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The Supreme Court affirmed the decision of the Board of Tax Appeals (BTA) finding that the “casualty-loss exception” to the general rule prohibiting successive valuation complaints within the same triennium applied in this case. Appellees filed a new valuation complaint for tax year 2013 even though they had already filed a complaint challenging the 2012 valuation of their property. The Board of Revision (BOR) ordered no change in value for 2013. The BTA found that the casualty-loss exception applied because Appellees’ evidence of damage to the property was not “truly considered” in determining the property’s value for 2012 and that the tax-year-2013 complaint was permissible. The Supreme Court affirmed, holding that the BTA acted reasonably and lawfully in determining that the BOR had jurisdiction over Appellees’ tax-year-2013 complaint. View "Glyptis v. Cuyahoga County Board of Revision" on Justia Law

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“Covered persons” as used in Mass. Gen. Laws ch. 176I, 11 refers solely to natural persons who, as employees, receive insurance coverage for health care services under a group insurance plan, rather than employer entities. At issue in this case was whether, when an employer purchases insurance on behalf of its employees, the insurer owes tax on premiums paid by on or behalf of only those individuals who live in Massachusetts or whether the insurer owes tax on all premiums received from the Massachusetts-based employer regardless of where its individual employees reside. The Supreme Judicial Court affirmed the judgment of the Appellate Tax Board, holding that the term “covered persons” in section 11 refers to the natural person receiving health care coverage under a preferred provider arrangement policy, including his or her spouse and additional dependents, not the employer-organization with whom the insurer contracts. View "Dental Service of Massachusetts, Inc. v. Commissioner of Revenue" on Justia Law

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The Georgia Department of Revenue denied New Cingular Wireless PCS, LLC; Chattanooga MSA LP; Georgia RSA No. 3, LP; and Northeastern Georgia RSA Limited Partnership (collectively “AT&T”) a tax refund. The appellants alleged that from November 1, 2005 until September 7, 2010, they sold wireless Internet access services to Georgia customers, which were exempt from state sales tax under OCGA 48-8-2. In November 2010, the appellants filed refund claims with the Department for sales tax that they claimed was, until September 2010, erroneously charged to Georgia customers on the purchase of wireless Internet access service. The Department officially refused to pay the requested refund claims. On April 17, 2015, the appellants filed their complaint to challenge this denial. The Department answered and moved to dismiss for a lack of subject-matter jurisdiction and the failure to state a claim, because: (1) appellants did not reimburse the alleged illegally collected sales tax to customers before seeking a refund from the Department, in violation of Department Regulation 560-12-1-.25; (2) the appellants lacked standing to file sales-tax-refund claims on behalf of customers for periods prior to May 5, 2009; and (3) the action was barred by Georgia class-action law. Following a hearing on the motion to dismiss, the trial court granted it on all three grounds. The Court of Appeals affirmed. The Georgia Supreme Court granted certiorari review to determine whether Ga. Comp. R. & Regs. R. 560-12-1-.25 (2) properly required a dealer seeking a sales tax refund reimburse its customer before applying for a refund from the Department of Revenue. The Supreme Court determined this was not a requirement, and that the Court of Appeals’ opinion had to be vacated in part and reversed in part, and that the case remanded with direction. View "New Cingular Wireless PCS, LLC v. Georgia Dept. of Revenue" on Justia Law

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The Ninth Circuit affirmed the district court's judgment in an action under 42 U.S.C. 1983, challenging the constitutionality of California Revenue and Tax Code 19195, which establishes a public list of the top 500 delinquent state taxpayers, and California Business and Professions Code 494.5, which provides for suspension of the driver's license of anyone on the top 500 list. The panel held that taxpayer was not deprived of procedural due process and rejected taxpayer's claim that he had an inadequate opportunity to be heard prior to license revocation; taxpayer was not deprived of substantive due process and the panel rejected his claims that the statutory scheme impermissibly burdened his right to choose a profession and that the scheme was retroactive; taxpayer's equal protection claim failed because there was a rational basis for state action against a citizen for failing to pay two years' worth of past-due taxes; and the panel rejected taxpayer's claim that the combined effect of the challenged statutes was to single out the largest 500 tax debtors for legislative punishment, amounting to a bill of attainder View "Franceschi v. Yee" on Justia Law

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The First Circuit reversed the decision of the Tax Court ruling that Appellants owed an excise tax for contributions made to their Roth individual retirement accounts (Roth IRAs) in violation of contribution limits, holding that a transaction Appellants entered into to reduce their federal taxes violated neither the letter nor purpose of the relevant statutory provisions. Specifically, the Tax Court found that the Commissioner of Internal Revenue appropriately recharacterized the transaction at issue under the common-law substance over form doctrine because the transaction’s sole purpose was to “shift[] millions of dollars into Roth IRAs in violation of the statutory contribution limits.” The First Circuit reversed, holding that the Commissioner did not have the power to call Appellants’ transaction a violation of the Tax Code where the transaction did not violate the plain intent of the relevant statutes. View "Benenson v. Commissioner of Internal Revenue" on Justia Law

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Plaintiff 1901 First Street Owner, LLC (First Street), appealed a judgment which interpreted the meaning and application of Government Code section 65995 (b)(1), in a manner favorable to defendant Tustin Unified School District (the District). First Street developed an apartment complex. The underlying dispute arose after the City of Santa Ana (the City) had calculated the square footage of the development for purposes of assessing a school impact fee. The District disputed the City’s method of calculating the assessable space and filed an administrative appeal. Before that appeal was resolved, the City revised its calculation in the District’s favor, prompting First Street to file an administrative appeal. First Street prevailed in its administrative appeal and subsequently filed the present lawsuit against the District, alleging various tort causes of action and seeking declaratory relief and a writ of mandate ordering the District to refund the excess school fees. The court dismissed the tort claims pursuant to an anti-SLAPP motion, which the Court of Appeal affirmed in a separate appeal. The case proceeded on the declaratory relief claim and writ petition, as well as a cross-complaint by the District for an administrative writ of mandate. The court found in favor of the District, and First Street appealed. At issue was whether the square footage of interior space outside the individual apartment units should have been included in the calculation of school impact fees. Finding no reversible error, the Court of Appeal affirmed the judgment in favor of the District. View "1901 First Street Owner v. Tustin Unified School District" on Justia Law

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The Supreme Court reversed the circuit court’s order granting Defendants’ motion to dismiss Plaintiff’s refund action pursuant to Ark. R. Civ. P. 12(b)(8) based on the doctrine of res judicata, holding that res judicata did not bar Plaintiff’s suit. After receiving the Faulkner County Assessor’s valuation of its personal property, Plaintiff challenged the assessments. The Faulkner County Board of Equalization upheld the assessments, as did the Faulkner County Court. The circuit court dismissed Plaintiff’s valuation appeal for lack of subject matter jurisdiction. During the discovery process in the valuation appeal, Plaintiff learned of errors regarding the issues in the first complaint. Plaintiff then filed a claim in the Faulkner County Court for a refund of its 2012 ad valorem taxes under Ark. Code Ann. 26-35-901 based on an erroneous assessment of its personal property and on the taxation of its exempt intangible property. The county court dismissed the refund action under Ark. R. Civ. P. 12(b)(8) because the earlier case involved the same parties and arose out of the same occurrence. Plaintiff appealed. The circuit court dismissed the refund action, finding that the refund claims were precluded by res judicata. The Supreme Court reversed, holding that because the valuation appeal was dismissed for lack of subject-matter jurisdiction, there was no valid judgment in that case by a court with proper jurisdiction, and all of the required elements of claim preclusion were not satisfied. View "Desoto Gathering Co. v. Hill" on Justia Law

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Spireas earned $40 million in technology license royalties in 2007-2008s. Royalties paid under a license agreement are usually taxed as ordinary income at 35 percent but Spireas claimed capital gains treatment (15 percent) under 26 U.S.C. 1235(a), which applies to money received “in consideration of” “[a] transfer . . . of property consisting of all substantial rights to a patent.” The IRS disagreed and gave Spireas notice of a $5.8 million deficiency for the two tax years. The Tax Court and Third Circuit affirmed. To qualify for automatic capital-gains treatment, income must be paid in exchange for a “transfer of property” that consists of “all substantial rights” to a “patent.” Not every transfer of “rights” qualifies because the statute grants capital gains treatment only to transfers of property. Spireas’s original theory was that he reduced the formulation to practice in 2000, giving him the required property interest, and later assigned his interest. Spireas later abandoned that theory, arguing that he transferred his rights prospectively in 1998. Because that was two years before the invention of the formulation, Spireas’s second position cannot depend on the legal standard of reduction to actual practice to establish that he held a property right at the time of transfer. Spireas’s sole claim on appeal was, therefore, waived. View "Spireas v. Commissioner of Internal Revenue" on Justia Law

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The Railroad Revitalization and Regulatory Reform Act prohibits states from imposing a tax that discriminates against a rail carrier. 49 U.S.C. 11501(b)(4). The Eleventh Circuit held that Alabama's tax scheme, which imposes either a sales or use tax on rail carriers when they buy or consume diesel fuel but exempts competing motor and water carriers from those taxes, violates the Act as to water carriers, but not to motor carriers. The court held that the district court correctly concluded that the excise tax was roughly equivalent to the sales and use tax and thus the excise tax justified the motor carrier sales-tax exemption. However, unlike the motor carrier exemption, the State could offer no rough equivalency justification for the water carrier exemption because water carriers pay no state taxes at all when they buy or consume diesel. View "CSX Transportation, Inc. v. Alabama Department of Revenue" on Justia Law

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The Railroad Revitalization and Regulatory Reform Act prohibits states from imposing a tax that discriminates against a rail carrier. 49 U.S.C. 11501(b)(4). The Eleventh Circuit held that Alabama's tax scheme, which imposes either a sales or use tax on rail carriers when they buy or consume diesel fuel but exempts competing motor and water carriers from those taxes, violates the Act as to water carriers, but not to motor carriers. The court held that the district court correctly concluded that the excise tax was roughly equivalent to the sales and use tax and thus the excise tax justified the motor carrier sales-tax exemption. However, unlike the motor carrier exemption, the State could offer no rough equivalency justification for the water carrier exemption because water carriers pay no state taxes at all when they buy or consume diesel. View "CSX Transportation, Inc. v. Alabama Department of Revenue" on Justia Law