Montana justices order Texas businessman to pay taxes

Montana justices order Texas businessman to pay taxes

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HELENA — A retired Texas businessman who said he was a Montana resident in order to vote, drive, buy hunting and fishing licenses, obtain a concealed weapons permit and register vehicles owes the state more than $500,000 in income tax, interest and penalties, the Montana Supreme Court ruled.

Clayton A. Greenwood "held himself out as a Montana resident and enjoyed many of the benefits and privileges granted by the state of Montana during the 2008 to 2012 audit years. He now seeks to bear none of the cost," Justice Jeremiah Shea wrote Tuesday in the 5-0 ruling.

Greenwood's attorney, James Ramlow of Whitefish, declined to comment.

The case stems from a 2013 Department of Revenue audit of Greenwood's nonresident individual income tax returns for the previous four years.

Greenwood and his family had lived in Kalispell from 1999 to 2004 before moving back to Houston, where he owned businesses.

However, Greenwood did not obtain a Texas driver's license and even renewed his Montana driver's license in 2010, the Department of Revenue found. He affirmed his Montana residency in voting, buying resident hunting and fishing licenses and obtaining a concealed weapons permit, investigators found. He acknowledged registering vehicles in Montana to avoid Texas sales taxes, court records said.

The Department of Revenue ordered Greenwood to pay more than $515,000 in income tax, interest and penalties.

"Mr. Greenwood's ability to misrepresent himself when it favors him calls his credibility into question," the Montana Tax Appeal Board said in upholding the agency's decision. A state District Court judge affirmed the board's decision regarding Greenwood's residency status in August 2019.

In his appeal to the Montana Supreme Court, Greenwood's attorney argued that District Court Judge James P. Reynolds wrongly focused on Greenwood's "improper and self-serving declarations of Montana residency rather than on the objective factors required by law to determine residency," such as buying a house in Texas and obtaining medical care there.

Greenwood argued he was a "Texas resident who improperly claimed the benefits of residence in Montana," during the audit years of 2008 to 2012.

The justices disagreed.

"Greenwood repeatedly took specific actions to maintain the benefits and privileges of a Montana residence, despite his current self-serving assertions that he intended to establish a Texas residence," justices wrote.

Any possible additional penalties and interest owed would be confidential, said Sanjay Talwani, spokesperson for the Department of Revenue.

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