiorari to review and reverse
that decision and his felony conviction.
Respectfully submitted,
MARLYN SOREN JENSEN
2225 Robin Street
—_— Osceola, Iowa 50213-8208
Telephone 641-342-3530
ATTORNEY FOR PETITIONER,
RANDALL WAYNE ENYEART
APPENDIX
Table of Contents
A. State v Enyeart, 676 NW2d 311 (Minn App 2004) .... 1
‘B. Order: Denial of further review in re State v Enyeart
by Minnesota Supreme Court, May 18, 2004 ..... 25
C. 49 U.S.C. § 40116 (State Taxation) ............0...0... 26
D. 49 U.S.C. § 46301 (Civil Penalties) .............0....... 27
E. 49 U.S.C. § 46316 (General Criminal Penalties) ...... 28
F. Income Taxation — Interstate Carriers
and Employees _— Public Law 91-569
| ree 30
G. Minnesota Statute 290.01 (Definitions) ................. 31
H. Minnesota Statute 289A.63 (Criminal Penalties) ..... 32
I. Minnesota Rule 8001.0300 (Residency and Domicile
Defined; Considerations) ...............cccccccccscceee 33
J. 18 U.S.C. § 3571. Sentence of fine ...................... 43
App 1
STATE OF MINNESOTA
IN COURT OF APPEALS
A03-360
State of Minnesota,
Respondent,
VS.
Randall Wayne Enyeart,
Appellant.
Filed March 23, 2004
Affirmed
Lansing, Judge
Hennepin County District Court
File No. 02012943
Mike Hatch, Attorney General, 1800 NCL Tower, 445
Minnesota Street, St. Paul, MN 55101; and
Amy Klobuchar, Hennepin County Attorney, Jean E.
Burdorf, Assistant County Attorney, C-2000 Government
Center, Minneapolis, MN 55487 (for respondent)
Robert D. Sicoli, Law Offices of Robert D. Sicoli, Ltd., 2520
Park Avenue South, Minneapolis, MN 55404: and
Sarah M. Aho, Gislason & Hunter, LLP, Suite 215E, 9900
Bren Road East, P.O. Box 5297, Minnetonka, MN 55343
(for appellant)
Considered and decided by Lansing, Presiding Judge,
Peterson, Judge, and Halbrooks, Judge.
App 2
SYLLABUS
I. The department of revenue rule listing considerations for
deciding whether a person is domiciled in Minnesota for
income-tax purposes, Minn. R. 8001.0300 (2001), is not
unconstitutionally vague.
II. The state’s method for counting days spent in Minnesota
for tax purposes is not preempted by 49 U.S.C. § 40116
(2000) in cases involving the domiciliary status of air- |
carrier employees.
OPINION
LANSING, Judge
Randall Enyeart was convicted for knowingly filing
fraudulent tax returns, willfully evading income taxes, and
intentionally evading motor-vehicle taxes, on the theory that
he sought to avoid taxation by fraudulently creating the
appearance that he was a resident of Alaska. On appeal from
the judgment of conviction, Enyeart challenges the
constitutionality of Minn. R. 8001.0300 (2001), the propriety
of the jury instructions, the determination that federal law
does not preempt Minnesoia’s method of calculating days
spent in the state, and the admission of Minn. R. 8001.0300
into evidence. Because we conclude that the domicile rule is
neither unconstitutionally vague not preempted by federal
law and that the district court did not abuse its discretion
either in instructing the jury or in admitting the domicile rule
into evidence, we affirm.
ee —
FACTS |
Randall Enyeart began working as a commercial pilot for
Northwest Airlines (NWA) in 1979. He later marred, had
eeerererer
App 3
two children, and moved to Minnetonka. His children were
enrolled in Minnetonka public schools, and he claimed
Minnesota residency on his federal and state income-tax
returns from 1993 until 1997.
In August 1997, Enyeart and his wife separated. Enyeart
remained in the family’s Minnetonka home, and his former
wife and children moved to Deephaven. In December 1997,
Enyeart notified NWA electronically that he had changed his
residency to Alaska effective September 1997. But he
continued to live in the Minnetonka house and to homestead
and insure it as a residence-until the house was sold in April
1999.
In early 1998, Enyeart completed a client-information
form for accountant Linda Gasch, in which he indicated that
he had moved his residence to Anchorage, Alaska. Relying
on that information, Gasch listed Enyeart in his 1997 income-
tax return as a part-year resident of Minnesota and a part-year
resident of Alaska.
In April 1998, Enyeart filed a dissolution petition in
which he indicated that he resided at the Minnetonka address
and had been a Minnesota resident for not less than 180 days
immediately precedirg the commencement of dissolution
proceedings. The dissolution judgment awarded Enyeart
joint legal and physical custody of his two sons.
In November 1998, Enyeart applied for an Alaska
driver’s license. A certified record from Alaska indicates
that Enyeart surrendered his Minnesota license. But
according to Minnesota records, his license was not
surrendered. Enyeart’s 1995 Ford Expedition remained in
Minnesota and was insured on the premise that it was
garaged in Minnetonka. Alsc in November 1998, Enyeart
registered to vote in Alaska. Up to that time, Enyeart had
been registered to vote in Minnesota.
App 4
In connection with his 1998 state returns, Enyeart told
Gasch that his residence continued to be in Alaska and that
he was now flying international flights only. Based on that
information, his Minnesota income taxes amounted to only
$509. Had he claimed Minnesota residency in 1998, his state
income tax would have been $14,471. Enyeart also claimed
a homestead credit on his Minnetonka house for 1998 and
received a $906 rebate. To be eligible for this property-tax
rebate, the property must be (1) homesteaded, and (2) the
taxpayer’s “principal place of residence.” |
In April 1999, Enyeart purchased a townhouse in
Shorewood, Minnesota. Enyeart paid the earnest money for |
the townhouse with a check from his NWA credit union
bearing his Minnetonka address. And _ he _ bought
homeowner’s insurance. On May 3, Enyeart filed a
homestead application for the townhouse, in which he
indicated that he intended to occupy the property. Two weeks
later, he filed a relative homestead application, listing his
brother as the occupant and himself as the non-occupying
owner. Enyeart listed the Minnetonka house as his current
address.
Enyeart also executed a statement of occupancy in
connection with a mortgage submitted for recording,
indicating that he planned the townhouse to be his “principal
residence.” In an affidavit prepared by the title company for
execution at closing, Enyeart indicated that he had lived at
the Minnetonka address for the past ten years. And in a
residential-loan application, Enyeart declared that he was the
sole owner of the townhouse and that the townhouse was to
be his principal residence. At closing, he provided the
mortgage company with a copy of his Minnesota driver’s
license.
In September 1999, Enyeart’s flight base moved from
Minneapolis to Detroit, Michigan. Later that month, he
—aoorrea—a-a_&»_aLSKaara
App 5
applied for an automobile loan through the NWA credit
union. In the application, Enyeart listed the townhouse as his
residence and stated that he had lived there for four months.
In October 1999, he applied for a home-equity loan that had
an occupancy requirement. Enyeart used the townhouse as
security.
In November 1999, Enyeart bought a 2000 Ford
Expedition from a dealer in Buffalo, Minnesota, and paid
with a check bearing his Shorewood address. The purchase
agreement listed a Minnesota mailing address and Minnesota
telephone numbers. Enyeart paid no sales tax on the vehicle
because he told the dealer that he planned to transfer title to
Alaska. Had he claimed Minnesota residency, the tax due on
the vehicle would have been $1,422. 18. Enyeart registered _
the Ford Expedition in Alaska in January 2000.
Even though he claimed Alaska residency and was based
out of Detroit, Enyeart continued to have his NWA pay stubs
and withholding information sent to the Minneapolis/St. Paul
base during 1999 and 2000. Enyeart did not file a 1999
Minnesota income-tax return, claiming that he was an Alaska
resident. Had he claimed Minnesota residency in 1999, he
would have had to pay $11,454 in state income taxes.
In January 2000, Enyeart told Hennepin County officials
that he had been a Hennepin County resident for the past ten
years and had resided at the Shorewood address for the past
nine months. In February 2000, he stated under oath that he
lived at the Shorewood address and had lived there since
April 1999. And in September 2000, he signed and filed
emergency-notification cards with his sons’ school that listed
the Minnetonka address and Minnesota telephone numbers as
his contact information.
In February and August 2000, Enyeart listed the
Shorewood address in his application for a medical certificate
App 6
of fitness, which he needed to maintain his commercial-
pilot’s license. Before then, he had used the Minnetonka
address. Enyeart listed his Alaska address for the first time
in February 2001. In December 2000, Enyeart applied for a
second home-equity loan. Once again, Enyeart listed the
Shorewood address as his current address and used the
townhouse as security.
In his 2000 federal income-tax return, Enyeart continued
to claim Alaska as his state of residence. Had he claimed
Minnesota residency and filed a state income-tax return, he |
would have had to pay $15,036 in state income taxes.
Using Enyeart’s flight schedules, bank records, Federal
Aviation Administration records, and court documents, the
state calculated the number of days Enyeart was present in
Minnesota during the last three months of 1997 and the
calendar years 1998, 1999, and 2000. The state attributed a
day to Minnesota residency only if there was evidence that
Enyeart was beginning or ending a flight in Minnesota or that
he was conducting business in the state (closing a loan or
attending a doctor’s appointment, for example). The state did
not count days in which Enyeart flew into or out of
Minnesota in transit to another state or days in which Enyeart
conducted business in another state. The state documented
that in 1998 Enyeart spent 194 days in Minnesota and only
twelve full days in Alaska. In 1999, Enyeart was in
Minnesota 144 days and in Alaska two full days. In 2000, |
Enyeart was in Minnesota 186 days and in Alaska two partial |
days.
Enyeart’s bank records indicate that between January
1998 and December 2000, Enyeart made 240 ATM
transactions in Minnesota. During the same period, he made
only three transactions in Alaska. Enyeart’s bank records |
were mailed to his Minnetonka address until he moved in
April 1999. His bank records for the remainder of 1999 and
App 7
2000 were mailed to his Shorewood address. Enyeart’s cell
phone records also show that the vast majority of calls were
made to locations within Minnesota.
The Minnesota Department of Revenue (DOR) began
investigating Enyeart after receiving a tip from Enyeart’s
brother in August 1999, indicating that Enyeart was evading
state income taxes. Investigators discovered that Enyeart was
listed in metro-area phonebooks at either his Minnetonka or
his Shorewood address from 1997 until 2000.
In March 2001, Enyeart attempted to have the relative
homestead status on the Shorewood residence removed for
the tax year 2000 because his brother had moved out.
Enyeart backdated the letter requesting the removal to
January 1999. The relative homestead status was removed in
2001 and a penalty was assessed. On the day he requested the
removal of the relative homestead status, Enyeart also
contacted his insurance company to change his mailing
address from Minnesota to Alaska.
In June 2001, Enyeart gave DOR agents a handwritten
letter from his father and a typewritten letter from fellow
NWA pilot Tim Branaman, indicating that Enyeart lived in
Alaska. He also gave the DOR a photocopy of a lease
agreement he signed with a storage facility in Minnesota.
The photocopy, dated September 1999, showed an address
and telephone number in Anchorage. The original, however,
which DOR agents later obtained, listed Enyeart’s
Shorewood address and Minnesota telephone numbers.
During a search of Enyeart’s Shorewood residence in
September 2001, DOR agents did not find any financial
records for the years 1997 to 2001. Agents discovered that
Enyeart’s computer hard drive contained a letter identical to
the letter, purportedly from his father, that Enyeart had
submitted to the DOR, and a proposed letter directed to the
DOR, purportedly from Branaman. In his testimony
App 8
Branaman admitted that Enyeart essentially wrote the letter
that actually went to the DOR. The first page of the letter on
Enyeart’s hard drive outlines the history of their friendship
and Branaman’s gratitude to Enyeart for providing him a
place to stay in Minneapolis in the early years of their
employment. At the bottom of the first page, the letter states
“we have had the opportunity to experience the following in
Alaska together.” At the top of the second page Enyeart
wrote: “(use your imagination here)” and left ten blank lines.
A search of the Anchorage condominium revealed that
Enyeart had no personal belongings there. The maintenance
man for the condominium complex testified that although
Enyeart received mail at the condo, he had seen Enyeart only
one time before September 2001.
In March 2002, the state charged Enyeart with one count
of filing a fraudulent tax return for the 1998 tax year in
violation of Minn. Stat. § 289A.63, subd. 2(a) (2002); two
counts of tax evasion for the 1999 and 2000 tax years in
violation of Minn. Stat. § 289A.63, subd. 1(a) (2002); and
two counts of failure to pay motor-vehicle taxes in violation
of Minn. Stat. § 297B.10(a) (2002). The court denied
Enyeart’s motion to dismiss the charges on grounds of
vagueness, reasoning that the statutes under which Enyeart
was charged were not unconstitutionally vague. A jury
subsequently found Enyeart guilty as charged. This appeal
followed the judgment of conviction and sentence.
ISSUES
I. Is Minnesota’s domicile rule _ unconstitutionally
vague?
|
|
App 9
II. Did the district court commit prejudicial error by
refusing to instruct the jury that they had to agree on
which theory of residency the state had proved?
Il. In cases involving the non-domiciliary status of an
air-carrier employee, does federal law preempt the
‘state’s method for counting days spent in Minnesota
for income-tax purposes?
IV. Did the district court impermissibly shift the burden
of proof to Enyeart by admitting into evidence a copy
of the rule that requires taxpayers claiming to be
nonresidents to have available for examination
adequate records to substantiate that they spent more
than one-half of the tax year outside Minnesota?
ANALYSIS
Enyeart first argues that the rule governing whether a
person is domiciled in the state for income-tax purposes is
“too ill-defined to form the basis for a criminal prosecution.”
Specifically, Enyeart argues that the rule is unconstitutionally
vague on its face and as applied because it does not specify
what factors a taxpayer must satisfy to establish domicile in a
particular state and invites arbitrary and discriminatory
enforcement. We disagree.
Laws are presumed to be constitutionally valid. Minn.
Stat. § 645.17(3) (2002); Associated Builders & Contractors
v. Ventura, 610 N.W.2d 293, 298 (Minn 2000). The
presumption of constitutional validity governs the
adjudication of constitutional challenges until disproved
beyond a reasonable doubt. Hickman v. Group Health Plan,
App 10
Inc., 396 N.W.2d 10, 13 (Minn. 1986). Courts have a duty to
uphold legislative enactments as reasonably certain when
possible, and should “resort to all acceptable rules of
construction to discover a competent and efficient expression
of the legislative will.” State v. Suess, 236 Minn. 174, 180,
52 N.W.2d 409, 414 (1952). The courts’ power to declare a
statute unconstitutional should be exercised “with extreme
caution and only when absolutely necessary.” State v.
Fingal, 666 N.W.2d 420, 423 (Minn. App.2003), review
denied (Minn. Oct. 21, 2003).
The void-for-vagueness doctrine requires that statutes
define an offense (1) with sufficient definiteness and
certainty that persons of ordinary intelligence can understand
what conduct is prohibited or mandated, and (2) in a manner
that does not encourage arbitrary and discriminatory
enforcement. Kolender v. Lawson, 461 U.S. 352, 357, 103 S.
Ct. 1855, 1858 (1983); State v. Newstrom, 371, N.W.2d 525,
528 (Minn. 1985). The doctrine is based on fairness and is
not designed to “convert into a constitutional dilemma the
practical difficulties in drawing criminal statutes both general
enough to take into account a variety of human conduct and
sufficiently specific to provide fair warning that certain kinds
of conduct are prohibited.” Colten v. Kentucky, 407 US.
104, 110, 92 S. Ct. 1953, 1957 (1972), quoted in State v.
Willenbring, 454 N.W.2d 268, 270-71 (Minn. App. 1990),
review denied (Minn. May 30, 1990). The vagueness
doctrine does not preclude the use of broad, flexible
standards that require persons subject to a statute to exercise
judgment. State v. Kuluvar, 266 Minn. 408, 417, 123
N.W.2d 699, 706 (1963). Instead, uncertainty invalidates a
statute only when those subject to it cannot determine with
reasonable certainty whether a particular act is forbidden or
permitted. /d.
App 11
A person is a resident for purposes of taxation if the
person is either (1) domiciled in Minnesota, or (2) domiciled
outside Minnesota but maintains a place of abode in the state
and spends in the aggregate more than one-half of the tax
year in Minnesota. Minn. Stat. § 290.01, subd. 7 (2002).
The term “domicile” means
the bodily presence of an individual person in a
place coupled with an intent to make such a place
one’s home. The domicile of any person shall be
that place in which that person’s habitation is fixed,
without any present intentions of removal
therefrom, and to which, whenever absent, that
person intends to return.
Minn. R. 8001.0300, subp. 2 (2001). The most significant
factor in determining domicile is the person’s intent to
remain in a fixed place. Manthey v. Comm'r of Revenue, 468
N.W.2d 548, 550 (Minn. 1991).
Rule 8001.0300 lists twenty-six items courts must
consider in determining whether a person intended to make a
particular state his or her home:
A. location of domicile for prior years; B. where
the person votes or is registered to vote, but
casting an illegal vote does not establish domicile
for income tax purposes; C. status as a student; D.
classification of employment as temporary or
permanent; E. location of employment; F. location
of newly acquired living quarters whether owned
or rented; G. present status of the former living
quarters, i.e., whether it was sold, offered for sale,
rented, or available for rent to another;
£
App 12
H. -whether homestead status has_ been
requested and/or obtained for property tax
purposes on newly purchased living quarters
and whether the homestead status of the
former living quarters has not been renewed;
I. ownership of other real property; J.
jurisdiction in which a valid driver’s license
was issued; K. jurisdiction from which any
professional licenses were issued; L. location
of the person’s union membership; M.
jurisdiction from which any motor vehicle
license was issued and the actual physical
location of the vehicles; N. whether resident
or nonresident fishing or hunting licenses
purchased; O. whether an income tax return
has been filed as a resident or nonresident; P.
whether the person has fulfilled the tax
obligations required of a resident; Q. location
of any bank accounts, especially the location
of the most active checking account; R.
location of other transactions with financial
institutions; S. location of the place of worship
at which the person is a member: T. location
of business relationships and the place where
business is transacted ; U. location of social,
fraternal, or athletic organizations or clubs or
in a lodge or country club, in which the person
is a member; V. address where mail is
received; W. percentage of time (not counting
hours of employment) that the person is
physically present in Minnesota and_ the
percentage of time (not counting hours of
employment) that the person is physically
present in each jurisdiction other than
App 13
Minnesota; X. location of jurisdiction from
which unemployment compensation benefits
are received; Y. location of schools at which
the person or the person’s spouse or children
attend, and whether resident or nonresident
tuition was charged; and Z. statements made
to an insurance company, concerning the
person’s residence, and on which insurance is
based.
Minn. R. 8001.0300, subp. 3 (2001).
Rule 8001.0300 does not specify the amount of evidence
necessary to prove an intention to change one’s domicile. On
the contrary, the rule provides that “[n]o positive rule can be
adopted with respect to the evidence necessary to prove an
intention to change a domicile.”
Minn. R. 8001.0300, subp. 2; see also Manthey, 468 N.W.2d
at 550 (stating that “[n]o magic formula exists for
determining a change in one’s domicile”). Instead, a person’s
intention to change domiciles is proved by acts and
declarations, and of the two forms of evidence, acts shall be
given more weight than declarations. Minn. R. 8001.0300,
subp. 2.
In addition to the twenty-six factors the rule lists, several
presumptions are relevant to a determination of domicile.
First, the place where a person’s family is domiciled is
presumed to be that person’s domicile, and the domicile of a
parent who has legal custody of a child is presumed to be the
child’s domicile. Minn. R. 8001.0300, subp. 2. Additionally,
one’s domicile is presumed to be the place where one lives.
Id. And once domicile is established, it is presumed to
continue until the contrary is shown. /d.; see Comm’r of
Revenue v. Stamp, 296 N.W. 2d 867, 870 (Minn. 1980). The
App 14
absence of an intention to abandon an existing domicile is
equivalent to an intention to retain it. Minn. R. 8001.0300,
subp. 2.
To succeed in a facial challenge to vagueness outside the
context of the First Amendment, a complainant must
demonstrate that the law is impermissibly vague in all its
applications. Vill. of Hoffman Estates v. Flipside, 455 U.S.
489, 495-96, 102 S. Ct. 1186, 1191 (1982). Enyeart argues
that the domicile rule is facially vague because it does not
indicate how many of the twenty-six factors it lists are
necessary to establish domicile. Enyeart specifically argues
that because expert testimony from a DOR agent failed to
show a regulatory scheme with a fixed method for weighing
the factors, a taxpayer could not exercise the required
criminal intent to violate the requirements. We disagree.
The DOR agent testified that the rule does not provide a
fixed method for weighing the domicile factors, but it
nonetheless provides guidance. As an example, he noted that
subpart 2 of the rule informs taxpayers that their actions will
be given more weight than their declarations. The agent
pointed out that the rule is not “extremely difficult,” and that
the rule’s application is governed by “common sense.”
The fact that taxpayers must rely on common sense and
intelligence to determine whether their conduct complies
with the law does not render the law unconstitutionally vague
on its face. See Kuluvar, 266 Minn. at 417, 123 N.W.2d at
706 (providing that use of broad, flexible standards requiring
exercise of judgment is not constitutionally precluded). A law
that is flexible and reasonably broad is_ nonetheless
constitutional if it is clear what the law as a whole proscribes.
Grayned v. City of Rockford, 408 U.S. 104, 110, 92 S. Ct.
2294, 2300 (1972). A criminal statute need not be drafted
with absolute certainty or mathematical precision. See, e.g.,
Suess, 236 Minn. At 180, 52 N.W.2d at 414. Instead, to
|
———n—n—n eee
App 15
comply with due process, criminal statutes drafted in general
and flexible terms must furnish only a test based on criteria
that “[persons] of common intelligence who come in contact
with the statute may use with reasonable safety in
determining its command.” Jd. Specificity will always be
limited by the necessity to draft statutes that are general
enough to address the diversity of human conduct and
specific enough to provide adequate notice. See Colten, 407
U.S. at 100, 92 S. Ct. at 1957. A statute that is flexible and
reasonably broad will thus be upheld if people of common
intelligence do not have to guess at what the statute means or
differ as to its application. Suess, 236 Minn. at 180, 52
N.W.2d at 413-14. All that is required is reasonable certainty.
Id.
Although the domicile rule does not provide a magic
formula for determining when a taxpayer has established an
intention to change domiciles — relying instead on an
exhaustive list of determinative factors — it specifies a
standard of conduct that ordinary people of reasonable
intelligence can understand. Contrary to Enyeart’s claim, the
statute does not defy common understanding but relies on it,
and few people — if any — could misapprehend what they
need to do to establish an intention to change domiciles. The
theoretical possibility of an erroneous classification of a
taxpayer as a domiciliary resident is insufficient to establish
that the statute provides no comprehensible standard of
conduct at all. The rule is thus not unconstitutionally vague
on its face.
Enyeart next argues that the rule is vague as applied to |
him, because some of the regulatory factors support a finding
that he was an Alaska resident while others favor a finding
that he was a Minnesota resident. Contrary to Enyeart’s |
argument, however, this case is a paradigm of domiciliary |
resident. :
stiaieaaaiaaiiaasietea aa
App 16
After declaring a change of domicile in 1997, Enyeart
continued to live in his Minnetonka house until 1999, and he
insured and homesteaded the house. He subsequently bought
the Shorewood townhouse and signed a statement of
occupancy and a residential-loan application in which he
indicated that he planned the townhouse to be his principal
residence. Enyeart bought homeowner’s insurance and filed
a homestead application for the townhouse in 1999.
Although his flight base moved from Minneapolis to
Detroit in 1999, Enyeart continued to have his bank records
and his NWA pay stubs and withholding information sent to
the Minneapolis/St. Paul base. And he continued to list his
Minnetonka or Shorewood address as his current address on
his checks, in his dissolution petition, on loan application, on
applications for homestead status and medical certificates of
fitness, and on school-emergency-notification cards for his
sons. Enyeart also retained his Minnesota driver’s license
and used it routinely for identification purposes. Not
surprisingly, in January 2000, Enyeart told Hennepin County
officials that he had been a Minnesota resident for the past
ten years. These facts clearly reflect Enyeart’s intention to
remain in Minnesota.
The number of days Enyeart spent in Minnesota and
Alaska confirm Enyeart’s intention to make Minnesota his
home. Records show that in 1998, Enyeart spent 194 days in
Minnesota and twelve days in Alaska. In 1999, he spent 144
days in Minnesota and two days in Alaska. And in 2000, he
spent 186 days in Minnesota and two partial days in Alaska.
Enyeart kept no personal belongings in his Alaska
condominium, and he made only three ATM transactions in
Alaska between January 1998 and December 2000. By
contrast, during the same period, he made 240 ATM
transactions in Minnesota.
eal
App 17
Finally, Enyeart’s fraudulent attempts to create the
appearance that he was an Alaska resident leave no doubt as
to his intent to remain in Minnesota while obtaining the tax
benefits of claiming to be an Alaska resident. Enyeart
backdated changes he made in NWA’s computerized
employee database that identified his residence. He also
backdated a letter he wrote in March 2001 to remove the
relative homestead status on the Shorewood townhouse for
the tax year 2000. In addition, Enyeart drafted a letter for his
father to send to the DOR, indicating that Enyeart was a
resident of Alaska. And he drafted a letter for fellow pilot
Tim Branaman to send the DOR, in which he urged him to
“Tulse [his] imagination” to write about experiences they had
in Alaska. Finally, Enyeart submitted to the DOR a _
photocopy of a mini-storage receipt that had been altered to
reflect his Anchorage address and phone number. Enyeart’s
claim that the regulatory scheme is vague as applied to him
lacks merit.
Il
Enyeart also argues that the district court committed
prejudicial error by refusing to instruct the jury that they had
to agree unanimously on which theory of residency the state
had proved. Specifically, Enyeart argues that the district
court should not have permitted the state to proceed on the
theory that he was a domiciliary resident, and that because
the court failed to give his requested instruction on
unanimity, it is impossible for a reviewing court to determine
whether the jury found him guilty on the theory that he was a
domiciliary resident or a nondomiciliary resident. We do not
agree.
First, as we have just concluded, the revenue department
rule is not unconstitutionally vague. The state, therefore,
App 18
properly prosecuted Enyeart on both residency theories.
Second, the jury’s finding of guilt on the charges based on
his 1997 and 1999 conduct, which were premised on a
domiciliary-resident theory, clearly establishes that the jury
believed Enyeart was a domiciliary resident. Finally,
“unanimity is not required with respect to the alternative
means or ways in which the crime can be committed.” State
v. Begbie, 415 N.W.2d 103, 106 (Minn. App. 1987)
(quotation omitted), review denied (Minn. Jan. 20, 1988); see
also Schad v. Arizona, 501 U.S. 624, 633, 111 S. Ct. 2491,
2497 (1991) (holding that submission to jury of alternative
theories of criminal charge, without requiring jury’s
agreement on a theory, was not unconstitutional); State v.
Day, 501 N.W.2d 649, 653 (Minn. App. 1993) (holding that
appellant’s mght to unanimous verdict not violated when
instruction allowed jury to convict without specifying which
alternative theory of guilt applied). Instead, “[u]nanimity is
required only with respect to the ultimate issue of the
defendant’s guilt or innocence of the crime charged.”
Begbie, 415 N.W.2d at 106 (quotation omitted).
Ill
Enyeart brought a pretrial motion to dismiss charges
premised on the theory that he was a nondomiciliary resident,
claiming that 49 U.S.C. § 40116 (2000) preempts the state’s
method of calculating days spent in Minnesota in cases
involving the nondomiciliary status of air-carrier employees.
The district court denied the motion. Enyeart subsequently
moved for a jury instruction requiring the jury not to count
days he flew in, out of, or over the state in determining
residency. The court denied the motion, and instead
instructed the jury that
~ et
App 19
a person shall be treated as present in Minnesota
on any day if the person is physically present in
the State of Minnesota at any time during the day.
However, a person in transit between two points
outside of Minnesota who is physically present in
Minnesota less than 24 hours will not be treated as
present in Minnesota.
Enyeart now argues that because federal law preempts
the domicile rule’s method for counting days spent in
Minnesota, the district court abused its discretion by denying
his requested instruction.
District courts have considerable latitude in selecting the
language of jury instructions. State v. Gray, 456 N.W.2d
251, 258 (Minn. 1990). But jury instructions may not
materially misstate the law. State v. Pendleton, 567N.W.2d
265, 269 (Minn. 1997). We review jury instructions to
determine whether, taken as a whole, they fairly and
accurately state the law. Gray, 456 N.W.2d at 258.
In determining whether state law is preempted by federal
law, a reviewing court’s sole task is to ascertain Congress’s
intent. See Cal. Fed. Sav. & Loan Ass'n v. Guerra, 479 US.
272, 280, 107 S. Ct. 683, 689 (1987). When Congress
legislates in a field traditionally occupied by the states, this
court must start with the presumption that the states’ historic
police powers were not to be superseded by the federal law
unless that was the clear and manifest purpose of Congress.
Dahl v. Charles Schwab Co., 545 N.W.2d 918, 922 (Minn.
1996).
Federal law preempts state law when Congress expressly
states that state law is preempted. Cal. v. ARC Am. Corp.,
490 U.S. 93, 100, 109 S. Ct. 1661, 1665 (1989). Absent an
express statement by Congress, congressional intent to
preempt state law in a particular area may be inferred when
App 20
the scheme of federal regulation is __ sufficiently
comprehensive to make reasonable the inference that
Congress left no room for supplementary state regulation.
Barnett Bank of Marion County, N.A. v. Nelson, 517,
US. 25, 31, 116 S. Ct. 1103, 1108 (1996). When Congress
has not occupied the field, state law may nevertheless be
preempted when compliance with both state and federal law
is impossible, Fla. Lime & Avocado Growers, Inc. v. Paul,
373 U.S. 132, 142-43, 83 S. Ct. 1210, 1217 (1963), or when
state law is in ‘irreconcilable conflict” with federal law, Rice
v. Norman Williams Co., 458 U.S. 654, 659, 102 S. Ct. 3294,
3299 (1982). An irreconcilable conflict exists when a state
law “stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress.”
Hines v. Davidowiiz, 312 U.S. 52, 67, 61 S. Ct. 399, 404
(1941).
Preemption, however, should not be “lightly presumed.”
Guerra, 479 U.S. at 281, 107 S. Ct. at 689. To avoid a
finding of preemption, a federal law and a state system of
regulation should be read in tandem, particularly in cases
where the state law or regulation at issue touches on
traditional areas of state sovereignty, such as taxation. See
ARC Am. Corp., 490 U.S. at 101, 109 S. Ct. at 1665; Merrill
Lynch, Pierce Fenner & Smith, Inc. v. Ware, 414 U.S. 117,
127, 94S. Ct. 383, 389 (1973).
In relevant part, 49 U.S.C. § 40116 provides that the pay
of air-carrier employees is subject to taxation by only two
states: the state where the employee resides and the state
where the employee earns more than fifty percent of his or
her pay from the carrer. /d., (f)(3)(A), (B). The bill
“reserves to the individual states the present practice of
taxing substantial compensation which is earned by a non-
resident,” but it “limit[s] that practice . . . to states wherein
more than 50 per centum of the non-resident interstate carrier
App 21
employee’s compensation is earned.” S. Rep. No. 91-1261,
at 5 (1970), reprinted in 1970 U.S.C.C.A.N. 5039, 5043.
Minn. Stat. § 290.01, subd. 7 (2002) defines “resident”
as “‘any individual domiciled outside the state who maintains
a place of abode in the state and spends in the aggregate more
than one-half of the tax year in Minnesota.” For tax purposes,
presence within the state for any part of a calendar day
constitutes a day spent in the state. Jd. But “a person in
transit between two points outside Minnesota who is
physically present in Minnesota less than 24 hours, will not
be treated as present in Minnesota on any day during transit.”
Minn. R. 8001.0300, subp. 4 (2001). Enyeart’s argument that
the federal statute preempts the state’s method for calculating
the number of days a taxpayer spends within and without
Minnesota ignores the rule.
Enyeart argues that state law conflicts with the federal
statute by equating residency with physical presence in the
state and thereby allowing taxation by more than the state of
residency or the state where the employee earns more than
fifty percent of his or her pay form the airline. But state law
does not equate residency with mere physical presence. On
the contrary, it precludes such an equation by requiring that
in determining the number of days spent in the state, time
spent by a taxpayer in transit not be counted as time spent in
Minnesota. Contrary to Enyeart’s argument, a person’s mere
presence in the state does not render him or her liable to state
taxation. Instead, presence in the state counts only if the
person subject to taxation remains in the state for more than
twenty-four hours. See Minn. Stat. § 290.01, subd. 7; Minn.
R. 8001.0300, subp. 4. ,
Enyeart also argues that state law thwarts or stands as an
obstacle to the federal statute’s objective of limiting
multistate taxation. But by providing that a person in transit
between two points outside Minnesota who spends less than
App 22
twenty-four hours in the state will not be treated as present
within the state, the rule avoids taxing air-carrier employees
with minimal or transitory contacts with the state and thereby
furthers the federal goal of avoiding multistate taxation.
Enyeart urges this court to read the federal statute to
preclude a state from considering any part of a day in which
an air-carrier employee works in Minnesota as a day spent in
the state, claiming that a different reading would allow the
state to tax income generated from less than fifty percent of
scheduled flight time. But the state’s residency requirements
are not based on a pilot’s scheduled flight time within the
state but on the pilot’s physical presence in the state for at
least twenty-four hours, enjoying the services and protections
the state affords. A rule that would make residence
contingent on flight time would unduly limit the state’s
legitimate interest in taxing state residents, an interest the
federal statute expressly recognizes by permitting states to
tax pilots who are residents.
Because Minn. Stat. § 290.01, subd. 7 is not in
“irreconcilable conflict” with 49 U.S.C. § 40116, it is not
preempted. The district court’s instruction accurately stated
the law and does not, therefore, constitute an abuse of
discretion.
VI
Enyeart last argues that the district court committed
prejudicial error by admitting Minn. R. 8001.0300 (2001)
into evidence without redacting the portion of the rule that
requires any person claiming to be a nonresident of the state
to “have available for examination adequate records to
substantiate that more than one-half of the tax year was spent
outside Minnesota.” Jd., subp. 5. Enyeart claims that the
App 23
rule impermissibly shifted to him the burden of proving his
innocence.
Evidentiary rulings rest within the district court’s broad
discretion and will not be reversed absent an abuse of that
discretion. State v. Lee, 645 N.W.2d 459, 465 (Minn. 2002).
A defendant claiming that the district court abused its
discretion in admitting evidence bears the burden of proving
both error and prejudice. Jd. An error is prejudicial only if it
“substantially influence[s] the jury to convict.” Jd.
In every criminal prosecution, the state has the burden of
proving the charged crime beyond a reasonable doubt. State
v. Robinson, 604 N.W.2d 355, 362 (Minn. 2000). The tax-
evasion charges in this case required the state to prove
beyond a reasonable doubt that Enyeart was either a
domiciliary or a nondomiciliary resident of Minnesota. The
court so instructed the jury.
Minn. R. 8001.0300, subp. 5, requires taxpayers
claiming to be nonresidents of Minnesota to maintain
adequate records to substantiate their claim that they spent
more than one-half of the tax year outside Minnesota.
Admittedly, the rule places an administrative burden on
taxpayers to maintain tax records and permits an inference
that taxpayers who do not maintain such records might have
been lying about their nonresident status. But the rule does
not release the state of its obligation of proving beyond a
reasonable doubt, with or without the taxpayer’s records, that
the taxpayer spent more than one-half the tax year in the
state. And a conviction could not be based merely on
evidence that the taxpayer failed to maintain adequate
records.
The admission of the rule clearly did not help Enyeart;
but it did not shift the burden of proof to him. The fact that
the jury was able to draw negative inferences from Enyeart’s
failure to maintain records, does not render the rule
maaan aaa aaa a a aa ee ae
|
:
a!
App 24
inadmissible. Inferences are permitted when they have a
“reasonable relation to the circumstances of life as we know
them,” and the facts “are likely to be much more easily
provable by the defendant than by the state, and the nature of
the charge . . . make[s] it fair to call on the defendant to
produce evidence.” State .v. Reps, 302 Minn. 38, 51, 223
N.W.2d 780, 788-89 (1974) (quotation omitted).
Even if we were persuaded that the rule was improperly
admitted, the error would be harmless because the jury was
properly instructed that the state had the burden of proof and
Enyeart’s counsel stated in closing argument that the jury
instructions controlled. Counsel specifically told the jury that
Enyeart was not required to prove the number of days he
spent outside the state and drew a distinction between civil
cases, where the taxpayer has the burden of proof, and
criminal cases, where the state is required to prove the
number of days a taxpayer spends in the state. Most
important, the evidence overwhelmingly establishes that
Enyeart spent more than 183 days in the state during 1998
and 2000 and was thus a domiciliary resident of Minnesota.
Any error in admitting subpart 5 of the rule is thus harmless.
DECISION
The district court correctly concluded that the domicile
rule is neither unconstitutionally vague nor preempted by
federal law. And the district court neither abused its
discretion by refusing to instruct the jury that they had to
agree on which theory of residency the state had proved not
shifted the burden of proof by admitting rule 8001.0300 into
evidence without redacting subpart 5.
Affirmed.
App 25
STATE OF MINNESOTA
IN SUPREME COURT
A03-360
State of Minnesota,
Respondent,
VS.
Randall Wayne Enyeart,
Petitioner.
ORDER
Based upon all the files, records and proceedings herein,
IT IS HEREBY ORDERED that the petition of Randall
Wayne Enyeart for further review be, and the same 1s,
denied.
Dated May 18, 2004
BY THE COURT:
s/ Kathleen A. Blatz
Kathleen A. Blatz
Chief Justice
App 26
49 U.S.C. § 40116 entitled “State Taxation”
(f) Pay of air carrier employees.
(1) In this subsection —
(A) “pay” means money received by an employee for
services.
(B) “State” means a State of the United States, the
District of Columbia, and a territory or possession of
the United States.
(C) an employee is deemed to have earned 50 percent
of the employee’s pay in a State or political
subdivision of a State in which the scheduled flight
time of the employee in the State or subdivision is
more than 50 percent of the total scheduled flight
time of the employee when employed during the
calendar year.
(2) The pay of an employee of an air carner having
regularly assigned duties on aircraft in at least 2
States is subject to the income tax laws of only the
following:
(A) the State or political subdivision of the State that
is the residence of the employee.
(B) the State or political subdivision of the State in
which the employee earns more than 50 percent of
the pay received by the employee from the carrier.
App 27
49 USCS § 46301 Civil penalties.
(a) General penalty. (1) A person is liable to the United
States Government for a civil penalty of not more than
$1,000 for violating —
(A) chapter 401 [49 USCS §0§ 40101 et seq.] (except
sections 40103(a) and (d), 40105, 40116, and
40117)...
App 28
49 USCS § 46316. General criminal penalty when specific
penalty not provided.
(a) Criminal penalty. Except as provided by subsection (b)
of this section, when another criminal penalty is not provided
under this chapter [49 USCS §§ 46301 et seq.] a person that
knowingly and willfully violates this part [49 USCS §§
40101 et seq.], a regulation prescribed or order issued by the
Secretary of Transportation (or the Administrator of the
Federal Aviation Administration with respect to aviation
safety duties and powers designated to be carried out by the
Administrator) under this part [49 USCS §§ 40101 et seq.],
or any term of a certificate or permit issued under section
41102, 41103, or 41302 of this title shall be fined under title
18. A separate violation occurs for each day the violation
continues.
(b) Nonapplication. Subsection (a) of this section does not
apply to chapter 401 [49 USCS §§ 4010let seq.] (except
sections 40103(a) and (d), 40105, 40116 and 40117), chapter
441 (except section 44109), chapter 445, chapter 447 (except
section 44718(a), and chapter 449 (except sections 44902,
44904, and 44907-44909 of this title.
(Added Pub.L. 103-272, § 1(e), July 5, 1994, 108 Stat. 1240,
and amended Pub.L. 105-102, § 3(d)(I)(D), Nov. 20, 1997,
111 Stat.2215.)....
[I]n subsection (a) the word “prescnbed” is added for
consistency with the revised title. The words “condition, or
limitation of” are omitted as surplus. The word “Administrator in
App 29
section 902(a) of the Federal Aviation Act of 1958 (Public Law
85-726, 73 Stat. 784) is retained on authority of 49:106(g). The
words “or in section 1474 of this Appendix” are omitted because
49 App.:1474 is not included in the revised title. The words “shall
be deemed guilty of a misdemeanor” are omitted for consistency
with title 18. The words “and upon conviction thereof” are omitted
as surplus. The words “shall be fined under title 18” are substituted
for “shall be subject for the first offense to a fine of not more than
$500, and for any subsequent offense to a fine of not more than
$2,000” for consistency with title 18. ....
[Above excerpted from: “Federal Code and Criminal Rules”, by
West Publishing 1999 Edition]
** * * *
App 30
INCOME TAXATION — INTERSTATE CARRIERS AND
EMPLOYEES — PUBLIC LAW 91-569; 84 STAT. 1499
[H.R. 10634]
Sec. 4. (a) Title XI of the Federal Aviation Act of 1958 is
amended by inserting after section 1111 the following new
section:
“Sec. 1112. (a) No part of the compensation paid by
any air carrier to an employee who performs his
regularly assigned duties as such an employee on an
aircraft in more than one State shall be withheld for
income tax purposes pursuant to the laws of any
State or subdivision thereof other than the State or
subdivision wherein more than 50 per centum of the
compensation paid by the carrier to such employee
is earned: Provided however, That if the employee
did not earn more than 50 per centum of his
compensation from said carrier in any one State or
subdivision thereof during the preceding calendar
year, then withholding shall be required only for the
State or subdivision of the employee’s residence, as
shown on the employment records of any such
CHTIGh ......
App 31
Minn. Stat. 290.01 Definitions. (a) The term “resident”
means any individual domiciled in Minnesota... .
(b) “Resident” also means any individual domiciled
outside the state who maintains a place of abode in the state
and spends in the aggregate more than one-half of the tax
year in Minnesota....
For purposes of this subdivision, presence within the state
for any part of a calendar day constitutes a day spent in the
state. Individuals shall keep adequate records to substantiate
the days spent outside the state.
The term “abode” means a dwelling maintained by an
individual, whether or not owned by the individual an
whether or not occupied by the individual, an includes a
dwelling place owned or leased by the individual’s spouse.
App 32
Minn. Stat. 289A.63 Criminal penalties.
Subdivision 1. Penalties for knowing failure to file or
pay; willful evasion.. (a) A person required to file a return,
report, or other document with the commissioner, who
knowingly, rather than accidentally, inadvertently, or
negligently, fails to file it when required, is guilty of a gross
misdemeanor. A person required to file a return, report, or
other document who willfully attempts in any manner to
evade or defeat a tax by failing to file it when required, is
guilty of a felony.
(b) A person required to pay or to collect and remit a tax,
who knowingly, rather than accidentally, inadvertently, or
negligently, fails to do so when required, is guilty of a gross
misdemeanor. A person required to pay or to collect and
remit a tax, who willfully attempts to evade or defeat a tax
law by failing to so when required, is guilty of a felony.
Subd. 2. False or fraudulent returns; penalties. (a) A
person who files with the commissioner a return, report, or
other document, known by the person to be fraudulent or
false concerning a material matter, is guilty of a felony.
(b) A person who knowingly aids or assists in, or advises in
the preparation or presentation of a return, report, or
other document that is fraudulent or false concerning a
material matter, whether or not the falsity or fraud
committed is with the knowledge or consent of the
person authorized or required to present the return,
report, or other document, is guilty of a felony.
Subd. 8. Criminal penalties. Criminal penalties
imposed by this section are in addition to any civil penalties
imposed by this chapter.
App 33
8001.0300 RESIDENT AND DOMICILE DEFINED;
CONSIDERATIONS.
Subpart 1. Resident. The term “resident” means:
A. any individual person who is domiciled in Minnesota,
subject to the exception set forth in subpart 9; and
B. any individual person (other than an individual deemed a
non-resident under the Soldiers’ and Sailors’ Relief Act of
1940, United States Code, title 50 appendix, section 574, or
an individual eligible for reciprocity under Minnesota
Statutes, section 290.081) who is not domiciled in
Minnesota but who maintains a place of abode in
Minnesota and spends in the aggregate more than one-half
of the taxable year in Minnesota.
A person may be a resident of Minnesota for income tax
purposes, and taxable as a resident, even though the person is not
deemed a resident for other purposes.
Subp. 2. Domicile; definition and presumptions. The term
“domicile” means the bodily presence of an individual person in a
place coupled with an intent to make such a place one’s home. The
domicile of any person is that place in which that person’s
habitation is fixed, without any present intentions of removal
therefrom, and to which, whenever absent, that person intends to
return.
aa
App 34
A person who leaves home to go into another jurisdiction for
temporary purposes only is not considered to have lost that
person’s domicile. But if a person moves to another jurisdiction
with the intention of remaining there permanently or for an
indefinite time as a home, that person has lost that person’s
domicile in this state. The presumption is that a person who leaves
this state to accept a job assignment in a foreign nation has not lost
that person’s domicile in this state.
Except for a person covered by the provisions of the Soldiers’
and Sailors’ Relief Act of 1940, United States Code, title 50
appendix, section 574, the presumption is that the place where a
person’s family is domiciled is that person’s domicile. The
domicile of a spouse is the same as the other spouse unless there is
affirmative evidence to the contrary or unless husband and wife
are legally separated or the marriage has been dissolved. When a
person has made a home at any place with the intention of
remaining there and the person’s family neither lives there nor
intends to do so, then that person has established a domicile
separate from that person’s family.
The domicile of a single person is that person’s usual home. In
a case of a minor child who is not emancipated, the domicile of the
child’s parents is the domicile of the child. The domicile of the
person who has legal custody of the child is the domicile of the
child. A person who is a permanent resident alien in the United
States may have a domicile in this state. The domicile of a member
of the armed forces will be governed by the facts just prior to
becoming a member of the armed forces unless the person takes
the necessary steps to establish a new domicile.
App 35
The mere intention to acquire a new domicile, without the facts
of physical removal, does not change the status of the taxpayer,
nor does the fact of physical removal, without the intention to
remain, change the person’s status. The presumption is that one’s
domicile is the place where one lives. An individual can have only
one domicile at any particular time. A domicile once shown to
exist 1s presumed to continue until the contrary is shown. An
absence of intention to abandon a domicile is equivalent to an
intention to remain in the existing one. No positive rule can be
adopted with respect to the evidence necessary to prove an
intention to change a domicile but such intention may be proved
by acts and declarations, and of the two forms of evidence, acts
must be given more weight than declarations. A person who is
temporarily employed within this state does not acquire a domicile
in this state if during that period the person is domiciled outside of
this state.
Subp. 3. Considerations. The following items listed will be
considered in determining whether or not a person is domiciled in
this state:
A. location of domicile for prior years;
B. where the person votes or is registered to vote, but
casting an illegal vote does not establish domicile for
income tax purposes;
C. status as a student;
D. classification of employment as temporary. or
permanent;
App 36
location of employment;
location of newly acquired living quarters whether
owned or rented;
present status of the former living quarters, i.e., whether
it was sold, offered for sale, rented, or available for rent
to another;
whether homestead status has been requested and/or
obtained for property tax purposes on newly purchased
living quarters and whether the homestead status of the
former living quarters has not been renewed;
ownership of other real property;
jurisdiction in which a valid driver’s license was issued;
jurisdiction from which any professional licenses were
issued;
location of the person’s union membership;
jurisdiction from which any motor vehicle license was
issued and the actual physical location of the vehicles;
whether resident or nonresident fishing or hunting
licenses purchased;
whether an income tax return has been filed as a
resident or nonresident;
whether the person has fulfilled the tax obligations
required of a resident;
App 37
Q. location of any bank accounts, especially the location
of the most active checking account;
R. location of other transactions with financial institutions;
S. location of the place of worship at which the person is
a member:
T. location of business relationships and the place where
business is transacted ;
U. location of social, fraternal, or athletic organizations or
clubs or in a lodge or country club, in which the person
is a member;
V. address where mail is received;
W. percentage of time (not counting hours of employment)
that the person is physically present in Minnesota and
the percentage of time (not counting hours of
employment) that the person is physically present in
each jurisdiction other than Minnesota;
X. location of jurisdiction from which unemployment
compensation benefits are received;
Y. location of schools at which the person or the person’s
spouse or children attend, and whether resident or
nonresident tuition was charged; and
Z. statements made to an insurance company, concerning
the person’s residence, and on which insurance is
based.
Any one of the items listed above will not, by itself, determine
domicile.
App 38
Charitable contributions made by a person will not be
considered in determining whether that person is domiciled in
Minnesota.
Subp. 4. Days within and without Minnesota. In counting
the number of days spent within and without Minnesota, a person
shall be treated as present in Minnesota on any day if the person is
physically present in Minnesota at any time during that day.
However, a person in transit between two points outside
Minnesota who is physically present in Minnesota less than 24
hours, will not be treated as present in Minnesota on any day
during transit.
Items A and B are examples of the application of this subpart:
A. T is flying from New York to California and must change
flights in Minnesota. T is scheduled to arrive in Minnesota
at 7:00 P.M. on March 1, and is scheduled to depart at 1:00
P.M. on March 2. Since T is in transit between two points
outside Minnesota and is present instate less than 24 hours,
neither March 1 or March 2 is treated as a day within
Minnesota.
B. T has been in Minnesota from March 1 to April 15. On
April 15, T departed from Minnesota at 6: A.M. T is treated
as present in Minnesota on April 15.
Subp. 5. Records. Any person domiciled outside Minnesota
who maintains a place of abode within Minnesota and claims to be
a non-resident of the state must have available for examination
adequate records to substantiate that more than one-half of the tax
year was spent outside Minnesota.
App 39
Adequate records means any contemporaneously kept records
that establish the placcs of physical presence of the person on
particular dates. Adequate records include, but are not limited
to, calendars, diaries, canceled checks, credit card receipts, and
airline tickets.
Subp. 6. Definition of abode. An abode is a dwelling place
permanently maintained by a person, whether or not owned and
whether or not occupied by a person. It does not need to be
permanent in the sense that the person does not intend to abandon
it at some future time. However, a cabin or cottage not suitable for
year round use and used only for vacations is not an abode.
Additionally, quarters which contain sleeping arrangements but do
not contain facilities for cooking or bathing will not generally be
considered an abode.
A person who moves a domicile outside Minnesota is not
considered to be maintaining an abode in Minnesota even though
the person continues to own or rent a dwelling in Minnesota if the
person has moved personal furnishings and belongings from the
dwelling and is making a good faith effort to sell, lease, or
sublease the dwelling.
Subp. 7. Domiciliary residents. The physical presence test
does not apply to persons who are domiciled in Minnesota
throughout the tax year. There is no presumption that a person
domiciled in Minnesota has lost that domicile if the person is
absent from Minnesota over one-half of the tax year.
Subp. 8. Part year domiciliaries. Persons domiciled in
Minnesota who move their domiciles outside Minnesota during the
tax year are part year residents of Minnesota. The physical
presence test does not apply to such persons unless a Minnesota
bi
~S
App 40
abode is maintained during the period domiciled outside
Minnesota.
Subp. 9. Certain persons deemed nonresidents. A person
domiciled in Minnesota is deemed a nonresident for the period of
time that the person is a qualified individual under the Internal
Revenue Code, section 911. For a person who has homesteaded
the person’s principal residence in Minnesota prior to leaving the
country, this subpart applies only if the person notifies the county
within three months of moving out of the country that homestead
status should be revoked and does not file a Minnesota homestead
application for any property in which the person has an interest
during the period the person is a qualified individual.
Subp. 10. Examples. Items A to E contain examples of the
application of this part:
A. T was domiciled in Minnesota from January 1, 1987,
through September 1, 1987, and did not leave the state
during that period. On September 2, 1987, T sold the
Minnesota dwelling and changed domicile to Texas.
T was a part year resident of Minnesota in 1987. Although T
was physically present in Minnesota over 183 days, the physical
presence test does not apply because T did not maintain an abode
during the part of the year T was not domiciled in Minnesota.
B. Same facts as item A., but decided not to sell the Minnesota
abode.
T was a full year resident of Minnesota in 1987. T was
physically present and maintained an abode in Minnesota.
App 41
C. Same facts as item A, but T did not sell the Minnesota
dwelling although T listed it for sale with a real estate
broker at fair market value from September | through
December 31, 1987.
T was a part year resident of Minnesota in 1987, assuming T
removed personal belongings and furnishings from the Minnesota
domicile when T changed domicile. Although T was physically
present over one-half of the year and continued to own a dwelling
in Minnesota, T will not be considered to have maintained an
abode in Minnesota because T moved belongings from the
dwelling and made a good faith effort to sell the dwelling.
D. T moved from Minnesota to Florida on February 1, 1987. T
maintained an abode in Minnesota and lived in that abode
May 1, 1987 to September 1, 1987.
T was not a full year resident of Minnesota under the physical
presence test. Although T maintained a Minnesota abode, T was
not physically present in Minnesota over one-half of the year.
However, the department could review steps T took to change
domicile and could consider T a full year resident if it were
determined T remained domiciled in Minnesota.
E. T moved domicile to Minnesota on June 1, 1987. T did not
have an abode in Minnesota prior to June 1, 1987. T was
physically present in Minnesota throughout the period of
June 1, 1987 to December 31, 1987.
T was a part year resident of Minnesota in 1987. Although T
was physically present in Minnesota over one-half of the year, T
did not have a Minnesota abode during the part of the year T was
App 42
domiciled outside the state. Therefore, the physical presence test
does not apply.
STAT AUTH: MS s 270.06; 290.52
HIST: 12 SR 2746; 17 SR 1279; 27 SR 1664;
Current as of 05/22/03
App 43
18 U.S.C. § 3571. Sentence of fine.
(a) In general. — A defendant who has been found guilty of an
offense may be sentenced to pay a fine.
(b) Fines for individuals.— Except as provided in subsection (e)
of this section, an individual who has been found guilty of an
offense may be fined not more than the greatest of—
(1) the amount specified in the law setting forth the offense;
(2)the applicable amount under subsection (d) of this
section;
(3) for a felony, not more than $250,000;
(4) for a misdemeanor resulting in death, not more than
$250,000;
(5) for a Class A misdemeanor that does not result in death,
not more than $100,000;
(6) for a Class B or C misdemeanor that does not result in
death, not more than $5,000; or
(7) for an infraction, not more than $5,000.
(c) Fines for organizations.— Except as provided in subsection
(e) of this section, an organization that has been found guilty of an
offense may be fined not more than the greatest of—
(1) the amount specified in the law setting forth the offense;
(2)the applicable amount under subsection (d) of this
section;
(3) for a felony, not more than $500,000;
(4) for a misdemeanor resulting in death, not more than
$500,000;
(5) for a Class A misdemeanor that does not result in death,
not more than $200,000;
(6) for a Class B or C misdemeanor that does not result in
death, not more than $10,000;
(7) for an infraction; not more than $10,000.
App 44
(d) Alternative fine based on gain or loss.— If any person
derives pecuniary gain from the offense, or if the offense results in
pecuniary loss to a person other than the defendant, the defendant
may be fined not more than the greater of twice the gain or twice
the gross loss, unless imposition of a fine under this subsection
would unduly complicate or prolong the sentencing process.
(e) Special ruie for lowering fine specified in substantive
provision.— If a law setting forth an offense specifies no fine or a
fine that is lower than the fine otherwise applicable under this
section and such law, by specific reference, exempts the offense
from the fine otherwise applicable under this section, the
defendant may not be fined more than the amount specified in the
law setting forth the offense.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.