Justia Tax Law Opinion Summaries

The Supreme Court affirmed the judgments of the tax court declining to include a "concession fee" as rental income attributable to the properties in this case under the income-capitalization approach to property valuation, holding that the tax court did not err.At issue was Hennepin County's valuation of the respective properties owned by Enterprise Leasing Company of Minnesota and Avis Budget Car Rental, LLC at the Minneapolis-St. Paul International Airport. The tax court disagreed with Hennepin County's approach, decided not to include the concession fee as rental income, and estimated a market value in each case that was lower than the value that the County sought at trial. The Supreme Court affirmed in both cases, holding that the tax court did not clearly err in excluding the concession fee from rental income. View "Enterprise Leasing Co. of Minn. v. County of Hennepin" on Justia Law

The Supreme Court reversed the judgment of the tax court denying summary judgment to Rainbow Early Education Center, an early childhood center, on its claim for a tax exclusion as a seminary of learning under Minn. Const. art. X, 1 and Minn. Stat. 272.02, subd. 5, holding that the tax court did not correctly apply the standard set forth in State v. Northwestern Preparatory School, 83 N.W.2d 242 (Minn. 1957).Rainbow petitioned for a property tax exemption, claiming status as a seminary of learning. Because prior decisions concerning the meaning of the phrase "seminaries of learning" centered on secondary or postsecondary institutions Rainbow cited licensure, facilities, programming, and rating by a government-administered best practices program in support of its claim that it was entitled to a property tax exemption . The tax court granted summary judgment to the County. The Supreme Court reversed, holding (1) an institution is an exempt seminary of learning when it has an educational purpose, provides a broad general education, and does so in a thorough and comprehensive manner; and (2) Rainbow presented uncontroverted evidence of each element. View "Under the Rainbow Early Education Center v. County of Goodhue" on Justia Law

The Supreme Court affirmed the judgment of the tax court ruling on certain motions filed by Taxpayer and rejecting Taxpayer's statutory claim that its property was unequally assessed, holding that the tax court did not abuse its discretion in ruling on the motions, and Taxpayer failed to present evidence to support the unequal assessment claim.On appeal, Taxpayer challenged the tax court's denial of its motion to compel Washington County to produce information about other similar properties, its motion to amend the pleadings to add unequal assessment and disparate treatment claims, and its motion to compel the county assessor to testify. Taxpayer further appealed the tax court's rejection of Taxpayer's unequal assessment claim. The Supreme Court affirmed, holding (1) the tax court's denial of Taxpayer's motions was not an abuse of discretion; and (2) the tax court did not err in rejecting the unequal assessment claim. View "Chambers Self-Storage Oakdale, LLC v. County of Washington" on Justia Law

The Supreme Court affirmed the decision of the tax court concluding that three clinics - Perham Clinic, Ottertail Clinic, and New York Mills Clinic - were not subject to property tax because they clinics were exempt under Minn. Stat. 447.31, subd. 6, holding that there was no error.The exemption at issue is provided for hospital districts. At issue on appeal was whether to classify the three medical clinics that were owned and operated by Perham Hospital District as taxable or exempt. Otter Tail County classified the clinics as commercial and thus subject to property tax, concluding that the tax exemption at issue was available to hospitals and not to clinics. After a trial, the tax court concluded that the clinics were exempt from tax under Minn. Stat. 447.31, subd. 6. The Supreme Court affirmed, holding that the tax court did not clearly err in finding that the District used the clinics to improve and run Perham Hospital during the tax years at issue. View "Perham Hospital District v. County of Otter Tail" on Justia Law

The Supreme Court affirmed the judgment of the Tax Court upholding that constitutionality of the Minnesota sales or use tax for aircraft purchases, holding that Minn. Const. art. X, 5 bars only the application of duplicative personal property taxes to aircraft.Article X, section 5 allows the Legislature to tax aircraft using the airspace over Minnesota "in lieu of all other taxes." Relators purchased aircraft outside of the state, paid the use tax, paid a separate annual tax imposed on aircraft, and then requested a refund of the use tax. When the refunds were denied, Relators sued the Department of Revenue, arguing that the use tax is unconstitutional under Minn. Const. art. X, 5. The Tax Court granted summary judgment for the Commissioner of Revenue. The Supreme Court affirmed, holding (1) the phrase "[a]ny such tax on aircraft shall be in lieu of all other taxes," as used in article X, section 5, prohibits only the application of duplicative personal property taxes on aircraft; and (2) the tax imposed on aircraft by Minn. Stat. 297A.82 does not violate article X, section 5. View "Sheridan v. Commissioner of Revenue" on Justia Law

The Supreme Court affirmed the decision of the court of appeals affirmed the orders of the district court dismissing Appellant's constitutional claims asserting discrimination in the tax assessments of its properties, holding that Appellants' claims were time-barred.Appellant, Walmart, Inc., owned real property in two counties (the Counties). In this action, Walmart claimed that for tax purposes the Counties overvalued the properties or unfairly assessed the properties' value as compared with other similarly situated properties. Appellant asserted that the Counties' international discrimination in their tax assessments violated the Equal Protection Clause and Appellant's right to uniformity in taxation. The district court dismissed the claims as time-barred, and the court of appeals affirmed. The Supreme Court affirmed, holding that Appellant's claims were subject to the limitations period of Minn. Stat. Ann. Chapter 278 and were time-barred. View "Walmart Inc. v. Winona County" on Justia Law

The Supreme Court affirmed the judgment of the tax court concluding that Menard, Inc. was not entitled to an offset on its sales tax liability under Minn. Stat. 297A.81, holding that the tax court correctly concluded that Menard was not eligible for a sales tax offset.Under section 297A.81, a taxpayer can reduce current tax liabilities by the amount of sales taxes attributable to uncollectible debts owed to the taxpayer. Menard claimed a sales tax offset based on uncollectible debts resulting from customer purchases made on Menard's private label credit card offered by Capital One, N.A. The Commissioner of Revenue concluded that Menard was ineligible to claim an offset and assessed additional sales tax. The tax court affirmed, concluding that unpaid debts from customer transactions made on Menard's private label credit card were owed to Capital One, not Menard. The Supreme Court affirmed, holding (1) the unpaid customer transactions were not debts owed to Menard; and (2) Menard was not a guarantor of the cardholders' debts. View "Menard, Inc. v. Commissioner of Revenue" on Justia Law

The Supreme Court affirmed the order of the tax court dismissing Relator's appeal of an tax order sent by the Department of Revenue by regular mail, holding that sending a tax order by regular mail provides constitutionally sufficient notice.The Department sent Relator a tax order assessing sales and use taxes covering a three-year period. The order was sent by regular mail, as authorized by Minn. Stat. 270C.33, subd. 8. Relator appealed, asserting that he only became aware of the tax liability when his bank account was levied on by the Commissioner. The tax court granted the Commissioner's motion to dismiss. The Supreme Court affirmed, holding that Relator's notice was constitutionally sufficient. View "Olson v. Commissioner of Revenue" on Justia Law

The Supreme Court affirmed the decision of the court of appeals affirming the district court's grant of summary judgment to Respondent on Appellant's adverse possession claim, holding that a claim of adverse possession to a portion of a separately assessed parcel requires the adverse claimant to pay taxes for at least five consecutive years unless a statutory exemption under Minn. Stat. 541.02 paragraph 3 applies.Appellant asserted adverse possession over a portion of two separately assessed parcels owned by Respondent. The district court ruled against Appellant's claim for both parcels. The court of appeals affirmed the court's grant of summary judgment to Defendant on Appellant's adverse possession claim for the west parcel but reversed the grant of summary judgment to Respondent as to the east parcel on the grounds that the percentage claimed did not trigger the tax payment requirement in section 541.02. Appellant appealed the court of appeals' decision that his adverse possession claim to fifty-two percent of the west parcel failed, arguing that the statute requires tax payment only for a claim to an entire separately assessed parcel. The Supreme Court affirmed, holding that the plain language of section 541.02 requires tax payment on a portion of a parcel. View "St. Paul Park Refining Co. LLC v. Domeier" on Justia Law

The Supreme Court affirmed the judgment of the tax court determining that Minnesota could tax an apportioned share of the income from the sale of a business as unitary business income, holding that the gain from the sale is business income of a unitary business.YAM Special Holdings, Inc. sold a majority interest in its Go Daddy business and reported the gain from the sale as income not subject to Minnesota tax. The Commissioner of Revenue assessed tax on an apportioned share of the income. On appeal, the tax court concluded that the income from the sale was business income subject to Minnesota tax. The Supreme Court affirmed, holding that the income generated from the transaction was business income of a unitary business, and therefore, Minnesota may tax that income through apportionment. View "YAM Special Holdings, Inc. v. Commissioner of Revenue" on Justia Law