                                  NO.    96-398
              IN THE SUPREMECOURT OF THE STATE OF MONTANA
                                        1996


JACK G. PLETCHER,
              Petitioner   and Appellant,
         v.
MONTANADEPARTMENT REVENUE,
                 OF
              Respondent   and Respondent.



APPEAL FROM:        District  Court of the Eleventh Judicial  District,
                    In and for the County of Flathead,
                    The Honorable Katherine R. Curtis,  Judge presiding.


COUNSEL OF RECORD:
              For Appellant:
                    James M. Ramlow; Kaufman,       Vidal    & Hileman,
                    Kalispell, Montana
              For Respondent:
                    Deborah Harten, Tax Counsel, Special          Assistant
                    Attorney General, Montana Department          of Revenue,
                    Helena, Montana


                                  Submitted    on Briefs:      November 7, 1996
                                                  Decided:      December 31, 1996
Filed:
Justice        W. William          Leaphart       delivered           the Opinion             of the Court.


         The Montana Department                  of Revenue (Department)                      assessed         taxes,
interest         and      penalty         against         the      appellant,           Jack         G.    Pletcher
(Pletcher),            for Montana income earned from his employment                                      in Alaska
during         the     years        1982     through             1992.         Pletcher          appealed          the
assessment            to the State          Tax Appeal Board                  (STAB), which            ruled     that
he was a resident                 of Montana for                income tax purposes                  during      that
period       of time.            Pursuant     to the Montana Administrative                               Procedure
Act,     Pletcher         then requested              judicial       review      of the STAB ruling                   in
the Eleventh           Judicial       District          Court.        He appeals         from the District
Court        ruling       that     he was a resident                     of   Montana         for      income      tax
purposes.             We affirm       the decision               of the District              Court.
                                           Factual        Backsround
         The facts         as they were developed                    by the Department's                   hearings
examiner        and again          by STAB are as follows:
         Pletcher         was employed by Udelhoven                       Oilfield           System Services,
Inc.      on the       Alaska       North     Slope        from      September,           1981 to October,
1992.         During       that     period       of     time,       Pletcher         lived      and worked            in
Alaska,        visiting          his wife     and children               in Columbia          Falls,       Montana,
during       regularly           scheduled       leave      periods.
         Pletcher's              Alaska     work for        Udelhoven          was full          time.         Within
a few years            he assumed managerial                     responsibilities              for     Udelhoven.
Udelhoven             supplied         general           contracting             services,                including
construction              and      maintenance            for       ARC0 and           British            Petroleum
facilities            on the Prudhoe Bay and Kuparuk River                               "reservations"               on
the     Alaska            North       Slope.             Pletcher               supervised         as many as                100
employees            at      a      time        and     took        charge,          from        1986      to       1989,     of
Udelhoven's               entire      North       Slope operations.                       From 1989 to 1992,                  he
acted       as its         senior      project          manager.
           STAB concluded              that       Pletcher's              presence        in Alaska         was not for
the purpose               of taking          on a series                 of "temporary"            jobs.
        He was in fact      a permanent employee,       for employment
        purposes, working the same periods,     shifts,    and hours as
        other employees of this company .             The Board agrees
        with [Pletcherl   that he was not taking on some seventy to
        eighty separate "temporary"    jobs for the same employer at
        the same location    over an eleven year period.
           Prior     to 1982, Pletcher                   lived          in Columbia         Falls,        Montana,          with
his     wife        and         children          and     filed            Montana        resident              income       tax
returns.           During           his decade of employment                        in Alaska,            Pletcher          made
regular        trips        to Montana to stay with                            his family        in Columbia           Falls.
These trips,               with      one exception,                 never         exceeded more than                  two and
one-half           weeks.           He continued               in        this     routine        until      Udelhoven's
North       Slope         operations             terminated               in     1992.      In September,                1991,
while        on      a      visit          to     Montana,               Pletcher         purchased             a    Montana
nonresident               fishing          license.
           Pletcher          spent         the majority                 of his     time     in Alaska.              He had a
permanent           apartment          unit       for     his       private         residence            and storage            on
the North          Slope.           Pletcher          was assigned               his own company vehicle                     and
oilfield           identity          cards       which were required                      in place         of an Alaska
driver's           license.
           During         his       eleven       years         of       employment          in    Alaska,           Pletcher
filed       federal          income tax returns,                         but did not file                Montana       income
tax     returns            on his          Alaska       earnings,               having      been advised              by his
                                                                    3
accountant            that          Montana          returns          were not             required.              Pletcher           did
not pay state                  income tax on his Alaska                            earnings           because Alaska                does
not    levy      such a tax.                   In November of 1991,                           the Montana Department
of Revenue sent                     an inquiry               letter         to Pletcher               requesting           that        he
file      returns          for       the years              1985 through               1990 or explain               why he had
not filed            those         returns.            Pletcher             responded            by explaining               that      he
had been absent                     from Montana                for        more than           half      of each of those
years,         had earned              all      of his           income outside                   of Montana,              and had
declared         himself             a nonresident                    on a Montana conservation                            license
earlier        that        year.
          In January                of 1992,          Pletcher             filed        1985 through              1990 Montana
income         tax        returns           jointly           with         his        wife.           The returns             listed
Pletcher             as        a    part-year               resident             of      Montana.             Subsequently,
Pletcher         filed             amended returns                   for    those        years         showing       his      filing
status         as     married,               filing           separately,                 nonresident.                 He filed
similar         nonresident                  returns           for       the     years        1983,       1984,       and 1991.
The Department                     adjusted           all      of     the        returns         to     reflect       full-year
residence            status          and assessed                   Montana           income       taxes,         interest           and
penalties            accordingly.
                                                 Standard              of Review
          The District                Court was called                     upon to determine                 whether          STAB's
conclusion            of law that              Pletcher              was subject              to Montana state                income
tax       on    his        earnings             in      Alaska             was        correct.             Steer,          Inc.        v.
Department                of       Revenue            (1990),              245     Mont.         470,       803      P.2d           601.
Likewise,             we           review       the           district             court's             interpretation                  to
determine            whether           it     correctly               applied           the      law.       Isaak       v.        Smith

                                                                      4
(1993)     I   257 Mont.        176,         848 P.2d 1014 (overruled                      on other            grounds).
         The issue           presented          for    our resolution               is    as follows:
               Did the District      Court err by finding that, although
         Pletcher   was a full-time,      permanent employee in Alaska,
         he was still    liable   for payment of Montana income taxes
         on his Alaska        wages because he still       maintained    a
         domicile   in the state of Montana?

                                                      Discussion
         Resolution            of     this      appeal       hinges         on a determination                      as to
whether        Pletcher,            during     the years         that       he worked in Alaska,                     was a
resident         of Montana under                   the provisions           of § 15-30-101(16),                      MCA,
which      states:
                (16)  "Resident" applies only to natural     persons and
         includes,   for the purpose of determining  liability     to the
         tax imposed by this chapter with reference      to the income
         of any taxable year, any person domiciled     in the state of
         Montana and any other person who maintains          a permanent
         place of abode within     the state even though temporarily
         absent from the state       and who has not established         a
         residence    elsewhere.
         Pletcher           contends         that     the finding           by the Department                   and STAB
that     he was permanently                    employed          in Alaska          on a full-time                   basis
inescapably            leads        to the conclusion                that    his     absence             from Montana
was not        "temporary"                and thus      he does not           fit        within          the    § 15-30-
101(16),         MCA, definition               of a "resident"              subject        to tax.             We reject
Pletcher's             contention            that       permanent           employment              out        of    state
necessarily            translates            to permanent            absence from the state.
         Section        15-30-101(16),                MCA, clearly           provides             that     "resident"
includes         all    other       persons         who have a "permanent                  place         of abode" in
the      state         of     Montana.                The    Department's                regulations                define
"permanent             place         of      abode"         as   a    dwelling            place           permanently

                                                             5
maintained           in Montana which                 he habitually                 uses as his          home.          ARM
42.15.104.            The agency's             interpretation                 of a statute            governing         its
operations           is    entitled         to deference               from      this     Court.            Department
of Revenue v. Kaiser                    Cement Corp.            (lPPO),             245 Mont.         502,     803 P.2d
1061.
         Although          Pletcher         maintained          permanent             employment            in Alaska,
the record         is clear          that      he came to his home in Columbia                               Falls     when
he     did     not        have     to       work.         Columbia             Falls           was    the      home he
established           before       he went to Alaska                   and is         the home in which                 his
wife     and family             continued        to reside            in his         absence.
         Section          l-1-215(1),          MCA, provides              that       a residence             is where a
person       remains        when not called             elsewhere             for    labor      or other         special
or temporary              purposes      and to which he returns                         in seasons of repose.
Further,        one's        domicile          is not lost            until         another      is    gained.          ARM
42.15.102(l),              provides         as follows:
         A domicile,    once established,  continues  until   abandoned
         and a new one acquired.          A change in domicile        is
         accomplished    only by a union of act and intent.        There
         must be intent    to change one's domicile,  actual removal,
         and acquisition      of a new domicile.     Domicile    is not
         changed by temporary absence or by absence for a special
         or particular    purpose.
         In the present                case,     although            Pletcher         worked         in Alaska,         his
ties     to    Alaska           were    strictly         work-related.                  The record             does      not
evidence        any intent             on the part        of Pletcher                to change his             domicile
from     Montana           to    Alaska.            Pletcher          and his           wife     continued            their
ownership        of the home and farm at Columbia                                    Falls      and his        wife      and
family        remained          on the farm throughout                   the entire            period.         Pletcher
kept     his Montana driver's                   license        all     eleven years              he was in Alaska

                                                           6
and his       name remained               with      his wife's            name on certain            Montana bank
accounts.
          Section           15-30-132,            MCA, provides             "[ilf        a resident               obtains
employment              outside         the       state,      income         from       such        employment          is
taxable          in     Montana."             When this         statutory             provision         is      read    in
conjunction              with      5      15-30-101(16),               MCA, it           is    clear         that      the
legislature             meant to tax              residents          of this         state    who work outside
the      state        but    maintain            a domicile          or    residence           in    the       state    of
Montana.              Pletcher's          contention          that     he can maintain               his       domicile
within       the        state      of     Montana          and hold         down permanent                 employment
outside          the state         of Montana free             of Montana taxation                   would defeat
this      clear        legislative            intent.
          The legislative                intent      is further           buttressed          by the provisions
of § l-l-215,               MCA, which provide:
          Residence -- rules for determining.        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 one remains when not
          called elsewhere for labor or other special or temporary
          purpose and to which he returns       in seasons of repose.
                (2)    There can only be one residence.
                (3) A residence cannot be lost until        another is gained.
                      . .
                (6) The residence can be changed only by the union
          of act and intent.
          The record             indicates           that     Montana          was the          state        in     which
Pletcher          remained         when he was not called                   elsewhere          for     labor        and to
which      he returned             in seasons of repose.                       We also        note      that       during

tax      years         1983,      1984 and 1986,               Pletcher             claimed     money spent             on
airline          tickets        to Alaska          as away-from-home                  business       expenses.
          The Department                relies      on a decision           from the Minnesota                    Supreme
court,      Manthey v. Commissioner                         of Revenue (Minn.                 1991),              468 N.W.2d
548.        The Minnesota                 Supreme Court              concluded             that        Manthey            was a
Minnesota          taxpayer         because he had maintained                         significant                  ties     with
Minnesota           while         working          in     Alaska.          While       he was employed                         in
Alaska,       Manthey            supplied          financial         support         for      his           wife     and two
children           in      Minnesota;             he      maintained           his       Minnesota                  driver's
license;          owned,         licensed         and registered              vehicles            in        the     state      of
Minnesota;              purchased          resident         hunting          licenses         in        the        state       of
Minnesota;          purchased             and maintained            rental      property;              and kept            joint
checking          accounts         in Minnesota.               Manthev,            468 N.W.2d at 549.
          Pletcher's            argument          is even less         compelling             than Manthey's                   in
that     Manthey had established                         stronger      ties        to the state                of Alaska;
he obtained              an Alaska            driver's         license;           performed             jury         duty      in
Alaska;      joined         fraternal            organizations,            registered             and licensed                his
car      and trailer             in Alaska;             purchased      Alaska         resident               hunting          and
fishing       licenses            and purchased             Alaskan        real      estate.                Manthev,          468
N.W.2d       at     549.          Pletcher,         on the         other      hand,        cannot            make any of
these      claims.          Although             he did register             to vote         in Alaska,                   he did
not do so until                 1992, some nine months after                         the Montana Department
of Revenue questioned                      his     residency        status.           Furthermore,                  he never
did      exercise         his     right     to vote         in Alaska.              Pletcher's               purchase          of
a non-resident                  conservation              and fishing              license             in     Montana              in
September           of      1991      was approximately                      two     months            prior          to      the
Department's              inquiry         into     his     tax returns.
          We hold          that      the      District         Court         correctly            interpreted                 the
phrase       "temporarily             absent            from the state"             as it         is used in 5 15-

                                                               a
30-101(16),       MCA, as modifying        persons      domiciled     in     the    state      of
Montana      and who maintain      a permanent        place    of abode in          Montana.
Pletcher's        permanent     employment       in   Alaska   does        not     equate      to
permanent      absence from the state.           The record    supports          the finding
that   Pletcher     has maintained     a permanent       abode in Montana to which
he has returned       when he is not working          in Alaska.      Accordingly,          the
decision      of the District      Court   is affirmed.




               Justices




                                             9
Justice          Terry           N. Trieweiler                   dissenting.
            I dissent            from       the     majority's                   conclusion              that        Jack     G. Pletcher

was      a resident                of     Montana               for      purposes               of      income          tax        liability

during         the      years           1982       through              1992.            In     order           to     arrive         at       that

conclusion,                the     majority               has necessarily                       had to           extract           a portion

of      the      applicable                 residency                  statute            and         completely                ignore          the

remaining            language             in      the      same statute.

          The only               relevant           definition                   of    "residency,n                  for      purposes            of

determining                whether             Pletcher               was        a resident               during            the     years         at

issue,          is    the         definition                   found        in        Montana's            Income            Tax      Code        at

§ 15-30-101(16),                     MCA.           That         section              provides           that:

                  "Resident"       applies      only    to natural         persons       and
          includes,      for the purpose of determining            liability        to the
          tax imposed by this          chapter     with reference       to the income
          of any taxable        year,   any person domiciled          in the state        of
          Montana      and any other        person     who maintains         a permanent
          place     of abode within        the state      even though        temporarily
          absent      from    the state       and who has not established                   a
          residence       elsewhere.

(Emphasis            added.)

          The        majority               opinion                  uses         "domiciled"                    and         "person            who

maintains            a permanent                  place         of     abode"           interchangeably.                          "Domicile"

is    not      otherwise             defined              in     the     majority              opinion.                Therefore,               the

discussion            in     the        dissent           is     limited              to the         conclusion              on which           the

majority's             decision             is      based.              That          conclusion            is       that:           "Section

15-30-101(16),                    MCA, clearly                   provides              that          'resident'              includes           all

other         persons        who have              a 'permanent                   place        of      abode'          in the        state        of

Montana."




                                                                         10
           The     majority                completely                  ignores           the         remainder               of        the
definition               which        further             limits            residency            to         those           who        are

"temporarily               absent          from         the     state"           and    have         "not        established                  a

residence              elsewhere."                  (Emphasis              added.)              In      other             words,         if
Pletcher           Was       located               in         Alaska        permanently,                    or       if       he       had
established              residency          in Alaska,                it   makes no difference                       that         he had

a permanent              place      of      abode        in     Montana.

           1n spite         of      this      plain            language,            neither           the        Department              of

Revenue's              hearing           examiner,               the       State         Tax     Appeal              Board,            the

District           Court,           nor       the         majority,               have         even         considered                 the

residency          requirements                 for       Alaska,           or     whether           Pletcher              satisfied

those         requirements.                        An          examination               of     Alaska's                   residency

requirement              leads       to      the        conclusion               that     Pletcher               clearly           was        a

resident          of     Alaska.            Alaska            Stat.        § 01.10.055               (1983)         provides             as

follows:

            (a)    A person establishes                residency        in the state         by being
           physically          present      in the state with the intent                   to remain
           in the         state     indefinitely           and to make a home in the
           state.
                    (b)      Aperson       demonstrates          the intent        required      under
            (a) of this          section
                    (1)      by maintaining            a principal           place     of abode in
           the state         for at least          30 days or for a longer                 period      if
           a longer         period     is required          by law or regulation;                and
                    (2)      by providing           other      proof     of intent        as may be
           required         by law or regulation,                 which may include              proof
           that    the person            is not claiming             residency         outside       the
           state      or obtaining            benefits       under a claim            of residency
           outside        the state.
                    Cc) A person who establishes                      residency        in the state
           remains         a resident           during      an absence           from     the     state
           unless        during       the      absence       the person           establishes          or
           claims       residency        in another        state,      territory        or country,
           or performs           other     acts or is absent under circumstances
           that      are inconsistent               with      the intent          required       under
            (a) of this          section       to remain        a resident         of this      state.

                                                                      11
          Pletcher                satisfied              all      the        requirements                 for      residency                    in    the
state         of      Alaska.                 He was employed                     there        for         over         ten         years            on a

full-time                basis.           He had a permanent                         apartment             there         (private                homes

were        not       available).                     He spent               seven     to     eight         months                per        year        in

Alaska         during             this        entire           time,         and visited             his        family             in     Columbia

Falls         during           only           those      brief          periods             when he was granted                                 leave.

His      permanent                return         to Montana                  had not        been planned.                          It     occurred

because            his      employer's                 operations              terminated             in        1992.             In the         terms

of      the        statute,              he was physically                        present            in     the         state             with        the

intent         to        remain          in    the      state          indefinitely,                 as demonstrated                            by the

fact      that           his      principal              place          of     abode        was in         that          state            for        more

than      thirty            days,         and other              than        a brief         period         during            1983,             he did

not      claim           residency             outside            of    the       state       for     purposes                of         obtaining

benefits

          The State                 Tax Appeal                 Board          (STAB)        specifically                  found              that:

          It is clearly       recognized        that   Mr. Pletcher        was not in
          Alaska    for temporary       employment     purposes.      He was in fact
          a permanent       employee,      for employment        purposes,     working
          the same periods,        shifts,     and hours as other employees            of
          this   company,     according       to the evidence         that    has been
          presented      to the Board.             The Board      agrees     with    the
          taxpayer     that    he was not taking            on "some seventy           to
          eighty    separate    'temporary'       jobs for the same employer           at
          the same location         over an eleven        year period."

          Therefore,                  based           on the           STAB's        own finding,                  Pletcher                  was not

out      of    the         state         temporarily.
          The            majority              completely                ignores             those          parts             of         §      15-30-

101(16),              MCA,          which         link           residency             in     Montana              to         a         "temporary

absence"              from         the        state,           and      which        exclude              from      residency                    those

persons             who have             established                   a residence             elsewhere.

                                                                             12
          Instead,              the       majority                  discusses                those             factors              set      forth           in

5 l-1-215(1),                   MCA;        § 42.15.102(l),                           ARM, which                 describes                  how a new
domicile           is     acquired;                and the Minnesota                             Supreme             Court's          decision               in

Mantheyv. Commissionfv of                         Revenue              (Minn.          1991),             468 N.W.2d                  548.

          Those          factors             for       determination                         of         residency                  which          are       set

forth      in     § l-1-215(1),                       MCA, are           irrelevant.                          Residency              for        purposes

of      income          tax     liability                 is        specifically                       defined           in        Montana's                Tax

Code at           § 15-30-101(16),                          MCA.

          The      discussion                    at    § 42.15.102(l),                            ARM,         regarding                  the      method
for     changing              domicile,               sheds          no light               on the            issue      before             the         Court

because            domicile                 is        not        defined,                   and          if       it          is      being              used
interchangeably                      with         residency,                it        is     clear            that       Pletcher                 changed

his      domicile             by      intending                to      do so and actually                                removing                 himself

from       Montana             and      acquiring                    a new domicile.                              Furthermore,                         as    is

apparent           from        the     previous                discussion,                       his     absence              from         this         state

was by no means                      temporary.

          Finally,              the     Minnesota                   Supreme                Court's             decision              in      Manthey is

irrelevant              to the         discussion                    in this           case            because          that         decision               was

not      based          on a statutory                         definition                   of         residency               similar             to       the

Montana           Tax     Code's            definition,                  by which                  we are             bound.

          The majority                  also          attaches            some significance                              to         the     fact         that

during          tax      years          1983,           1984,           and       1986            Pletcher              claimed                 that        the

money        spent            on      airline               tickets              to         Alaska             were           "away-from-home

business              expenses."                   That         fact      has          no significance.                               Presumably,

the     tickets           provided               round-trip               transportation,                              and since                Pletcher


                                                                          13
owned a sheep                 ranch         in Montana,               the     travel           would      have been business
related         regardless                  of     which       location            he considered               his      home.

          I    conclude              that        to       recover           income        taxes        from        persons      whose

sole      source         of     income           is       derived         outside         the      state      of     Montana,       the
Department              of     Revenue             must       prove         that        that      person       is     temporarily

absent         from      the     state           &         has not          established             residency           elsewhere.

In      this       case,             it      was          clearly           established                that         Pletcher        was

permanently              absent             from      the      state         and had established                      a residence

elsewhere.                   Therefore,               I     dissent           from       the      majority           opinion.             I

would         reverse          the        judgment           of     the      District            Court.




                                                                       14
