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After Dawson retired from the U.S. Marshals, his home state, West Virginia, taxed his federal pension benefits as it does all former federal employees. The pension benefits of certain former state and local law enforcement employees, however, are exempt from state taxation, W. Va. Code 11–21–12(c)(6). Dawson alleged that the state statute violates the intergovernmental tax immunity doctrine, 4 U.S.C. 111, under which the United States consents to state taxation of the pay or compensation of federal employees, only if the state tax does not discriminate on the basis of the source of the pay or compensation. The West Virginia Supreme Court of Appeals rejected Dawson’s argument. A unanimous U.S. Supreme Court reversed. A state violates section 111 when it treats retired state employees more favorably than retired federal employees and no significant differences between the two classes justify the differential treatment. West Virginia expressly affords state law enforcement retirees a tax benefit that federal retirees cannot receive. The state’s interest in adopting the discriminatory tax is irrelevant. The Court noted that the West Virginia statute does not draw lines involving job responsibilities and that the state courts agreed that there are no “significant differences” between Dawson’s former job responsibilities and those of the tax-exempt state law enforcement retirees. View "Dawson v. Steager" on Justia Law

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Cobb and Gwinnett Counties, Georgia, sued telephone companies for their failure to collect and remit to the Counties a charge imposed on subscribers to offset the cost of 911 services. The telephone companies raised various defenses to the Counties’ suits, including that the 911 charge was a tax that the Counties were not allowed to collect by a lawsuit like this one. The trial court rejected that argument and allowed the cases to proceed, but the Court of Appeals vacated that aspect of the trial court’s ruling and remanded because further development of the record was needed to determine whether the charge was a tax. The Georgia Supreme Court concluded the charge was indeed a tax regardless of more factual development, and the Counties lacked legal authority to collect that tax in this lawsuit. View "BellSouth Telecommunications, LLC v. Cobb County et al." on Justia Law

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The Fourth Circuit affirmed the district court's order granting summary judgment to the City and the Foundation in an action alleging discriminatory taxation in violation of the Railroad Revitalization and Regulatory Reform Act of 1976. The court applied the factors in San Juan Cellular Tel. Co. v. Pub. Serv. Comm'n, 967 F.2d 683, 685 (1st Cir. 1992), and held that the City's storm water management charge was a fee, rather than a tax, and therefore was not subject to the Act's requirements. In this case, the charge was imposed by the City's legislative body, and the charge was part of a comprehensive regulatory scheme. View "Norfolk Southern Railway Co. v. City of Roanoke" on Justia Law

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Before selling their business, Page Printing, the Pettinatis followed the tax strategy suggested by their attorney and formed BASR, a general partnership. BASR assumed Treasury Note obligations, which increased its cost basis; each of the partners contributed all their Page shares to BASR in 1999. Two months later, BASR sold 100% of its Page stock for $6,898,245. When offset against its overstated cost basis, BASR realized a gain of only $263,934. The Pettinati partners reported their shares on their 1999 individual returns. In 2010, the IRS issued a final partnership administrative adjustment (FPAA), disallowing the tax benefits generated from BASR’s 1999 tax filing. Pettinati challenged the FPAA as untimely under I.R.C. 6501(a)’s three-year statute of limitations. BASR had “zero assets,” and had filed its last partnership return in 1999. BASR offered the government $1.00 to settle; the government refused. In 2013, the Claims Court granted BASR summary judgment. The Federal Circuit affirmed. In 2016, BASR sought litigation costs under 26 U.S.C. 7430(c)(4)(E). The Federal Circuit affirmed an award of $314,710.69, rejecting the government’s arguments: that BASR does not qualify for lcosts under section 7430(a) because a partnership is not a prevailing “party,” that BASR did not pay or incur costs because a partnership has no legal obligation, that the amount of individual tax liability was not “in issue” during the Tax Equity and Fiscal Responsibility Act (TEFRA) partnership-level court proceeding, and that the qualified offer rule did not apply. View "BASR Partnership v. United States" on Justia Law

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The Supreme Court affirmed the judgment of the circuit court granting summary judgment in favor of the Tax Department on the Corporate Executive Board Company’s (CEB) complaint alleging that its income tax assessments violated the “dormant” Commerce Clause and the Due Process Clause of the United States Constitution and that the assessments were “inequitable” under the Tax Department’s regulations, holding that the circuit court did not err in declining to grant relief. CEB sought relief from the assessments for the years 2011, 2012, and 2013 and requested a redetermination of its income tax. The circuit court found in favor of the Tax Department. The Supreme Court affirmed, holding (1) the Tax Department’s apportionment of CEB’s income tax was in accord with constitutional requirements; and (2) the regulation allowing relief did not apply under its plain language. View "The Corporate Executive Board Co. v. Department of Taxation" on Justia Law

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DFS is in the business of duty-free sales at airports and holds an exclusive lease and concession to sell merchandise duty-free in the San Francisco International Airport (SFO) international terminal. AN extension of DFS’s lease agreement triggered a reassessment; the Assessor valued DFS’s possessory interest in the leased properties using the income approach. The parties disputed the income stream used by the Assessor in applying that methodology, which was the full amount of the Minimum Annual Guaranteed rent (MAG). For 2011 this was $26.4 million. Capitalizing that entire amount, and after deducting certain expenses and applying a discount factor, the Assessor arrived at a present value for the possessory interest of $59 million. DFS challenged the assessment under Revenue and Taxation Code provisions that bar the taxation of intangible rights. Section 110(d)(3) expressly exempts from taxation the exclusive right to operate a concession. DFS argued that the MAG was consideration not only for its taxable use and occupancy of space but also for the valuable but non-taxable exclusive concession rights it obtained under the agreement to sell merchandise on a duty-free basis. The court of appeal agreed and reversed. Exclusivity is essential to the business and DFS was willing to pay extra money for it and would have no interest in being at SFO without it. View "DFS Group, L.P. v. County of San Mateo" on Justia Law

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The Court of Appeal affirmed the trial court's grant of the District's motion for judgment on the pleadings in an action seeking to invalidate a voter-approved special property tax imposed by the District. Public Resources Code section 5566 requires that collected tax money be spent on parks and recreation land and facilities. The court held that section 5566 was not ambiguous and did not read the statute to require a uniform effect or outcome, but rather uniform application. The court held that the District's Measure A special tax satisfied section 5566's uniformity requirement. Finally, the district court did not abuse its discretion by denying leave to amend the complaint. View "Dondlinger v. L.A. County Regional Park and Open Space District" on Justia Law

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After the County refunded taxes Harmony overpaid beginning in the year Harmony first challenged the erroneous base value, Harmony sought to recover tax overpayments for those prior years. The Court of Appeal affirmed the trial court's decision to sustain a demurrer without leave to amend and to dismiss the complaint. The court held that Taxation Code section 80 barred Harmony's tax refund claim, and section 80's prospective assessment limit barred refund of the pre-2011 taxes Harmony's complaint sought to recover. The court also held that the prospective assessment limit in section 80, subdivision (a)(5) is constitutional and bars the tax refund claim alleged in Harmony's complaint. Furthermore, the trial court did not abuse its discretion by denying Harmony's request for leave to amend, and the court rejected Harmony's declaratory relief and writ requests. View "Harmony Gold U.S.A., Inc. v. County of Los Angeles" on Justia Law

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The Supreme Judicial Court affirmed the decision of the superior court granting summary judgment on Appellants’ appeal from the assessment of tax on certain foreign income, holding that there was no error in the proceedings below. On appeal, Appellants argued that the superior court misinterpreted and misapplied Me. Rev. Stat. 36, 5217-A regarding the income tax credit available to them for income taxes paid to a foreign jurisdiction and erred in determining that the penalties and interest assessed against them for the 2012 and 2013 tax years were appropriate. The Supreme Judicial Court affirmed, holding (1) the superior court properly upheld the decision limiting the credit available under section 5217-A; and (2) the court did not err in its decision to uphold in full the assessment of penalties and interest against Appellants. View "Warnquist v. State Tax Assessor" on Justia Law

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The Eighth Circuit affirmed the district court's grant of the government's motion for summary judgment and denied taxpayer's cross motion. The court held that the government established the existence and proper mailing of the notice of deficiency for tax year 2002 by producing a copy of the notice and Form 4340. Although the government did not produce a copy of the notice for the 2009 tax year, it submitted a Case History Report that described steps taken by the IRS officer assigned to taxpayer's case. Therefore, the Case History Report and the Form 4340 produced by the government established both the existence and mailing of the notice for tax year 2009. View "United States v. Meyer" on Justia Law