Fielding v. Commissioner of RevenueAnnotate this Case
The Supreme Court held that four irrevocable inter vivos trusts (the Trusts) lacked sufficient relevant contacts with Minnesota during the relevant tax year to be permissibly taxed, consistent with due process, on all sources of income as “resident trusts.”
The Trusts filed their 2014 Minnesota income tax returns under protest, asserting that Minn. Stat. 290.01(7b)(a)(2), the statute classifying them as resident trusts, was unconstitutional as applied to them. The Trusts sought refunds for the difference between taxation as resident trusts and taxation as non-resident trusts. The Commissioner of Revenue denied the refund claims. The Minnesota Tax Court granted summary judgment for the Trusts, holding that the statutory definition of “resident trust” violates the Due Process Clauses of the Minnesota and United States Constitutions as applied to the Trusts. The Supreme Court affirmed, holding that, for due process purposes, the State lacked sufficient contacts with the Trusts to support taxation of the Trusts’ entire income as residents.