## Facts

- Walter W. “Wally” Backman was born and raised in Oregon and later played professional baseball, including Major League Baseball seasons from 1980 through 1993.
- Oregon taxes “residents,” which for personal income tax purposes generally means Oregon domiciliaries, unless a domiciliary meets the statutory conditions to be treated as a nonresident for a given year.
- Backman filed an Oregon personal income tax return for 1977 but did not file Oregon personal income tax returns for 1988 through 1991 or for 1993.
- The Oregon Department of Revenue issued assessments for Oregon personal income tax, penalties, and interest for tax years 1988, 1989, 1990, 1991, and 1993 on the ground that Backman was an Oregon resident in those years.
- Backman appealed the assessments to the Oregon Tax Court, Magistrate Division, disputing Oregon residency and arguing that even if he remained domiciled in Oregon, he qualified for the “nonresident domiciliary” treatment in some years.
- Evidence supporting continuing Oregon domicile included that Backman:
  - was born and raised in Oregon and, until about 1986, regularly returned to Oregon with his family during the off-season;
  - owned two homes in Oregon, including one used as an address on tax filings in other jurisdictions;
  - maintained Oregon bank accounts;
  - renewed an Oregon driver’s license;
  - obtained Oregon resident hunting licenses; and
  - spent time in Oregon with his wife after his 1993 retirement, as shown by their presence and activities in the state.
- Evidence tending against Oregon domicile included that Backman:
  - did not live in Oregon during baseball seasons because he played for teams located elsewhere;
  - purchased a home in New York in 1988 while playing for the New York Mets, but did not take some common steps associated with shifting domicile there (such as registering to vote or registering vehicles);
  - beginning around 1986, spent off-seasons in Hawaii, where he rented a home and owned a business; and
  - filed nonresident or part-year resident income tax returns in other states for 1988 through 1990.

## Issues

1. Whether Backman was domiciled in Oregon during tax years 1988–1991 and 1993 and therefore treated as an Oregon “resident” for personal income tax purposes.
2. If Backman was domiciled in Oregon, whether he qualified for “nonresident domiciliary” treatment under ORS 316.027(1)(a) for 1988–1991 and/or 1993.

## Decision

- The court found Backman’s domicile remained Oregon during the years at issue based on his objective conduct and continuing Oregon ties.
- The court held Backman met the requirements of ORS 316.027(1)(a) to be treated as a nonresident domiciliary for tax years 1988, 1989, 1990, and 1991.
- The court held Backman did not qualify as a nonresident domiciliary for tax year 1993 and was taxable as an Oregon resident for that year.
- The court resolved the appeal consistently with those year-by-year determinations, sustaining the Department’s position on domicile and on resident treatment for 1993, while recognizing nonresident-domiciliary treatment for 1988–1991.

## Legal Principles

- Oregon “residence” for personal income tax purposes under ORS 316.027(1) is treated as domicile, which involves (1) a fixed habitation or abode and (2) an intent to remain.
- A person may have only one domicile at a time.
- A change of domicile requires both abandonment of the old domicile and establishment of a new domicile.
- Intent regarding domicile is determined from objective, observable conduct (overt acts), not merely stated intent.
- Under ORS 316.027(1)(a), an Oregon domiciliary is treated as a nonresident for a tax year only if the person:
  - does not maintain a permanent place of abode in Oregon,
  - maintains a permanent place of abode elsewhere, and
  - is present in Oregon for no more than 30 days in the aggregate during that year.

## Conclusion

The Oregon Tax Court, Magistrate Division held that Wally Backman never changed his domicile from Oregon during the years assessed, but applied ORS 316.027(1)(a) on a year-by-year basis and determined he qualified as a nonresident domiciliary for 1988–1991 due to his limited Oregon presence and out-of-state living arrangements, while concluding he did not meet the statutory requirements in 1993 after his retirement and was taxable as an Oregon resident for that year.


Backman v. Department of Revenue, 1999 WL 1567108 (1999)