from the Arizona Tax Court The Honorable Christopher Whitten,
Judge No. TX2014-000444
of the Court of Appeals, Division One 242 Ariz. 621 (App.
Brnovich, Arizona Attorney General, Dominic E. Draye
(argued), Solicitor General, Mark Ingle, Assistant Attorney
General, Phoenix, Attorneys for Arizona Department of
Christopher T. Rapp (argued), Ryan Rapp & Underwood, PLC,
Phoenix, Attorney for BSI Holdings, LLC
Timothy I. McCulloch (argued), Erica A. Morris, Dickinson
Wright PLLC, Phoenix, Attorneys for Amicus Curiae Arizona
Business Aviation Association
JUSTICE BOLICK authored the opinion of the Court, in which
CHIEF JUSTICE BALES, VICE CHIEF JUSTICE BRUTINEL, and
JUSTICES PELANDER, TIMMER, GOULD, and LOPEZ joined.
Arizona Revised Statute § 28-8336 establishes a license
tax for "a nonresident whose aircraft is based in this
state for more than ninety days but less than two hundred ten
days in a calendar year." We granted review to determine
the meaning of the term "day" as used in §
28-8336. Although we reject the court of appeals' holding
that it "means any calendar day during which the
aircraft was on the ground in Arizona for any period of time,
" BSI Holdings, LLC v. Ariz. Dep't of
Transp., 242 Ariz. 621, 622 ¶ 1 (App. 2017),
ultimately the meaning can be construed only in the context
of the days an aircraft is "based in" the state.
Because the parties have not fully addressed, nor did the tax
court decide, the meaning of the term "based in, "
we cannot fully resolve the issue on the current record, and
therefore remand to the tax court for further proceedings.
BSI Holdings ("BSI") is an Oregon limited liability
company formed to purchase, operate, and maintain a jet used
by Arizona resident (and BSI member) Richard Burke and his
family for personal purposes. The jet was regularly flown
into and out of Scottsdale Airport, where BSI had a tie-down
arrangement/hangar agreement during the period at issue.
In 2004, BSI and the Arizona Department of Transportation
("ADOT") resolved an aircraft license tax fee
dispute, agreeing that BSI would pay no tax for 2003 and the
nonresident rate applicable for aircraft based in Arizona for
more than 90 days but fewer than 210 days for 2004.
See A.R.S. § 28-8336. BSI subsequently paid the
nonresident rate for tax years 2005 through 2012.
ADOT later conducted an audit and concluded the jet was based
in Arizona for more than 210 days in each year from 2004
through 2012 and therefore subject to the higher license tax
rate prescribed in A.R.S. § 28-8335. The agency assessed
BSI for $161, 004 and recorded a lien against the jet.
After an unsuccessful administrative proceeding, BSI filed
this action to challenge ADOT's assessment. The parties
filed cross-motions for summary judgment disputing, among
other issues, the meaning of the term "day" in
The tax court granted partial summary judgment in favor of
BSI. It concluded that the term "day" in §
28-8336 is undefined and unclear. The tax court cited
State ex rel. Arizona Department of Revenue v. Capitol
Castings, Inc.,207 Ariz. 445, 447 ¶¶ 9-10
(2004), in holding that when statutes' "legislative
intent cannot be determined, they are to be construed
liberally in favor of the taxpayer." Applying that rule,
the court concluded that BSI was entitled to the discounted,
nonresident tax rate in ...