United States v. Bennett

Background

The dispute is between the United States and the owner of a private yacht. The Government sought to recover an excise duty under §37 of the Tariff Act of 1909 that became due on September 1, 1910, on the same yacht involved in a related 1909 tax question decided the same day. The case was submitted to the trial court by agreement without a jury. The trial court found that the owner was a U.S. citizen who for several years had been living and resident in the Republic of France.

Reasoning

The central question was whether the 1909 law applied when a U.S. citizen owner had been permanently living abroad for more than two years before the September 1, 1910 levy. Following the reasons given in the companion Goelet decision, the Court answered that question in the negative, holding the statute did not apply in these circumstances. Because of that conclusion, the Court declined to answer the other certified questions. The practical result is that the owner prevailed against the Government’s claim to recover the tax.

Real world impact

The ruling prevents the Government from collecting the 1910 excise duty on this yacht based on the owner’s long-term foreign residence, and it protects similarly situated owners in like factual situations. The decision tracks a companion case and leaves open the possibility of further lower-court action because the Court noted conflicting factual findings with an earlier related case, which could affect future proceedings.