Justia Tax Law Opinion Summaries

The State of Wyoming owns a 3.37-acre parcel in Uinta County, leased to Pilot Corporation for operating a truck stop. The property, held for the benefit of the Wyoming State Hospital, generates revenue for the hospital through the lease. In 2022, the Uinta County Assessor assessed the property for taxation, which the State contested, claiming the property was used primarily for a governmental purpose and thus exempt from taxation.The County Board of Equalization initially ruled in favor of the State, stating the property was used for a governmental purpose because the Board of Land Commissioners had a fiduciary duty to generate revenue for the hospital. However, the State Board of Equalization reversed this decision, holding that the Department of Revenue’s rules, which state that governmental property used by a lessee for non-governmental purposes is not tax-exempt, were binding. The district court affirmed the State Board’s decision, agreeing that the lessee’s use of the property for a truck stop did not constitute a governmental purpose.The Wyoming Supreme Court reviewed the case and affirmed the district court’s ruling. The Court held that the property was not exempt from taxation because it was used by the lessee, Pilot Corporation, for a non-governmental purpose. The Court emphasized that the end use of the property by the lessee determines its tax status, not the purpose of the lease. Additionally, the Court found that the legislature had not provided an exemption for such properties, as required by the Wyoming Constitution. Therefore, the property was subject to taxation. View "State of Wyoming v. Uinta County Assessor" on Justia Law

Texas Truck Parts & Tire, Incorporated, a wholesaler and retailer of truck parts and tires, purchased tires from Chinese manufacturers between 2012 and 2017. These manufacturers shipped the tires to Texas Truck in Houston, Texas. Texas Truck did not file quarterly excise tax returns or pay excise taxes on the tires, believing the Chinese manufacturers were the importers responsible for the tax. Following an IRS audit, Texas Truck was assessed approximately $1.9 million in taxes. Texas Truck paid a portion of the taxes and filed for a refund, which the IRS did not act upon, leading Texas Truck to file a lawsuit seeking a refund. The Government counterclaimed for the remaining taxes owed.The United States District Court for the Southern District of Texas granted summary judgment in favor of Texas Truck, determining that the Chinese manufacturers were the importers and thus liable for the excise tax. The court based its decision on the interpretation that Texas Truck did not "bring" the tires into the United States under the applicable Treasury regulation, and did not consider whether Texas Truck was the beneficial owner of the tires.The United States Court of Appeals for the Fifth Circuit reviewed the case and held that Texas Truck was the beneficial owner of the tires and therefore liable for the excise tax. The court found that the district court erred by not considering whether Texas Truck was the beneficial owner under the Treasury regulation. The Fifth Circuit concluded that the Chinese manufacturers were nominal importers and that Texas Truck, as the beneficial owner, was responsible for the excise tax. Consequently, the court reversed the district court's summary judgment in favor of Texas Truck, rendered judgment for the Government, and remanded the case to the district court to determine the damages. View "Texas Truck Parts & Tire v. United States" on Justia Law

Hawaiian Airlines entered into a contract with Boeing, agreeing to indemnify Boeing for any taxes incurred on maintenance supply parts sold to Hawaiian. Boeing did not remit general excise taxes (GET) on these sales, claiming an exemption under Hawai'i Revised Statutes (HRS) § 237-24.9. The Hawai'i Department of Taxation audited Boeing for tax years 2013-2018 and proposed disallowing the exemption. Boeing received a Notice of Proposed Assessment (NOPA) in May 2021, and Hawaiian paid $1,624,482.75 under protest, then filed a lawsuit seeking a declaration that GET was not owed and a refund of its payment.The Tax Appeal Court dismissed the lawsuit, ruling it lacked jurisdiction because there was no "final agency decision" or "actual dispute" at the time of Hawaiian's payment. The court found that the inter-office memorandum, email, and closing letter from the Department did not constitute formal administrative decisions. The Intermediate Court of Appeals (ICA) affirmed the dismissal, citing the need for a formal administrative decision to create an actual dispute under HRS § 40-35.The Supreme Court of Hawai'i reviewed the case and held that a NOPA qualifies as a "formal administrative decision" sufficient to create an actual dispute for HRS § 40-35 jurisdiction purposes. The court found that the NOPA contained a demand and determination of tax liability, thus meeting the requirements set forth in Grace Business Development Corp. v. Kamikawa. The court vacated the tax court's dismissal and the ICA's judgment, remanding the case for further proceedings consistent with its opinion. View "Tax Appeal of Hawaiian Airlines, Inc. v. Department of Taxation" on Justia Law

Vensure HR, Inc. ("Vensure") filed tax-penalty-refund claims with the IRS, which were denied on their merits. Vensure then filed a complaint in the U.S. Court of Federal Claims, but the IRS moved to dismiss the complaint, arguing that Vensure had failed to attach a power of attorney to the claims. Despite Vensure having filed two powers of attorney that potentially covered these claims, the Court of Federal Claims dismissed the case solely because a power of attorney was not attached at the time of filing.The U.S. Court of Federal Claims dismissed Vensure's complaint for failing to state a claim upon which relief could be granted. The court determined that the requirement to attach a power of attorney to the refund claims was statutory and could not be waived. Vensure appealed this decision, arguing that the requirement was regulatory and thus waivable.The United States Court of Appeals for the Federal Circuit reviewed the case and concluded that the requirement for a power of attorney to "accompany" a claim, as stated in 26 C.F.R. § 301.6402-2(e), is regulatory and not statutory. Therefore, this requirement may be waived by the IRS in certain circumstances. The court vacated the decision of the Court of Federal Claims and remanded the case for further proceedings to determine whether the IRS had waived the requirement in this instance. The main holding was that the "accompany" requirement is regulatory and waivable, not a statutory mandate. View "VENSURE HR, INC. v. US " on Justia Law

Circle of Seasons Charter School (Charter School) purchased two properties from The Pennsylvania State University (PSU) in May 2017. These properties were previously tax-exempt as part of PSU's Lehigh Valley Campus. Following the sale, Lehigh County issued assessment notices changing the properties' status from non-taxable to taxable, effective January 1, 2018. The notices did not include the required mailing date. Charter School claimed it did not receive these notices and subsequently did not pay the 2017 and 2018 tax bills until refinancing the properties in June 2018.The Lehigh County Court of Common Pleas sustained the preliminary objections of Northwestern Lehigh School District (School District) and dismissed Charter School's complaint with prejudice. The trial court found that Charter School had actual notice of the tax assessments by November 2017 and could have addressed the taxes in its 2018 annual appeal to the Lehigh County Board of Assessment Appeals (the Board). The Board granted tax-exempt status effective January 1, 2019, but Charter School did not seek retroactive relief or a refund for the taxes paid for 2017 and 2018.The Commonwealth Court reversed the trial court's decision, ruling that the defective notices entitled Charter School to a nunc pro tunc hearing before the Board to determine the validity of the assessment changes and potential refunds. The court emphasized that the omission of the mailing date on the notices was a significant defect, warranting a new hearing.The Supreme Court of Pennsylvania reversed the Commonwealth Court's decision, reinstating the trial court's order. The Supreme Court held that Charter School had the burden to establish the properties' tax-exempt status and failed to do so in a timely manner. The court concluded that Charter School waived its claims by not seeking retroactive relief or a refund during the 2018 appeal and that nunc pro tunc relief was not warranted. View "Circle of Seasons Chart School v. Northwestern Lehigh School District" on Justia Law

A group of landowners challenged the Ohio Tax Commissioner’s decision to set a woodland-clearing-cost rate of $1,000 per acre for the purpose of calculating the current agricultural use valuation (CAUV) of their properties for tax years 2015 through 2020. The landowners argued that the rate was too low and not based on reliable evidence, causing their woodlands to be overvalued and resulting in higher property taxes.The Board of Tax Appeals (BTA) upheld the Tax Commissioner’s decision, finding that the Commissioner did not abuse her discretion in setting the $1,000 rate. The BTA concluded that the rate was within the Commissioner’s discretion and based on input from the agricultural advisory committee. The BTA also rejected the Tax Commissioner’s argument that some landowners lacked standing to challenge the CAUV entries for certain years.The Supreme Court of Ohio reviewed the case and found that the Tax Commissioner abused her discretion by adopting the $1,000 rate without reliable evidence or a sound reasoning process. The court noted that the decision was arbitrary and not supported by any fixed rules or standards. The court also found that the Tax Commissioner failed to comply with Ohio Administrative Code 5703-25-33, which requires obtaining information from reliable sources and ensuring that CAUV tables are accurate, reliable, and practical.The Supreme Court of Ohio reversed the BTA’s decision and remanded the case to the Tax Commissioner with instructions to adopt a woodland-clearing-cost rate that complies with the administrative code. The court emphasized that the Tax Commissioner must base the rate on reliable evidence and follow the prescribed standards. View "Adams v. Harris" on Justia Law

The case involves James Harper, who challenged an IRS "John Doe" summons issued to Coinbase, a cryptocurrency exchange, seeking records of numerous customers, including Harper. Harper argued that the IRS's actions violated his Fourth and Fifth Amendment rights and did not meet statutory requirements under the Administrative Procedure Act (APA). The IRS had issued the summons to investigate potential tax noncompliance among Coinbase users.The United States District Court for the District of New Hampshire dismissed Harper's complaint. The court found that Harper lacked a reasonable expectation of privacy in his Coinbase account information and that the records were Coinbase's property, not Harper's. The court also concluded that the IRS summons was reasonable and that Harper had received constitutionally adequate process. Additionally, the court dismissed Harper's statutory challenge, ruling it was an improper collateral attack on prior district court proceedings that had enforced the summons and found it met statutory standards.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the district court's decision. The appellate court agreed that Harper lacked a protectable interest under the Fourth or Fifth Amendment. It held that Harper had no reasonable expectation of privacy in the information he voluntarily provided to Coinbase and that the records were Coinbase's property. The court also found that Harper's due process claim failed because he had no protected liberty interest in the confidentiality of his financial information. Finally, the court ruled that the IRS summons was not "final agency action" under the APA, thus not subject to judicial review.The First Circuit affirmed the district court's dismissal of Harper's complaint, concluding that Harper's constitutional and statutory claims were without merit. View "Harper v. Werfel" on Justia Law

The case involves a dispute over the taxability of personal property used by a hospital at an outpatient rehabilitation facility. The plaintiff, a hospital owned by a health system, operates a rehabilitation facility in a leased suite. The plaintiff claimed that the personal property used at this facility was exempt from taxation under Connecticut General Statutes § 12-81 (7) or (16), which provide tax exemptions for charitable and hospital property, respectively. The town's assessor denied the tax exemption, and the town's board of assessment appeals upheld this denial.The trial court reviewed the case and sided with the plaintiff, granting its motion for summary judgment. The court reasoned that although the plaintiff is part of a health system, the personal property was located at a leased facility, not owned by the health system, and therefore did not fall under the purview of General Statutes § 12-66a. The court concluded that the personal property was exempt from taxation under § 12-81 (7) and (16).The Connecticut Supreme Court reviewed the case and reversed the trial court's decision. The Supreme Court held that the personal property used at the rehabilitation facility is taxable under § 12-66a, even if it would otherwise be exempt under § 12-81 (7) or (16). The Court determined that the term "acquired" in § 12-66a includes leased property, not just purchased property. The Court emphasized that the statute aims to protect municipalities from losing tax revenue due to health systems acquiring tax-exempt status for properties they use, whether owned or leased. The Court also clarified that the plaintiff, as part of a health system, falls under the statute's provisions, making the personal property taxable.The Supreme Court reversed the trial court's judgment and remanded the case with directions to deny the plaintiff's motion for summary judgment and for further proceedings. View "William W. Backus Hospital v. Stonington" on Justia Law

Robert Turner, a property owner in Suwannee County, Florida, claimed that his homestead property was sold at an impermissibly low amount under Florida law, which deprived him of any surplus after back taxes and costs were deducted. Turner had a homestead exemption on his property, which was automatically renewed until 2015. After failing to pay property taxes, a tax certificate was issued, and a tax deed sale was conducted in 2015. Turner alleged that the sale was unlawful because it did not account for the homestead exemption, and he did not receive proper notice of the sale.Turner initially sought relief in state court, challenging the removal of his homestead exemption, but his complaint was dismissed as untimely. He then filed a federal lawsuit under 42 U.S.C. § 1983, claiming violations of his constitutional rights, including First Amendment retaliation, Fourth Amendment illegal seizure, and due process violations. The federal district court dismissed his complaint, finding that abstention was warranted under the comity doctrine, which prevents federal courts from interfering with state tax administration when state remedies are adequate.The United States Court of Appeals for the Eleventh Circuit reviewed the district court's decision. The court affirmed the dismissal, holding that the relief Turner sought would disrupt Florida's administration of its ad valorem property tax scheme. The court found that Florida provided plain, adequate, and complete state remedies, including the ability to challenge tax deed sales and homestead exemption removals in state court. The court concluded that the district court did not abuse its discretion in abstaining from exercising jurisdiction under the comity doctrine. View "Turner v. Jordan" on Justia Law

José Mireles was involved in a drug distribution conspiracy that transported large quantities of cocaine and heroin from Los Angeles to Chicago. Mireles's role included retrieving drug shipments, delivering them to customers, and laundering the proceeds back to Los Angeles. The Drug Enforcement Agency eventually dismantled the network, arresting Mireles and other conspirators. Mireles escaped custody while being transported to court but was re-arrested 18 months later. He was convicted and sentenced to 342 months in prison.The United States District Court for the Northern District of Illinois handled the initial trial. Mireles challenged the admission of certain evidence and the calculation of his sentence. The district court admitted evidence of Mireles's failure to file tax returns, his escape from custody, and a conversation about procuring a firearm. The court also calculated the drug quantity attributable to Mireles and applied sentencing enhancements for obstruction of justice and reckless endangerment.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed Mireles's conviction, finding no abuse of discretion in the admission of the challenged evidence. However, the court ordered a limited remand for resentencing. The appellate court could not discern the factual basis for one of the sentencing enhancements related to obstruction of justice. The court upheld the enhancement for reckless endangerment but required further proceedings to clarify the obstruction enhancement. The court vacated Mireles's sentence and remanded the case for further proceedings consistent with its opinion. View "United States v. Mireles" on Justia Law