Office Depot, Inc., which is incorporated in the state of Delaware and headquartered in Florida, contracts with a printer to have catalogs printed in Illinois and Indiana. The Postal Service delivers the catalogs to customers in Missouri. Office Depot accrued and paid almost $85,000 in Missouri use tax based on the cost of the printed catalogs between 2008 and 2010. Office Depot filed an application for use tax refund for the amount it paid. The Director of Revenue denied Office Depot’s refund claim. The Administrative Hearing Commission reversed, finding that Office Depot was entitled to a full refund because use tax may be imposed only if Office Depot used the catalogs in Missouri but that Office Depot did not. The Supreme Court affirmed, holding that Office Depot did not exercise any right or power incident to ownership or control over the catalogs in Missouri, and therefore, it did not “use” the catalogs in Missouri. Consequently, Office Depot was entitled to a refund of use tax under the use tax statute. View "Office Depot, Inc. v. Dir. of Revenue" on Justia Law

Wasilla landowner, appellant Ray Pursche appealed the tax foreclosure against his property, arguing that the property was exempt from local property taxes because it was originally transferred to his predecessor by federal patent. He claimed that the federal patent made this property beyond state court jurisdiction. The Supreme Court affirmed the tax foreclosure, finding that after a patent issues, property disputes must generally be resolved in state court. Land once owned by the federal government was subject to local property taxes after it was conveyed to a private party. View "Pursche v. Matanuska-Susitna Borough" on Justia Law

Taxpayer Leslie Scott appealed a tax court judgment that dismissed his appeal for lack of jurisdiction. In 2012, the Department of Revenue issued notices of deficiency assessments against taxpayer relating to his personal income taxes for the tax years 2007 and 2008. Taxpayer appealed, and the Magistrate Division of the Tax Court determined that taxpayer had substantiated some claimed deductions that the department had disputed, but also that he had additional unreported income. Following the proceedings in the Magistrate Division, the department assessed additional income taxes for 2007 and 2008, and issued notices of liability balances to that effect. Taxpayer appealed to the Regular Division. The Tax Court received taxpayer’s complaint, a declaration of mailing, a motion for a stay of the requirement to pay the taxes owed, and the filing fee for the complaint. The Tax Court did not, however, receive an affidavit, with the complaint, alleging that payment of the disputed amounts pending appeal would cause him undue hardship. The department moved to dismiss taxpayer’s complaint on the ground that the court lacked jurisdiction over the subject matter because taxpayer had not complied with the requirements of ORS 305.419 and TCR 18 C. Taxpayer opposed the department’s motion and submitted a declaration by his counsel that, according to counsel’s recollection, he had printed and assembled a packet for mailing to the Tax Court that included a complaint, a declaration of mailing, a motion for a stay, a hardship declaration, and a filing fee. Ultimately, the Tax Court granted the department’s motion. The Supreme Court reversed. "We hesitate to deem as jurisdictional a statutory requirement that is designed to allow someone without funds access to the courts to pursue their statutory appeal rights. […] what makes the taxpayer’s complaint subject to dismissal is the failure to establish undue hardship, not the failure to file an affidavit with the complaint." The Supreme Court concluded the Tax Court erred in dismissing taxpayer’s appeal on that ground. View "Scott v. Dept. of Rev." on Justia Law

When Respondents filed their Minnesota tax return for tax year 2007, they claimed they were part-year residents of the state. After an audit, the Commissioner of Revenue determined that Respondents were full-year residents of Minnesota for that year and assessed additional income tax, penalties, and interest. On appeal, the tax court granted summary judgment in favor of Respondents, concluding that Respondents were not “residents” under Minn. Stat. 290.01. The Supreme Court reversed, holding (1) the statute is ambiguous; and (2) the tax court’s interpretation of the statute was erroneous. Remanded to the tax court for a recalculation of Respondents’ tax debt in accordance with this opinion. View "Curtis G. v. Comm’r of Revenue" on Justia Law

Plaintiff filed a class action lawsuit against the City of Los Angeles challenging the validity of a certain tax and seeking a refund of taxes. In 2007, during discovery proceedings in the underlying litigation, the trial court determined that certain documents the City possessed were privileged under either the the attorney-client privilege or the privilege for attorney work product. In 2013, Plaintiff filed a request under the California Public Records Act seeking to obtain copies of documents relating to the tax at issue. The City’s administrative office, in response, inadvertently provided Plaintiff with some of the privileged documents. The City filed a motion for an order compelling the return of the privileged material. The trial court denied the motion, concluding that the production of the documents under the Public Records Act had waived any privilege. The Court of Appeal affirmed. The Supreme Court reversed, holding that Cal. Gov’t Code 6254.5, which generally provides that “disclosure” of a public record waives any privilege, applies to an intentional, not an inadvertent, disclosure. Remanded. View "Ardon v. City of Los Angeles" on Justia Law

The issue this case presented for the Supreme Court's review centered on whether the legislature's amendment to a business and occupation (B&O) tax exemption, applied retroactively, violated a taxpayer's rights under the due process clause of the Fourteenth Amendment, collateral estoppel, or separation of powers principles. Taxpayer Dot Foods contended that it should have remained eligible for a B&O tax exemption pursuant to the Washington Supreme Court's decision in "Dot Foods, Inc. v. Department of Revenue," (215 P.3d 185 (2009) (Dot Foods I)), despite an intervening, contrary amendment to the applicable law. Because Dot Foods I did not encompass the tax periods at issue in this case, the Supreme Court held that retroactive application of the legislative amendment to Dot Foods did not violate due process, collateral estoppel, or separation of powers principles. View "Dot Foods, Inc. v. Dep't of Revenue" on Justia Law

At issue before the Louisiana Supreme Court was whether the materials, machinery, and equipment that became part of an inland marine drilling barge during its reconstruction following a fire were exempt from sales and use tax. La. R.S. 47:305.1(A) exempted these materials when vessels were “built in Louisiana.” The Louisiana Department of Revenue promulgated LAC 61:I:4403(A) and (B)(2) to clarify that certain reconstruction projects fell within the scope of the statutory exemption. The lower courts found the regulation exceeded the scope of the statute and declared it unconstitutional. The Supreme Court granted review to determine the constitutionality of LAC 61:I:4403(A) and (B)(2), and to review its application to the facts at issue. After this review, the Court found the regulation constitutional and applicable to the facts in this case. Accordingly, the Court reversed the court of appeal’s judgment and rendered judgment in favor of the taxpayer. View "Coastal Drilling Company v. Dufrene" on Justia Law

On remand from the Supreme Court, these consolidated appeals challenge six actions brought by the district court to enforce summonses issued by the IRS in an investigation of DHLP and Beekman. The court remanded the case to the district court to determine whether defendants’ allegations of improper purpose were improper as a matter of law or sufficiently supported under United States v. Clarke to require a hearing. The district court enforced the summonses, finding that defendants neither alleged improper motives as a matter of law nor met their burden under Clarke. The court concluded that issuing a summons for the sole purpose of retaliation against a taxpayer would be improper as a matter of law; issuing summons in bad faith for the sole purpose of circumventing tax court discovery would be an improper purpose as a matter of law; the district court's decision not to hold a status conference or permit additional evidence is appropriate in light of the summary nature of a summons enforcement proceeding; and, although the district court erred in finding that the allegations set forth by defendants could not constitute an improper purpose as a matter of law, the district court correctly found that defendants failed to meet their burden under Clarke. Clarke permits a taxpayer challenging the enforcement of a summons “to examine an IRS agent when he can point to specific facts or circumstances plausibly raising an inference of bad faith.” In this case, defendants' submissions suggest that the summonses were issued in bad faith anticipation of tax court proceedings rather than in furtherance of Agent Fierfelder’s investigation. Conjecture and bare allegations of improper purpose are insufficient as a matter of law. Accordingly, the court affirmed the judgment. View "United States v. Clarke" on Justia Law

At issue in this case was the Director of Revenue’s final determination regarding Harry Fischer’s 2007 income tax liability. Fischer appealed the Director’s decision to the Administrative Hearing Commission (AHC), arguing that the Director erred in assessing additions and interest under Mo. Rev. Stat. 143.741.1 and 143.731.7 in calculating his tax liability for 2005, 2006, and 2007. The AHC affirmed the Director’s final determination. The Supreme Court affirmed the decision of the AHC, holding (1) the addition to Fischer’s 2007 tax liability was properly assessed; and (2) interest on Fischer’s 2007 tax liability was properly assessed. View "Fischer v. Dir. of Revenue" on Justia Law

Vee’s is a Subchapter S corporation wholly owned by Vee, who reports its income on his own tax returns. Vee sought a refund of $40,000 in penalties that the IRS had assessed because he took deductions for contributions to a benefit plan from 2004-2007 but did not file a Form 8886. In a separate Tax Court suit, the government is arguing that the deductions were improper. Contributions to multi-employer benefit plan, like the Vee's, are deductible unless the plan “maintains experience-rating arrangements with respect to individual employers,” 26 U.S.C. 419A(f)(6). Experience rating means that rather than pooling the risks and contributions of all the employees of the different employer-members to determine benefits, benefits are determined separately for each employer according to that employer’s contributions. If contributions go to purchase life insurance policies that accumulate cash value, the contributions are not tax deductible; such a plan is mainly an investment vehicle rather than insurance. Vee’s plan included no medical benefits. Vee’s contribution in ithe first year was $165,000, but the cost of the term life insurance purchased was only $5,400. The difference was invested to earn interest for and is the property of Vee. The district judge denied a refund. The Seventh Circuit affirmed. Vee’s plan was enough like the plan described in the IRS notice to require lForm 8886. View "Vee's Mktg., Inc. v. United States" on Justia Law