Justia Tax Law Opinion Summaries

Articles Posted in Montana Supreme Court
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In this fifth case arising from an ongoing dispute between Plaintiffs and Glacier County and certain county officials (collectively, the County), the Supreme Court reversed the district court's grant of Plaintiffs' motion for appointment of a financial receiver for the County, holding that the court abused its discretion.Plaintiffs alleged claims against the County regarding alleged financial mismanagement and non-compliance with government budgeting, auditing, and tax laws. By motion filed prior to filing their complaint, Plaintiffs sought appointment of a financial receiver pendente lite to assure that the budgeting, tax levying, expenditure and disbursement, and accounting laws were strictly complied with. The district court refused to appoint a receiver for the purpose requested by Plaintiffs but appointed a more limited receivership to determine the extent of personal liability for the County officials for deficit spending. The Supreme Court reversed, holding that the district court (1) erred in appointing a receiver for a stated purpose in excess of and unrelated to the limited purpose of a receivership pendente lite; and (2) erred in basing the receivership on a preliminary adjudication of the ultimate merits of its underclass claims for relief and on a reason that did not establish or contribute to the requisite necessity for appointment of a receiver under section 27-20-102(3). View "Gottlob v. DesRosier" on Justia Law

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The Supreme Court affirmed the judgment of the district court denying Defendants' motion to dismiss claims asserted against Glacier County officials (collectively, the County) in Plaintiffs' complaint due to lack of subject matter jurisdiction, holding that the district court did not err.This was the fourth case arising from a dispute between Plaintiffs and the County regarding alleged financial mismanagement and non-compliance with government budgeting, auditing, and tax laws. The County sought dismissal of certain claims under Mont. R. Civ. P. 12(b)(1), arguing that subject matter jurisdiction was lacking because no express or implied right to remedy existed. The district court denied the motion on the ground that Mont. Code Ann. 15-1-406 through -408 provided and express private right and related remedies, and thus related subject matter jurisdiction. The Supreme Court affirmed without prejudice to issues properly preserved and raised pursuant to Mont. R. Civ. P. 12(b)(6), holding that the district court did not err in denying the County's Rule 12(b)(1) motion to dismiss. View "Gottlob v. DesRosier" on Justia Law

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The Supreme Court affirmed but on different grounds the summary judgment granted by the district court ruling that the equitable doctrine of unjust enrichment precluded the claim brought by Mountain Water Company for a general property tax refund on taxes that accrued during the pendency of a condemnation action initiated by the City of Missoula, holding that Mountain Water contractually waived its right to property tax proration and reimbursement from or against the City under Mont. Code Ann. 70-30-315.Specifically, the Supreme Court held (1) the district court erred in concluding that the doctrine of unjust enrichment precluded relief on Mountain Water's claim for property tax proration and relief under Mont. Code Ann. 70-30-315; (2) the district court erred in concluding that, but for application of equitable unjust enrichment, section 70-30-315 would entitle Mountain Water to a general property tax refund under Mont. Code Ann. 15-1-402(1)-(2), (6)(b)(i) and -406(1)-(3); (3) Mountain Water contractually waived its right to property tax proportion and reimbursement from the City under section 70-30-315; and (4) the district court correctly concluded that Mountain Water's subsequent assertion of a general property tax refund claim did not breach the parties' 2017 condemnation action settlement agreement. View "Mountain Water v. Department of Revenue" on Justia Law

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The Supreme Court affirmed the order of the district court affirming the administrative decision of the Montana Tax Appeal Board (MTAB) regarding Petitioner's residency status and dismissing his petition for judicial review, holding that Petitioner did not sever his Montana residency during the years 2008 to 2012 for income tax purposes.The Montana Department of Revenue determined that Petitioner was a Montana resident from 2008 to 2012 and assessed Petitioner $515,321 of Montana resident income tax, interest, and penalties. The MTAB affirmed. On review, the district court denied Petitioner's petition regarding the issue of his residency. The Supreme Court affirmed, holding that the district court did not err when it affirmed MTAB's administrative decision that Petitioner did not sever his Montana residency for income tax purposes from 2008 to 2012. View "Greenwood v. Department of Revenue" on Justia Law

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The Supreme Court reversed the order of the district court denying Exxon Mobil Corporation's (ExxonMobil) petition for interlocutory adjudication and affirming the Department of Revenue's determination that ExxonMobil was entitled to an eighty percent exclusion from income for the dividends it received from several of its domestic subsidiaries, holding that ExxonMobil correctly excluded 100 percent of the actual dividends.On appeal, ExxonMobil argued that the district court erred when it concluded that the dividends at issue were expressly apportionable as income under Mont. Code Ann. 15-31-325 and that, therefore, ExxonMobil was not entitled to a 100 percent income exclusion under Internal Revenue Code (I.R.C.) 243. The Supreme Court reversed, holding that ExxonMobil may deduct the actual dividends it receives from the domestic subsidiaries at issue for purposes of Montana taxation through I.R.C. 243. View "Exxon Mobil Corp. v. Montana Department of Revenue" on Justia Law

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The Supreme Court reversed the district court’s order granting summary judgment in favor of Plaintiffs, holding that the Tax Credit Program, which provides a taxpayer a dollar-for-dollar tax credit based on the taxpayer’s donation to a Student Scholarship Organization (SSO), violates Mont. Const. art. X, 6.SSOs fund tuition scholarships for students who attend private schools meeting the definition of Qualified Education Provider (QEP). Pursuant to its authority to implement the Tax Credit Program, Mont. Code Ann. 15-30-3111, the Montana Department of Revenue implemented Admin. R. M. 42.4.802 (Rule 1), which excluded religiously-affiliated private schools from qualifying as QEPs. Plaintiffs, parents whose children attended a religious-affiliated private school, challenged Rule 1. The district court granted summary judgment for Plaintiffs. The Supreme Court affirmed, holding that the Tax Credit Program violates Article X, Section 6’s prohibition on aid to sectarian schools and that the Department exceeded the scope of its rulemaking authority when it enacted Rule 1. View "Espinoza v. Montana Department of Revenue" on Justia Law

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The Supreme Court affirmed the district court’s grant of summary judgment in favor of Hiland Crude, LLC in this declaratory action challenging the tax classification of Hiland Crude’s crude oil gathering pipelines in Montana. Hiland Crude owns and operates crude oil gathering and transmission systems in Montana. The Department of Revenue began centrally assessing Hiland Crude’s property in 2013 and classified all of its pipeline systems within the State as class nine property. Hiland Crude filed this suit asserting that gathering pipeline systems should be taxed as class eight property, regardless of whether the property is centrally assessed, because they are “flow lines and gathering lines” under the class eight statute. The district court agreed and granted summary judgment for Hiland Crude. The Supreme Court affirmed, holding that the district court properly granted summary judgment in favor of Hiland Crude. View "Hiland Crude, LLC v. State, Department of Revenue" on Justia Law

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The Supreme Court affirmed the district court’s dismissal of this putative class action for lack of standing.Taxpayers, owners of real property and payers of property taxes in Glacier County, paid their taxes under protest 2015 in response to an independent audit that revealed deficiencies in the County’s budgeting and accounting practices. Taxpayers sued the County and the State, alleging that both entities failed to comply with budgeting and accounting laws. The district court denied class certification and dismissed the case for lack of standing, concluding that Taxpayers failed to demonstrate that they had suffered a concrete injury. The Supreme Court affirmed, holding that the district court correctly determined that Taxpayers lacked standing to sue either the County or the State. View "Mitchell v. Glacier County" on Justia Law

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Richland Aviation filed this proceeding to determine whether it was a “scheduled airline” and therefore subject to central tax assessment by the Montana Department of Revenue (DOR). The district court concluded that Richland Aviation was not a scheduled airline because it “does not hold out to the public that it operates between certain places at certain times[.]” Therefore, the district court concluded that Richland Aviation was not subject to central assessment. Applying the definitions found in Montana Department of Revenue v. Alpine Aviation, Inc., 384 P.3d 1035, the Supreme Court affirmed, holding that Richland Aviation does not engage in “regularly scheduled flights” required for central assessment. View "Richland Aviation, Inc. v. State, Department of Revenue" on Justia Law

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The Montana Supreme Court reversed the district court's order of a refund to Mountain Water and assessment of property taxes against the City of Missoula. The court held that section 70-30-315, MCA, selects a different date for purposes of designating the person who shall be assessed the property taxes in condemnation situations, requiring the condemnor to be assessed earlier in time than the general tax statutes would normally require, thus effectuating a unique proration of taxes as between condemnation parties. The statute simply established a tax proration date that is more favorable to condemnees than under general law, and provided no additional or alternate process to accompany this simple adjustment. In this case, Mountain Water retains responsibility for actual payment of the property taxes for the period it possesses the property, until the taking occurs. View "Mountain Water v. Department of Revenue" on Justia Law