Chadwick-BaRoss Inc., a business located in the City of Westbrook, is a heavy-equipment dealer that sells equipment at retail and occasionally leases equipment to customers. After receiving a 2012 personal property tax declaration from Chadwick-BaRoss, the City asked the company to include additional equipment that was held in the physical possession of others pursuant to lease agreements. Chadwick-BaRoss responded that those items were available for immediate sale and were therefore exempt from the personal property tax. When the City and its tax assessor (together, Defendants) issued a supplemental tax bill, Chadwick-BaRoss filed a complaint seeking a declaratory judgment that it did not owe personal property taxes on the equipment that it leased to others. The superior court entered summary judgment for Defendants, concluding that the equipment did not fall clearly within the personal property tax exemption for stock-in-trade. The Supreme Court affirmed, holding that the leased equipment was not held or kept in stock by Chadwick-BaRoss for sale or rental and was thus properly subject to taxation. View "Chadwick-BaRoss, Inc. v. City of Westbrook" on Justia Law

Believing the purchase of orthopaedic prosthetic devices and other implants were eligible for a sales tax exemption, CareAlliance Health Services (the Hospital) sought a refund from South Carolina Department of Revenue (DOR). Following an audit, DOR denied the request as to orthopaedic prosthetic devices on the grounds they did not require a prescription to be sold and a prescription was not used in the purchase of the devices. The DOR also held other bone, muscle, and tissue implants were not exempt because they did not replace a missing part of the body, as required for the exemption. The Hospital filed for a contested case hearing. After discovery, both parties filed motions for summary judgment. Following a hearing on the motions, the ALC granted summary judgment in favor of the Hospital, finding orthopaedic prosthetic devices qualified for the exemption and other bone, muscle, and tissue implants replaced a missing part of the body. The DOR appealed, arguing the ALC erred in finding a prescription was required for the sale of an orthopaedic device between the Hospital and vendor because of federal regulations. The Supreme Court agreed and reversed: "The ALC's broad interpretation of the federal regulation is fundamentally at odds with the plain reading of the regulation and the strict construction afforded a tax exemption." Further, the Court reversed the ALC's finding that other bone, muscle and tissue implants replace a missing body part because it was not supported by substantial evidence in the record. The Court reversed the ALC and found the Hospital was not entitled to a tax exemption. View "CareAlliance Health Services v. SCDOR" on Justia Law

The Texas Tax Code provides that “only the net gain” from the sale of investments should be included in a key component of the statutory franchise-tax formula. In implementing Texas’ statutory franchise-tax liability scheme, the state comptroller adopted a rule requiring businesses to include net gains or net losses. Hallmark Marketing Company filed a franchise-tax protest suit against the state comptroller seeking a refund of more than $200,000 in taxes it paid, arguing that the comptroller’s rule conflicts with the very statute it purports to enforce. The trial court and court of appeals ruled in favor of the comptroller. The Supreme Court reversed, holding that Tex. Tax Code 171.105(b) does not require Hallmark to include a net loss from the sale of investments. Remanded. View "Hallmark Marketing Co., LLC v. Hegar" on Justia Law

In 2014 the Tax Court held that Roberts had deducted expenses from his horse‐racing enterprise on his federal income tax returns for 2005 and 2006 erroneously because the enterprise was a hobby rather than a business, 26 U.S.C. 183(a), (b)(2)..The court assessed tax deficiencies of $89,710 for 2005 and $116,475 for 2006, but ruled that his business had ceased to be a hobby, and had become a bona fide business, in 2007. The IRS has not challenged Roberts’ deductions since then and Roberts continues to operate his horse‐racing business. The Seventh Circuit reversed the Tax Court’s judgment upholding the deficiencies assessed for 2005 and 2006. A business is not transformed into a hobby “merely because the owner finds it pleasurable; suffering has never been made a prerequisite to deductibility.” The court noted instances demonstrating Roberts’ intent to make a profit. View "Roberts v. Comm'r of Internal Revenue" on Justia Law

Christian Voice of Central Ohio operated a radio station from offices located in New Albany. In 1991, the tax commissioner granted an exemption for the property on the grounds that it was being used for church purposes. In 2007, following the relocation of Christian Voice’s offices to Gahanna, a complaint was filed challenging the continued exemption of Christian Voice’s New Albany property. The tax commissioner denied the complaint. In 2008, Christian Voice applied for the same exemption for its Gahanna property. The tax commissioner denied the exemption, finding no evidence that people assembled to worship together on the subject property. The Board of Tax Appeals (BTA) affirmed. The Supreme Court reversed, holding that the BTA should have allowed the exemption under Ohio Rev. Code 5709.07(A)(2) because the primary use of the property was for public worship. View "Christian Voice of Cent. Ohio v. Testa" on Justia Law

When Daniel Berglund refused to file Minnesota income tax returns for tax years 2008, 2009, and 2010, the Minnesota Department of Revenue prepared and filed returns for Berglund and mailed him Notices of Commissioner Filed Returns for the relevant tax years. In total, the Commissioner of Revenue assessed $668,840 in unpaid taxes, penalties, and interest for the three-year period. Berglund appealed, arguing that because the returns did not contain the Commissioner’s signature they were invalid and unenforceable. The tax court granted the Commissioner’s motion for judgment on the pleadings, finding that the lack of a “manual signature” was of no consequence. The Supreme Court affirmed, holding that the relevant statutes do not require that the Commissioner sign commissioner-filed returns in order for those returns to be valid. View "Berglund v. Comm’r of Revenue" on Justia Law

When Daniel Berglund refused to file Minnesota income tax returns for tax years 2008, 2009, and 2010, the Minnesota Department of Revenue prepared and filed returns for Berglund and mailed him Notices of Commissioner Filed Returns for the relevant tax years. In total, the Commissioner of Revenue assessed $668,840 in unpaid taxes, penalties, and interest for the three-year period. Berglund appealed, arguing that because the returns did not contain the Commissioner’s signature they were invalid and unenforceable. The tax court granted the Commissioner’s motion for judgment on the pleadings, finding that the lack of a “manual signature” was of no consequence. The Supreme Court affirmed, holding that the relevant statutes do not require that the Commissioner sign commissioner-filed returns in order for those returns to be valid. View "Berglund v. Comm’r of Revenue" on Justia Law

The PACT Act, 15 U.S.C. 376a(a)(3)-(4), (d), prohibits the remote sale of cigarettes unless sales taxes have been paid in advance. Plaintiff, an enrolled member of the Seneca Indian tribe of New York State, operated a tobacco business in the Allegany Indian Territories and sold tobacco products from there across state lines. In 2010, plaintiff sought a preliminary injunction barring enforcement of several sections of the PACT Act. The district court preliminarily enjoined the provisions and the court affirmed. The court found that plaintiff's closure of his business in the course of the litigation had not mooted the appeal, but observed that facts might later develop that had that effect. After remand, plaintiff renewed his pursuit of relief. The district court concluded that the case was moot and vacated the preliminary injunction because plaintiff stipulated that he had no intent to re-enter the business and the BATFE submitted a declaration stating that it had no intention of seeking or recommending enforcement action against plaintiff. The court concluded that, because plaintiff faces only a remote risk of federal prosecution or civil penalties, and any further merits decision would not shield him from the effects of possible state or local lawsuits, the case is moot. Accordingly, the court affirmed the judgment. View "Gordon v. Lynch" on Justia Law

In 2012, IBM Corp. filed a use tax return for its sales of hardware and software to MasterCard International, LLC for MasterCard’s use in processing credit and debt card transactions, claiming that the equipment it sold to MasterCard was exempt from use tax because MasterCard’s activities qualify as “manufacturing” under Mo. Rev. Stat. 144.054.2. The Administrative Hearing Commission granted IBM a refund, finding that MasterCard’s use of the hardware and software qualified as “manufacturing a product” as that term is used in the tax exemption set out in the statute. The Supreme Court reversed, holding that MasterCard’s use of the hardware and software does not qualify as the “manufacturing of any product” under section 144.054.2, and therefore, IBM is not entitled to an exemption from use tax. View "IBM Corp. v. Dir. of Revenue" on Justia Law

The Macon County Emergency Services Board (Board) filed a petition for declaratory judgment against the Macon County Commission (Commission) seeking a judgment that it was entitled to receive a share of Mason County’s use tax revenue proportionate to its share of the county sales tax revenue. The circuit court denied the Board’s request. The Supreme Court affirmed, holding that because Mo. Rev. Stat. 144.757 does not direct third-class counties as to the disbursement of county use tax revenue, it is within the discretion of the Commission whether to share that revenue with the Board. View "Macon County Emergency Servs. Bd v. Macon County Comm’n" on Justia Law