Justia Tax Law Opinion Summaries

The Supreme Court reversed the circuit court’s order granting Defendants’ motion to dismiss Plaintiff’s refund action pursuant to Ark. R. Civ. P. 12(b)(8) based on the doctrine of res judicata, holding that res judicata did not bar Plaintiff’s suit.After receiving the Faulkner County Assessor’s valuation of its personal property, Plaintiff challenged the assessments. The Faulkner County Board of Equalization upheld the assessments, as did the Faulkner County Court. The circuit court dismissed Plaintiff’s valuation appeal for lack of subject matter jurisdiction. During the discovery process in the valuation appeal, Plaintiff learned of errors regarding the issues in the first complaint. Plaintiff then filed a claim in the Faulkner County Court for a refund of its 2012 ad valorem taxes under Ark. Code Ann. 26-35-901 based on an erroneous assessment of its personal property and on the taxation of its exempt intangible property. The county court dismissed the refund action under Ark. R. Civ. P. 12(b)(8) because the earlier case involved the same parties and arose out of the same occurrence. Plaintiff appealed. The circuit court dismissed the refund action, finding that the refund claims were precluded by res judicata. The Supreme Court reversed, holding that because the valuation appeal was dismissed for lack of subject-matter jurisdiction, there was no valid judgment in that case by a court with proper jurisdiction, and all of the required elements of claim preclusion were not satisfied. View "Desoto Gathering Co. v. Hill" on Justia Law

The Supreme Court reversed the circuit court’s order granting Burger King’s motion for summary judgment in an action seeking relief from a tax assessment pursuant to Ark. Code Ann. 26-18-406, holding that the circuit court erred in construing the relevant statutes and promulgated rules to find that Burger King was required to pay taxes only on the wholesale value of the food ingredients removed from stock, as opposed to the retail value of the meals. The Supreme Court held (1) because the parties did not raise in the proceedings below the issue of sovereign immunity, it was not properly addressed further in this case; and (2) as to the merits of the case, the tax of the manager meals is assessed on the retail value of the meal, rather than the wholesale value of the individual ingredients withdrawn from stock. View "Walther v. Flis Enterprises, Inc." on Justia Law

A nonlawyer may not appeal a tax assessment to a county court on behalf of a corporation.Appellants appealed the county assessor’s tax assessment, and the letters were signed by Appellants’ representative, a nonattorney. The county court upheld the assessments. Appellants appealed, and the notice of appeal was filed by a licensed attorney. Appellees filed a motion to dismiss, arguing that the circuit court lacked jurisdiction because the notice of appeal constituted the unauthorized practice of law, rendering the petition to appeal a nullity and depriving the circuit court of jurisdiction. The circuit court granted the motion. The Supreme Court agreed, holding that, because a nonlawyer invoked the process of a court, the county court never acquired jurisdiction over Appellants’ appeal, thus depriving the circuit court of jurisdiction. View "USAC Leasing LLC v. Hill" on Justia Law

In this case challenging a county assessor’s ad valorem tax assessments, the Supreme Court affirmed the circuit court’s order granting the motion to dismiss filed by Appellees on the grounds that Appellants’ representative, a nonattorney, committed the unauthorized practice of law by signing a petition to appeal the tax assessment to the county court.The Supreme Court agreed with the circuit court for the reasons expressed in its opinion issued today in DeSoto Gathering Co., LLC v. Hill, 2017 Ark. 326, holding that the petitions for appeal were null and void because a corporation or its nonattorney officers or employees on its behalf are not authorized to practice law in Arkansas. View "USAC Leasing LLC v. Hill" on Justia Law

In this case challenging a county board of equalization tax assessment, the Supreme Court affirmed the order of the circuit court dismissing Appellants’ appeal, holding that the circuit court did not err in dismissing Appellants’ appeal when Appellants’ representative, a nonlawyer, initiated the appeal on behalf of Appellants. Specifically, the court held that the notices of appeal that Appellants’ tax manager filed on behalf of Appellants must be deemed a nullity because they were filed in violation of the prohibition of the unauthorized practice of law. Therefore, the petitions of appeal were a nullity, and the county and circuit courts lacked jurisdiction to hear the appeals. View "DeSoto Gathering Co. v. Hill" on Justia Law

In this case concerning a county board of equalization tax assessment, the Supreme Court affirmed the order of the circuit court dismissing Appellants’ appeal, holding that the circuit court did not err in dismissing the appeal when Appellants’ tax manager, a nonlawyer, initiated the appeal on behalf of Appellants. Specifically, the notices of appeal that Appellants’ tax manager filed on behalf of Appellants must be deemed a nullity because they were filed in violation of the prohibition of the unauthorized practice of law. Therefore, the petitions of appeal were a nullity, the county court did not have jurisdiction, and the circuit court did not have jurisdiction. View "DeSoto Gathering Co. v. Hill" 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 2011, 2012, and 2013, the Board of Trustees of the University of Arkansas (“University”) submitted applications to the Washington County Tax Assessor seeking immunity from taxation or, alternatively, exemption from taxation for tax years 2010 through 2012. The assessor denied the University’s applications. The Washington County Board of Equalization affirmed. The University paid the assessed taxes under protest and appealed. The county court affirmed. The University appealed and filed a complaint in the circuit court. The Fayetteville School District intervened in the case. The circuit court granted summary judgment in favor of the University, concluding that the University was entitled to sovereign immunity from ad valorem taxation. The school district and the county and its assessor and tax collector appealed. The Supreme Court affirmed, holding that the University is an instrumentality of the State, and therefore, the property at issue was immune from ad valorem taxation. View "Washington County Bd. of Trs." on Justia Law

Several government entities (the class representatives) and all others similarly situated brought a class-action complaint against several online travel companies (OTCs) who marketed hotel rooms in Arkansas and elsewhere via the internet, asserting that the OTCs had failed to collect, or collected and failed to remit, the full amount of gross-receipts taxes imposed by the government entities on hotel accommodations. The circuit court granted the class representatives' motion to certify and certified two classes. The Supreme Court affirmed the circuit court's order granting class certification, holding that the circuit court did not abuse its discretion in (1) certifying the classes where the class representatives and putative class members had no adequate administrative remedies available to exhaust before filing suit; and (2) finding that the predominance requirement for class actions was satisfied. View "Hotels.com LP v. Pine Bluff Advertising & Promotion Comm'n" on Justia Law

Pulaski County issued an assessment and taxation of property owned by the University of Arkansas for Medical Sciences (UAMS). On behalf of UAMS, Appellant (the University) filed a tax-exemption application seeking an exemption from ad valorem property taxes based on sovereign immunity. The county assessor's office and county equalization board denied the request. The county court also denied the exemption. On appeal, the circuit court denied the University's motion for summary judgment and subsequent motion for reconsideration. The Supreme Court dismissed the University's interlocutory appeal for lack of jurisdiction, holding that the University failed to establish an exception to the general rule that the denial of a motion for summary judgment is neither reviewable nor appealable. View "Bd. of Trs. of Univ. of Ark. v. Pulaski County" on Justia Law