Richard Payzant v. Commissioner of Revenue (October 13, 2009)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD

RICHARD PAYZANT		   v.	 COMMISSIONER OF REVENUE
Docket No. C293838		 		 Promulgated:
						 	 October 13, 2009


	This is an appeal under the formal procedure pursuant to G.L. c. 58A, § 7 and G.L. c. 62C, § 39 from the refusal of the appellee Commissioner of Revenue ("Commissioner" or "appellee") to abate use tax assessed against the appellant, Richard Payzant ("Mr. Payzant" or "appellant"), under G.L. c. 64I, § 2 on his storage and use in Massachusetts of a motor yacht for the taxable period ended July 31, 2002 ("tax period at issue").  
	Chairman Hammond heard the appeal.  Commissioners Scharaffa, Egan, Rose, and Mulhern joined him in the decision for the appellee.
	These findings of fact and report are made pursuant to a request by the appellant under G.L. c. 58A, § 13 and 831 CMR 1.32.

	Richard Payzant, pro se for the appellant.  
	Bensen C. Solivan, Esq. and Timothy R. Stille, Esq. for the appellee.

FINDINGS OF FACT AND REPORT
On the basis of the testimony and exhibits introduced at the hearing of this appeal, the Appellate Tax Board ("Board") made the following findings of fact.  In 2006, the Commissioner conducted an audit of the Admiral's Hill Marina in Chelsea, Massachusetts.  The Commissioner's audit revealed that a sales/use tax return had not been filed for the appellant's vessel, the Blaze of Glory ("subject vessel" or "Blaze of Glory").  The Commissioner issued a Notice of Failure to File to the appellant.  On December 15, 2006, the Commissioner issued to the appellant a Notice of Intent to Assess use tax in the amount of $11,450, plus statutory additions, based on the subject vessel's assessed value of $114,500.  On January 30, 2007, the Commissioner issued a Notice of Assessment in the amount of $11,450, plus interest and penalties, for the tax period at issue. On June 17, 2007, the appellant filed an Application for Abatement with the Commissioner, seeking an abatement of the use tax assessment, which the Commissioner denied on September 25, 2007.  On November 19, 2007, the appellant filed his appeal with the Board.  On the basis of these facts, the Board found and ruled that it had jurisdiction over this appeal. 
According to Mr. Payzant's testimony and the statement attached to his abatement application, he purchased the subject vessel in New Hampshire sometime in November of 2001.  Evidence of the exact date that Mr. Payzant purchased the subject vessel was not entered into the record, but insurance documents entered into the record showed that he began insuring the subject vessel in November of 2001.  He christened the subject vessel with what would prove to be a prophetic moniker: "Blaze of Glory."  It was destroyed by a fire in 2006.  
Mr. Payzant testified that at the time he purchased the subject vessel, he had hoped to find a slip for it in New Hampshire.  However, according to the written statement attached to his Application for Abatement, "[t]he only slip [he] could find at the time of purchase was at Admirals [sic] Hill Marina in Chelsea, Massachusetts."  He testified that he began mooring the subject vessel in Chelsea in May of 2002.  Evidence of the exact date he began mooring the subject vessel in Chelsea was not entered into the record.  Mr. Payzant testified that all of the documents pertaining to the subject vessel were destroyed along with it in the fire.   
The evidence of record concerning the state in which Mr. Payzant resided during the relevant time periods was inconsistent at best. Mr. Payzant at one point testified that he was living on the subject vessel prior to its demise.  Later, upon cross-examination, Mr. Payzant alternately claimed that he was living in Massachusetts and New Hampshire during overlapping periods.  
Q. [ATTORNEY SOLIVAN}  Where do you live now?
A.  [MR. PAYZANT] I live in Pelham, New Hampshire.
Q.  How long have you lived in Pelham, New Hampshire?
A.  Four years.
Q.  When did you begin to live in New Hampshire?
A.  I believe it was September, 2004.
Q.  When you purchased the boat in 2002, you were living in New Hampshire?
A.  I was living in Londonderry, NH.
Q.  So in 2002, you were living in New Hampshire?
A.  Yes.
Q.  Did you ever live in Massachusetts?
A.  Yes.
Q.  When did you live in Massachusetts?
A.  Basically all my life.  Actually, I lived with my girlfriend and we didn't get along.  So from 2001 to 2003, I was living in Londonderry, New Hampshire.
Q. So from 2001 to 2003 you were living in New Hampshire, correct?
A.  Yes.
Q. In 2002, you were still living in New Hampshire?
A.  Yes.
Q.  From 2004 through 2006, you were living in New Hampshire?
A.  Yes.
Q.  From 2006 to 2008, you were living in New Hampshire?
A.  Yes.
Q.  So that means from 2001 to 2008, you were living in New Hampshire?
A.  From 2003 to 2004 I moved back with my girlfriend in Massachusetts.
Q.  Do you know how many months that was for?
A.  No, I don't.
Q.  With the exception of 2003, 2004, you were living in New Hampshire?
A.  Yes.

The Board did not find Mr. Payzant's testimony to be credible. He not only contradicted himself, but his testimony was often contradicted by other evidence in the record.  For example, the home address listed on his 2001 and 2003 Massachusetts income tax returns was 7 Carter Terrace, Somerville, Massachusetts, although in his testimony he claimed that he lived in New Hampshire during those periods.  Mr. Payzant obtained a New Hampshire driver's license in 2008.  Prior to that time, he had a Massachusetts driver's license, despite his claim that he was living in New Hampshire as early as 2001.  The evidence also revealed that Mr. Payzant was employed at U.S. Food Service in Everett, Massachusetts from 1988 to 2003.  During 2003, Mr. Payzant worked for Titan Transportation in Chelsea, Massachusetts, where the subject vessel was moored.  Based on this evidence, the Board found that Mr. Payzant lived in Massachusetts during much of the period relevant to this appeal.  
There was no dispute that the subject vessel was stored and used in the Commonwealth.  The sole issue raised in this appeal was whether the Blaze of Glory was "purchased . . . for storage, use or other consumption" within the Commonwealth.  G.L. c. 64I, § 2.  The appellant argued that at the time he purchased the subject vessel, he had no intent to use it in the Commonwealth.  
On the basis of all of the evidence, the Board found that Mr. Payzant bought the subject vessel in New Hampshire in November of 2001 and subsequently moored it at the Admiral's Hill Marina in Chelsea, Massachusetts.  The evidence of record did not indicate that, at any time relevant to this appeal, the subject vessel was moored anywhere other than in the Commonwealth.  Further, the Board found no support in the record for Mr. Payzant's assertion that he intended at the time of its purchase to use the subject vessel in New Hampshire.  That assertion was plainly contradicted by the statement submitted along with his abatement application that "[t]he only slip [he] could find at the time of purchase was at Admirals [sic] Hill Marina in Chelsea, Massachusetts."  The Board found that Mr. Payzant was fully aware at the time of its purchase that he was going to moor the subject vessel in Massachusetts, rather than in New Hampshire.  Moreover, the uncontroverted facts were that from the time Mr. Payzant purchased the Blaze of Glory to the time of its incineration in 2006, he moored it in Chelsea, Massachusetts and nowhere else.  
Based on these subsidiary findings, the Board found that Mr. Payzant was subject to the tax at issue because he purchased the subject vessel for storage and use in the Commonwealth and in fact stored and used it in the Commonwealth.  The Board therefore found that the Commissioner's assessment of use tax was proper.  Accordingly, the Board issued a decision for the appellee in this appeal. 
                         OPINION
At all material times, G.L. c. 64I, § 2 imposed a five-percent tax on the "storage, use or other consumption in the commonwealth of tangible personal property purchased . . . for storage, use, or consumption within the commonwealth."  Massachusetts residents and non-residents alike are liable for the tax.  See Towle v. Comm'r of Revenue, 397 Mass. 599, 605 (1986).  There was no dispute in the instant appeal that the appellant stored and used the subject vessel in the Commonwealth.  Compare Town Fair Tire Centers, Inc. v. Commissioner of Revenue, 454 Mass. 601, 603 (2009).  The only issue raised in this appeal was whether the Blaze of Glory was "purchased . . . for storage, use or other consumption within the Commonwealth."  The appellant argued that at the time he purchased the subject vessel, he had no intent to use or store it in the Commonwealth, but did so only because he could not find a suitable mooring in New Hampshire.  The Commissioner countered that the appellant was subject to the tax and that the outcome of this case was controlled by the presumption found in G.L. c. 64I, § 8(f), which provides that:  "It shall be presumed that tangible personal property shipped or brought to the commonwealth by the purchaser was purchased from a retailer for storage, use or other consumption in the commonwealth provided that such property was shipped or brought into the commonwealth within six months after its purchase."
The Board found that the evidence of the exact date that Mr. Payzant purchased the subject vessel and the exact date that he brought it to the Commonwealth was inconclusive and therefore found and ruled that the facts of the instant appeal did not give rise to the statutory presumption.  However, even in the absence of the statutory presumption, the burden of proof to establish the right to an abatement rests with the taxpayer.  See Staples v. Comm'r of Corporations and Taxation, 305 Mass. 20, 26 (1940).  In the instant appeal, the appellant had the burden of proving that he was not liable for the use tax imposed by G.L. c. 64I, § 2.  The Board found and ruled that he did not meet that burden.
In support of his position, the appellant offered only his testimony that he had intended to moor his boat in New Hampshire, but was forced to moor it in Massachusetts because he was unable to find a mooring in New Hampshire.  As an initial matter, the Board did not find the appellant's testimony to be credible, as it was contradictory and also contradicted by other evidence in the record.  Further, the Board did not find Mr. Payzant's testimony to be persuasive when weighed against the objective and uncontroverted evidence of record.  That evidence includes the fact that Mr. Payzant admittedly knew at the time he purchased the subject vessel that the only available mooring for it was in Massachusetts; the fact that Mr. Payzant lived and worked in Massachusetts during most of the relevant time period; and the fact that, from the time Mr. Payzant purchased the subject vessel until the time it was destroyed by fire in 2006, the subject vessel was moored at the Admiral's Hill Marina in Chelsea and nowhere else.  Moreover, there was no evidence in the record that Mr. Payzant paid a sales or use tax in another jurisdiction in connection with the subject vessel.  
	On the basis of all of the evidence, the Board found and ruled that the Commissioner properly assessed the tax at issue because the subject vessel was purchased for storage and use in the Commonwealth and was in fact stored and used in the Commonwealth.    The Board thus entered a decision for the appellee in this appeal.

					 THE APPELLATE TAX BOARD


  By: ______________________________________
                        Thomas W. Hammond, Jr., Chairman
A true copy,

Attest:  ___________________________________
              		 Clerk of the Board

 This value was determined using the BUC Used Boat Price Guide.  The tax was assessed at double the amount otherwise due because of the appellant's failure to file a use tax return after the Commissioner's issuance of a Notice of Failure to File.  See G.L. c. 62C, § 28.  
 New Hampshire does not impose a sales or use tax, and there was no evidence in the record that Mr. Payzant paid a sales or use tax to any other jurisdiction in connection with the subject vessel.  
 Mr. Payzant testified that he purchased the boat in November of 2001.  It is unclear from the record whether he misunderstood the question posed by counsel for the Commissioner or whether he simply failed to correct him.  
 The Commissioner took the position that this appeal was controlled by G.L. c. 64I, § 8(f), which creates the statutory presumption that property brought into the Commonwealth within six months of its purchase was purchased for storage, use or consumption in the Commonwealth.  However, the Board found that the evidence of record as to the exact date that Mr. Payzant purchased the subject vessel and the exact date that he brought the subject vessel into the Commonwealth was inconclusive.  The Board therefore found that the facts of the instant appeal did not trigger the presumption found in G.L. c. 64I, § 8(f).  

ATB 2009-994