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Law Digest — Md. Court of Special Appeals — Sept. 16, 2021

Maryland Court of Special Appeals

Administrative Law; Exhaustion of remedies: Judgment of the circuit court dismissing petition for judicial review of developers’ Forest Conservation Plan affirmed, because such plans are but one component of the administrative approval process, and their approval does not allow for a separate, statutorily authorized mechanism of review subject to exhaustion. Chesapeake Bay Foundation, Inc., et al. v. CREG Westport, LLC, et al., No. 1063, Sept. Term, 2020.

Criminal Law; Felony murder: The manslaughter by vehicle statute, codified as by the Criminal Law Article §2-209, does not preempt a charge of common law felony murder when a motor vehicle is involved. Harris v. State, No. 1515, Sept. Term, 2019.

Tax Law; Sales and use exemption: In order for an aircraft to qualify for the sales and use tax exemption under §11-208(c)(1) of the Maryland Code, Tax – General Article, which states that an aircraft, motor vehicle, railroad rolling stock, or vessel that “is used principally to cross State lines in interstate or foreign commerce is exempt from the State’s sales and use tax,” the aircraft must be used for a commercial or business purpose; therefore, the Tax Court erred in applying the exemption in §11-208(c)(1) of the Tax Code to an aircraft where the owner purchased the aircraft for the personal purpose: of teaching his son to fly, there was no business purpose for the friends and family flying on the airplane, none of the flights involved the movement of freight or cargo, and none of the flights involved the movement of passengers for a commercial or business purpose. Comptroller of Maryland v. Atwood, No. 163, Sept. Term, 2020.

Administrative Law

Exhaustion of remedies

BOTTOM LINE: Judgment of the circuit court dismissing petition for judicial review of developers’ Forest Conservation Plan affirmed, because such plans are but one component of the administrative approval process, and their approval does not allow for a separate, statutorily authorized mechanism of review subject to exhaustion.

CASE: Chesapeake Bay Foundation, Inc., et al. v. CREG Westport, LLC, et al., No. 1063, Sept. Term, 2020 (filed Sept. 8, 2021) (Judges Shaw Geter, WELLS & Ripken).

FACTS: CREG Westport I and Harford Investors, LLP (hereafter “the developers”) sought Harford County’s approval of their plan to develop a mixed-use business park bordered by Interstate 95 and Edgewood and Abingdon Roads in Harford County. The completed project, to be called the Abingdon Business Park, would have retail venues, restaurants, a hotel, and warehouses.

The site, also known as Abingdon Woods, is zoned Commercial-Industrial. It is composed of multiple parcels and covers over 300 acres of forested land, including nontidal wetlands. Because the land is mostly forested, it is subject to the Harford County Forest and Tree Conservation Plan Regulations and to a Forest Stand Delineation as found in the Maryland Code (2012 Repl. Vol., 2016 Supp.), Natural Resources Article (“NR”) §5-1605 and the Harford County Code (hereafter, “County Code”) §267-37. As they were required to do, the developers submitted an FCP, outlining the specific strategies the developers would take to retain, protect, and reforest the site, consistent with the provisions of the 1991 Maryland Forest Conservation Act. See NR §§5–1603(a), 5–1604, and 5– 1605.

The Director of the Harford County Department of Planning and Zoning (hereafter, “the Department”) approved the FCP on December 9, 2019. A month later, January 8, 2020, the Chesapeake Bay Foundation and several local homeowners (hereafter, collectively referred to as “the Foundation”) petitioned for judicial review of the FCP. The developers moved to dismiss, arguing that the FCP was not a final decision of the Department. The Circuit Court for Harford County set the matter for a hearing on August 19, 2020.

In the meantime, and prior to the August 19 hearing, the developers submitted a preliminary plan application to the Department, which, among other things, sought to consolidate several of the parcels and create a public road. The Department approved the preliminary plan on January 17, 2020. And, the developers submitted a site plan for three lots, specifying what buildings were to be constructed and the specific uses for each lot. The Department approved Lot 1 on February 19, 2020 and subsequently approved Lots 2 and 3 five days later, February 24, 2020. These approvals allowed the developers to begin construction of the business park.

The hearing on the motion to dismiss was held as scheduled on August 19, 2020, after which the court took the case under advisement. On November 22, 2020, the court issued a memorandum opinion and order that sided with the developers, concluding that the FCP was “not a final decision of the Department [of Planning and Zoning].”

Significantly, the Foundation chose not to challenge either the Department’s approval of the preliminary plan or the approval of the site development plan. Instead, the Foundation appealed from the circuit court’s dismissal of the petition for judicial review. Satisfied that the circuit court did not commit error, the Court of Special Appeals affirmed.

LAW: Both parties agreed that the so-called rules of “exhaustion” and “finality” applied in this case. In other words, before a party seeks judicial review of an administrative agency’s actions, they must first exhaust all statutorily prescribed administrative remedies and the agency’s action must be its final one. See Renaissance Centro Columbia, LLC v. Broida, 421 Md. 474, 487 (2011). They disagreed about whether an FCP is a final administrative decision of the Department.

“When a legislature provides an administrative remedy as the exclusive or primary means by which an aggrieved party may challenge a government action, the doctrine of administrative exhaustion requires the aggrieved party to exhaust the prescribed process of administrative remedies before seeking ‘any other remedy or invok[ing] the ordinary jurisdiction of the courts.’” Priester v. Baltimore County, Maryland, 232 Md. App. 178, 193 (2017) (quoting Soley v. State Comm’n on Human Relations, 277 Md. 521, 526 (1976)). Soley explained that the exhaustion rule is based, in part, on the “discretionary nature” of agency decisions and the “expertise” that “the agency can bring to bear in sifting the information presented.” Id.

The United States Supreme Court has emphasized that administrative exhaustion acts as a brake on judicial interference in the administrative process. “[T]he rule requiring exhaustion of administrative remedies, is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties.” United States v. Western Pac. R.R. Co., 352 U.S. 59, 63–64 (1956). “‘Exhaustion’ applies where a claim is cognizable in the first instance by an administrative agency alone; judicial interference is withheld until the administrative process has run its course.” Long Green Valley Ass’n v. Bellevale Farms, Inc., 205 Md. App. 636, 690 (2012) (quoting Western Pac. R.R., 352 U.S. at 64).

The Court of Appeals has explained that “an agency order is not final when it is contemplated that there is more for the agency to do.” Kim v. Comptroller, 350 Md. 527, 533–34 (1998). So, “[t]o be ‘final,’ the order or decision must dispose of the case by deciding all questions of law and fact and leave nothing further for the administrative body to decide.” Willis v. Montgomery Cnty., 415 Md. 523, 534 (2010) It has been said that exhaustion and finality “overlap” to the extent that “a party must exhaust the administrative remedy and obtain a final administrative decision…before resorting to the courts.” Laurel Racing Ass’n, Inc. v. Video Lottery Facility Location Comm’n, 409 Md. 445, 460 (2009).

Here, Harford County has a comprehensive process for regulating development. The process for approval of a preliminary or a site plan, (either of which allows the owner-developer to start construction), begins with the owner-developer filling out a “site plan application.” The plan must be submitted to the Department for review by all necessary county agencies. County Code § 267-3. Subdivision of more than five residential lots and development of institutional and commercial sites must be reviewed by the Development Advisory Committee (DAC). County Code §268-19. The DAC advises the director of planning about major subdivisions and large-scale developments. Id. The DAC is composed of representatives of county, state, federal, and utility agencies. Each county agency represented on the DAC provides oral or written comment expressing that agency’s recommendation or opinion regarding each development plan under review by the committee. The DAC meeting is also a forum for the public to address issues and comment, with adequate notice being given to the public by conspicuously posting a sign near the property as well placing a notice in two newspapers of general circulation in the county. County Code §268-19(4) and (5).

As part of the site plan application, a developer must submit an FCP, among several other requirements, such as, site plans, a landscaping/lighting/buffer plan, a storm water management concept, and a traffic impact analysis “to ensure acceptance of the plan for processing.” As previously discussed, an FCP is required by County Code §267-37 and NR §5-1605.

After reviewing the County Code and the relevant statutory authorities the Court discovered no means by which an FCP may be administratively reviewed, except in the context of the approval of an overall development plan. For example, County Code §267- 37(D) indicates that the FCP should be viewed as part of the Department’s approval of a preliminary plan or a site plan.

“The Department’s review of a forest conservation plan shall be concurrent with the review of the subdivision plan, grading permit application or building permit application associated with the project.” Additionally, NR §5-1608(a) has an almost identical provision: “The review of the forest conservation plan shall be concurrent with the review process of the State or local authority for the subdivision plan, or the grading or sediment control permit, whichever may be submitted first.”

From our review of the relevant statutory authority, there did not appear to be a statutorily derived means of obtaining judicial review of an FCP as an “independent” or “stand alone” agency decision as the Foundation insists. Instead, what was understood from County Code §267-37(D) and NR §5-1608(a) was that the Department’s approval of an FCP is but one component of the entire zoning process and is subject to the county’s review of the entire subdivision plan.

Consistent with the its obligation to make sense of seemingly conflicting county zoning provisions, the Court read the county charter and the County Code together to effectuate the overall regulatory scheme, which in this case involves county approval of commercial construction. It give greater weight to the county’s charter as the authorizing authority for when appeals may be filed in zoning cases. See Smallwood, 327 Md. at 237. The charter makes clear that only “final” decisions of the Department may be the subject of judicial review in the circuit court.

It was concluded that there is not a separate right to seek judicial review of an approved FCP any more than there is a sperate right to seek a separate review of any other component of a zoning site plan. Indeed, the developers were accurate when they referred to the FCP as part of a negotiation between the relevant agencies and the Department. Once the FCP, like other “negotiations” the DAC (and ultimately the Department) considers, is approved it then becomes an essential term of the contract between the developers and the county. That contract was a preliminary plan or a site plan. In this case, the developer had to obtain both. And only with a preliminary plan or a site plan may the developer begin construction.

Turning specifically to the issue of finality, it was concluded that the Department’s approval of an FCP did not end the administrative process. After reviewing Harford County’s zoning policies and the comprehensive process that the county has established to approve large-scale commercial development such as the Abingdon Business Park, it was determined that preliminary plan approval, or site plan approval, were “final” actions of the Department which only then triggered judicial review of any of the components of the approved plans under County Charter §709 and County Code §268-28.4 The mere approval of the FCP during the process left “more for the agency to do,” such as assessing the impact that the development will have on local traffic, storm water management, surveys and the creation of plats, public hearings, etc. The goal, and therefore the final stage in the process, was for the developer to commence construction. That could only occur after the site plan was ultimately approved. Consequently, to allow judicial review of an FCP in the middle of the zoning approval process would have amounted to the type of “piecemeal” consideration of administrative decisions which the Court of Appeals has strongly disfavored. Driggs Corp., 348 Md. at 407–08.

Accordingly, the judgment of the circuit court was affirmed.

COMMENTARY: While the Foundation argued that the county’s approval of an FCP “marks the end of the [c]ounty’s decision-making process with regard to the removal, retention, and replacing of forested area associated with the development,” the Court agreed that approval of an FCP indeed ends that part of the approval process. But the Court disagreed that simply because that part of the process ends, a party then has a right to seek judicial review, particularly where none is statutorily permitted.

The Court of Appeals has explained that “in order for an administrative agency’s action properly to be before this Court (or any court) for judicial review, there generally must be a legislative grant of the right to seek judicial review.” Appleton v. Cecil County, 404 Md. 92, 98–99 (2008). Maryland Rule 7–201(a) regulates an action to review an order or action of an administrative agency “where judicial review is authorized by statute….” See Bucktail, LLC v. County Council of Talbot County, 352 Md. 530, 541 (1999) (noting that Maryland Rules 7–201 and 7–202 do “not grant a right of judicial review, and … [are] inapplicable where judicial review is not authorized by statute”).

Here, it was concluded that the Department’s approval of an FCP was but one stage of the development process for which there is no separate mechanism of administrative review subject to exhaustion.

  

PRACTICE TIPS: “The action of an administrative agency is final if it determines or concludes the rights of the parties, or if it denies the parties means of further prosecuting or defining their rights and interests in the subject matter in proceedings before the agency, thus leaving nothing further for the agency to do.” Arnold Rochvarg, Principles and Practice of Maryland Administrative Law 190 (2011).

Criminal Law

Felony murder

BOTTOM LINE: The manslaughter by vehicle statute, codified as by the Criminal Law Article §2-209, does not preempt a charge of common law felony murder when a motor vehicle is involved.

CASE: Harris v. State, No. 1515, Sept. Term, 2019 (filed July 28, 2021) (Judges GRAEFF, Kehoe & Zic).

FACTS: On May 1, 2019, Dawnta Harris was convicted by a jury in the circuit court of first-degree felony murder, first-degree burglary, and theft less than $25,000. These convictions were based on his actions on May 21, 2018, when he struck and killed a Baltimore County Police officer with a stolen car during the commission of a burglary with three other individuals. Harris, who was 16 years old at the time of the crime, was sentenced to life in prison with the possibility of parole.

Harris appealed to the Court of Special Appeals, which affirmed the convictions and sentencing.

LAW: Harris argued that his conviction for felony murder should be vacated because, he contended, the misdemeanor manslaughter by automobile statute, Md. Code Ann., Criminal Law Article (“CL”) §2-209 (2012 Repl. Vol.), preempted all unintended homicides committed by motor vehicle. In support of his assertion, Harris cited State v. Gibson, 4 Md. App. 236, aff’d, 254 Md. 399 (1969), where the Court of Special Appeals held that the manslaughter by vehicle statute preempted the common law offense of misdemeanor manslaughter by operation of a motor vehicle, and all unintended homicides resulting from the use of a vehicle, and Blackwell v. State, 34 Md. App. 547, cert. denied, 280 Md. 728 (1977), in which the Court of Appeals held that the manslaughter by vehicle statute preempted second-degree murder when the killing was the unintended result of the operation of a motor vehicle. Harris urged the Court of Special Appeals to extend the holdings of Gibson and Blackwell to the common law offense of felony murder by finding that the statutory preemption applies to all unintended homicides resulting from the operation of a motor vehicle.

However, the cases to which Harris cited found preemption in situations involving “unintended homicides resulting from the operation of a motor vehicle.” Blackwell, 34 Md. App. at 554; Gibson, 4 Md. App. at 247. Felony murder, by contrast, is not an unintended homicide. Although intent to kill is not a required element of felony murder, for a homicide to constitute murder, the homicide must be committed with malice, a mental state that includes an intent to do the “death-producing act in the course of the commission, or attempted commission, of a felony.” Selby v. State, 76 Md. App. 201, 210 (1988), aff’d, 319 Md. 174 (1990). A person acting with this intent is guilty of felony murder. Id.

The Court of Appeals has explained that, under the felony-murder rule, “the malice involved in the underlying felony is permitted to stand in the place of the malice that would otherwise be required with respect to the killing.” intent to kill is not a required element of felony murder. State v. Allen, 387 Md. 389, 402 (2005). Felony murder is not, therefore, within the scope of unintended homicides. Accordingly, felony murder is not preempted by the manslaughter by automobile statute when the homicide involves a motor vehicle.

Furthermore, although Harris that the killing here was unintentional, the jury in this case was not asked to, and it did not specify, whether it found an unintentional homicide. The State argued, and the facts would have permitted a finding, that Harris intended to run over police Baltimore County Police Officer Amy Caprio when he hit the gas while she was standing in front of the car. As such, Harris’s argument that his felony murder conviction should be vacated because the manslaughter by vehicle statute (CL §2-209) preempted his felony murder conviction was without merit.

Accordingly, the judgment of the circuit court was affirmed.

COMMENTARY: Harris additionally argued that his life sentence for felony murder was an illegal sentence because the court failed to conduct an individualized hearing to consider his “youth and all of its attendant circumstances and the penological justification for imposing such a sentence.” However, the Court of Special Appeals rejected a similar argument in Court’s decision in Hartless v. State, 241 Md. App. 77, 92 (2019). As such, Harris’s contention that his sentence was unconstitutional because he did not receive an individualized sentencing hearing was without merit.

Harris next contended that an automatic life sentence for a juvenile convicted of felony murder is “grossly disproportionate” and unconstitutional. The Court of Special Appeals has set forth a two-step process for reviewing a proportionality challenge. First, a reviewing court must first determine whether the sentence appears to be grossly disproportionate. In so doing, the court should look to the seriousness of the conduct involved, the seriousness of any relevant past conduct as in the recidivist cases, any articulated purpose supporting the sentence, and the importance of deferring to the legislature and to the sentencing court. See State v. Davis, 310 Md. 611 (1987). If these considerations do not lead to a suggestion of gross disproportionality, the review is at an end. If the sentence does appear to be grossly disproportionate, the court should engage in a more detailed analysis. In order to be unconstitutional, a punishment must be more than very harsh; it must be grossly disproportionate. Howard v. State, 232 Md. App. 125, 175–76, cert. denied, 453 Md. 366 (2017).

In this case, Harris’s life sentence did not pass the first step in the proportionality analysis. Given that his conduct caused another person to lose her life, the life sentence did not appear grossly disproportionate. Therefore, Harris’s sentence of life with the possibility of parole was not grossly disproportionate, and it did not constitute cruel and unusual punishment.

  

PRACTICE TIPS: Exercise of plain error review is reserved for instances when the unobjected-to error is “compelling, extraordinary, exceptional or fundamental to assure the defendant a fair trial.”

Tax Law

Sales and use exemption

BOTTOM LINE: In order for an aircraft to qualify for the sales and use tax exemption under §11-208(c)(1) of the Maryland Code, Tax – General Article, which states that an aircraft, motor vehicle, railroad rolling stock, or vessel that “is used principally to cross State lines in interstate or foreign commerce is exempt from the State’s sales and use tax,” the aircraft must be used for a commercial or business purpose; therefore, the Tax Court erred in applying the exemption in §11-208(c)(1) of the Tax Code to an aircraft where the owner purchased the aircraft for the personal purpose: of teaching his son to fly, there was no business purpose for the friends and family flying on the airplane, none of the flights involved the movement of freight or cargo, and none of the flights involved the movement of passengers for a commercial or business purpose.

CASE: Comptroller of Maryland v. Atwood, No. 163, Sept. Term, 2020 (filed July 28, 2021) (Judges Kehoe, Shaw Geter & ZIC).

FACTS: On February 6, 2017, William Atwood purchased a “1958 Beechcraft Travelair airplane” in Ohio and stored it in Maryland, his place of residence. Atwood purchased the aircraft for $34,000. He did not pay a sales and use tax for the aircraft in Ohio or in Maryland.

The applicable audit period was Atwood’s first year of ownership of the aircraft, from February 8, 2017 through February 7, 2018. During the audit period, the aircraft was flown 126 times; 92 of the flights crossed state lines. Atwood used the aircraft primarily to give his son flight lessons and to commute to his place of employment at John F. Kennedy International Airport in New York.

Atwood’s son subsequently became certified as a commercial multi-engine pilot, and the flight lessons that Atwood provided to his son had an estimated value in excess of $100,000. During the flights, Atwood carried personal property and would often purchase fuel and personal items during stops at various airports. For over 70 percent of the flights, Atwood crossed state lines.

On January 4, 2018, the Comptroller of Maryland assessed Atwood a sales and use tax for the aircraft for a total of $2,554. In May 2018, the Comptroller issued a Notice of Final Determination after Atwood filed an application to revise the assessment of the sales and use tax. At the hearing, Atwood argued to the Comptroller that his use of the aircraft qualified for an exemption from the sales and use tax pursuant to §11-208(c)(1) of the Tax Code because the aircraft was used in interstate commerce. The Comptroller affirmed the assessment, concluding that Atwood’s use of the aircraft to provide his son flight lessons and to commute to and from work was not interstate commerce and thus did not qualify for an exemption under §11-208(c)(1).

Atwood then filed a Petition of Appeal of the Comptroller’s Notice of Final Determination with the Tax Court, arguing that the aircraft was used principally in interstate commerce during the first year of ownership and was thus exempt pursuant to §11-208(c)(1).

Following a hearing on August 27, 2019, the Tax Court found that the aircraft qualified for the exemption pursuant to §11-208(c)(1). In an order dated September 13, 2019, the Tax Court reversed the Comptroller’s assessment of the sales and use tax.

On October 3, 2019, the Comptroller filed a Petition for Judicial Review of the Tax Court’s decision with the circuit court, which affirmed the holding of the Tax Court reversing the Comptroller’s assessment of the sales and use tax. The Comptroller then appealed to the Court of Special Appeals, which reversed the judgment of the circuit court and remanded the case.

LAW: The Comptroller argued that Atwood’s use of his aircraft during the audit period, which was principally to provide his son with flight lessons and to commute to his place of employment in New York, did not fall under the definition of interstate commerce, and, thus, the purchase of the aircraft did not fall within the exemption from the Maryland sales and use tax pursuant to §11-208(c)(1) of the Maryland Tax Code. The statute at issue, §11-208(c)(1) of the Tax Code, states that the “sales and use tax does not apply to a sale of an aircraft, motor vehicle, railroad rolling stock, or vessel that is “used principally to cross State lines in interstate or foreign commerce.” Tax-Gen. §11-208(c)(1) (1992, 2016 Repl.) (emphasis added). This exemption to the sales and use tax is further explained in Code of Maryland Regulations (“COMAR”) 03.06.01.26.B, which indicates that an aircraft must be involved in the pickup or delivery of items or passengers to qualify for the interstate commerce exemption. See COMAR 03.06.01.26.B(1)–(3) (2021).

The exemption to the sales and use tax for aircraft used principally in interstate commerce has a long history. The 1947 version of the sales and use tax statute stated in part that the tax does not apply to sales which are not within the taxing power of Maryland under the Constitution of the United States. Md. Code Ann., Art. 81 §261(f) (Supp. 1947). In former Comptroller Rule 64, the Comptroller interpreted the language of Article 81 to exempt two categories of sales: (a) Sales or transactions which occur beyond the territorial limits of the State of Maryland”; and “(b) Sales upon which the tax imposes an unreasonable or discriminatory burden on interstate commerce.” Comptroller of the Treasury, Retail Sales Tax Div., Rule 64 (1947) (emphasis added). Former Comptroller Rule 64 further defined the exemption for aircraft engaged in interstate commerce, noting that the exemption applied regardless of whether goods were transported into the State or out of the State. Id. When interpreting former Comptroller Rule 64 and the interstate commerce exemption, the Court of Appeals found that aircraft used to transport company employees and customers “across state lines” for company business qualified for the exemption. W.R. Grace & Co., Davison Chem. Div. v. Comptroller of the Treasury, 255 Md. 550, 566-67 (1969). Principally, former Comptroller Rule 64 was adopted “to protect the shipping industry from having to pay sales tax for repair of their vessels. However, all aircraft, railroad rolling stock, and trucks [were] shielded by Rule 64 as well.” Dep’t of Fiscal Servs., Revised Fiscal Note, H.B. 211 (1977).

The exemption to the sales and use tax for aircraft used in interstate commerce as defined in former Comptroller Rule 64 was codified in 1977 and provided that sales of aircraft “which will be used principally in the movement of passengers or freight, or both, in interstate commerce” are exempt from sales and use tax. Md. Code Ann., Art. 81, §326(gg) (1977) (emphasis added). However, the Revisor’s notes do not indicate that the General Assembly intended to expand the scope of the exemption to include all interstate commerce that is involved in the movement of passengers and freight. Comptroller of the Treasury v. Martin G. Imbach, Inc., 101 Md. App. 138, 151 (1994). As set forth in the Revised Fiscal Note, the statute “simply makes Rule 64 law rather than a rule.” Dep’t of Fiscal Servs., Revised Fiscal Note, H.B. 211 (1977). In reviewing the legislative history of Article 81 §326(gg) (1971), the Court of Special Appeals has recognized that the Legislature intended to merely codify former Comptroller Rule 64, not to change its scope. See Imbach, 101 Md. App. at 150. It is plain from the statutory history of §11-208(c)(1) of the Tax Code that the Legislature intended the exemption to the sales and use tax to apply to aircraft used to transport goods or passengers in interstate commerce.

Atwood argued that no business or commercial purpose is necessary for the use of an aircraft to qualify for the interstate commerce exemption to the Maryland sales and use tax. He contended that the term “interstate commerce” “would clearly include any trips across state lines regardless of their underlying purpose.” This argument was unpersuasive. The statute’s plain language, its history, and the applicable case law require the person seeking the exemption to have a business or commercial purpose. See, e.g., W.R. Grace, 255 Md. at 566-68.

Atwood purchased a personal aircraft for a personal purpose: to teach his son to fly. As stipulated by the parties, there was no business purpose for the friends and family flying on the airplane, none of the flights involved the movement of freight or cargo, and none of the flights involved the movement of passengers for a commercial or business purpose. In sum, the use of the aircraft was not in the course of commercial or business activity. Therefore, it was not used principally to cross state lines in interstate commerce. The Tax Court erred in applying the exemption in §11-208(c)(1) of the Tax Code to Atwood’s purchase of the aircraft because he did not use the aircraft principally in interstate commerce.

Accordingly, the decision of the circuit court was reversed, and the case was remanded with instructions to reversed the final decision of the Tax Court and remand the case to the Tax Court with instructions to enter a new decision affirming the assessment of the comptroller, including any accrued interest, to be paid by Atwood.

COMMENTARY: The decisions of the Tax Court are subject to the same standards of judicial review as adjudicatory decisions of other administrative agencies. Carbond, Inc. v. Comptroller of the Treasury, 247 Md. App. 79, 84 (2020). Therefore, on appellate review, it is the decision of the Tax Court that is reviewed, not the ruling of the circuit court. The reviewing court gives “great weight to the Tax Court’s interpretation of the tax laws,” but reviews its application of case law without special deference. Id. at 84-85.

  

PRACTICE TIPS: A court’s role in reviewing an administrative agency adjudicatory decision is narrow; it is limited to determining whether there is substantial evidence in the record as a whole to support the agency’s findings and conclusions, and to determine if the administrative decision is premised upon an erroneous conclusion of law. The reviewing court is also required to construe exemptions “narrowly” and, in instances where there is any doubt, rule in favor of the taxing authority.’