Car Rental tax

AVIS BUDGET GROUP, INC., and THE HERTZ CORPORATION, Plaintiffs-Appellants, v. CITY OF NEWARK, CITY COUNCIL OF THE CITY OF NEWARK, MAYOR OF THE CITY OF NEWARK, and DIRECTOR OF FINANCE OF THE CITY OF NEWARK, Defendants-Respondents.

Case Information: Docket/Court: A-3801-10T4, Superior Court of New Jersey, Appellate Division Date Issued: 08/01/2012 Argued March 13, 2012 Tax Type(s): Sales and Use Tax On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-6126-10. John Longstreth (K & L Gates, LLP) of the District of Columbia bar, admitted pro hac vice, argued the cause for appellants (Mark D. Marino and Mr. Longstreth, of counsel and on the brief; Daniel A. Suckerman, on the brief). Michael R. Griffinger argued the cause for respondents (GluckWalrath and Gibbons, P.C., attorneys; Mr. Griffinger, Robert C. Brady, Fruqan Mouzon, Brian P. McElroy, David A. Clark and Antonella Colella, on the brief).

OPINION

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
APPROVED FOR PUBLICATION Before Judges Carchman, Fisher and Baxter. The opinion of the court was delivered by CARCHMAN, P.J.A.D. This appeal requires us to consider the validity of Ordinance 6PFS-I 050510 (the Ordinance), enacted by defendant City of Newark (the City), ¹ levying a tax on all car rental transactions within the City's Second and Third Industrial Zones, the latter of which encompasses parts of Newark Liberty International Airport (the Airport). Plaintiffs Avis Budget Group (Avis) and Hertz Corporation (Hertz) challenge the Ordinance, asserting that it violates the Anti-Head Tax Act (AHTA), 49 U.S.C.A. § 40116, as well as 42 U.S.C.A. § 1983 and the Commerce Clause of the United States Constitution, Article I, Section 8, Clause 3. We conclude that the Ordinance is not a discriminatory tax or otherwise in violation of the AHTA or the dormant Commerce Clause. We determine that the Ordinance is a valid exercise of municipal authority. Accordingly, we affirm.

I.

On July 28, 2009, the New Jersey Legislature enacted the New Jersey Economic Stimulus Act of 2009, N.J.S.A. 40:48H-1 to -9, which, among other things, granted authority to certain municipalities to tax motor vehicle rental transactions taking place in designated industrial zones, specifically, zones within which commercial airports are located. N.J.S.A. 40:48H-2. The stated purpose of the legislation and the tax was to finance the redevelopment of certain municipalities. N.J.S.A. 40:48H-1. N.J.S.A. 40:48H-2, the operative provision granting authority to tax, provides in relevant part:

a. A municipality having a population in excess of 100,000 and within which is located a commercial airport which provides for a minimum of 10 regularly scheduled commercial airplane flights per day, or a municipality in which any portion of such an airport is located, by ordinance, may impose a tax on the rental of motor vehicles on such rental transactions that occur within a designated industrial zone of the municipality. Such tax shall be imposed on the person, corporation, or other legal entity that is permitted the use of a motor vehicle that it does not own for a period of time that is less than one year, in exchange for the payment of a fee, and shall be collected on behalf of the municipality by the person collecting such rental fee, in accordance with such procedures as shall be established in the ordinance imposing the tax.

The local motor vehicle rental tax rate imposed under an ordinance adopted pursuant to this section shall not exceed five percent of the total amount of the fee charged for the rental of the motor vehicle, excluding any taxes and surcharges.
The City, which has a population in excess of 100,000 and “within which [the Airport] is located,” qualified under this provision. On April 27, 2010, the City Council, pursuant to N.J.S.A. 40:48H-2, introduced an ordinance to tax car rental transactions. During a public meeting to consider the proposed ordinance, council members informed the public that the Ordinance was intended to tax “outsiders” at the Airport but not Newark residents. Following the meeting, the Council passed the Ordinance, and the Mayor signed it into law on May 7, 2010. It was published on May 14, 2010. The Ordinance provides in relevant part:

10:22A-3. IMPOSITION OF MOTOR VEHICLE RENTAL TAX.

There is hereby imposed on the person, corporation or other legal entity that is permitted the use of a motor vehicle that it does not own for a period of time that is less than one year, in exchange for the payment of a fee, a tax of five (5%) percent on the fee charged for the rental of such motor vehicle, excluding any taxes and surcharges, in respect of rental transactions that occur within the industrial zone. This tax is in addition to any other taxes or surcharges.

10:22A-4. DESIGNATION OF INDUSTRIAL ZONE.

a. The City hereby designates the following portion of the City as an “industrial zone” for purposes of the motor vehicle rental tax authorized by the Act and this chapter, such portion not exceeding, in the aggregate, fifty percent (50%) of the territory of the City: All of the territory within the City which is, as of the effective date of this ordinance, located [within] the “Second Industrial District” and the “Third Industrial District[,]”[] as such areas are established by Title XL, Chapter 2 of the Newark Municipal Code. The area so designated as an industrial zone under this paragraph a. shall not be altered by any subsequent revision of the City's zoning districts, but rather shall be amended only by an ordinance expressly amending this ordinance in accordance with the [A]ct. b. The City hereby determines that the industrial zone designated in paragraph a. of this Section 10:22A-4 of the City constitutes an area having, or intended to have, predominantly industrial, port, airport, and related uses.
The Third Industrial Zone encompasses parts of the Airport and the Port Newark Marine Terminal. All of the ten rental car companies that are currently affected by the Ordinance are located within the Third Industrial Zone. Plaintiffs are two of the ten affected companies. Plaintiffs challenged the validity of the Ordinance in the Law Division, asserting that it violated State due process rights, was arbitrary, capricious and unreasonable, and was contrary to the AHTA and the Commerce Clause. At the hearing on the cross-motions for summary judgment, the parties focused on whether the tax violated the AHTA. The City argued that the court could not consider the issue since there was no private right of action to enforce the AHTA. On the merits, it claimed that the Ordinance did not exclusively affect Airport businesses because three rental car companies located in the Third Industrial Zone were not located “at the Airport.” Plaintiffs countered that two of the referenced “companies” were actually Avis parking lots where no rental transactions occurred, and were unaffected by the tax, and the third, Action Car Rental, was “at the Airport” because it serviced the Airport by shuttle bus from an Airport hotel. In a written opinion, Judge Michael R. Casale rejected the City's claim that plaintiffs did not have a private right of action to enforce the AHTA, relying on Interface Group, Inc. v. Massachusetts Port Authority, 816 F.2d 9, 16 (1st Cir. 1987) , and Northwest Airlines, Inc. v. County of Kent, 955 F.2d 1054, 1058 (6th Cir. 1992), aff'd, 510 U.S. 355, 114 S. Ct. 855, 127 L. Ed. 2d 183 (1994) (deciding the questions presented on other grounds and not reaching the issue of the implied right of action). He rejected contrary decisions by the Seventh and Tenth Circuits in Southwest Air Ambulance, Inc. v. City of Las Cruces, 268 F.3d 1162, 1169 (10th Cir. 2001) , and Miller Aviation v. Milwaukee County Board of Supervisors, 273 F.3d 722, 729 (7th Cir. 2001) . However, since plaintiffs averred violations of 42 U.S.C.A. § 1983 in the complaint, the trial court relied on Southwest, supra, 268 F.3d at 1176 , to conclude that plaintiffs were not precluded from either enforcing the AHTA or challenging the Ordinance. Turning to the merits, the judge addressed the issue of whether the Ordinance violated the AHTA. Citing Burbank-Glendale-Pasadena Airport Authority v. City of Burbank, 76 Cal. Rptr. 2d 297, 298 (Cal. App. 1998) , the judge concluded that the Ordinance did not offend the AHTA:

Here, the tax is not on air commerce; it is on the fee paid for renting a car. Second, the tax is paid by the customer, not the businesses. Third, the tax is not imposed exclusively on airport businesses, but rather it must be paid by any rental car facility that is open or will open in the qualified zones. Finally, the tax is payable by anyone who rents a car in the designated zones, not only air travelers[;] and air travelers who wish to avoid the tax can travel outside of the industrial zones and rent a car elsewhere. The tax at issue herein is very similar to the tax upheld by the California Court of Appeals [in Burbank] and is the type of tax authorized by 4[9] U.S.C.[A.] § 40116(e)(1).

The court neither found a violation of the AHTA, nor a violation of the Commerce Clause. The judge held: (1) where Congress has legislated, as it did in enacting the AHTA, courts need not determine whether state action authorized by the statute has violated the Commerce Clause; and (2) the statements City Council members made during the public meeting did not affect the Commerce Clause analysis when the City enacted the Ordinance “in strict compliance with ... [N.J.S.A. 40:48H-2].” Finally, the judge determined that the City Council followed proper procedures in enacting the Ordinance, and the Ordinance neither offended due process nor was arbitrary, capricious or unreasonable. The court granted the City's motion for summary judgment and dismissed plaintiffs' complaint. This appeal followed.

II.

The City reiterates its argument that even if the tax violates the AHTA, dismissal must be affirmed because there is no private right of action to enforce the AHTA. Plaintiffs counter that even if there is no private right of action, an AHTA violation may be remedied under 42 U.S.C.A. § 1983. That the AHTA permits a private right of action is no longer a viable argument. The AHTA is within the regulatory purview of the Department of Transportation under the direction of the Secretary of Transportation (the Secretary). See Northwest Airlines, Inc. v. Cnty. of Kent, 510 U.S. 355, 366-67, 114 S. Ct. 855, 863, 127 L. Ed. 2d 183, 195 (1994) (observing that the “Secretary of Transportation is charged with administering ... the AHTA”); Township of Tinicum v. U.S. Dep't of Transp., 582 F.3d 482, 484 (3d Cir. 2009) (same); Miller, supra, 273 F.3d at 729-30 (same); Southwest, supra, 268 F.3d at 1169-70 (same). Because the AHTA is encompassed in the Federal Aviation Act (FAA), ² alleged violations of the AHTA are remedied through an administrative process initiated by filing a complaint with the Secretary. 49 U.S.C.A. § 46101. See also 14 C.F.R. 16.1 (providing that the FAA will determine disputes under AHTA except for challenges to fees by air carriers against airport proprietors). Determinations by the Secretary on questions involving the AHTA may be appealed to a federal district court. 49 U.S.C.A. § 46110. The First and Sixth Circuits have held that Congress intended to create a private right of action in the former AHTA, 49 U.S.C.A. § 1513, based on the fact that that statute lacked an administrative enforcement scheme. Interface, supra, 816 F.2d at 16 ; Northwest Airlines, supra, 955 F.2d at 1058 . The United States Supreme Court subsequently granted certiorari in Northwest Airlines; although it did not consider whether the AHTA created private rights of action, the Court disagreed with the First and Sixth Circuits' construction of the AHTA when it observed that the AHTA was encompassed by the FAA, which statute reflected an administrative enforcement scheme. Northwest Airlines, supra, 510 U.S. at 366-67, 114 S. Ct. at 863, 127 L. Ed. 2d at 195 . The Seventh and Tenth Circuits went further in rejecting Interface and Northwest Airlines. These courts held that since the AHTA is included in the FAA, ³ Congress intended for public enforcement of the AHTA and did not create a private right of action. Miller, supra, 273 F.3d at 729-31 ; Southwest, supra, 268 F.3d at 1169-70 . Courts that have considered the issue since the Supreme Court's decision in Northwest Airlines have followed Southwest and Miller. See Air Transp. Ass'n of Am. v. City of Los Angeles, 844 F. Supp. 550, 555 (C.D. Cal. 1994) (concluding that AHTA lacks private right of action); Susquehanna Area Reg'l Airport Auth. v. Middletown Area Sch. Dist., 918 A.2d 813, 816 (Pa. Commw. Ct. 2007) (same). Other courts have rejected the claim that the AHTA may be enforced in state court under Section 1983 based on the premise that the FAA provides a comprehensive remedial scheme for AHTA violations that is sufficient to foreclose Section 1983 actions. See, e.g., New England Legal Found. v. Mass. Port Auth., 883 F.2d 157, 176 (1st Cir. 1989) ; Air Transp. Ass'n of Am. v. Public Util. Comm'n, 833 F.2d 200, 207 (9th Cir. 1987), cert. denied, 487 U.S. 1236, 108 S. Ct. 2904, 101 L. Ed. 2d 936 (1988) ; Montauk-Caribbean Airways, supra, 784 F.2d at 98 ; Air Transp. Ass'n, supra, 844 F. Supp. at 559-60 . Even if a violation of the AHTA could be remedied under 42 U.S.C.A. § 1983, a party would be required to assert a violation of a federal right, not merely a federal law, “to avail himself [or herself] of [Section] 1983.” Southwest, supra, 268 F.3d at 1173 . In Southwest, the Tenth Circuit held that the plaintiff airline could enforce the AHTA under Section 1983 because state and municipal taxation of airlines based on gross receipts, a practice prohibited by the AHTA, would violate a federal right afforded to airlines to be free of those taxes. Id. at 1173-74. Southwest does not support a finding that airport businesses have a federal right under the AHTA. Airport businesses have no right to be totally free from state or local taxes based on gross receipts, and they remain subject to nonexclusive taxes. In sum, we will not apply Southwest to car rental companies at the Airport and find no basis for diverging from the overwhelming authority holding that the AHTA may not be enforced in a suit under 42 U.S.C.A. § 1983. The AHTA allows airport proprietors to levy reasonable rental, landing and service fees from airline carriers for using airport facilities. Challenges to the reasonableness of fees or charges must be brought before the Secretary. See Miller, supra, 273 F.3d at 725-26, 731 (noting that there is no private right of action in the AHTA to challenge the fees Milwaukee County charged an airport hangar owner); Southwest, supra, 268 F.3d at 1170 (holding that there is no private right of action to challenge local ordinance that set fees at airport); Air Transp. Ass'n, supra, 844 F. Supp. at 555 (concluding that the Secretary has discretion to remedy unreasonable fees). ⁴ There is no private right of enforcement under the AHTA.

III.

Plaintiffs next argue that the Ordinance violates the AHTA by imposing a tax on rental car companies at the Airport. Even though there is no private cause of action, we will address the merits and review the trial court's grant of summary judgment to defendants. We first identify the standard of review. Our review of the grant or denial of summary judgment is de novo, using the same legal standard as the trial court. Dugan Constr. Co. v. N.J. Tpk. Auth., 398 N.J. Super. 229, 238 (App. Div.), certif. denied, 196 N.J. 346 (2008) ; Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998) . Summary judgment is proper if, viewing the evidence in the light most favorable to the nonmoving party, no genuine issue of material fact is disputed. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995); R. 4:46-2(c) . The trial court's factual findings are binding on appeal when supported by adequate, substantial and credible evidence in the record. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974) . Conversely, the trial court's conclusions of law “and the legal consequences that flow from established facts are not entitled to any special deference.” Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) . Under the Supremacy Clause, federal law is “the supreme Law of the Land[.]” U.S. Const. art. VI, cl. 2. State laws that “'interfere with, or are contrary to the laws of [C]ongress, made in pursuance of the [C]onstitution[,]' are invalid.” Vail v. Pan Am Corp., 260 N.J. Super. 292, 297 (App. Div. 1992) (quoting Wisconsin Pub. Intervenor v. Mortier, 501 U.S. 597, 604, 111 S. Ct. 2476, 2481, 115 L. Ed. 2d 532, 542 (1991) ). The “focus of analysis is on the intent of Congress.” Miranda v. Fridman, 276 N.J. Super. 20, 25 (App. Div.), certif. denied, 138 N.J. 271 (1994) . Congressional intent may be express or implied. Ibid. To determine if a conflict exists between state and federal law, a court must consider “'the relationship between [the] ... laws as they are interpreted and applied, not merely as they are written.'” R.F. v Abbott Labs., 162 N.J. 596, 618 (2000) (quoting Jones v. Rath Packing Co., 430 U.S. 519, 526, 97 S. Ct. 1305, 1310, 51 L. Ed. 2d 604, 614 (1977) ). Congress amended 49 U.S.C.A. § 40116(d), when it enacted the Federal Aviation Administration Authorization Act of 1994 (FAAA), Pub. L. No. 103-305, 108 Stat. 1569 (1994), to include the following prohibition:

(2) (A) A State, political subdivision of a State, or authority acting for a State or political subdivision may not do any of the following acts because those acts unreasonably burden and discriminate against interstate commerce:

.... (iv) levy or collect a tax, fee, or charge, first taking effect after August 23, 1994, exclusively upon any business located at a commercial service airport or operating as a permittee of such an airport other than a tax, fee, or charge wholly utilized for airport or aeronautical purposes.

[49 U.S.C.A. § 40116(d).]

In the nearly twenty years since the enactment of this amendment, “43 States and the District of Columbia” have levied taxes on airport car rental companies by applying non-exclusive taxes to “all similar entities within that taxing jurisdiction.” 157 Cong. Rec. H45, 2199 (daily ed. March 31, 2011) (statements of Rep. Greg Cohen and Rep. Sam Graves). ⁵ In 2009, the Legislature enacted N.J.S.A. 40:48H-2, which authorized qualifying municipalities to levy a tax on car rental transactions that “occur within a designated industrial zone of the municipality.” Ibid. The Legislature intended for N.J.S.A. 40:48H-2 to apply to “the City of Elizabeth and the City of Newark,” the two municipalities in which sections of the Airport are located. Assembly Appropriations Committee Statement to Assembly Bill No. 4048 (June 11, 2009). The legislative history provides that car rental companies at the Airport generated $132.7 million in revenue in the first nine months of the fiscal year 2009. Ibid. We review the Ordinance against this background. In determining whether a statute violates the AHTA, the Supreme Court has looked to the statute's purpose and effect. See Aloha Airlines v. Dir. of Taxation, 464 U.S. 7, 13-14, 104 S. Ct. 291, 295, 78 L. Ed. 2d 10, 16 (1983) (“The manner in which the [Hawaii] ... [L]egislature has described ... [the statute] cannot mask the fact that the purpose and effect of [it] are to impose a levy upon the gross receipts of airlines.”). See also Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279, 97 S. Ct. 1076, 1079 , 51 L. Ed. 2d 326, 331 (1977) (noting that, in determining whether a tax violates the Commerce Clause, the Court considers the tax statute's “practical effect,” not its formal language). Burbank provides assistance in our consideration of the issues before us. In Burbank, the court considered whether a local parking tax levied pursuant to a city ordinance was precluded by the AHTA. Burbank, supra, 76 Cal. Rptr. 2d at 298 . The tax affected customers at fifteen parking lots in the City of Burbank; however, three lots were within two miles of the airport, and ninety percent of the tax revenues derived from parking lots “at or near the airport.” Ibid. The court concluded that the tax was not precluded by the AHTA, most notably 49 U.S.C.A. § 40116(d)(2)(A)(iv). The court said:

First, the TPT [tax] is not a tax on air commerce. It is a tax on the fee paid for short-term parking. The AHTA does not apply to taxes on airport ground transportation services, such as parking facilities. Second, because the TPT is paid by the customer, not the parking lot operator, it is analogous to the “sales or use taxes” expressly permitted by the AHTA. Third, the TPT is not imposed exclusively upon airport businesses, because it is collected by all qualified parking lots in the City.

[Burbank, supra, 76 Cal. Rptr. 2d at 300 (citations omitted).]

Susquehanna, a more recent Pennsylvania decision, also upheld a parking tax under the AHTA, for many of the same reasons provided in Burbank:

[P]arking patrons, not airport businesses, bear the burden of this tax; a tax on parking transactions is not a head tax. The incidence of the tax is the parking fee transaction, and the measure of the tax is on the transaction fee itself. Further, it is undisputed here that non-airport parking transactions are subject to the parking tax, and there is no exclusivity sub judice.

[Susquehanna, supra, 918 A.2d at 816 .]

As in both Burbank and Susquehanna, here, the tax is not “wholly utilized for airport or aeronautical purposes” under 49 U.S.C.A. § 40116(d)(2)(A)(iv). We must determine whether the City has imposed the tax “exclusively upon any business [that is] located at [the Airport]” or is “operating as a permittee of [the Airport][.]” 49 U.S.C.A. § 40116(d)(2)(A)(iv). Judge Casale, relying on Burbank, held that the Ordinance did not violate the AHTA because it levied a tax “on the fee paid for renting a car” and “not on air commerce.” In finding that the AHTA did not apply to ground transportation, the Burbank court cited Alamo Rent-A-Car, Inc. v. Palm Springs, 955 F.2d 30 (9th Cir. 1992) , which analyzed the former AHTA, 49 U.S.C.A. § 1513, which statute applied only to air transportation by aircraft. Id. at 31. See also Salem Transp. Co. v. Port Auth. of N.Y. & N.J., 611 F. Supp. 254, 257 (S.D.N.Y. 1985) (rejecting claim by ground transportation provider that a fee violated 49 U.S.C.A. § 1513). Two years after Alamo was decided, Congress amended the FAA to prohibit taxes exclusively levied on any business located at a commercial service airport. 49 U.S.C.A. § 40116(d)(2)(A)(vi). The current statute does not distinguish between air and ground transportation. The Law Division held that the Ordinance levied a tax not on a “business” at the Airport, but on a consumer. The trial court reasoned that the tax was permissible under the AHTA as “the type of [sales] tax” allowed by 49 U.S.C.A. § 40116(e)(1). This is consistent with the reasoning in Susquehanna, where the court upheld a parking tax on parking transactions at or near the airport because the “measure of the tax [was] on the transaction fee” and was not a head tax. Supra, 918 A.2d at 817. A state may levy “sales or use taxes on the sale of goods or services” that do not violate subsection (d) of the AHTA. 49 U.S.C.A. § 40116(e)(1). When subsection (e) is read in conjunction with subsection (d), the AHTA states that a state or municipality is prohibited from levying any “sales or use taxes” exclusively upon any business located at a commercial service airport. 49 U.S.C.A. § 40116(d)-(e). The relevant inquiry is whether there is a meaningful distinction between the terms “consumer” and “business” under these provisions. We conclude that the AHTA's prohibition against taxes levied upon a business does not extend to consumers. To be sure, Congress expressly precluded taxes levied on consumers traveling in air commerce under 49 U.S.C.A. § 40116(b), but did not do so under 49 U.S.C.A. § 40116(d)(2)(A)(iv), notwithstanding Congress' awareness that businesses, including airlines, could pass on the taxes imposed on them to air travelers. See Niagara Frontier Transp. Auth. v. E. Airlines, Inc., 658 F. Supp. 247, 251 (W.D.N.Y. 1987) (stating that “Congress was aware that if the tax ... were assessed to the airline, it would, in all probability, be passed on to the airline passengers”). In Susquehanna, the court explained:

The difference then between a business privilege tax and a transaction tax is not just the stated subject of the tax, but how the tax is measured. A business privilege tax is a tax imposed on all of the gross receipts from all of the businesses' activities anywhere, so long as the base of operations within the political subdivision contributes to those activities because the privilege of doing business is “far more than the sum of transactions ... performed within the territorial limits of the taxing entity.” A transaction tax, however, is imposed on the receipts from the designated transactions that are actually performed within the taxing entity, because its subject is only the transaction and not the privilege of engaging in a business that allows the transaction to be consummated.

[Supra, 918 A.2d at 818 (quoting Airpark Int'l I v. Interboro Sch. Dist., 735 A.2d 646, 647 (Pa. 1999) ).]

The statute provides that levying exclusive taxes on businesses located at an airport is one of those acts that “unreasonably burden and discriminate against interstate commerce[.]” 49 U.S.C.A. § 40116(d)(2)(A). Congress determined that, like airlines, airport businesses are engaged in interstate commerce. This is because airport businesses, like airlines, service air travelers and not in-state users. See Denver v. Cont'l Air Lines, Inc., 712 F. Supp. 834, 840 (D. Colo. 1989) (observing 49 U.S.C.A. § 1513 was intended to prohibit “the imposition of such local taxes, fees, and charges that would be passed on to the flying public”). As the Seventh Circuit noted in dicta in Indianapolis Airport Authority v. American Airlines, Inc., 733 F.2d 1262 (7th Cir. 1984) , customers of car rental companies located at airports are air travelers, and the “rental fees” that are imposed upon those companies by airport proprietors are similar to head taxes on air travelers:

The parking lot is used by emplaning passengers and by people picking up deplaning passengers. The car rental agencies are used by emplaning and deplaning passengers, and likewise the food stands and newsstands. This means that when the airport charges a rental fee to concessionaires it is as if it were charging a landing fee to the airlines or imposing a head tax on the passengers.

[Id. at 1267-68.]

See also Southerland v. St. Croix Taxicab Ass'n, 315 F.2d 364, 369 (3d Cir. 1963) (finding that the airline passengers' prearranged transportation was part of the “interstate journey,” and thus, an exclusive franchise granted to a taxicab company by the Virgin Islands Territory to transport people to and from the airport was an unreasonable burden on interstate commerce); Charter Limousine, Inc. v. Dade Cnty. Bd. of Cnty. Comm'rs, 678 F.2d 586, 589 (5th Cir. 1982) (following Southerland). Although the express language of the AHTA makes clear that a consumer is not a “business,” the statute prohibits taxes upon consumers because such taxes constitute taxes upon businesses located at airports. Here, car rental operators have an obligation under the Ordinance to collect the tax, and the failure to do so subjects them to penalties; consumers do not bear the whole obligation to remit the tax. The Ordinance has been carefully drafted to not violate any limitations imposed by the AHTA. The trial court held that the tax was non-exclusive because it was similar to the parking tax upheld in Burbank. There, the tax applied to every parking lot in the City of Burbank, except for exempt lots used for medical facilities, and metered and monthly parking. Supra, 76 Cal. Rptr. 2d at 298. Here, rental car companies in the City are not subject to the tax unless they are located in either the Second or Third Industrial Zone, both of which districts extended well beyond the boundaries of the Airport. In fact, the record indicates that the industrial zones at issue together comprise over forty percent of the area of the City, and the Airport occupies only a portion of the Third Industrial Zone. The AHTA does not define the term “exclusively.” As such, it is unclear whether, in order to be deemed non-exclusive, a tax must apply to all, or only some, of the like-kind businesses not located at an airport. The holding in Susquehanna suggests that, unlike the tax in Burbank, a sales tax is non-exclusive if it affects any non-airport transactions and need not affect every like-kind business within the taxing jurisdiction. Susquehanna, supra, 918 A.2d at 817 . The AHTA prevents the imposition of taxes exclusively on airport businesses, but it does not preclude taxes that disproportionately affect the airport businesses. A tax is non-exclusive if it affects at least one business that is not located at an airport. While all of the car rental companies affected by the tax here are located in the Third Industrial Zone, either at or near the Airport, and they all service the Airport in some capacity, they also provide car rental services for and store rental cars to be used by customers at locations other than the Airport. Significantly, the AHTA does not prohibit a tax on businesses near an airport. Here, the Ordinance does not apply only to the rental transactions that occur at the Airport, even though all of the affected businesses are in the Third Industrial Zone. As the trial judge noted:

[T]he tax is payable to anyone who rents a car in the designated zones, not only air travelers[;] and air travelers who wish to avoid the tax can travel outside of the industrial zones and rent a car elsewhere.

We give little weight to the statements City Council members made at the public hearing on adopting the Ordinance. We look to the adopted Ordinance first rather than to the political process that may have generated it. Political rhetoric will not overcome the language of the Ordinance. We recognize that the State retains the power to impose a sales tax upon transactions near an airport, which power will not be abridged absent clear and manifest congressional intent in the AHTA to bar sales taxes imposed on a “consumer” of airport car rental businesses under the circumstances presented here.

IV.

Finally, we address the argument that the Ordinance violates the Commerce Clause. We reject this claim. Plaintiffs have failed to address the threshold question in the dormant Commerce Clause analysis, which is whether Congress has exercised its plenary power under the Commerce Clause in the field at issue. See Western & S. Life Ins. Co. v. State Bd. of Equalization, 451 U.S. 648, 652-53, 101 S. Ct. 2070, 2075, 68 L. Ed. 2d 514, 520 (1981) . See also National Fed'n of Indep. Bus. v. Sebelius, 567 U.S. _______ , _______ S. Ct. _______ , 183 L. Ed. 2d 450 (2012) (slip op. at 17-18) (recognizing that Congress has broad authority under the Commerce Clause, not confined to the regulation of commerce among the states, and extending to activities that have a substantial effect on interstate commerce, including activities that do so only when aggregated with similar activities of others). Congress may authorize a state to engage in regulation that would otherwise violate the dormant Commerce Clause by manifesting its “'unambiguous intent'” in a federal statute to approve of the violation. Southwest, supra, 268 F.3d at 1177 (quoting Wyoming v. Oklahoma, 502 U.S. 437, 458, 112 S. Ct. 789, 802, 117 L. Ed. 2d 1, 24-25 (1992) ). When Congress authorizes a state to act, courts may not review the state taxes or other regulations for violations of the dormant Commerce Clause. Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 154, 102 S. Ct. 894, 910 , 71 L. Ed. 2d 21, 40 (1982) . In the AHTA, Congress expressly permitted states to tax airport businesses in the manner provided in subsection (e). See Burbank, supra, 76 Cal. Rptr. 2d at 301 (finding that the tax fell within subsection (e) and was therefore “expressly permitted by the AHTA” and did not violate the Commerce Clause). We agree that the tax enabled by the Ordinance falls within the scope of congressional authorization provided in the AHTA. Dormant Commerce Clause review is therefore precluded. See Hughes v. Oklahoma, 441 U.S. 322, 336, 99 S. Ct. 1727, 1736, 60 L. Ed. 2d 250, 262 (1979) (stating the analysis). For the sake of completeness, we recognize that even if Congress had not granted the City express permission in the AHTA, under a traditional dormant Commerce Clause analysis, a tax that affects interstate commerce will be sustained if it passes scrutiny under the test articulated in Complete Auto. Our Court has followed the Complete Auto test, noting that

[t]he [Complete Auto] test will sustain a state tax using a formula apportionment method “[(1)] when the tax is applied to an activity with a substantial nexus with the taxing State, [(2)] is fairly apportioned, [(3)] does not discriminate against interstate commerce, and [(4)] is fairly related to the services provided by the State.”

[Whirlpool Props., Inc. v. Dir., Div. of Taxation, 208 N.J. 141, 163 (2011) (quoting Complete Auto, supra, 430 U.S. at 279, 97 S. Ct. at 1079, 51 L. Ed. 2d at 331) .]

Here, the Ordinance applies to car rental activity that has a substantial nexus to the City because the rental car agencies and the Airport are located in the City, and customers “drive over City streets” to pick up and return the rented car. Burbank, supra, Cal. Rptr. at 1225-26 . The tax is fairly apportioned because the rental car transaction occurs within the City, and the tax does not discriminate against interstate commerce because every person in the City must pay the tax if a car is rented from either the Second or Third Industrial Zone. Lastly, the tax would likely be reasonably related to the services provided by the City because, as we have previously noted, customers drive on the City's streets using the cars they have rented, and additionally, their rights under the rental car contracts are protected by New Jersey law. See Commonwealth Edison Co. v. Montana, 453 U.S. 609, 624-26, 101 S. Ct. 2946, 2957-58, 69 L. Ed. 2d 884, 899-900 (1981) (stating that where a general revenue tax does not discriminate against interstate commerce and is apportioned to activities occurring within the State, the tax is valid if reasonably related to the benefits afforded by the State). The Ordinance does not violate the Commerce Clause. Affirmed.
¹
Additional defendants include the City Council of the City of Newark, Mayor of the City of Newark and Director of Finance of the City of Newark.
²

Congress enacted the FAA in 1958. Federal Aviation Act of 1958 (FAA), Pub. L. No. 85-726, 72 Stat. 731 (1958). In 1994, Congress restructured the FAA through the Federal Aviation Authorization Act (FAAA). Pub. L. No. 103-305, 108 Stat. 1569 (1994).
³

The First Circuit also found that Congress did not intend to create private rights of action within the FAA. Bonano v. E. Caribbean Airline Corp., 365 F.3d 81, 84-86 (1st Cir. 2004) . Bonano is consistent with holdings of the Second, Third, Ninth and Tenth Circuits that the FAA does not contain private rights of action. Schmeling v. NORDAM, 97 F.3d 1336, 1344 (10th Cir. 1996) ; G.S. Rasmussen & Assoc., Inc. v. Kalitta Flying Serv., Inc., 958 F.2d 896, 901-02 (9th Cir. 1992), cert. denied, 508 U.S. 959, 113 S. Ct. 2927, 124 L. Ed. 2d 678 (1993) ; Montauk-Caribbean Airways, Inc. v. Hope, 784 F.2d 91, 97 (2d Cir.), cert. denied, 479 U.S. 872, 107 S. Ct. 248, 93 L. Ed. 2d 172 (1986) ; Wolf v. Trans World Airlines, Inc., 544 F.2d 134, 137-38 (3d Cir. 1976), cert. denied, 430 U.S. 915, 97 S. Ct. 1327, 51 L. Ed. 2d 593 (1977) . See also Enyeart v. Minnesota, 408 F. Supp. 2d 797, 806-07 (D. Minn. 2006), aff'd, 218 Fed. Appx. 560 (8th Cir. 2007) (dismissing a complaint on the grounds that there is no private right of action in the FAA).
⁴

We do recognize limitations to the AHTA that are relevant here. AHTA does not grant either the Secretary or federal courts exclusive jurisdiction to decide the validity of a local tax ordinance, and state courts retain the ability to hear issues of state tax administration. See 28 U.S.C.A. § 1341 (providing that federal district courts “shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law” where a speedy and efficient remedy may be had in state courts).
⁵

Some members of Congress have viewed such a tax as exploiting a “loophole” in the AHTA, thereby violating the spirit of the Act. During the March 31, 2011 debate on the FAA Reauthorization and Reform Act of 2011, Representatives Graves and Cohen proposed an amendment to the AHTA that, were it adopted by Congress, would prohibit all but general sales taxes on car rental companies at commercial airports. Ibid. See also H.R. Rep. No. 112-45 (2011). Despite this effort, Congress did not amend the AHTA to proscribe non-exclusive taxes when it passed H.R. 658 as the FAA Modernization and Reform Act of 2012, Pub. L. No. 112-95, 126 Stat. 11, 87 (2012).

Montana Residence

MARK C. and JOAN E. SINNARD, Appellants, v. THE DEPARTMENT OF REVENUE OF THE STATE OF MONTANA, Respondent.

Case Information: Docket/Court: IT-2012-1, Montana State Tax Appeal Board Date Issued: 08/01/2012 Tax Type(s): Personal Income Tax

OPINION

FACTUAL BACKGROUND,CONCLUSIONS OF LAW,ORDER and OPPORTUNITY

FOR JUDICIAL REVIEW

This case comes to us through a direct appeal by Taxpayers Mark C. Sinnard and Joan E. Sinnard from an adverse decision of the Office of Dispute Resolution (ODR) of the Department of Revenue (DOR). Michael W. Green, Crowley Fleck, PLLP, represented Taxpayers and Teresa G. Whitney represented the DOR. The case was heard on the record by agreement of the parties. Both parties submitted briefs and materials and, by agreement of the parties, the ODR decision and transcript were included in the materials considered by this Board.

ISSUE

The issue presented is whether or not the Sinnards were residents of Montana for the tax years 2005 through 2008 and were required to file resident income tax returns during those years.

FACTS PRESENTED

1. Mark Sinnard was employed by the 3M Corporation from 1974 until his retirement in 2009. Mark was assigned to work in several foreign countries during his career. Sinnards' Opening Brief, p.2. 2. When Mark's foreign service began, in 1995, in San Juan, Puerto Rico, the Sinnard family moved there with their children. They filed resident tax returns and obtained local driver's licenses. They also retained ownership of their home in Minnesota, maintained Minnesota driver's licenses, filed nonresident Minnesota tax returns, and voted in Minnesota elections. Sinnards' Opening Brief, p.2. 3. With every foreign assignment, 3M allocated a fixed percentage of Mark's income to the foreign country and the remaining portion to Minnesota, representing the time he worked at company headquarters in that state. Sinnards' Opening Brief, p.2. 4. Each year, while on “home leave” from their foreign assignments, the Sinnards visited family in Minnesota and began annual summer vacations in Montana. Sinnards' Opening Brief, p.2. 5. In 1998, 3M transferred Mark to Shanghai, China, and the Sinnards moved there directly from Puerto Rico. They maintained their property, voter registrations and tax filings with Minnesota and continued to spend summer vacations in Montana. Sinnards' Opening Brief, pgs. 2 and 3. 6. In 2001, the Sinnards purchased a vacation property, consisting of a double-wide trailer and land outside of Wilsall, Montana. They leased the land to neighboring farmers for agricultural use and stayed at the property during summer vacations. Sinnards' Opening Brief, p.3. 7. In 2002, 3M assigned Mark to Texas. The Sinnards purchased a home there, obtained Texas driver's licenses and registered their vehicle there. They sold their Minnesota home. Texas does not have an income tax, so they did not file a state tax return. Their Montana vacations continued. Sinnards' Opening Brief, p.3. 8. From 2002 to 2004, Mark purchased annual non-resident conservation and fishing licenses from Montana Fish, Wildlife and Parks Department. DOR Opening Brief, p.3. 9. In 2004, the Sinnards purchased additional land in Montana near Wilsall. They built a cabin on the property which they leased. They filed non-resident Montana tax returns reporting the rental income on their two properties. Sinnards' Opening Brief, p.4. 10. The Sinnards registered two vehicles in Montana which they kept at the Wilsall property. Sinnards' Opening Brief, p.4. 11. In 2004, Mark was reassigned to Singapore. The Sinnards sold their Texas home when they moved abroad. They vacationed in Montana and obtained Montana driver's licenses. They also registered to vote in Montana. Sinnards' Opening Brief, p. 4. 12. In Singapore, the Sinnards obtained Singapore drivers licenses, filed resident tax returns and US federal tax returns. They continued to file nonresident Montana tax returns reporting the income from their rental property and Minnesota income tax returns reporting the income Mark earned when assigned to corporate headquarters in that state. Sinnards' Opening Brief, p. 5. 13. In 2005, Mark purchased a Montana resident conservation hunting license, attesting that he was a resident of Montana and using his Montana driver's license to substantiate his residency. DOR Opening Brief, p.3. 14. The Sinnards reported that they maintained a home in Wilsall, Montana, in their federal tax returns for 2006, 2007, and 2008. DOR Opening Brief, p.2. 15. In 2006, 2007, and 2008, Mark again purchased a resident conservation hunting license, attesting that he had been a Montana resident for two, three or four years, respectively. DOR Opening Brief, p.4. 16. In 2008, the Sinnards voted by absentee ballot in Park County, Montana. Sinnards' Opening Brief, p.5. 17. In 2010, the Sinnards received and completed a residency questionnaire sent by the DOR. The form, completed by Joan in Mark's absence, stated that they claimed Montana as their residence since 2005. ODR/Sinnard Exhibit A, DOR Sinnard 000225. 18. Joan explained on that form: “Mark had a temporary assignment in Singapore. Joan and Abby accompanied him. However, Montana is/was still considered our residency. Due to Mark's employment with 3M in MN, he had to file a MN tax return however he did not live there. All business in U.S. was as a MT resident. No legal residence in Singapore — only MT.” ODR/Sinnard Exhibit A, DOR Sinnard 000225 and 000227. 19. Joan testified in the ODR hearing that she was uncertain about the meaning of the terms resident and residence in the questionnaire. Sinnards' Opening Brief, p. 7, ODR Tr. 63:5-13. 20. In 2009, Mark retired from 3M and the Sinnards relocated to their Wilsall property, upgrading it for permanent residency. Sinnards' Opening Brief, p.6. 21. The DOR informed the Sinnards in 2010 that they were determined to be Montana residents for the tax years 2005-2008 and requested that they file tax returns for those years. The Sinnards disputed that by filing a letter from their tax accountant explaining their circumstances. Sinnards' Opening Brief, p. 7. 22. On December 13, 2010, the DOR sent an Audit Adjustment Notice and Statement of Account assessing the Sinnards with Montana income tax liability, Sinnards' Opening Brief, p.7. 23. Their taxability was upheld by the decision of the ODR following a hearing and submission of materials. This appeal followed.

Findings of Fact, Conclusions of Law and Discussion

The question at issue is whether the Sinnards are residents of Montana for the tax years in question and therefore liable for taxes on income earned outside Montana. '“Montana source income' means: (i) wages, salary, tips, and other compensation for services performed in the state or while a resident of the state.” Section 15-30-2101 (18)(a), MCA. The rules for determining residency under § 1-1-215, MCA, state: Every person has, in law, a residence. In determining the place of residence, the following rules are to be observed:

(1) It is the place where a person remains when not called elsewhere for labor or other special or temporary purpose and to which the person returns in seasons of repose.

(2) There may be only one residence. If a person claims a residence within Montana for any purpose, then that location is the person's residence for all purposes unless there is a specific statutory exception.

(3) A residence cannot be lost until another is gained.

(7) The residence can be changed only by the union of act and intent.

The Taxpayers claim that they did not establish Montana residency until 2009 when they moved to the Wilsall property following Mark's retirement. Prior to that time, they came to Montana only for vacations, although they purchased two parcels of land and kept a vehicle in Montana. They argue that their actions in 2004 of obtaining drivers' licenses and registering to vote do not meet the statutory “union” test because they did not live in Montana. The DOR contends that their actions did establish residency and that their moving to Singapore mat same year did not terminate their Montana residency because it was a temporary assignment and was known to be temporary from the outset. It is important to note that the Sinnards do not claim to have been resident anywhere else in the U.S. during the relevant time, having surrendered other prior U.S. and foreign residences, sold their Texas property and relinquished their Texas driver's licenses. Montana law, quoted above, states that “every person has, in law, a residence.” Section 1-1-215, MCA. Much of the parties' argument is focused on interpreting the various actions of the Taxpayers to indicate their intent. Intent is, of course, a key element in determining residency and domicile. Changing residence requires a union of action and intent under § 1-1-215(7), MCA and regulations state that residency “is determined in light of all facts and circumstances.” ARM 42.15.109(1). Montana law, however, also contains a specific statutory section that appears to be controlling in this situation: when a person claims a residence within Montana for any purpose, then that location is the person's residence for all purposes unless there is a specific statutory exception. Section 1-1-215(2), MCA. Under Montana law, therefore, when the Sinnards registered to vote in Montana, they held themselves out as residents of the state because only residents can vote in our elections. Section 13-1-111(l)(c), MCA. Voting is certainly one of the most significant benefits of citizenship and much of the legal commentary on the subject of residency and domicile emphasizes its importance in proving an individual's intent. In determining domicile, courts have cited the act of voting as one of the most significant indicators of intent. Oglesby v. Williams, 372 Md. 360, 373, 812 A.2d 1061 (2002). The Sinnards also represented themselves as residents in obtaining hunting and fishing licenses in this state at a considerable discount from the rate charged to non-residents. Montana law has a separate definition of residency for purposes of obtaining hunting and fishing licenses in the state. Section 87-2-102, MCA. To qualify, a person must have “physically resided in Montana as the person's principal or primary home or place of abode for 180 consecutive days, file a Montana state income tax return as a resident if required to file, license and title any vehicles in Montana that the person owns and operates in Montana, and “if the person registers to vote, the person registers only in Montana.” Section 87-2-102(2) and (4), MCA. The resident hunting and fishing licenses obtained by Mark Sinnard during the years in question clearly required him to expressly agree that he was a resident. Further, the Sinnards represented themselves as residing in Montana on their Federal income tax returns each year at issue, and in 2010 they made those same representations to the State of Montana when they completed a residency questionnaire for the DOR stating that they had regarded Montana as their residence since 2005. Joan Sinnard claims she failed to understand the terms used in the questionnaire but her statements about their residency were clear, simple and unequivocal. She clearly stated that they did not intend to be Singapore residents and regarded Montana as their residence during the years at issue. We find their representations indicate intent to be Montana citizens. The Sinnards also obtained Montana driver's licenses in 2004 and maintained those licenses while in Singapore, an act typical of those intending to reside here rather than vacation here, and they do own two pieces of real property in the state, so their physical connection to the state is also clear. The Sinnards now claim that they established residency in Singapore which would be considered inconsistent with residency in Montana during the years in question. The facts, however, indicate strong and continuous ties with Montana, most notably the fact that they voted here in 2008, four years after they claim to have established residency in Singapore. “The controlling factor in determining a person's domicile is his intent. One's domicile, generally, is that place where he intends to be. The determination of his intent, however, is not dependent upon what he says at a particular time, since his intent may be more satisfactorily shown by what is done than by what is said.” Roberts v. Lakin, 340 Md. 147, 153, 665 A.2d 1024,1027 (1995) . “Self-serving declarations of the party...have but litde weight in a suit of this kind.” Elwert v. Elmrt, 196 Ore. 256, 248 P. 2d 847 (1952) . In this case, the Sinnards' actions indicate that they regarded themselves as Montana residents. During the time they claim to be residents of Singapore, they also visited the state annually, maintained their Montana driver's licenses and represented themselves on at least three separate occasions as Montana residents on their hunting and fishing license applications. They obtained Singapore driver's licenses and participated in local schools and churches while there, but the facts demonstrate they made no effort to make Singapore their permanent home. According to their own statements, they regarded Singapore as a temporary assignment similar in duration to the other temporary assignments from 3M, generally of two or three years duration, and throughout their stay regarded Montana as their residence, and surrendered other prior U.S. residences, selling their Texas property and relinquishing their Texas driver's licenses. We find their actions terminating their residency elsewhere but maintaining their property and connections to Montana during their temporary stay in Singapore are strong indications of their intent to be Montana residents. The Montana tax residency statute is clear: when a person claims a residence within Montana for any purpose, then that location is the person's residence for all purposes unless there is a specific statutory exception. Section 1-1-215(2), MCA. There is no relevant statutory exemption in this matter. The evidence shows the Sinnards claimed a residence within Montana for several purposes. Further, the evidence is sufficient that the residency requirements are clearly stated for those who apply for voter registration and hunting/fishing licenses that we find it to be the intent of the Sinnards to be residents of Montana as demonstrated by their filing those applications with the state of Montana. We conclude the statute is controlling and find that the Sinnards are residents of Montana. While it is unfortunate that they neglected to pay income tax, their residency required that they do so.

Order

IT IS THEREFORE ORDERED by the State Tax Appeal Board of the State of Montana that the Taxpayers' appeal and complaint be denied and the tax, interest, and penalties, as assessed by the Department, are properly due and owing. DATED this 1st day of August, 2012.

BY ORDER OF THE STATE TAX APPEAL BOARD

/s/

KAREN E. POWELL, Chairwoman

(SEAL)

/s/

SAMANTHA SANCHEZ, Member

/S/

KELLY FLAHERTY SETTLE, Member

NOTICE: You are entitled to judicial review of this Order in accordance with Section 15-2-303(2), MCA. Judicial review may be obtained by filing a petition in district court within 60 days following the service of this Order.

CERTIFICATE OF SERVICE

I certify that on this 1st day of August, 2012, a true and correct copy of the foregoing Order was served by placing same in the United States Mail, postage prepaid, and addressed as follows:

Michael W. Green
     Attorney at Law
     CROWLEY FLECK, PLLP
     PO Box 797
     Helena, Montana 59624-0797
     Teresa G. Whitney
     Tax Counsel
     Montana Department of Revenue
     Legal Services Office
     PO Box 7701
     Helena, MT 59604-7701

/s/

DONNA EUBANK, paralegal assistant

Mileage

DUSTIN ROBISON, Petitioner and Appellant, v. MONTANA DEPARTMENT OF REVENUE, Respondent and Appellee.

Case Information: Docket/Court: 11-0672; 2012 MT 145, Supreme Court of Montana Date Issued: 07/06/2012 Submitted on Briefs: May 23, 2012 Tax Type(s): Personal Income Tax

Headnote

1. TAXATION — INCOME TAXES — ASSESSMENT — Judicial review — Scope and extent of review in general. District court reviews a decision of State Tax Appeals Board (STAB) to determine whether STAB's findings of fact are clearly erroneous and whether STAB correctly interpreted the law. 2. APPEAL AND ERROR — REVIEW — QUESTIONS OF FACT, VERDICTS, AND FINDINGS — FINDINGS OF COURT — Conclusiveness in general — In general — Clearly erroneous findings. A factual finding is clearly erroneous if it is not supported by substantial evidence, if the trier of fact misapprehended the effect of the evidence, or if a review of the record leaves the reviewing court with the definite and firm conviction that a mistake has been made. 3. TAXATION — INCOME TAXES — ASSESSMENT — Judicial review — Scope and extent of review in general. Supreme Court reviewing a district court order affirming or reversing decision of State Tax Appeals Board (STAB) employs the same standards as the district court, and determines whether STAB's findings of fact are clearly erroneous and whether STAB correctly interpreted the law. 4. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Deductions — In general. Tax deductions are a matter of legislative grace and it is the taxpayer's burden to clearly demonstrate the right to the claimed deduction. 5. TAXATION — INCOME TAXES — ASSESSMENT — Evidence — In general. Tax deductions are a matter of legislative grace and it is the taxpayer's burden to clearly demonstrate the right to the claimed deduction. 6. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — In general. Traveling expenses are deductible if the taxpayer can prove the expenses are: (1) reasonable and necessary; (2) incurred while away from home; and (3) incurred in the pursuit of a trade or business. . 7. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — Necessity that expenses be incurred away from home; determination of taxpayer's home. Traveling expenses are deductible if the taxpayer can prove the expenses are: (1) reasonable and necessary; (2) incurred while away from home; and (3) incurred in the pursuit of a trade or business. . 8. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Expenses — Trade or business. Traveling expenses are deductible if the taxpayer can prove the expenses are: (1) reasonable and necessary; (2) incurred while away from home; and (3) incurred in the pursuit of a trade or business. . 9. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — In general. For travel expenses to be deductible, it is the job, not the taxpayer's pattern of living, that must require the travel. . 10. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Expenses — Trade or business. For travel expenses to be deductible, it is the job, not the taxpayer's pattern of living, that must require the travel. . 11. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — Temporary or indefinite employment. One exception to the general rule that commuting expenses are non-deductible as traveling expenses is when the taxpayer travels to a temporary, as opposed to indefinite, job. . 12. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Expenses — Trade or business. One exception to the general rule that commuting expenses are non-deductible as traveling expenses is when the taxpayer travels to a temporary, as opposed to indefinite, job. . 13. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — Temporary or indefinite employment. For purposes of provision of Internal Revenue Code governing deduction of business expenses, employment is generally temporary when it lasts for less than one year. . 14. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Expenses — Trade or business. For purposes of provision of Internal Revenue Code governing deduction of business expenses, employment is generally temporary when it lasts for less than one year. . 15. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — Temporary or indefinite employment. Taxpayer is generally allowed to deduct travel expenses related to temporary employment. . 16. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Expenses — Trade or business. Taxpayer is generally allowed to deduct travel expenses related to temporary employment. . 17. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — Temporary or indefinite employment. In determining whether taxpayer is allowed to deduct business travel expenses, employment is indefinite when the length of the employment is indeterminate. . 18. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Expenses — Trade or business. In determining whether taxpayer is allowed to deduct business travel expenses, employment is indefinite when the length of the employment is indeterminate. . 19. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — Temporary or indefinite employment. In determining whether taxpayer is allowed to deduct business travel expenses, employment which merely lacks permanence is indefinite unless termination is foreseeable within a short period of time. . 20. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Expenses — Trade or business. In determining whether taxpayer is allowed to deduct business travel expenses, employment which merely lacks permanence is indefinite unless termination is foreseeable within a short period of time. . 21. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — Temporary or indefinite employment. Taxpayer is not allowed to deduct business travel expenses related to indefinite employment. . 22. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Expenses — Trade or business. Taxpayer is not allowed to deduct business travel expenses related to indefinite employment. . 23. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — Necessity that expenses be incurred away from home; determination of taxpayer's home. For purposes of provision of Internal Revenue Code governing deduction of business expenses, "home' does not have its usual and ordinary meaning. . 24. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Expenses — Trade or business. For purposes of provision of Internal Revenue Code governing deduction of business expenses, "home' does not have its usual and ordinary meaning. . 25. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — Necessity that expenses be incurred away from home; determination of taxpayer's home. When a regularly employed taxpayer maintains his personal residence within the general area of his employment, his "tax home' will be his personal residence, such that business travel expenses would be deductible. . 26. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Expenses — Trade or business. When a regularly employed taxpayer maintains his personal residence within the general area of his employment, his "tax home' will be his personal residence, such that business travel expenses would be deductible. . 27. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — Necessity that expenses be incurred away from home; determination of taxpayer's home. When a taxpayer accepts employment either permanently or for an indefinite period of time away from his personal residence, his "tax home' will shift to the new location, the vicinity of his new principal place of business; in this situation, the decision to retain a former residence is a personal choice, and the expenses of traveling to and from that residence are non-deductible personal expenses. . 28. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Expenses — Trade or business. When a taxpayer accepts employment either permanently or for an indefinite period of time away from his personal residence, his "tax home' will shift to the new location, the vicinity of his new principal place of business; in this situation, the decision to retain a former residence is a personal choice, and the expenses of traveling to and from that residence are non-deductible personal expenses. . 29. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — Necessity that expenses be incurred away from home; determination of taxpayer's home. Taxpayer's employment in state was indefinite, rather than temporary, and his "tax home' was his principal place of business, rather than his personal residence, and thus, his business travel expenses were disallowed; taxpayer was never told how long his work in state would last, since taxpayer took indefinite employment away from his personal residence his "tax home' consequently shifted to his place of business, and expenses of traveling from camp to each drill site could not be differentiated from any other worker's normal commuting expenses. . 30. INTERNAL REVENUE — INCOME TAXES — DEDUCTIONS — EXPENSES — Travel — Temporary or indefinite employment. Taxpayer's employment in state was indefinite, rather than temporary, and his "tax home' was his principal place of business, rather than his personal residence, and thus, his business travel expenses were disallowed; taxpayer was never told how long his work in state would last, since taxpayer took indefinite employment away from his personal residence his "tax home' consequently shifted to his place of business, and expenses of traveling from camp to each drill site could not be differentiated from any other worker's normal commuting expenses. . 31. TAXATION — INCOME TAXES — DEDUCTIONS, CREDITS, AND EXEMPTIONS — Expenses — Trade or business. Taxpayer's employment in state was indefinite, rather than temporary, and his "tax home' was his principal place of business, rather than his personal residence, and thus, his business travel expenses were disallowed; taxpayer was never told how long his work in state would last, since taxpayer took indefinite employment away from his personal residence his "tax home' consequently shifted to his place of business, and expenses of traveling from camp to each drill site could not be differentiated from any other worker's normal commuting expenses. . 32. APPEAL AND ERROR — PRESENTATION AND RESERVATION IN LOWER COURT OF GROUNDS OF REVIEW — ISSUES AND QUESTIONS IN LOWER COURT — Necessity of presentation in general. The Supreme Court does not address issues raised for the first time on appeal. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis & Clark, Cause No. DDV 11-330, Honorable James P. Reynolds, Presiding Judge For Appellant: Thomas J. Stusek, Stusek Law Firm, P.C., Bozeman, Montana For Appellee: Michelle R. Johnson, Amanda L. Myers, Teresa G. Whitney, Special Assistant Attorneys General, Helena, Montana

OPINION

Justice Michael E Wheat delivered the Opinion of the Court. Petitioner Dustin Robison (Robison) appeals from an order of the First Judicial District Court, Lewis and Clark County, which reversed the findings of the State Tax Appeals Board (STAB) and reinstated the findings of the Montana Department of Revenue (DOR). We affirm.

BACKGROUND

This case concerns whether Robison is allowed to claim a deduction on his Montana income taxes for certain mileage as a business travel expense. The facts that follow are undisputed. Robison resides in Billings, Montana. He was employed by Unit Drilling Company (Unit) as a rig hand on oil rigs in the Big Piney/Pinedale area of western Wyoming. When Robison began working in the Big Piney/Pinedale area in 2005, he did not know how long his employment there would last — for example, 1 week, or 5 years, or longer. Robison also did not know that his employment there would be for a specific limited duration; for example, he did not know at the outset that his employment there would terminate in 8 months. Robison said “Oil rigs are designed to move. That's the principle that allows us to do what we do. We rig up on a location. Once our hole is drilled, we have to move to the next one. No telling where that will be.” Robison also stated that Billings is a good place to live because it is central to several oil fields. As STAB found, it is “uncontroverted” that Robison “never knew how long he would be employed at any one site.” In reality, Robison was employed in the same Big Piney/Pinedale area for over 3 years, from March of 2005 to early October of 2008. While so employed, Robison worked a 7-day-on, 7-day-off schedule. As his mileage logs reflect, he would drive his personal vehicle ¹ from his residence in Billings to a camp (provided and maintained by Unit for its workers) in the Big Piney/Pinedale area. Then, during the 7 days he worked, he would drive from the camp to an oil rig (or rigs) and back, until finally, at the end of the 7-day-on schedule, Robison would drive from the rig location back to his residence in Billings. Robison claimed this mileage as a business travel expense during tax years 20052008, and deducted it accordingly. In total, Robison claimed $78,812 in business travel expenses for the 2005-2008 tax years. Robison was audited by the DOR in 2009 after “reporting significant amounts of unreimbursed employee business expenses claimed for extended periods.” The audit determined that Robison's employment was indefinite, making his “tax home” the Big Piney/Pinedale area of Wyoming; thus, the claimed business expenses were actually personal commuting expenses and therefore disallowed. DOR determined additional tax liability for the 2005-2008 tax years of approximately $7,000, including penalties and interest. It appears that interest continues to accrue on the balance the DOR claims is due. Robison requested informal review by the DOR. The Field Unit Audit Manager determined the initial audit was correct. Robison then appealed to the DOR's Office of Dispute Resolution (ODR). After a full evidentiary hearing, the ODR hearing examiner issued a lengthy and well-reasoned order affirming the audit determination. The hearing examiner found Robison's employment in Wyoming was indefinite, not temporary. Because Robison's employment was indefinite, his “tax home” for purposes of the business travel expense deduction was the Big Piney/Pinedale area of Wyoming, not Billings, Montana, his place of residence. Therefore, none of the $78,812 claimed was allowed as a business travel expense. Robison then appealed to STAB. The STAB appeal was confined to the ODR's order, transcript, and exhibits. After review, STAB reversed the decision of the ODR and found Robison's employment was temporary, that his “tax home” was in Billings, and that all his business travel expenses were allowable deductions. To reach this conclusion, STAB found that Robison's “tax home” was Billings (based upon its reading of Coombs v. Commissioner, 608 F.2d 1269, 1275 (9th Cir. 1979) ), and that Robison “was not located in Wyoming for over a year, but actually made numerous seven-day temporary business trips to Wyoming.” STAB also separately determined that “[b]ecause the law is unclear, and can be subject to multiple interpretations,” even if the deductions were not allowed, the “case is not an appropriate one for the imposition of penalties and interest.” The DOR then filed a petition for judicial review in the First Judicial District Court, Lewis and Clark County. After briefing by the parties, the District Court reversed STAB's determination and reinstated the decision of the ODR hearing examiner. It found that STAB “misapprehended the effect of [the] evidence and misapplied pertinent case law” in determining that Robison's employment was temporary and that his “tax home” was in Billings, Montana. The District Court also found STAB erred as a matter of law when it suggested, in a footnote, that if Robison's “tax home” was in Wyoming, Montana could not impose state income tax on him, and when it found that DOR should not impose penalties and interest upon Robison. Robison then obtained appellate counsel and filed the present, timely appeal. Robison appeals only the “deductibility of certain business-related travel, lodging, and meal expenses[.]” He does not appeal the District Court's determination that STAB erred in suggesting Montana could not impose income tax on him, nor does he appeal imposition of penalties and interest.

STANDARD OF REVIEW

A district court reviews a STAB decision to determine whether STAB's findings of fact are clearly erroneous and whether STAB correctly interpreted the law. Puget Sound Energy, Inc. v. State, 2011 MT 141, ¶ 14, 361 Mont. 39, 255 P.3d 171 . A factual finding is clearly erroneous if it is not supported by substantial evidence, if the trier of fact misapprehended the effect of the evidence, or if a review of the record leaves the reviewing court with the definite and firm conviction that a mistake has been made. Micone v. Department of Public Health and Human Services, 2011 MT 178, ¶ 10, 361 Mont. 258, 258 P.3d 403 . We apply the same standards when reviewing a district court's order affirming or reversing STAB's decision. Puget Sound, ¶ 14 ; O'Neill v. Department of Revenue, 2002 MT 130, ¶ 10, 310 Mont. 148, 49 P.3d 43 .

DISCUSSION

Before we discuss the issues in this case, we begin by laying out the legal framework we must consider in a case such as Robison's. Tax deductions are a matter of legislative grace and it is the taxpayer's burden to clearly demonstrate the right to the claimed deduction. INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992) ; Baitis v. Department of Revenue, 2004 MT 17, ¶ 28, 319 Mont. 292, 83 P.3d 1278 ; GBN, Inc. v. Department of Revenue, 249 Mont. 261, 266, 815 P.2d 595, 597 (1991) . Under Montana law, in computing net income, ² deductions are generally those permitted by 26 U.S.C. §§ 161 and 211. Section 15-30-2131(1)(a), MCA. A deduction is generally allowed for all ordinary and necessary business expenses. 26 U.S.C. § 162. ³ Montana has specifically adopted this provision of the Internal Revenue Code. Magnuson v. Montana State Board of Equalization, 162 Mont. 393, 395, 513 P.2d 1, 3 (1973) . Included in ordinary and necessary business expenses are “traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business[.]” 26 U.S.C. § 162(a)(1). Such travelling expenses are deductible if the taxpayer can prove the expenses are: 1) reasonable and necessary; 2) incurred while away from home; and 3) incurred in the pursuit of a trade or business. Commissioner v. Flowers, 326 U.S. 465, 470 (1946) . In contrast, it is well settled that unless specifically provided by law, expenses incurred in commuting to and from work are not deductible, but rather are personal expenses. 26 U.S.C. § 262(a); Flowers, 326 U.S. at 469-70 ; Coombs, 608 F.2d at 1275-76 ; Sanders v. Commissioner, 439 F.2d 296, 297 (9th Cir. 1971) . “If, for personal reasons, one chooses to live far from the place of employment, the resulting travel costs are nondeductible, personal expenses.” Kasun v. United States, 671 F.2d 1059, 1061 (7th Cir. 1982) . For travel expenses to be deductible, it is “'the job, not the taxpayer's pattern of living, [that] must require the travel.'” Kasun, 671 F.2d at 1061 (quoting Commissioner v. Peurifoy, 254 F.2d 483, 486 (4th Cir. 1957), aff'd, 358 U.S. 59 (1958) (per curiam) ). Robison's case concerns the second prong of the test annunciated in Flowers — was Robison “away from home” while working in Wyoming? To answer this question, we must consider two distinct, yet inevitably intertwined concepts — temporary or indefinite employment and a taxpayer's “tax home.” The nature of Robison's employment will determine the location of his “tax home.” ⁴ As discussed in detail below, if Robison's employment in Wyoming was temporary, his tax home would be his residence in Billings and his business travel expenses are deductible. However, if Robison's employment in Wyoming was indefinite, his “tax home” is his principal place of business (the Big Piney/Pinedale area of Wyoming) and his business travel expenses are disallowed.

The Nature of Robison's Employment

One exception to the general rule that commuting expenses are non-deductible is when the taxpayer travels to a temporary, as opposed to indefinite, job. Peurifoy v. Commissioner, 358 U.S. 59, 60 (1958) ; Kasun, 671 F.2d at 1061 ; Sanders, 439 F.2d at 298 . “[I]t is not reasonable to expect people to move to a distant location when a job is foreseeably of limited duration. If, on the other hand, the prospect is that the work will continue for an indefinite or substantially long period of time, the travel expenses are not deductible.” Kasun, 671 F.2d at 1061 . Employment is temporary when, at the time the job commences, termination is foreseeable within a short period. Kasun, 671 F.2d at 1060-61 . In 1992, Congress modified 26 U.S.C. § 162 to define the “short period” language, adding that “[f]or purposes of [the travel expense deduction], the taxpayer shall not be treated as being temporarily away from home during any period of employment if such period exceeds 1 year.” 26 U.S.C. § 162; Pub. L. No. 102-486, § 1938, 106 Stat. 2776, 3033 (1992). Thus, for purposes of 26 U.S.C. § 162, employment is generally temporary when it lasts for less than one year. Kasun, 671 F.2d at 1062 ; Boone v. United States, 482 F.2d 417, 420 (5th Cir. 1973) . A taxpayer is generally allowed to deduct travel expenses related to temporary employment. See Peurifoy, 358 U.S. at 60 . Employment is indefinite when the length of the employment is indeterminate. Boone, 482 F.2d at 419 . “[E]mployment which merely lacks permanence is indefinite unless termination is foreseeable within a short period of time.” Kasun, 671 F.2d at 1061 . A taxpayer is not allowed to deduct business travel expenses related to indefinite employment. See Peurifoy, 358 U.S. at 60 . Of particular interest in Robison's case is the treatment of quite similar employment — work in the construction industry. In Kasun, a construction worker argued his employment was temporary because he was not told how long his job would last. Kasun, 671 F.2d at 1060 . The Seventh Circuit rejected this argument, instead finding:

[W]ork in the construction industry is, by its very nature, impermanent. Workers move from job to job and often must seek employment at some distance from their homes. Courts have not, however, found that these characteristics distinguish construction work from other forms of employment.

Kasun, 671 F.2d at 1062 (internal citations omitted). The Kasun court refused to create an exception to 26 U.S.C. § 262 for construction workers. Kasun, 671 F.2d at 1062 n. 5 . Rather, it found that construction workers, just like “suburban or exurban commuters,” must pay their own commuting expenses. Kasun, 671 F.2d at 1062-63 . Similarly, in Commissioner v. Peurifoy, construction workers argued their employment was temporary because “they were not guaranteed a job for any specific period nor were they told by the employer how long the work was expected to last.” Peurifoy, 254 F.2d at 485 . The Fourth Circuit found that this demonstrated indefinite or impermanent employment, not temporary employment:

Work in the heavy construction industry, by its very nature, has a degree of impermanence. Employment is usually for each job only and lasts no longer than the need at that project for the particular skill of the individual employee. Upon many of the larger projects, however, such need, and the actual employment of an individual, may last for several, even many, years. Other projects may be of comparatively short duration. It is also a characteristic of the industry, as shown in the stipulations in this case, that upon larger construction projects outside the larger metropolitan centers, the local supply of the necessary skills must be greatly augmented by workers coming from other places. Work in the industry, therefore, is, to some extent, transient as well as impermanent.

Construction workers are not the only ones, however, who find it necessary or profitable to move or seek employment from place to place, and the Tax Court, in its opinion in these cases, recognizes that the transient and impermanent aspect of work in heavy construction does not itself distinguish construction work from other employment or hold the answer to our problem. Indeed these characteristics of the industry tend to strip from a remote residence elements essential to its status as the sole 'tax home.'

Peurifoy, 254 F.2d at 486 . Accordingly, “[h]owever justified [a taxpayer] may be from a subjective or personal point of view in maintaining a residence away from his post of duty, his travel and maintenance expense at his post of duty is not an ordinary and necessary business expense within the meaning of 23(a)(1)(A) [now 26 U.S.C. § 162] if the employment is of substantial or indefinite duration.” Peurifoy, 254 F.2d at 486-87 .

The “Tax Home” Concept

The location of a taxpayer's “tax home” determines whether his business travel expenses were incurred “away from home” under 26 U.S.C. § 162. For the purposes of 26 U.S.C. § 162, the term “tax home” does not mean “home” in the ordinary or common sense of the word. Henderson v. Commissioner, 143 F.3d 497, 499 (9th Cir. 1998) . A taxpayer's “tax home” is not necessarily the place he or she lives (i.e. house, residence, abode, etc.). When a regularly employed taxpayer maintains his personal residence within the general area of his employment, his “tax home” will be his personal residence. Coombs, 608 F.2d at 1275 . However, when a taxpayer accepts employment either permanently or for an indefinite period of time away from his personal residence, his “tax home” will shift to the new location — the vicinity of his new principal place of business. Coombs, 608 F.2d at 1275-76 (emphasis added). In this later situation, “the decision to retain a former residence is a personal choice, and the expenses of traveling to and from that residence are non-deductible personal expenses.” Coombs, 608 F.2d at 1276 .

Analysis

With this framework in mind, we now turn to Robison's case. Robison appears to argue that his employment in Wyoming was at all times temporary. However, he also alternately argues that for a time his employment was temporary, but then became indefinite. Therefore, he argues the first year of his business travel expenses should be allowed. The DOR argues the District Court correctly concluded that at all times Robison's employment was indefinite, making none of his business travel expenses deductable. In reversing STAB, the District Court determined that Robison's employment was “indefinite ... not temporary.” We agree. Just like the construction workers in Kasun and Peurifoy, Robison did not know his employment would terminate in a short period of time. Rather, he was never told how long his work in Wyoming would last. This undoubtedly makes his employment indefinite. Kasun, 671 F.2d at 1062 ; Peurifoy, 254 F.2d at 486-87 . It is true that Robison's employment lacked permanence, but that alone does not make his employment temporary. Kasun, 671 F.2d at 1061 . Employment is only temporary if “termination is foreseeable within a short period of time.” Kasun, 671 F.2d at 1061 . Further bolstering the conclusion that Robison's employment was indefinite is the language of 26 U.S.C. § 162 - “the taxpayer shall not be treated as being temporarily away from home during any period of employment if such period exceeds 1 year.” Robison was employed in the same Big Piney/Pinedale area of Wyoming for over 3 years, well beyond the 1 year limitation in the statute. The language of 26 U.S.C. § 162 also precludes any of Robison's business travel expenses from being deductable. The statute clearly states that “the taxpayer shall not be treated as being temporarily away from home during any period of employment if such period exceeds 1 year.” 26 U.S.C. § 162 (emphasis added). Thus, Robison is not considered as being temporarily away from home during any of his 3-plus years of employment in Wyoming because his employment period exceeded 1 year. Contrary to Robison's argument, this is not a case where Robison was told his employment was to be terminated within a short period of time only to have his employment extended. See generally Rev. Rul. 93-86, 1993-2 C.B. 71. It is undisputed that, from the beginning, Robison “never knew” the length of his employment. His employment was indefinite. The District Court also found that STAB incorrectly interpreted Coombs to hold that a taxpayer's “tax home” is his residence. We again agree. Coombs does not stand for the proposition that a taxpayer's “tax home” is his residence, only that in certain circumstances it can be. As applicable to Robison's case, however, Coombs clearly states that when a taxpayer accepts employment either permanently or for an indefinite period of time away from his personal residence, his “tax home” will shift to the new location — the vicinity of his new principal place of business. Coombs, 608 F.2d at 1275-76 (emphasis added). This is precisely what Robison did — he took indefinite employment away from his personal residence. His “tax home” for the purposes of the business travel expense deduction consequently shifted to the Big Piney/Pinedale area of Wyoming. As a result, “the decision to retain a former residence is a personal choice, and the expenses of traveling to and from that residence are non-deductible personal expenses.” Coombs, 608 F.2d at 1276 . Additionally, because his “tax home” for the purposes of 26 U.S.C. § 162 was the Big Piney/Pinedale area, the expenses of traveling from camp to each drill site cannot be differentiated from any other worker's normal commuting expenses. These commuting expenses are not deductable. 26 U.S.C. § 262(a); Flowers, 326 U.S. at 469-70 ; Coombs, 608 F.2d at 1275-76 ; Sanders, 439 F.2d at 297 . Finally, Robison raises several arguments that were not raised below, such as lodging and meal expenses. We do not address issues raised for the first time on appeal. Hoff v. Lake County Abstract & Title Co., 2011 MT 118, ¶ 35, 360 Mont. 461, 255 P.3d 137 (citing Peterman v. Herbalife International, Inc., 2010 MT 142, ¶ 20, 356 Mont. 542, 234 P.3d 898) .

CONCLUSION

For the reasons stated above, we affirm the District Court.

/S/ MICHAEL E WHEAT

We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ JAMES C. NELSON /S/ BRIAN MORRIS
¹
Unit did not provide company vehicles for rig hands, nor did it reimburse them for travel expenses.
²

Net income means “the adjusted gross income of a taxpayer less the deductions allowed by this chapter [Chapter 30].” Section 15-30-2101(19), MCA. The amount of tax due is determined based upon a taxpayer's net income. Section 15-30-2102, MCA.
³

Deductions under 26 U.S.C. § 162 are allowed by 26 U.S.C. § 161.
⁴

We decline Robison's invitation to preliminarily determine his “tax home” without reference to the nature of his employment.