Justia Tax Law Opinion SummariesArticles Posted in Delaware Supreme Court
Director of Revenue v. Verisign, Inc.
Verisign, Inc. claimed large net operating loss deductions on its 2015 and 2016 Delaware income tax returns, which reduced its bill to zero in both years. The Division of Revenue reviewed the returns and found that Verisign’s use of net operating losses violated a longstanding, but non-statutory, Division policy. Under the policy, a corporate taxpayer that filed its federal tax returns with a consolidated group was prohibited from claiming a net operating loss deduction in Delaware that exceeded the consolidated net operating loss deduction on the federal return in which it participated. The Division applied the policy, determined that Verisign had underreported its income, and assessed the company $1.7 million in unpaid taxes and fees. After Verisign’s administrative protest of the assessment was denied, it appealed to the Superior Court. The Superior Court held that the policy violated the Uniformity Clause of Article VIII, section 1 of the Delaware Constitution. The Delaware Supreme Court agreed with the Superior Court that the Division’s policy was invalid, but it affirmed on alternate grounds: the policy exceeded the authority granted to the Division by the General Assembly in 30 Del. C. sections 1901– 1903. As a result, the Court declined to reach Verisign’s constitutional claims. View "Director of Revenue v. Verisign, Inc." on Justia Law
Commerce Associates, LP, et al. v. New Castle County Office of Assessment, et al.
The New Castle County Office of Assessment (“New Castle County”) valued office condominium units for real property tax purposes but failed to take into account depreciation. The Superior Court affirmed the decision of the New Castle County Board of Assessment Review (the “Board”) upholding New Castle County’s valuation. The property owner appealed, arguing that its office condominium units were over-assessed because New Castle County and the Board did not factor in the age and resulting depreciation of the units. Because Delaware law required that all relevant factors bearing on the value of a property (in its current condition) be considered, the Delaware Supreme Court reversed and required that New Castle County reassess the value of the units, taking into account the influence depreciation has on their taxable value. View "Commerce Associates, LP, et al. v. New Castle County Office of Assessment, et al." on Justia Law
One-Pie Investments, LLC v. Jackson
A monition action was brought by the City against defendant for the collection of taxes and charges. The real property was sold at a sheriff's sale to the successful third-party bidder, One-Pie. After confirmation, One-Pie filed a petition for tax deed. The Superior Court confirmed a Commissioner's order denying the petition, because defendant had successfully redeemed the property. One-Pie raised three claims on appeal, contending that the Superior Court erred by: (i) determining that the property had been redeemed properly; (ii) determining that One-Pie lacked standing; and (iii) allowing defendant to use One-Pie's funds for redemption. The court found no merit in the appeal and affirmed the judgment. View "One-Pie Investments, LLC v. Jackson" on Justia Law
Ins. Commissioner of State of Delaware v. Sun Life Assurance Co. of Canada
Appellant filed requests with appellee for refunds of taxes that appellant paid on premiums derived from certain life insurance policies, for tax years 2001 to 2003. The Delaware Insurance Commissioner ("Commissioner") denied appellant's request on the basis that appellant could not aggregate the premium income from those insurance policies into one unitary "case" for tax purposes under section 702 of the Delaware Insurance Code. At issue on appeal was the meaning of the term "case," which appeared in section 702. The court held that the plain meaning of section 702(c)(2)b, both pre- and post-amendment, was that the premiums received from insurance policies could be aggregated into one "case" only if those policies were issued through the same private placement memorandum. Therefore, appellant could not aggregate the seven insurance policies that were issued via separate private placements into one "case."