Justia Tax Law Opinion Summaries

Dahmes Stainless, Inc. challenged the additional use taxes and interest assessed by the Commissioner of Revenue on components that Dahmes purchased to manufacture its products. In making the assessment, the Commissioner determined that Dahmes’s products constituted improvements to real property because they were common law fixtures. The tax court disagreed, concluding that Dahmes’s products were tangible personal property rather than improvements to real property, and therefore, the Commissioner erred by assessing use taxes. Dahmes subsequently filed a Minnesota Equal Access to Justice Act (MEAJA) application for attorney fees. The tax court awarded fees, concluding that the Commissioner’s position was not “substantially justified” by a “reasonable basis in law and fact” under Minn. Stat. 15.472(a). The Supreme Court affirmed, holding (1) Dahmes’s MEAJA application for attorney fees was timely filed; and (2) the tax court did not abuse its discretion by awarding attorney fees. View "Comm’r of Revenue v. Dahmes Stainless, Inc." on Justia Law

The Commissioner of Revenue disallowed certain charitable-contribution deductions claimed on an income tax return filed by Respondents. The tax court reversed and granted summary judgment in favor of Respondents. In doing so, the court excluded evidence offered by the Commissioner of Revenue regarding a computational error made in calculating Respondents’ tax liability and thus failed to correct Respondents’ tax liability to account for the Commissioner’s computational error. The Supreme Court affirmed, holding that (1) the tax court did not abuse its discretion in excluding the Commissioner’s evidence of a computational error; and (2) the tax court’s finding regarding Respondents’ tax liability was supported by the record. View "Antonello v. Comm’r of Revenue" on Justia Law

Two churches (the Churches) located in the City of Saint Paul were subject to a right-of-way assessment (ROW assessment) that the City assessed to nearly every owner of real property within the city limits to pay for public right-of-way maintenance services. The Churches appealed their 2011 ROW assessment, arguing that the charge was a tax and was not imposed uniformly upon the same class of property and that the assessed amount improperly exceeded the special benefit to the Churches’ properties. The district court upheld the assessments after applying a reasonableness test, concluding that the ROW was not a tax imposed under the City’s taxing power but was a fee imposed under the City’s police power and, therefore, was not subject to constitutional restrictions on taxation. The court of appeals affirmed. The Supreme Court reversed, holding (1) the ROW assessment was imposed as an exercise of the City’s taxing power rather than its police power; and (2) summary judgment was inappropriate because a genuine issue of material fact existed regarding the extent of special benefits to the Churches’ properties attributable to the right-of-way services. View "First Baptist Church of St. Paul v. City of St. Paul" on Justia Law

Blandin Paper Company (Blandin) owned 4,680 parcels of timberland located in Aitkin, Itasca, St. Louis, and Koochiching Counties (the Counties). Blandin challenged tax assessments of market value for the timberland properties. Before trial, the Counties filed a motion to exclude evidence Blandin offered regarding the unit-rule method for determining the market value of the property at issue. The tax court denied the motion, determining that the unit-rule method is admissible in property tax proceedings. At trial, the court adopted Blandin’s appraisal values based on the unit-rule method and reduced the assessor's aggregate market value of the properties. The Supreme Court reversed, holding (1) the unit-rule method to determine the fair market value of real property may be admissible in a property tax proceeding; (2) the record in this case does not establish that the appraisal evidence offered by Blandin satisfied the requirements set forth in this opinion for admitting such evidence; and (3) the case must be remanded for both parties to have the opportunity to present evidence in favor of their respective positions. View "County of Aitkin v. Blandin Paper Co." on Justia Law

At issue in this case was Hennepin County’s assessment of the market value of two bulk-distribution warehouses for two assessment dates in 2009 and 2010. The tax court adopted market valuations that were far lower than the recent sale price of each subject property. The County appealed, arguing that the tax court provided inadequate reasons for rejecting the County’s sales comparison analysis and for rejecting a large portion of the County’s income capitalization analysis. The Supreme Court reversed the portion of the tax court’s decision rejecting the County’s sales comparison analysis and vacated the tax court’s order, holding that the tax court (1) did not err in rejecting portions of the County’s income capitalization analysis, but (2) failed adequately to explain its reasons for rejecting the County’s sales comparison analysis. Remanded. View "Archway Marketing Servs. v. County of Hennepin" on Justia Law

After the Commissioner denied Kimberly-Clark's corresponding refund claims that accompanied amended corporate franchise tax returns, Kimberly-Clark appealed to the tax court. Kimberly-Clark argued that its refund claims were allowable because the Legislature’s enactment of the Multistate Tax Commission’s apportionment formula was a contractual obligation that was unconstitutionally impaired when the 1987 Legislature repealed the provisions that authorized the use of that formula. The Minnesota Tax Court concluded that the Legislature’s 1987 repeal of the apportionment formula was constitutional and therefore the Commissioner properly denied Kimberly Clark’s refund claims. Kimberly-Clark petitioned for review. The court concluded that the Legislature made no unmistakable commitment in 1983 when it enacted Multistate Tax Compact, Minn. Stat. 290.171 that was impaired when the Legislature later repealed portions of that statute. Accordingly, the court affirmed the judgment. View "Kimberly-Clark Corp. Commissioner" on Justia Law

When Daniel Berglund refused to file Minnesota income tax returns for tax years 2008, 2009, and 2010, the Minnesota Department of Revenue prepared and filed returns for Berglund and mailed him Notices of Commissioner Filed Returns for the relevant tax years. In total, the Commissioner of Revenue assessed $668,840 in unpaid taxes, penalties, and interest for the three-year period. Berglund appealed, arguing that because the returns did not contain the Commissioner’s signature they were invalid and unenforceable. The tax court granted the Commissioner’s motion for judgment on the pleadings, finding that the lack of a “manual signature” was of no consequence. The Supreme Court affirmed, holding that the relevant statutes do not require that the Commissioner sign commissioner-filed returns in order for those returns to be valid. View "Berglund v. Comm’r of Revenue" on Justia Law

When Daniel Berglund refused to file Minnesota income tax returns for tax years 2008, 2009, and 2010, the Minnesota Department of Revenue prepared and filed returns for Berglund and mailed him Notices of Commissioner Filed Returns for the relevant tax years. In total, the Commissioner of Revenue assessed $668,840 in unpaid taxes, penalties, and interest for the three-year period. Berglund appealed, arguing that because the returns did not contain the Commissioner’s signature they were invalid and unenforceable. The tax court granted the Commissioner’s motion for judgment on the pleadings, finding that the lack of a “manual signature” was of no consequence. The Supreme Court affirmed, holding that the relevant statutes do not require that the Commissioner sign commissioner-filed returns in order for those returns to be valid. View "Berglund v. Comm’r of Revenue" on Justia Law

When Respondents filed their Minnesota tax return for tax year 2007, they claimed they were part-year residents of the state. After an audit, the Commissioner of Revenue determined that Respondents were full-year residents of Minnesota for that year and assessed additional income tax, penalties, and interest. On appeal, the tax court granted summary judgment in favor of Respondents, concluding that Respondents were not “residents” under Minn. Stat. 290.01. The Supreme Court reversed, holding (1) the statute is ambiguous; and (2) the tax court’s interpretation of the statute was erroneous. Remanded to the tax court for a recalculation of Respondents’ tax debt in accordance with this opinion. View "Curtis G. v. Comm’r of Revenue" on Justia Law

After completing an audit of Taxpayers' joint income tax returns, the Commissioner of Revenue issued an order assessing additional taxes. That day, a revenue tax specialist sent Taxpayers an e-mail informing them of the existence of the order. The order was attached to the e-mail. Taxpayers claimed to have been unable to open the attachment containing the letter until sixty-six days after receiving the e-mail. The specialist claimed that he also sent the order by regular mail to Taxpayers' home address, but Taxpayers contended that a mailed copy of the order never arrived. Fifty-three days after Taxpayers opened the e-mail attachment and 119 days after they received the e-mail, Taxpayers filed an appeal with the tax court. The tax court dismissed the appeal as untimely, as it was filed after the sixty-day statutory deadline. The Supreme Court affirmed, holding (1) the tax court's findings that sending the order to Taxpayers electronically and by regular mail was sufficient were not clearly erroneous; and (2) the methods by which the Commissioner sent the order did not violate Taxpayers' due process rights. View "Turner v. Comm'r of Revenue" on Justia Law