Justia Tax Law Opinion Summaries

The Supreme Court affirmed in part and reversed in part the judgment of the tax court increasing the assessed unit value of a pipeline system for tax years 2015 and 2016, holding that the tax court did not err in its calculations for the cost indicator of value but erred in assigning equal weight to the cost and income indicators of value.On appeal, the taxpayer (1) challenged the tax court's market value determination, asserting that the court erred in its treatment of construction work in progress and external obsolescence in the computation of the cost indicator of value; and (2) challenged the weight that the court assigned to the cost indicator of value, as opposed to the income indicator, in determining the unit value of the pipeline system. The Supreme Court held that the tax court (1) did not err in its calculations for the cost indicator of value; but (2) erred by concluding that it had no discretion to adjust the default weightings prescribed by Minnesota Rule 8100.0300, subpart 5 for the cost and income indicators of value. View "Enbridge Energy, Limited Partnership v. Commissioner of Revenue" on Justia Law

The Supreme Court affirmed the judgment of the tax court concluding that the market value of a distribution-warehouse property in Rogers, Minnesota was $15,638,000 as of January 2, 2014 and $15,597,000 as of January 2, 2015, holding that the tax court did not err in any of the ways asserted by Medline Industries.Specifically, the Supreme Court held that the tax court (1) did not err by crediting some of the county appraiser's opinions despite rejecting his opinion about the highest and best use of the property as a multi-tenant facility; (2) did not clearly err in the sales-comparison approach by relying on four comparable sales other than the May 2017 of a former Walgreens distribution center; (3) did not err in its income approach analysis; and (4) did not err in relying on the cost approach. View "Medline Industries, Inc. v. County of Hennepin" on Justia Law

In this appeal from the tax court's conclusion that the market value of Relator's two parcels of improved real estate was higher than the initial assessment value determined by Hennepin County or the valuation opinion presented by the sole appraiser to testify at trial the Supreme Court reversed in part the tax court, holding that the tax court erred in its valuation determination under the sales comparison approach.Relator sought review of Hennepin County's assessed value of $8,384,300 for Relator's retail shopping center property as of January 2, 2015. After a trial, the tax court gave a final valuation determination for the property of $8,461,400. Relator appealed, arguing that the tax court's value determination was excessive. The Supreme Court affirmed in part and reversed in part, holding (1) the tax court did not err in its decision to afford no weight to Relator's expert's opinion on the income approach; but (2) the tax court erred in its valuation determination based on the sales-comparison approach. View "Inland Edinburgh Festival, LLC v. County of Hennepin" on Justia Law

The Supreme Court affirmed the decision of the tax court reducing Hennepin County's valuation of a Lowe's store in Plymouth, Minnesota for the 2015 tax year, holding that the tax court did not inflate the property's fair market value and did not violate Lowe's due process rights.Lowe's petitioned the tax court asserting that Hennepin County's assessment for the 2015 tax year overstated the fair market value of the property. The tax court agreed and reduced the County's valuation. The Supreme Court affirmed, holding (1) the tax court did not violate Lowe's due process rights by failing to rely on evidence in the record in reaching its conclusions; and (2) because the record supported the tax court's decision to place greater weight on the cost approach rather than on the sales approach and its adjustments under both approaches, the tax court did not violate Lowe's due process rights. View "Lowe's Home Centers, LLC (Plymouth) v. County of Hennepin" on Justia Law

The Supreme Court affirmed the judgment of the Minnesota Tax Court dismissing Avis Budget Car Rental's property tax petition for failure to disclose certain concession fee information as required by Minn. Stat. 278.05, subd. 6, holding that the tax court did not err in dismissing the petition.On appeal, Avis argued that disclosure of the concession fee information was not required by the mandatory disclosure provision and that, even if disclosure of the concession fee was mandatory, other information provided to Hennepin County satisfied that requirement. The Supreme Court disagreed and affirmed, holding (1) under the circumstances of this case, the concession fees were subject to the mandatory disclosure provision, and such information was not disclosed by Avis by the deadline; and (2) because the information provided to Hennepin County was not disclosed by Avis the tax court properly dismissed the petition. View "Avis Budget Car Rental LLC v. County of Hennepin" on Justia Law

The Supreme Court affirmed the judgment of the Minnesota Tax Court dismissing the property tax petition filed by Enterprise Leasing Company of Minnesota for failure to disclose certain concession fee information as required by Minn. Stat. 278.05, subd. 6, holding that the tax court did not err in dismissing the petition.Specifically, the Court held that, for the reasons explained in Avis Budget Car Rental LLC v. County of Hennepin, __ N.W.2d __, also decided this day, the tax court did not err in dismissing Enterprise's petition because the concession fees at issue in this case were subject to the mandatory disclosure requirements of Minn. Stat. 278.05, subd. 6 and Enterprise did not comply with the requirements of the statute. View "Enterprise Leasing Co. of Minnesota v. County of Hennepin" on Justia Law

The Supreme Court affirmed the decision of the Minnesota Tax Court holding that the Minnesota Legislature incorporated the federal "minimum base amount" limitation into Minnesota's research and development (R&D) tax credit statute, Minn. Stat. 290.068, and that for the 2011 tax year, the term "aggregate gross recipes" referred to federal aggregate gross receipts, not Minnesota aggregate gross receipts, holding that the tax court's conclusions were without error.Specifically, the Court held (1) to calculate Minnesota's R&D tax credit, Minnesota incorporates the "minimum base amount" limitation set forth in I.R.C. 41(c)(2); and (2) the plain language of Minn. Stat. 290.068, subd. 2(c) and its incorporation of the term "aggregate gross receipts" through the term "base amount" referred to federal aggregate gross receipts for the 2011 tax year, and therefore, the tax court did not err in concluding that federal aggregate gross receipts must be used in the fixed-base-percentage formula contained with the base amount calculation for General Mills, Inc.'s 2011 Minnesota R&D tax credit. View "General Mills, Inc. v. Commissioner of Revenue" on Justia Law

The Supreme Court affirmed the decision of the tax court holding that the Minnesota Legislature incorporated the federal "minimum base amount" limitation into Minnesota's research and development (R&D) tax credit statute, Minn. Stat. 290.068, and that for the 2011 tax year the term "aggregate gross receipts" referred to federal aggregate gross receipts, not Minnesota aggregate gross receipts, holding that the reasoning from the Court's opinion in General Mills v. Commissioner of Revenue, __ N.W.2d __, filed today, governed this case as well.At issue was whether the Legislature's incorporation of the federal tax code's definition of the term "base amount" in the tax credit statute includes the federal "minimum base amount" limitation and whether the term "aggregate gross receipts" as used in the Internal Revenue Code formula for calculating the R&D credit refers to Minnesota or federal aggregate gross receipts. The Supreme Court affirmed the tax court's decision, holding (1) to calculate the Minnesota R&D tax credit, section 290.068, subd. 2(c) incorporates the "minimum base amount" limitation contained within I.R.C. 41(c)(2); and (2) the plain language of section 290.068, subd. 2(c) and its incorporation of the term "aggregate gross recipes" through the term "base amount" referred to federal aggregate gross receipts for the 2011 tax year. View "International Business Machines Corp. v. Commissioner of Revenue" on Justia Law

The Supreme Court affirmed the decision of the tax court dismissing petitions filed by Wal-Mart Real Estate Business Trust (the Trust) challenging Anoka County's assessment of the Trust's three parcels of land in the county, holding that the tax court properly found that the properties were "income-producing" and that the Trust's disclosures were inadequate.Each parcel at issue in this case had a Walmart retail store, operated by Walmart, Inc. The Trust was a wholly-owned subsidiary of Walmart. The tax court dismissed the Trust's petitions challenging the Trust's assessment of the parcels because the Trust failed to disclose certain information before the deadline set forth in Minn. Stat. 278.05, subd. 6(a). The Trust appealed, arguing that it was not subject to the mandatory disclosure rule because Walmart stores are not "income-producing" within the meaning of the tax statute's mandatory-disclosure provision. The Supreme Court affirmed, holding that the properties were income-producing and that the Trust's disclosures were inadequate. View "Wal-Mart Real Estate Business Trust v. County of Anoka" on Justia Law

The Supreme Court affirmed the decision of the tax court affirming the conclusion of the Commissioner of Revenue that the sales tax exemption in Minn. Stat. 297A.68, subd. 5 for the purchase of capital equipment did not apply to items that Kroll Ontrack, LLC purchased.Kroll - a Minnesota LLC that sold technology-driven services to government entities, law firms, and corporate law departments - provided two internet-based programs that allowed its customers to maintain private databases of litigation documents and to sort, search, and produce relevant documents from those databases. From March 1, 2011 to November 30, 2012 Kroll purchased machinery and equipment needed to run its computer system and paid Minnesota sales tax on its purchases. In 2014, Kroll filed two requests for a refund of the sales tax it paid on the machinery and equipment, asserting that these items qualified as exempt capital equipment. The Commissioner of Revenue denied the refund claim. The tax court affirmed. The Supreme Court affirmed, holding that Kroll's system did not qualify for the capital equipment exemption in Minn. Stat. 297A.68, subd. 5. View "Kroll Ontrack, LLC v. Commissioner of Revenue" on Justia Law