Justia Tax Law Opinion Summaries

Articles Posted in Maryland Court of Appeals
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The Court of Appeals affirmed the decision of the tax court determining that, between 2003 and 2011, Travelocity.com LP was liable for sums due under the sales and use tax pursuant to Md. Code Tax-Gen. 11-102(a), holding that Travelocity was not liable to pay the sales and use tax during the relevant audit period.The Comptroller of Maryland issued a tax assessment of almost $6.5 million. The tax court upheld the assessment, concluding that Travelocity's business of facilitating vehicle rentals and hotel room reservations was included in the sale of tangible personal property in Maryland, rendering Travelocity liable for the tax during the audit period at issue. The circuit court affirmed. The court of special appeals reversed. The court of appeals reversed, holding that Travelocity was not liable for the tax during the audit period at issue. View "Travelocity.com v. Comptroller" on Justia Law

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The Court of Appeals affirmed the denial of Clear Channel Outdoor, Inc.'s request for a refund of the taxes that it paid pursuant to a Baltimore City ordinance for the privilege of selling advertising on billboards that are not located on the premises where the goods or services being advertised were offered or sold, holding that the ordinance is constitutional.Clear Channel, which was in the business of selling advertising on its billboards in Baltimore City, sought a refund from the City Director of Finances of the taxes it paid pursuant to the city ordinance at issue. Clear Channel claimed that the ordinance was unconstitutional under the First and Fourteenth Amendments and Article 40 of the Maryland Declaration of Rights. The City denied a refund, and the Maryland Tax Court affirmed. The circuit court and court of appeals affirmed. The Supreme Court affirmed, holding that the ordinance survives the application of a rational basis test and, accordingly, is constitutional. View "Clear Channel Outdoor, Inc. v. Department of Finance of Baltimore City" on Justia Law

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The Court of Appeals affirmed the decision of the circuit court holding that the General Assembly's amendment of the Maryland tax code authorizing the State Comptroller to pay refunds to taxpayers affected by a provision held to be invalid and providing for the State to pay interest on those refunds at a certain rate did not violate the dormant Commerce Clause of the federal Constitution.This litigation arose when Appellants challenged the credit allowed by State law against a Maryland resident's income tax liability based on taxes the resident paid to other states on income derived from those states. The Court of Appeals and the Supreme Court agreed with Appellants' argument that the tax scheme violated the dormant Commerce Clause. In response, the General Assembly amended the tax code. After the Comptroller issued Appellants a refund in compliance with the new legislation, Appellants appealed, seeking a higher rate of interest on the refunds. Following an administrative ruling in Appellants' favor, the circuit court held that the interest rate did not violate the dormant Commerce Clause. The Court of Appeals affirmed, holding that Appellants failed to meet their burden of showing discrimination in effect. View "Wynne v. Comptroller of Maryland" on Justia Law

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Petitioner, the assignee of an entity that paid certain sewer connection charges, sought a refund of the charges, asserting that they were improperly charged by the Town of Bel Air. The Town’s Director of Finance denied Petitioner’s refund application. On appeal, the Tax Court granted the Town’s motion to dismiss, concluding (1) it lacked jurisdiction to consider Petitioner’s refund claim because it did not come within the purview of the refund statute, and (2) even if the sewer connection charges were miscalculated or illegally imposed the common law voluntary payment doctrine precluded Petitioner from obtaining a refund. The Supreme Court reversed, holding (1) Petitioner may pursue its refund claim under the refund statute; (2) Petitioner’s claim is not barred by the voluntary payment doctrine; and (3) the Tax Court has jurisdiction to consider the appeal. View "Brutus 630, LLC v. Town of Bel Air" on Justia Law

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The assessment of real property in the State for property tax purposes is calculated by reference to the value on the “date of finality,” which is defined as “January 1, immediately before the 1st taxable year to which the assessment based on the new value is applicable.” Petitioner appealed her 2011 tax assessment of a condominium she owned and occupied. The Tax Court concluded that the Tax Property Article did not prohibit the court from taking into account sales of comparable properties that occur after the date of finality in determining the value of a property on the date of finality and, thus, relied on sales of comparable properties that occurred several months after the date of finality. The Circuit Court ruled that the Tax Court erred in considering evidence of post-date of finality sales of comparable properties. The Court of Special Appeals reversed. The Court of Appeals affirmed, holding (1) the Tax Court may consider the sale of comparable properties occurring within a reasonable time after the date of finality to assess the value of the property; and (2) substantial evidence in the record supported the Tax Court’s assessment of Petitioner’s property, relying on the post-date of finality sales. View "Lane v. Supervisor of Assessments of Montgomery County" on Justia Law

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Appellees’ farm was condemned by the Board of Education for the purpose of building a school. On Appellees’ behalf, the Board paid the State agricultural land transfer tax and the County farmland transfer tax. Appellees requested from the County a refund of a portion of the County farmland transfer tax, arguing that the County, in calculating the County farmland transfer tax, was incorrect in concluding that the twenty-five percent State surcharge was not part of the combined transfer tax. The County denied the request for a refund. The Tax Court affirmed, concluding that the State surcharge was to be collected in addition to the State agricultural land transfer tax and the County farmland transfer tax. The circuit court reversed. The Court of Special Appeals certified the case to the Court of Appeals to answer a question of law. The Court of Appeals answered (1) the agricultural land transfer tax, as set forth in Md. Code Ann. Tax-Prop. 13-407(a)(2) and (3), includes the State surcharge imposed under Md. Code Ann. Tax-Prop. 13-303(d), and the State surcharge must be calculated into the tax ceiling on a county’s agricultural land transfer tax; and (2) therefore, Appellees were entitled to a refund in the amount of the overcharge of the County farmland transfer tax. View "Montgomery County v. Phillips" on Justia Law

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The Maryland Economic Development Corporation (MEDCO) is a public corporation established by the legislature to aid in promoting the economic development of the State. This litigation arose from MEDCO's involvement in the development of a technology development center. MEDCO sought a loan with Bank to finance the center. MEDCO executed a leasehold deed of trust with Bank requiring MEDCO to pay all recording costs and fees in connection with filing the loan documents. MEDCO subsequently presented the deed of trust for recording in Montgomery County, claiming an exemption from the recordation tax based on Md. Code Ann. Econ. Dev. 10-129(a), which granted MEDCO a tax exemption "from any requirement to pay taxes or assessments on its properties or activities." The county transfer office denied the exemption and required MEDCO to pay recordation tax. The county department of finance denied MEDCO's recordation tax refund claim. The tax court denied MEDCO's petition for appeal. The circuit court reversed, and the court of special appeals reversed the circuit court. The Court of Appeals reversed, holding that, based on the plain language of section 10-129(a), the legislature intended to exempt MEDCO from paying the recordation tax at issue in this case. View "Md. Econ. Dev. Corp. v. Montgomery County" on Justia Law

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To facilitate the transition to a competitive market for the supply of electricity, the Legislature provided that consumers would receive certain credits over the period of a year to mitigate a large projected increase in Baltimore Gas & Electric Company's (BGE) rates for the supply of electricity. The overall scheme involving credits, charges, and bond financing was known as the rate stabilization plan. Following passage of the rate stabilization law, BGE took the position that the legislation had the effect of deferring part of its franchise tax liability during the period that credits were applied to customers' bills. The Department of Assessments rejected BGE's position. BGE filed a refund claim, which was rejected. The tax court upheld the Department's denial. The circuit court concluded that the deferral credit affected BGE's distribution revenues for purposes of computing its franchise tax liability, that the tax court decision would subject BGE to double taxation, and that BGE was entitled to the claimed refund. The court of special appeals affirmed. The Court of Appeals reversed, holding that, in establishing the rate stabilization plan, the legislature neither intentionally nor inadvertently provided for the credits and charges to affect BGE's franchise tax liability. Remanded. View "Dep't of Assessments v. Baltimore Gas & Elec. Co." on Justia Law

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Taxpayer, a Maryland resident, appealed an assessment by the State Comptroller that did not allow a credit against the county income tax portion of the Maryland income tax. Taxpayer's income consisted of significant "pass-through" income generated by a Subchapter S corporation in other states, which was apportioned to Taxpayer and taxed by the states in which it was generated. The tax court affirmed the assessment. The circuit court reversed and remanded for further factual development and "an appropriate credit for out-of-state income taxes paid" on the corporation's income. The Court of Appeals affirmed, holding that the failure of the Maryland income tax law to allow a credit against the county tax for a Maryland resident taxpayer with respect to pass-through income of an S corporation that arises from activities in another state and that is taxed in that state violates the dormant Commerce Clause of the federal Constitution. View "Md. State Comptroller v. Wynne" on Justia Law

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The Church of Jesus Christ of Latter-day Saints requested that it be exempt from paying property tax on an apartment complex it owned in Maryland to house missionaries. The county supervisor of assessments concluded that the apartment complex did not qualify for a property tax exemption under Md. Code Ann. Tax-Prop. 7-204 because the complex was not exclusively used as a "parsonage" or a "convent." The Maryland tax court upheld the decision. The circuit court reversed, determining that the complex qualified as both a parsonage and a convent. The Court of Appeals affirmed, holding that the tax court applied the wrong standard in assessing whether the apartment complex constituted a convent. Remanded for the tax court to issue an order granting the exemption. View "Green v. Church of Jesus Christ of Latter-day Saints" on Justia Law