This appeal centered on a timber harvest by landowner Plum Creek Maine Timberlands, LLC in forestland enrolled in the current-use, tax-incentive program. The Vermont Department of Forests, Parks and Recreation (FPR) issued an adverse inspection report, concluding that Plum Creek violated its forest-management plan and failed to comply with minimum acceptable standards during the harvest. Consequently, the Department of Taxes removed the land from the current-use program and levied a tax assessment. Plum Creek appealed, and the superior court reversed those administrative decisions. FPR then appealed, arguing that the superior court failed to give appropriate deference to FPR’s determination of the proper methodology for measuring compliance with the forest-management plan. After review, the Supreme Court reversed the court’s decision, reinstating the adverse-inspection report as upheld by the FPR Commissioner. The case was remanded back to the superior court to consider the questions raised in Plum Creek’s appeal of the PVR Director’s decision removing land from the UVA program and leveling a tax assessment. View "Plum Creek Maine Timberlands, LLC v. Vermont Dept. of Forests, Parks & Rec." on Justia Law

Habitat for Humanity of the Mid-Willamette Valley was a nonprofit corporation. Part of Habitat's mission (as reflected in its articles of incorporation) is that it acquires vacant lots and builds affordable housing on those lots. In this direct appeal from the Regular Division of the Tax Court (Tax Court), the issue was whether Habitat was entitled to an exemption from property taxes assessed on a vacant lot that it owned. During the relevant time, Habitat intended to build a home on the lot but had not yet started construction. The Marion County Assessor (the county) denied Habitat’s application for a tax exemption under ORS 307.130(2)(a), which provided nonprofit institutions with a tax exemption on “such real or personal property, or proportion thereof, as is actually and exclusively occupied or used in the literary, benevolent, charitable or scientific work carried on by such institutions.” The Tax Court affirmed, holding that Habitat was not using the vacant lot to carry out its charitable work at the time of the assessment. The Supreme Court reversed, finding that it was "apparent" that the real property at issue was actually and exclusively "used in the literary, benevolent, charitable or scientific work carried on" by Habitat. As a result, at the time of the assessment, Habitat was entitled to receive the exemption that the county denied. View "Habitat for Humanity v. Dept. of Rev." on Justia Law

Miller & Rhoads Building, LLC (MRB) purchased a building that was subject to a city-wide real estate tax and an annual special district tax. MRB sought a partial exemption from real estate taxes for the property under the City of Richmond’s Tax Abatement for Rehabilitated Real Estate Program (the Partial Exemption). The City applied the Partial Exemption to the base real estate tax but refused to apply it to the special district tax. MRB paid the special district taxes under protest and brought an action to correct the alleged erroneous assessments. At issue at trial was whether the Partial Exemption also applied to the City’s computation of the special district tax. The trial court ruled in favor of the City, concluding that the Partial Exemption did not apply to the special district tax. The Supreme Court affirmed, holding that the special district tax, while a real estate tax, is a different type of real estate tax that is not subject to the Partial Exemption. View "Miller & Rhoads Bldg., LLC v. City of Richmond" on Justia Law

Daniel George, a self-taught chemist who created his own health supplements, was convicted of tax evasion based on his failure to pay taxes for the tax years 1996 through 1999. Six weeks after his tax evasion indictment, George incorporated Biogenesis Foundation, Inc. George then applied for tax-exempt status for Biogenesis as a charitable organization. The IRS granted Biogensis’s application in 2003. In 2011, Biogenesis retroactively filed tax forms claiming it was a section 26 U.S.C. 501(c)(4) organization for the tax years 1996 through 2002. Thereafter, the IRS issued a notice of deficiency to George, stating that he owed $3.790 million in income taxes and penalties on $5.65 million in bank deposits he made and interest earned for the tax years 1995 through 2002. George petitioned for review, asserting that the income earned for those tax years was not his but Biogenesis’s. The tax court rejected George’s arguments and found George liable for the full amount of the alleged deficiency. The Supreme Court affirmed, holding that the tax court did not err in determining that an organization distinct from George did not exist during the applicable tax years. View "George v. Comm’r of Internal Revenue" on Justia Law

After the Court of Appeals of Maryland suspended Michael Tankersley’s law license when he refused to provide his social security number to the Client Protection Fund of the Bar of Maryland, Tankersley filed suit against the trustees of the Fund, and the judges and the clerk of the Court of Appeals. Tankersley filed suit against these defendants in their official capacities, seeking injunctive relief based on his claim that his suspension violated the federal Privacy Act, 5 U.S.C. 552a. The district court granted defendants’ motion to dismiss. Both the Tax Reform Act, 42 U.S.C. 405(c)(2)(C)(i), and the Welfare Reform Act, 42 U.S.C. 666(a)(13)(A), allow states to collect individuals’ social security numbers in specific situations. The court held that the district court erred in relying on section 666 of the Welfare Reform Act to dismiss Tankersley’s complaint. In this case, the court agreed with Tankersley that “applicant” cannot properly be read to include a Maryland attorney who must pay an annual fee to maintain his license. However, the court concluded that section 405 of the Tax Reform Act applies to Tankersley, and the state of Maryland may lawfully compel him to provide his social security number to the Fund or consequently have his law license suspended. Accordingly, the court affirmed the district court's judgment. View "Tankersley v. Almand" on Justia Law

To stimulate economic development, Jersey City, New Jersey offers tax exemptions and abatements to private developers of projects in certain designated areas. Those tax benefits are conditioned on the developers’ entry into agreements with labor unions that bind the developers to specified labor practices. Employers and a trade group challenged that law, alleging that it is preempted by the National Labor Relations Act (NLRA) and Employee Retirement Income Security Act (ERISA) and barred by the dormant Commerce Clause of the U.S. Constitution. The district court dismissed the complaint, concluding that Jersey City acts as a market participant, not a regulator, when it enforces the law, so that NLRA, ERISA, and dormant Commerce Clause claims were not cognizable. The Third Circuit reversed, holding that Jersey City was acting as a regulator in this context. The city lacks a proprietary interest in Tax Abated Projects. The Supreme Court has recognized a government’s proprietary interest in a project when it “owns and manages property” subject to the project or it hires, pays, and directs contractors to complete the project; when it provides funding for the project; or when it purchases or sells goods or services. This case fits none of these categories. View "Assoc. Builders & Contractors, Inc. v. City of Jersey City" on Justia Law

Petitioners challenge the Tax Court's decision sustaining the Commissioner's determination of deficiencies in petitioners' 2007 income tax return due to an improper characterization of income from the sale of property as a capital gain rather than as ordinary business income. The Tax Court also imposed a 20% penalty for substantial understatement of income under I.R.C. 6662. The court concluded that the Tax Court correctly determined that petitioners were liable for the deficiency and affirmed as to this issue. However, the court found clear error in the Tax Court’s determination that petitioners failed to establish that they acted with reasonable cause and in good faith. In this case, there is no indication in the record that petitioners withheld any information from their accountant, and the Commissioner conceded at oral argument that petitioners did not provide any false information. Accordingly, the court reversed the Tax Court’s assessment of the substantial understatement of income tax penalty. View "Boree v. Commissioner" on Justia Law

The owners of residential properties in Lowndes County appealed a final superior court order that declared OCGA 48-5-2(3) (B.1), which excluded low-income housing income tax credits from consideration for the purpose of assessing ad valorem tax, was unconstitutional for violating the taxation uniformity provision of the Georgia Constitution. The properties at issue were eligible to receive federal and state low-income housing income tax credits. In exchange for receiving a ten-year award of tax credits, the property owners agreed to lease their rental units to eligible low-income tenants at below-market rents set by the state Department of Community Affairs (GDCA) for thirty years or more. During the credit period, the owner may not sell, transfer, or exchange the property without first requesting GDCA’s approval of the proposed sale, transfer, or exchange. After being awarded state and federal income tax credits by the GDCA, the property owners in this case “sold” the tax credits to investors in that they allowed investors to purchase limited partnership interests. The tax credits would “flow through” the partnerships to the limited partners, who would then use the tax credits to reduce their individual income tax liabilities. The Lowdnes County Board of Tax Assessors filed for a declaration as to the constitutionality of OCGA 48-5-2 (3) (B.1), which precluded the Assessors from considering the tax credits in determining the fair market value of the real property at issue. After review of the trial court's judgment, the Supreme Court affirmed: "inasmuch as OCGA 48-5-2 (3) (B.1) exempts these income tax credits from consideration in determining the fair market value of the properties at issue, the statute grants preferential treatment for ad valorem taxation purposes and creates a subclass of tangible property other than as permitted by the State Constitution." View "Heron Lake II Apartments, L.P. v. Lowndes Cty Bd. of Tax Assessors" on Justia Law

Taxpayer TransCanada Hydro Northeast, Inc. appealed a superior court order setting the value of its Bellows Falls hydroelectric facility at $130,000,000, with $108,495,400 taxable by the Town of Rockingham TransCanada argued that the superior court erred when it relied on testimony of the Town’s expert witness. After review, the Supreme Court corrected the trial court’s valuation to read $127,412,212, and affirmed. View "TransCanada Hydro Northeast Inc. v. Town of Rockingham" on Justia Law

Marvel challenges the tax court's grant of summary judgment for the Commissioner. At issue is whether Marvel's consolidated group must reduce its consolidated net operating loss (CNOL) under I.R.C. 108(b)(2)(A) by the total amount of the groupʹs previously excluded cancellation of indebtedness income under a ʺsingle entityʺ approach as opposed to determining the amount of CNOL apportionable to each member and applying section 108(b)(2)(A) on a member‐by‐member basis. Applying de novo review, the court affirmed the tax court's application of a ʺsingle entityʺ approach to reduce the CNOL, and finding of deficiencies in income tax due for the taxable years 2003 and 2004 in the amounts of $2,144,756 and $14,453,653, respectively. View "Marvel Entm't, LLC v. Comm'r" on Justia Law