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Plaintiff Harley-Davidson, Inc. and its subsidiaries (Harley-Davidson) formed a multistate enterprise with numerous functionally integrated subsidiary corporations. It contended that defendant California Franchise Tax Board's (Board) tax scheme violated the commerce clause of the federal Constitution, arguing it burdened interstate enterprises by providing a benefit to intrastate enterprises not available to interstate enterprises. The trial court granted summary judgment for the Board, finding that whether or not the state's tax law unduly burdened interstate commerce, the state had a legitimate reason for treating in-state and out-of-state unitary businesses differently that could not be served by reasonable nondiscriminatory alternatives - to accurately measure, apportion and tax all revenue acquired in California by an interstate unitary business. After independent review, the Court of Appeal also found there was a legitimate state interest to require combined reporting of taxable income of interstate unitary businesses, to accurately measure and tax all income attributable to California, that outweighed any possible discriminatory effect. Accordingly, the Court affirmed the trial court. View "Harley-Davidson, Inc. v. Franchise Tax Bd." on Justia Law

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Plaintiff The Marist Brothers of New Hampshire (MBNH) appealed several superior court orders: (1) a decision upholding the denial by defendant Town of Effingham (Town), of MBNH’s request for a charitable tax exemption, for tax year 2015, for real property; and (2) an order granting the Town’s motion in limine to exclude evidence of the tax treatment of New Hampshire youth camps other than the camp run by MBNH. When Camp Marist was not in session, MBNH rented the Property subject to this appeal: no restrictions were placed on who is eligible to rent, or how renters use, the Property. Rental proceeds were allocated to either the “regular Camp fund, the running of the Camp, or . . . to some of [MBNH’s] scholarships.” MBNH argues that the trial court erred in determining that it met none of the "ElderTrust" factors. After careful consideration, the New Hampshire Supreme Court concluded MBNH did satisfy all ElderTrust factors, reversing the trial court. View "The Marist Brothers of New Hampshire v. Town of Effingham" on Justia Law

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California Attorney General's Form 990 Schedule B requirement, which obligates charities to submit the very information they already file each year with the IRS, survived exacting scrutiny as applied to plaintiffs because it was substantially related to an important state interest in policing charitable fraud. The Ninth Circuit held that, even assuming arguendo that plaintiffs' contributors would face substantial harassment if Schedule B information became public, the strength of the state's interest in collecting Schedule B information reflected the actual burden on First Amendment rights because the information was collected solely for nonpublic use, and the risk of inadvertent public disclosure was slight. Accordingly, the panel vacated the district court's permanent injunctions, reversed the bench trial judgments, and remanded for entry of judgment in favor of the California Attorney General. View "Americans for Prosperity v. Becerra" on Justia Law

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On January 21, 2014, House Bill 331 (H.B. 331) was introduced in the Alabama House of Representatives "to authorize the [Chilton] county commission to levy an additional one cent sales tax which shall be used exclusively for the construction, maintenance, and operation of a hospital in Chilton County; to provide for an expiration date for the tax; and to provide for a referendum and subsequent referendums." H.B. 331 was approved by both the Alabama House and Senate. The Governor signed the bill into law, designated as Act 2014-162. Notices had been placed in a county newspaper containing the full text of a second bill, introduced as Senate Bill 462 (S.B. 462), "to levy additional sales and use taxes to be used for the construction, maintenance, and operation of hospital facilities in Chilton County; to provide for certain matters relating to the administration, collection, and enforcement of such taxes; to provide for the effective date and termination of such taxes; to provide for an advisory referendum regarding the levy of the taxes; to provide that such taxes may not be abated pursuant to Chapter 9B, Title 40, Code of Alabama 1975, or otherwise; and to authorize the pledge of such taxes by Chilton County or a public corporation acting as its agent to secure indebtedness issued for the purposes for which the taxes are authorized." S.B. 462 was approved by both the House and Senate, and again forwarded to the Governor, who declined to sign it so that it be amended so that it repealed the earlier bill as a duplicative Act. The Legislature approved an amended version of S.B. 462, and the amended bill was signed into law as Act 2014-422. No notice of 2014-422 was ever published to Chilton County. An advisory referendum was held in Chilton County pursuant to Act No. 2014-422, and voters approved the tax. Roy Burnett filed a complaint on behalf of himself and others who paid the tax pursuant to 2014-422, arguing the act was unconstitutional because the bill was designed to raise revenue and did not originate in the House,and was not published after it was amended and signed into law. The Alabama Supreme Court determined 2014-422 was not unconstitutional because it was designed to "raise revenue" as that phrase was contemplated by section 70 of the Alabama Constitution. However, the Court found the Act violated section 107 of the Constitution because no published notice of the Act informed the people of Chilton County it was repealing Act 2014-162. Judgment was reversed that the matter remanded for further proceedings. View "Burnett v. Chilton County Health Care Authority and Chilton County" on Justia Law

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At issue was whether a notice to remove an assigned tax court judge was timely and, if so, whether the assigned judge erred in finding that it was impracticable to honor the notice. OCC, LLC, a property owner in Hennepin County, petitioned for a writ of mandamus that directed the tax court to vacate an order that quashed OCC’s notice to remove the assigned tax court judge and to honor the notice. The tax court declined specifically to decide whether the notice was timely and, instead, concluded that it was not “practicable” to honor the removal notice. The Supreme Court granted OCC’s petition for mandamus, directed the tax court to vacate its order quashing the notice to remove, and directed the tax court to honor that notice by assigning OCC’s consolidated tax proceedings to a different judge, holding (1) OCC’s notice to remove was timely under Minn. R. Civ. P. 63.03; and (2) the record did not establish that honoring the timely notice to remove was impracticable in this case. View "OCC, LLC v. County of Hennepin" on Justia Law

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The Supreme Court held that voter approval was not required for a transfer from a utility’s enterprise fund to the city’s general fund. Cal. Const. art. XIIIC prohibits local governments from imposing or increasing any tax without voter approval. Any charge imposed for a service or product that does not exceed the reasonable costs of providing it is excepted from the definition of tax. The City of Redding operated an electric utility as a department of its city government. At issue was whether an annual interfund transfer from the utility’s enterprise fund to the city’s general fund required voter approval where the transfer was intended to compensate the general fund for costs of services that other city departments provide to the utility. The Supreme Court held that because neither the budgetary transfer nor the rate the city charged its utility customers constituted a tax, voter approval was not required. View "Citizens for Fair REU Rates v. City of Redding" on Justia Law

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The Eighth Circuit affirmed the district court's dismissal of Thompson's complaint claiming a refund of excise taxes for its diesel particulate filters under Internal Revenue Code 4051(a)(1). The court held that the phrase "part or accessory" in section 4051(a)(1) was not ambiguous and the filters were properly taxed as either parts or accessories, both of which fell within the scope of the statute. View "Thompson Truck & Trailer v. United States" on Justia Law

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Offer of compromise is not a reasonable alternative to seizure under 26 C.F.R. sec. 301.6334-1(d)(1), which requires an alternative for collection, not an alternative to collection. The Eighth Circuit affirmed the district court's grant of the government's petition for permission to levy taxpayer's home and to apply the proceeds toward her debt. The court rejected taxpayer's claim that the government must respond to her offer to compromise the debt before the court may levy on her principal residence. View "United States v. Brabant-Scribner" on Justia Law

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The Eighth Circuit vacated the tax court's valuation of Medtronic's true income for the 2005 and 2006 tax years. The Commissioner claimed that Medtronic shifted income from its highly profitable U.S. operations and intangibles to an offshore subsidiary operating in a tax haven in Puerto Rico by charging an artificially low rate for the intangibles. The court held that the tax court's factual findings were insufficient to enable the court to conduct an evaluation of the tax court's determination that the Pacesetter agreement was an appropriate comparable uncontrolled transaction (CUT) because it involved similar intangible property and had similar circumstances regarding licensing. In this case, the tax court did not address in sufficient detail whether the circumstances of the settlement between Pacesetter and Medtronic US were comparable to the licensing agreement between Medtronic and Medtronic Puerto Rico; did not analyze the degree of comparability of the Pacesetter agreement's contractual terms and those of the Medtronic Puerto Rico licensing agreement; did not evaluate how the different treatment of intangibles affected the comparability of the Pacesetter agreement and the Medtronic Puerto Rico licensing agreement; and did not decide the amount of risk and product liability expense that should be allocated between Medtronic US and Medtronic Puerto Rico. View "Medtronic, Inc. & Consolidated Subsidiaries v. Comissioner" on Justia Law

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Comcast Corporation challenged the Oregon Tax Court's construction of the statutory formula by which Oregon calculated the portion of its income taxable by Oregon. Based in part on those statutes, the Oregon Department of Revenue calculated that taxpayer had underpaid Oregon taxes for the tax years 2007-2009 and sent notices of deficiency, which Comcast appealed to the Tax Court. The Tax Court agreed with the department’s construction of the income-apportionment statutes and granted the department partial summary judgment on that part of Comcast's appeal. The Tax Court also entered a limited judgment to permit this appeal. After review, the Oregon Supreme Court concluded the Tax Court correctly construed the statutes that governed income-apportionment for interstate broadcasters, and affirmed the limited judgment. View "Comcast Corp. v. Dept. of Rev." on Justia Law