McCURRY EXPEDITIONS, LLC, ET AL.
RICHARD H. ROBERTS
Argued, September 16, 2014
As Corrected July 17, 2015.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Reversed and Remanded. Appeal from the Chancery Court for Giles County. No. 5548. Jim T. Hamilton, Chancellor.
Robert E. Cooper, Jr., Attorney General and Reporter; Joseph F. Whalen, Acting Solicitor General; R. Mitchell Porcello, Assistant Attorney General, for the appellant, Richard H. Roberts, Commissioner, State of Tennessee Department of Revenue.
Joe W. Henry, Jr., Pulaski, Tennessee, for the appellee, McCurry Expeditions, LLC and Ralph McCurry.
J. STEVEN STAFFORD, P.J., W.S., delivered the opinion of the Court, in which JOHN W. MCCLARTY, J., and BRANDON O. GIBSON, J., joined.
J. STEVEN STAFFORD, J.
The case concerns the imposition of sales and use tax on a luxury motor home stored in Tennessee by an out-of-state corporation. The trial court granted summary judgment to the tax-payer corporation, finding that the imposition of sales tax was not authorized by statute and was not consistent with the Commerce Clause of the United States Constitution. We reverse and remand.
On December 6, 2005, Plaintiff/Appellee McCurry Expeditions, LLC (" McCurry LLC" ) purchased a 2007 model 450 Newell motor home for $939,600.00. McCurry LLC is a limited liability company organized under the laws of the State of Montana. Plaintiff/Appellee Ralph McCurry (together with McCurry LLC, " Appellees" ) is the owner and sole member of McCurry LLC. Mr. McCurry has a residence in Tennessee. The purpose of the purchase was to allow Mr. McCurry, as owner of McCurry LLC, to use the motor home as a " mobile office to research, develop and purchase recreational parks and other real property in states outside the State of Tennessee." Neither McCurry LLC nor Mr. McCurry paid any sales tax on the purchase of the motor home in December 2005. Mr. McCurry first drove
the motor home to Tennessee in 2006. Beginning in September 2007, the Appellees stored the motor home in Tennessee approximately six months out of every year. On numerous occasions thereafter, Mr. McCurry drove the motor home from Tennessee to other states for trips beginning at Mr. McCurry's home in Tennessee. At the conclusion of the trips, Mr. McCurry would return home to Tennessee using the motor home.
In July 2012, the Defendant/Appellant Commissioner of the Tennessee Department of Revenue (" Department of Revenue" ) assessed Appellees for use tax in a total amount of $103,605.33, as a result of their use and storage of the motor home in Tennessee. McCurry LLC was also assessed use tax by the State of Alabama as a result of the use of the motor home in that State. McCurry LLC paid $26,716.05 to Alabama to satisfy the Alabama use tax assessment, which included tax, interest, and a penalty. After giving credit for the tax paid to Alabama, the outstanding balance on the Tennessee assessment was allegedly $78,357.53, plus statutory interest continuing to accrue.
On October 22, 2012, the Appellees filed a declaratory judgment complaint in the Giles County Chancery Court to challenge the assessment. On December 6, 2012, the Department of Revenue filed an answer and a counterclaim for the amount of the assessment, plus statutory interest. On October 30, 2012, the Appellees filed an answer to the counterclaim.
In September 2013, the parties filed competing motions for summary judgment. To support their motion for summary judgment, the Appellees filed the affidavit of Mr. McCurry. The Department of Revenue filed a Statement of Undisputed Facts in support of its motion. For purposes of this appeal, it is undisputed that since 2007, the motor home had been stored in Tennessee for six months per year, that the motor home was not serviced or repaired in Tennessee, and that the motor home was never loaned to any third party for use in the State. The only disputes concerned whether the motor home was used or stored for use in Tennessee, as required by the relevant taxing statute, and whether the taxation comported with constitutional principles. The Appellees argued that the imposition of use tax was in error because the motor home was neither used or stored for use in Tennessee, and instead was only used by McCurry LLC for business purposes. The Appellees cite Mr. McCurry's affidavit, which states that the motor home is stored in Tennessee " for use solely outside the State of Tennessee and has never [been] used . . . in the State of Tennessee." The Department of Revenue, in contrast, argued that the motor home was both used and stored for use in Tennessee and that imposition of the Tennessee use tax was proper. The Department of Revenue relies on the Appellees' response to its statement of undisputed facts, which states that:
5. [Appellees] first drove the motor home into Tennessee in January 2006. On numerous occasions thereafter, [Appellees] drove the motor home to and from Tennessee. . . .
RESPONSE: This fact is undisputed with the caveat that the vehicle was being driven by the individual Plaintiff Ralph McCurry.
6. Beginning in September 2007, [Appellees] began storing the motor home in Tennessee for approximately six ...