Articles Posted in Nebraska Supreme Court

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At issue in this case was the adjustment of the valuation of three subclasses of residential real property in Douglas County. The Tax Equalization and Review Commission (TERC) issued an order to show cause why it should not increase the valuation of two properties by seven percent and decrease the valuation of a third property by eight percent. TERC voted to adjust the valuations. Douglas County filed a motion to reconsider, which the TERC commissioners overruled. The Supreme Court affirmed in part and reversed in part, holding (1) TERC’s order to decrease the valuation of one property by eight percent was not supported by competent evidence and was arbitrary, capricious, and unreasonable; (2) TERC’s order to increase the valuation of the other two properties was supported by competent evidence and was not arbitrary, capricious, and unreasonable; and (3) TERC did not abuse its discretion by denying Douglas County’s motion to reconsider its order. View "County of Douglas v. Nebraska Tax Equalization & Review Commission" on Justia Law

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The Nebraska Department of Revenue and the acting Tax Commissioner denied, in part, the requested refunds of Farmers Cooperative and Frontier Cooperative Co. (collectively, the Cooperatives). The district court affirmed. The Cooperatives sought refunds of sales and use taxes paid on the purchase of repairs and parts for agricultural machinery and equipment under Neb. Rev. Stat. 77-2708.01. At issue in these consolidated appeals was how the phrase “depreciable repairs or parts” within section 77-2708.01 should be interpreted. The Supreme Court affirmed, holding that the district court did not err in affirming the partial denial of the Cooperatives’ requested refunds based upon its interpretation of section 77-2708.01. View "Farmers Cooperative v. State" on Justia Law

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Two taxpayers sold their capital stock of a corporation and structured the transaction to comply with the terms of a definitional statute in order to qualify for a special capital gains election. The Nebraska Department of Revenue disallowed the taxpayers’ special capital gains election. The taxpayers filed a petition for redetermination, and the Tax Commissioner denied the petition. The district court affirmed. The taxpayers appealed, asserting that the district court erred in applying the “economic substance” and “sham transaction” doctrines in determining whether they were entitled to the special capital gains election. The Supreme Court reversed, holding that the economic substance doctrine and the sham transaction doctrines did not provide a basis to disallow the taxpayers’ election. Remanded. View "Stewart v. Nebraska Dep’t of Revenue" on Justia Law

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Several indoor tanning salons filed claims for tax refunds with the Department of Revenue for admissions taxes. Apparently, in 2012, the Attorney General’s office had issued an opinion that Neb. Rev. Stat. 77-2703(1) did not authorize subjecting tanning salons to admissions taxes. The Department has since repealed the regulation listing tanning salons among the businesses subject to the tax and has ceased collecting the tax. The Tax Commissioner disallowed the claims, stating that “[a] refund of a tax improperly or erroneously collected can only be issued by the State directly to the purchaser who paid the tax.” The district court consolidated the cases and affirmed. The Nebraska Supreme Court affirmed, agreeing that the salon customers were the taxpayers of the admissions tax. View "Aline Bae Tanning, Inc. v. Neb. Dep't. of Revenue" on Justia Law

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In 2011, Cheyenne County conducted its annual tax sale. Rather than using a traditional “round robin” format at the sale, the county treasurer used the “bid down” format provided by Neb. Rev. Stat. 77-1807. Adair Asset Management, LLC purchased a tax sale certificate on certain real estate, now owned by Terry’s Legacy, LLC, after offering to pay the taxes due for a one percent undivided interest in the property. After paying delinquent taxes on the property, Adair filed a complaint and obtained a decree judicially foreclosing the lien provided by the tax sale certificate. The complaint alleged that there was a potential claim against the property by First State Bank. The subsequent decree, in effect, ordered a sale of a 100-percent interest in the property. Terry’s Legacy appealed, arguing that the district court erred by failing to determine that it retained a ninety-nine-percent interest in the property. The Supreme Court modified the decree of foreclosure to apply only to Adair’s undivided one percent interest in the property and, as so modified, affirmed, holding that Adair’s lien to be foreclosed is limited to one percent of the property. Remanded. View "Adair Asset Mgmt., LLC v. Terry’s Legacy, LLC" on Justia Law

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Neb. Rev. Stat. 77-1502(2) imposes a requirement and specifies a consequence for its violation. In this case, a taxpayer filed a property valuation protest. The taxpayer’s protest form specified the assessed and requested valuation amounts but stated no reason for the requested change. The Lincoln County Board of Equalization dismissed the protest, citing section 77-1502(2). The taxpayer appealed to the Nebraska Tax Equalization and Review Commission (TERC). TERC dismissed the appeal with prejudice, concluding that it lacked jurisdiction because the Board did not have jurisdiction to hear the protest due to the taxpayer’s failure to state the reason for the protest. The Supreme Court affirmed, holding (1) the Board correctly dismissed the taxpayer’s protest because the protest failed to include a reason for the requested change in valuation; and (2) because the Board lacked authority to hear the taxpayer’s property valuation protest on the merits, TERC likewise lacked authority to do so. View "Village at North Platte v. Lincoln County Bd. of Equalization" on Justia Law

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The Harold Warp Pioneer Village Foundation (Foundation) owned and operated a museum, motel, and campground. The motel and campground were primarily used by museum visitors. The museum, motel, and campground were all granted property tax exemptions for many years, but in 2011, state tax officials challenged the exemptions granted to the motel and campground. The Nebraska Tax Equalization and Review Commission determined that because the motel and campground were not used exclusively for educational purposes, neither was entitled to tax exemptions under Nebraska law. The Supreme Court reversed, holding that the motel and campground were beneficial to the museum and reasonably necessary to further its educational mission, and were therefore entitled to property tax exemptions. View "Harold Warp Pioneer Village Found. v. Ewald" on Justia Law

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Employee was injured during the scope and course of his employment with Employer, the Burlington Northern Santa Fe Railway Company. Because he was a railroad employee, Employee filed a claim for personal injury damages pursuant to the Federal Employers' Liability Act. The district court entered judgment in favor of Employee for $145,000. Employer paid the judgment but withheld $6,202 as Employee's share of Railroad Retirement Tax Act (RRTA) payroll taxes on the entire general verdict award. The district court (1) overruled BNSF's motion for satisfaction and discharge of judgment and directed BNSF to pay $6,202 directly to Employee, and (2) directed the parties to agree in writing that no amount of the award would be considered lost wages so as to avoid any obligations under the RRTA. The Supreme Court reversed, holding that the general verdict award in favor of Employee was an award of compensation from which Employer was required to withhold a portion of in order to pay RRTA payroll taxes. Remanded with directions that the district court enter a satisfaction and discharge of the judgment upon proof of payment of $6,202 by BNSF to the IRS on account of the lost wages paid to Employee. View "Heckman v. Burlington N. Santa Fe Ry. Co." on Justia Law

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Effective in 2010, the Legislature changed the manner in which wind energy generation facilities are taxed. The change (1) exempted personal property used by wind energy generation facilities from the personal property tax and imposed a new tax based upon the facility's nameplate capacity, and (2) allowed taxpayers who had paid personal property tax prior to 2010 to claim a credit against nameplate capacity taxes assessed for the year 2010 and onward. Plaintiffs, Nebraska taxpayers, challenged the constitutionality of the credit. The district court determined that the credit provision of the new statute constituted an improper commutation of taxes and was therefore unconstitutional and void. The Supreme Court reversed, holding (1) the nameplate capacity tax credit did not violate the constitutional prohibition against commutation of taxes because the prohibition does not apply to an excise tax, and the tax in this case was an excise tax; and (2) the statute authorizing the credit was not special legislation prohibited by the state constitution. Remanded with directions to dismiss. View "Banks v. Heineman" on Justia Law

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This appeal involved a declaratory judgment action challenging the constitutionality of a municipal ordinance creating an offstreet parking district adjoining a Cabela's store. Plaintiff, a resident of the City, filed a complaint against the City and its mayor and city council members, seeking a declaration of the unconstitutionality of the ordinance. The district court found the action was barred by the general four-year statute of limitations because it was commenced more than four years after the ordinance was adopted. At issue on appeal was when the statute of limitations began to run. The Supreme Court reversed without reaching the constitutionality of the ordinance because the Court could not tell from the face of Plaintiff's complaint when Plaintiff's cause of action accrued for purposes of the running of the statute of limitations. Remanded. View "Lindner v. Kindig" on Justia Law