The City of Eugene sued to collect from Comcast of Oregon II, Inc. (Comcast) a license fee that the city, acting under a municipal ordinance, imposes on companies providing “telecommunications services” over the city’s rights of way. Comcast did not dispute that it used the city’s rights of way to operate a cable system. However it objected to the city’s collection effort and argued that the license fee was either a tax barred by the Internet Tax Freedom Act (ITFA), or a franchise fee barred by the Cable Communications and Policy Act of 1984 (Cable Act). The city read those federal laws more narrowly and disputed Comcast’s interpretation. The trial court rejected Comcast’s arguments and granted summary judgment in favor of the city. The Court of Appeals affirmed. Finding no reversible error, the Supreme Court affirmed. View "City of Eugene v. Comcast of Oregon II, Inc." on Justia Law

In this appeal, the issue raised for the Supreme Court's review was whether freight brokerage services were excepted from local business privilege taxation1 under the “public utility” exception found in Section 301.1(f)(2) of the Local Tax Enabling Act (“LTEA”), Act of December 31, 1965, P.L. 1257, as amended, 53 P.S. sec. 6924.301.1(f)(2). The Commonwealth Court concluded that S&H Transport was not excepted. The Supreme Court affirmed the Commonwealth Court’s decision because the Supreme Court concluded that the rates of the common motor carriers with whom S&H did business were not fixed and regulated by the Pennsylvania Public Utility Commission, and thus the entire exception was inapplicable. View "S & H Transport v. City of York" on Justia Law

New Cingular Wireless PCS LLC, an affiliate of AT&T Mobility LLC, provides both wireless voice telephone services and data services to customers in the city of Clyde Hill. Clyde Hill imposes a local utility tax on wireless telephone services, which applies to both voice and data services. New Cingular had for years collected utility taxes from Clyde Hill's residents on all charges for wireless and telephone voice and data services, and paid the tax to the city. In this case, the issue presented for the Supreme Court's review was whether the cellular service provider could challenge a city fine through an action for declaratory judgment in superior court. The trial court dismissed, holding that a declaratory judgment action was improper and judicial review should have been sought by way of a statutory writ of review under RCW 7 .16.040. The Court of Appeals reversed, reinstating the declaratory action and remanding for a decision on the merits. Finding no reversible error in the Court of Appeals' judgment, the Supreme Court affirmed. View "New Cingular Wireless PCS, LLC v. City of Clyde Hill" on Justia Law

Christine C. Peterson and Roger V. Peterson challenged the tax court's determination that deferred compensation payments under corporate plans made after Christine's retirement from Mary Kay, Inc. in tax year 2009 were derived from her former Mary Kay association, making them subject to self-employment tax. The court held that the percentage commissions received by Christine, a retired National Sales Director, under the Family Program and Futures Program are subject to self-employment tax, because they are classified specifically as deferred compensation, derived from her prior association with Mary Kay. Because the Petersons did not pay the self-employment tax Christine owed for her 2009 commission payments from two post-retirement, deferred-compensation programs, the Family Program and Futures Program, “the tax court did not err in upholding the additional tax imposed by the IRS,” including interest and penalties. Therefore, the appeal from the decision of the tax court upholding Christine’s self-employment tax for 2009, Appeal No. 14-15774, is affirmed. The consolidated appeal from the decision of the Tax Court relating to tax years 2006 and 2007, Appeal No. 14-15773, is dismissed as improperly filed. View "Peterson v. Commissioner" on Justia Law

Petitioner challenged an administrative summons issued by the IRS after it issued an approximately $25 million penalty against petitioner and his company. The district court granted the government's motion to dismiss the petition for lack of subject matter jurisdiction and denied petitioner's request for jurisdictional discovery. The court agreed with the district court that it lacked jurisdiction because the United States has not waived sovereign immunity to allow suits to quash summonses that are “issued in aid of the collection of . . . an assessment,” and that the challenged summons was issued in aid of collection. Moreover, the IRS had authority to issue the summons, as there was not an outstanding criminal referral at the time the summons was issued. The court also held that the district court did not abuse its discretion in denying jurisdictional discovery because petitioner did not meet his burden of showing that the requested discovery is likely to produce the facts needed to establish jurisdiction. Accordingly, the court affirmed the judgment. View "Haber v. United States" on Justia Law

Several indoor tanning salons filed claims for tax refunds with the Department of Revenue for admissions taxes. Apparently, in 2012, the Attorney General’s office had issued an opinion that Neb. Rev. Stat. 77-2703(1) did not authorize subjecting tanning salons to admissions taxes. The Department has since repealed the regulation listing tanning salons among the businesses subject to the tax and has ceased collecting the tax. The Tax Commissioner disallowed the claims, stating that “[a] refund of a tax improperly or erroneously collected can only be issued by the State directly to the purchaser who paid the tax.” The district court consolidated the cases and affirmed. The Nebraska Supreme Court affirmed, agreeing that the salon customers were the taxpayers of the admissions tax. View "Aline Bae Tanning, Inc. v. Neb. Dep't. of Revenue" on Justia Law

The City of Russellville created the City Corporation to operate, maintain, and improve the city’s municipal waterworks system. The City Corporation managed a water treatment plant that provided potable drinking water to the residents of Russellville. In 1998, Carrothers Construction Company of Arkansas, LLC (Carrothers) constructed an expansion of the water-treatment plant. Carrothers purchased several items of machinery and equipment for the project. Carrothers installed this machinery and equipment for an extensive three-phase water treatment process at the Russellville plant. In 2004, the auditor for the Arkansas Department of Finance and Administration (DFA) conducted an audit of Carrothers’s records pertaining to its activities and purchases in 1999 and 2000 in performing its contractual obligations to expand the Russellville water treatment plant. The auditor determined that Carrothers purchased personal property from out-of-state vendors and that these purchases were subjected to Arkansas’s state and local use taxes, plus interest. Carrothers objected to the assessments, resulting in a lawsuit to challenge the tax assessments, and to demand refund of additional use taxes paid. Carrothers filed a motion for summary judgment asserting that there were no genuine issues of material fact and that, as a matter of law, it qualified for a manufacturing exemption. In 2015, the circuit court granted Carrothers’s motion for summary judgment and ruled that Carrothers was entitled to the manufacturing exemption. The Supreme Court reversed and remanded: "Carrothers acquired materials and constructed a facility to treat and clean the water, but it did not manufacture the water. Thus, Carrothers is not entitled to the manufacturing exemption," and therefore not entitled to summary judgment as a matter of law. View "Walther v. Carrothers Constr. Co. of Ark." on Justia Law

In a prior appeal of this tax case, the court affirmed the district court’s decision to disregard the partnership form of Chemtech Royalty Associates, L.P. (Chemtech I), and Chemtech II, L.P. (Chemtech II), for tax purposes but vacated and remanded as to the penalty award. On remand, the district court reinstated the vacated penalty award and further held that a tax penalty for gross-valuation misstatement applied to Chemtech II. Real party in interest Dow now appeals the penalty award solely as to Chemtech I. The court rejected Dow’s theory that the court's mandate required the district court to consider whether Dow had a reasonable basis and substantial authority for its sham-partnership position; the district court did not err in failing to justify the negligence and substantial-understatement penalties on the basis of the court's sham-partnership holding, but it could have done so; and the court affirmed the applicability of the negligence and substantial-understatement penalties on the ground that the district court would have been correct to do so. The court also concluded that Dow lacked substantial authority for its position that Chemtech I was a valid partnership. For substantially the same reasons, Dow fails to meet the lesser reasonable-basis standard. Accordingly, the court affirmed the judgment. View "Chemtech Royalty Ass'n, LP v. United States" on Justia Law

This matter involved the interpretation and application of the Uniform Local Sales Tax Code (ULSTC). Yesterdays of Lake Charles, Inc. (Yesterdays) and Cowboy’s Nightlife, Inc. (Cowboy’s) were cash-based bars or nightclubs located adjacent to each other in Calcasieu Parish. The clubs were audited in 2009, by the Calcasieu Parish School System Sales and Use Tax Department ("Collector) for years 2005 through 2008, on the basis that the clubs had violated their duties as tax collection agents for the Calcasieu Parish School System. The trial court found ambiguity in the language of the ULSTC requiring the plaintiff nightclubs to “keep and preserve suitable records” of all sales and expenditures. The trial court then found the tax collector had failed to show that the records actually kept by the clubs, in this case, bank statements and deposit slips, were not "suitable records" within the meaning of the ULSTC. The trial court further found the tax collector’s assessment was arbitrary and that the tax collector had failed to establish that its methodology for auditing the taxpayer was proper. Accordingly, the trial court: (1) ordered the tax collector to refund amounts paid under protest by the clubs; (2) determined that prescription had run on the sales taxes for the years 2005 and 2006 for one of the clubs, aside from those taxes admittedly withheld by the clubs; and (3) denied the tax collector’s motion for new trial and awarded attorney fees to the clubs. After its review, the Supreme Court reversed the trial court’s judgment ordering a refund of the taxes and interest paid under protest by the clubs. Furthermore, the Court reversed the trial court’s award of attorney fees. In all other respects, the judgment of the trial court was affirmed, and the matter was remanded to the trial court for further proceedings. View "Yesterdays of Lake Charles, Inc. v. Calcasieu Parish Sales & Use Tax Dept." on Justia Law

Property owners (Petitioners) appealed the Department of Revenue’s valuation of their residential lot for the tax year 2012. The Flathead County Tax Appeal Board (County Board) reduced the value of the land and the value of the improvements. Petitioners appealed, arguing that the appraised value was still too high. The State Tax Appeal Board (STAB) upheld the County Board’s determination of the value of the property. The district court reversed, concluding that the County Board property value upheld by STAB was clearly erroneous. The Supreme Court reversed the district court and reinstated the STAB decision, holding that the district court erred in reversing STAB’s order concerning the valuation of the property. View "Peretti v. State, Dep’t of Revenue" on Justia Law