Justia Tax Law Opinion Summaries

The Supreme Judicial Court vacated in part and affirmed in part a summary judgment entered in the business and consumer docket that adjudicated all claims on the parties' separate, but judicially consolidated, petitions for review of two tax abatement decisions, holding that the court erred in partially abating a portion of certain penalties levied by the State Tax Assessor against Kraft.On appeal, Kraft argued that the lower court erred in determining that it was not entitled to an alternative apportionment of a portion of its 2010 taxable income, that it was not entitled to a full abatement of penalties levied by the Assessor as part of the "first assessment," and that the "second assessment" was not time barred. The Assessor cross-appealed, arguing that the lower court erred in partially abating the substantial understatement penalty levied as part of the first assessment. The Supreme Court (1) affirmed the court's conclusion that Kraft was not entitled to an alternative apportionment; (2) vacated the court's partial abatement of the substantial underpayment penalty because Kraft was not entitled to any abatement; and (3) affirmed the court's determination that the second assessment was not barred by the statute of limitations. View "State Tax Assessor v. Kraft Foods Group, Inc." on Justia Law

The Supreme Judicial Court affirmed the judgment of the superior court concluding that the Department of Administrative and Financial Services (DAFS) had issued correct decisions regarding Somerset County's two requests for public records submitted pursuant to Maine's Freedom of Access Act (FOAA), Me. Rev. Stat. 1, 400-414, holding that the court properly concluded that one set of records was subject to disclosure and the other set was not subject to disclosure.In December 2016 and October 2017 the County submitted its requests seeking records concerning valuation information that Blue Sky West, LLC had submitted to Maine Revenue Services as part of the State's assessment of taxes on property that Blue Sky owned in the County. DAFS determined that the records responsive to the County's 2016 request were public records subject to disclosure but that the records responsive to the 2017 request were confidential by statute and thus were not public records. The Supreme Court affirmed, holding that the court did not err by concluding that the 2016 records were subject to inspection and copying by the public but that the 2017 records comprised clearly labeled proprietary information protected from disclosure pursuant to FOAA. View "Blue Sky West, LLC v. Maine Revenue Services" on Justia Law

The Supreme Judicial Court affirmed the decision of the superior court granting summary judgment on Appellants’ appeal from the assessment of tax on certain foreign income, holding that there was no error in the proceedings below.On appeal, Appellants argued that the superior court misinterpreted and misapplied Me. Rev. Stat. 36, 5217-A regarding the income tax credit available to them for income taxes paid to a foreign jurisdiction and erred in determining that the penalties and interest assessed against them for the 2012 and 2013 tax years were appropriate. The Supreme Judicial Court affirmed, holding (1) the superior court properly upheld the decision limiting the credit available under section 5217-A; and (2) the court did not err in its decision to uphold in full the assessment of penalties and interest against Appellants. View "Warnquist v. State Tax Assessor" on Justia Law

The Supreme Judicial Court held that an individual resident of Maine was not entitled to a Maine income tax credit for any portion of business taxes imposed by New Hampshire on a New Hampshire limited liability company of which the Maine resident was a member.Appellants, Maine residents, appealed from the judgment of the Business and Consumer Docket affirming the State Tax Assessor’s denial of a tax credit for a share of a New Hampshire business taxes paid by a New Hampshire LLC proportional to the membership interest that Appellants had in the LLC. The court reasoned that no income tax credit applied because (1) the New Hampshire business taxes were imposed on the LLC and were not an “amount of income tax imposed on [an] individual,” Me. Rev. Stat. 36, 5217-A; and (2) Maine’s tax statutes do not violate the Commerce Clause of the federal Constitution. The Supreme Judicial Court affirmed, holding (1) the lower court correctly interpreted Maine’s income tax statutes; and (2) the court did not err in concluding that Maine’s tax statutes are constitutionally sound. View "Goggin v. State Tax Assessor" on Justia Law

The Supreme Judicial Court affirmed the judgment of the State Board of Property Tax Review granting Emera Maine’s request for a property tax abatement for tax year 2012 pursuant to Me. Rev. Stat. 36, 841(1). Emera Maine was in the business of transporting and distributing electric power over transmission lines. The Board found that Emera’s abatement applications concerned an issue of error or illegality in assessment amounting to double taxation. The superior court affirmed the decision of the Board. The Supreme Judicial Court affirmed, holding that the evidence supported the Board’s finding that Emera’s error in estimating a value for and reporting ownership of a transmission line that Emera did not own resulted in an “illegality, error or irregularity in assessment” rather than an “error in the valuation of property,” thus entitling Emera to an abatement pursuant to Me. Rev. Stat. 36, 841(1). View "Town of Eddington v. Emera Maine" on Justia Law

The Supreme Judicial Court affirmed the judgment entered in the Business and Consumer Docket awarding the State and ConnectME Authority $406,852 in unpaid fees pursuant to Me. Rev. Stat. 35-A, 9216, plus interests and costs. On appeal, all parties argued that the lower court erred by concluding that the section 9216 assessment was a valid business excise tax. The Supreme Judicial Court held (1) the Legislature properly characterized the section 9216 assessment as a fee and not a tax; and (2) while the lower court erred by concluding that the assessment was a valid business excise tax, the error was harmless. View "State v. Biddeford Internet Corp." on Justia Law

RIHC, a Maine nonprofit entity, owns Roque Island, 1,242 acres of land, with five houses and numerous outbuildings. Roque Island is a homestead that has been owned by the same family since the early 1800s. In 2010, Jonesport hired a certified private assessor for revaluation of all town properties. The assessor used state-approved assessment software. Its calculations include the character of the neighborhood so that values for island properties are calculated at a lower rate because they are not benefitted by certain services that mainland properties receive. Building values on islands are subject to an “economic obsolescence factor” of 200%, resulting in a greater assessed value than for a comparable mainland structures because of the additional cost of building on an island. Due to an oversight, the economic obsolescence factor originating with the 2010 revaluation was not fully applied to the Island structures until the 2014 tax year, when their total valuation increased by 52% from the previous year. RIHC sought an abatement of $1,305,150 from the 2014 building valuation assessment of $2,609,846, which would result in a property tax reduction of $20,000. That application was constructively denied. The Board of Appeals also denied RIHC’s application, concluding that RIHC’s buildings were being taxed consistently with buildings on islands in other towns. The lower court and the Maine Supreme Judicial Court affirmed; the record does not compel the conclusion that the rate differentiation is unjustly discriminatory. View "Roque Island Gardner Homestead Corp. v. Town of Jonesport" on Justia Law

Maine Revenue Services (MRS) assessed MCI Communications Services, Inc. (MCI) $184,873.69 for two types of surcharges - property tax recovery charges (PTRCs) and carrier cost recovery charges (CCRCs) - that MCI imposed upon its Maine customers. The Maine Board of Tax Appeals vacated the imposition of the tax based on its determination that the PTRCs and CCRCs were excluded or exempt from taxation because they were part of the sale of interstate or international telecommunications services. The Supreme Judicial Court affirmed, holding that the PTRCs and CCRCs collected by MCI before July 18, 2008 were excluded from taxation and that those charges collected from MCI from July 18, 2008 forward were exempt from taxation. View "State Tax Assessor v. MCI Communications Services, Inc." on Justia Law

BCN Telecom, Inc. was assessed a state service provider tax on certain flat charges that BCN imposed on some business customers’ lines from 2008 to 2011. The charges were designed both to reimburse BCN for presubscribed interexchange carrier charges that it paid to access local telephone infrastructure and to generate profits. The Sales and Use Tax Division of Maine Revenue Services affirmed the assessment. The Maine Board of Tax Appeals affirmed. On judicial review, the superior court granted summary judgment in favor of BCN, concluding that BCN’s charges were not part of the “sale price” of telecommunications service and that, even if they were, they were exempt from taxation under Me. Rev. Stat. 36, 2557(34) because they were charges for interstate telecommunications services. The Supreme Judicial Court vacated the judgment entered by the superior court, holding (1) the amounts received by BCN were subject to the service provider tax as part of the sale price for telecommunications services; and (2) BCN failed to provide prima facie proof that the tax exemption for interstate telecommunications services applied as a matter of law to these charges. View "BCN Telecom, Inc. v. State Tax Assessor" on Justia Law

As a result of a partial revaluation of parcels of land located within the Town of Scarborough, including land owned by Plaintiffs, the municipal assessment of the parcels of land increased. Plaintiffs sought abatements from the Town assessor and the Scarborough Board of Assessment Review without success. Plaintiffs appealed the Board’s decision, arguing that they bore an unequal share of the Town’s overall tax burden. The Business and Consumer Docket concluded that Plaintiffs did not have standing to seek remedial relief because Plaintiffs’ properties were not treated differently than the properties of other taxpayers. The Supreme Judicial Court vacated the judgment, holding (1) the Town’s method of assessing separate but abutting parcels held in common ownership resulted in unequal apportionment, and the Board erred in concluding that the unlawful practice did not result in discriminatory assessments of Plaintiffs’ properties; and (2) therefore, Plaintiffs had standing to pursue all of their challenges. Remanded. View "Petrin v. Town of Scarborough" on Justia Law