Justia Tax Law Opinion Summaries

Several local taxing districts within Kootenai County, Idaho, including East Side Highway District, Post Falls Highway District, Worley Highway District, the City of Coeur d’Alene, and the City of Post Falls, filed claims against Kootenai County and its Treasurer, Steven Matheson. The dispute arose when Matheson decided that the County would retain all late charges and interest from delinquent property taxes to cover collection costs, rather than distributing a proportionate share to the taxing districts. The taxing districts argued that they were entitled to their share of these funds.The District Court of the First Judicial District of Idaho ruled in favor of the taxing districts, granting their motions for summary judgment and judgment on the pleadings. The court determined that Idaho Code sections 63-1015 and 63-1007(1) required the County to distribute the late charges and interest proportionately to the taxing districts. The court also awarded attorney fees to the taxing districts under Idaho Code section 12-117(4).The Supreme Court of the State of Idaho reviewed the case and affirmed the district court's judgment. The Supreme Court held that the statutory language was unambiguous and required the County to apportion late charges and interest among the taxing districts in the same manner as property taxes. The Court also upheld the award of attorney fees to the taxing districts, noting that Idaho Code section 12-117(4) mandates such an award in cases involving adverse governmental entities. The Supreme Court awarded attorney fees and costs on appeal to the taxing districts. View "East Side Hwy Dist v. Kootenai County" on Justia Law

The case involves a dispute over the interpretation and application of Idaho Code section 63-602G, which governs the homestead property tax exemption. In 2020, the Idaho Legislature amended the statute to remove the April 15 application deadline and added that the exemption "shall be effective upon the date of the application." The Idaho State Tax Commission issued guidance stating that the exemption should not be prorated based on the application date, which was supported by an Attorney General Opinion. However, Latah and Lincoln Counties disagreed and prorated the exemption based on the application date.The Counties petitioned for judicial review in their respective district courts, which were consolidated. The district court ruled in favor of the Counties, determining that the Tax Commission exceeded its authority and that the statute was ambiguous, allowing for proration based on legislative intent. The Tax Commission appealed the decision.The Supreme Court of Idaho reviewed the case and held that the plain language of Idaho Code section 63-602G requires the retroactive application of the homestead exemption to January 1 of the tax year during which the application was submitted, regardless of the application submission date. The Court found that the statute was unambiguous and that the exemption applies to the entire tax year, not prorated based on the application date.The Court also determined that the Tax Commission did not exceed its statutory authority when it issued the May 2022 Order directing the Counties to apply the full homestead exemption. The Court concluded that the Tax Commission's order was within its constitutional and statutory powers to ensure uniformity and compliance with property tax laws.The Supreme Court of Idaho reversed the district court's order, vacated the judgment, and remanded the case for entry of an order affirming the Tax Commission’s May 2022 Order. View "Latah County v. Idaho State Tax Commission" on Justia Law

Grand Peaks, a nonprofit healthcare provider, applied for a full property tax exemption for its clinics and administrative offices in Rexburg, Idaho, under Idaho Code section 63-602C. Grand Peaks argued that it qualifies as a charitable organization and uses its property exclusively for charitable purposes, providing healthcare to underserved communities regardless of patients' ability to pay. The Madison County Board of Equalization granted a partial tax exemption of sixty-five percent, citing concerns about competition with for-profit healthcare providers and the revenue generated from insured patients.Grand Peaks appealed to the District Court of the Seventh Judicial District, which found that Grand Peaks qualified as a charitable organization and used its property exclusively for charitable purposes. However, the district court remanded the case to the Board for further fact-finding, suggesting that the partial tax exemption might be appropriate due to the "revenue-generating" nature of some of Grand Peaks' activities. The district court vacated the Board's sixty-five percent exemption, deeming it arbitrary and capricious.The Supreme Court of Idaho reviewed the case and reversed the district court's order for remand. The Court held that Grand Peaks is entitled to a full tax exemption under Idaho Code section 63-602C. The Court clarified that the proper test for tax exemption focuses on the exclusive use of the property for charitable purposes, not the income generated from the property. The Court found substantial and competent evidence supporting that Grand Peaks' properties are used exclusively for its charitable mission. The case was remanded to the district court with instructions to grant Grand Peaks a one hundred percent tax exemption for the properties at issue. Grand Peaks was awarded costs on appeal. View "Upper Valley Community Health Svcs, Inc. v. Madison County" on Justia Law

Idaho Power Company and Avista Corporation (collectively the “Companies”) contested the the Idaho State Tax Commission (the “Commission”), in its capacity as the State Board of Equalization, assessments of their operating property during 2019 and 2020, asserting that those assessments violated the proportionality and uniformity requirements set out in Article VII, sections 2 and 5 of the Idaho Constitution. The Commission rejected the Companies’ challenges and upheld its assessments. The Companies then sought judicial review of the Commission’s decision in district court, arguing that the Commission had erred in two significant ways: (1) because the Commission reduced the assessed values of certain railroads’ operating property in compliance with federal law, the assessed values of the Companies’ operating property were unconstitutionally assessed at a higher percentage of their actual cash value than were the railroads’ operating properties (the "4-R" claim); and (2) that commercial property had been assessed (and therefore taxed) at a lower percentage of its actual cash value than the Companies’ operating property, rendering the Companies’ operating property unconstitutionally disproportionally over-taxed (the "alternative claim"). The district court granted summary judgment to the Commission as to the Companies’ first argument. However, the district court concluded genuine issues of material fact existed as to the Companies’ second argument and declined to grant the Commission’s request for summary judgment. Both parties appealed. The Idaho Supreme Court concluded the district court erred in dismissing the 4-R claim, but did not err as to the alternative claim. Judgment was reversed in part, affirmed in part, and remanded for further proceedings. View "Idaho Power Company v. Idaho State Tax Commission" on Justia Law

In 2017, Appellant Shoshone County assessed properties owned by Respondents S&W OPS, LLC; POWDER, LLC; H2O, LLC; GOLF, LLC; APARTMENT, LLC; F&B, LLC; and VILLAGE MANAGEMENT, LLC (collectively “Taxpayers”). Taxpayers disputed the valuation and sought review by the Board of Equalization, and subsequently the Board of Tax Appeals (“BTA”). The BTA reduced the assessed value, and the County appealed to the district court. After a four-day bench trial, the district court upheld the BTA decision, determining that the County’s appraisal evidence was more credible than Taxpayers’ evidence; however, the district court ultimately held the County had not satisfied its burden of showing how the BTA decision was erroneous by a preponderance of the evidence. The County appealed to the Idaho Supreme Court, arguing that the district court applied the wrong standard of review by requiring the County to prove “how or why” the BTA decision was erroneous instead of simply concluding that the market value of the property was different than what was found by the BTA. After review, the Supreme Court agreed with the County’s position. The district court’s decision was reversed, the judgment was vacated, and the case was remanded with instructions for the district court to consider whether the BTA’s decision on valuation was erroneous given the evidence submitted during the de novo trial. If that decision on valuation was erroneous, the district court, as the fact-finder, had to set the valuation. View "Shoshone County v. S&W OPS, LLC" on Justia Law

Christopher and Debra James appealed a district court order granting summary judgment in favor of the Idaho State Tax Commission (“Tax Commission”), reversing the decision of the Board of Tax Appeals (“BTA”). The district court affirmed the Tax Commission’s notice of deficiency decision, which disallowed a net operating loss carryback because the Jameses missed the deadline to claim the loss. Finding no reversible error, the Idaho Supreme Court affirmed the district court’s decision: Idaho Code sections 63-3072(e) and 63-3022(c)(2) required the Jameses to file their amended 2012 Idaho tax return by December 31, 2015, to carryback their 2014 NOL to the 2012 tax year. The Jameses failed to do so. View "Idaho State Tax Commission v. James" on Justia Law

Appellants were five individuals and one Idaho limited liability company (collectively, “Plaintiffs”) who owned real property in the City of Boise (“City”) and paid ad valorem taxes to Ada County, Idaho. Plaintiffs brought an action in district court challenging ordinances the City passed that allocate tax increment financing (“TIF”) revenues to Capital City Development Corporation (“CCDC”), the City’s urban renewal agency. Specifically, the ordinances approved the allocation of TIF revenues for CCDC’s use in the Shoreline District Urban Renewal Project Area and Gateway East Economic Development District Project Area. Because Plaintiffs’ alleged injuries were solely predicated upon their status as taxpayers, the district court dismissed their complaint for lack of standing. On appeal to the Idaho Supreme Court, Plaintiffs alleged they had standing under Koch v. Canyon County, 177 P.3d 372 (2008), in which the Supreme Court held that no particularized harm was necessary to establish taxpayer standing where a violation of article VIII, section 3 of the Idaho Constitution was alleged. Because the Supreme Court determined here that, as a matter of law, the ordinances Plaintiffs challenged did not violate article VIII, section 3, it affirmed the judgment of the district court. View "Hoffman v. City of Boise" on Justia Law

In 2010, Noell Industries, Inc. sold its interest in a limited liability company for a net gain of $120 million. Noell Industries reported the income to Idaho, but paid all of the resulting tax on the gain to the Commonwealth of Virginia, its commercial domicile. Following an audit, the Idaho Tax Commission concluded the net gain was “business income” pursuant to Idaho Code section 63-3027(a)(1) and, thus, apportionable to Idaho. Noell Industries sought judicial review before the Ada County District Court pursuant to Idaho Code section 63-3049(a). The district court ruled that the Commission erred when it: (1) determined that Noell Industries paid insufficient taxes in 2010; and (2) assessed additional tax and interest against it. The Commission appealed. Finding no reversible error in the trial court's judgment, the Idaho Supreme Court affirmed. View "Noell Industries v. Idaho Tax Commission" on Justia Law

Employers Resource Management Company (“Employers”) returned to the Idaho Supreme Court in a second appeal against the Idaho Department of Commerce. In 2014, the Idaho Legislature passed the Idaho Reimbursement Incentive Act (“IRIA”). The Economic Advisory Council (“EAC”), a body created under IRIA to approve or deny tax credit applications, granted a $6.5 million tax credit to the web-based Illinois corporation Paylocity, a competitor to Employers Resource Management Company. Employers claimed Paylocity’s tax credit created an unfair economic advantage. Paylocity, however, had yet to receive the tax credit because it did not satisfy the conditions in the Tax Reimbursement Incentive agreement. Having established competitor standing in Employers Res. Mgmt. Co. v. Ronk, 405 P.3d 33 (2017), Employers argued the Idaho Reimbursement Incentive Act was unconstitutional under the separation of powers doctrine. The district court dismissed Employers’s case upon finding the Act constitutional. Finding no reversible error in that judgment, the Idaho Supreme Court affirmed. View "Employers Resource Mgmt Co v. Kealy" on Justia Law

SSI Food Services Inc. (SSI) appealed the district court’s decision rejecting the Board of Tax Appeal’s (BTA) 2016 assessed value of SSI’s food processing facility in favor of the Canyon County Assessor’s (Canyon County) significantly higher valuation. On appeal, SSI argued the district court erred when it modified the BTA’s valuation because: (1) Canyon County did not meet its burden of proving that the BTA’s valuation was erroneous; (2) the modified valuation was not supported by substantial and competent evidence; and (3) the conclusions of law contained in the district court’s findings of fact and conclusions of law are inadequate. SSI also appealed the district court’s decision to allow Canyon County’s expert to testify on rebuttal. Canyon County cross-appealed the district court’s decision that SSI was not obligated to pay penalties and interest on the unpaid amount of property taxes. Finding no reversible error or abuse of discretion, the Idaho Supreme Court affirmed the district court. View "Stender v. SSI Food Services, Inc." on Justia Law