Justia Tax Law Opinion Summaries

This case involved a constitutional challenge to an occupation tax levied pursuant to Neb. Rev. Stat. 2-3226.05. Appellant landowners, who were residents and taxpayers of natural resources districts in the Republican River basin, brought an action for declaratory and injunctive relief seeking to have the occupation tax declared unconstitutional and its levy and collection enjoined. The district court upheld the constitutionality of the occupation tax, determining that it did not violate the Nebraska Constitution as (1) the occupation tax was not a property tax but, rather, an excise tax levied upon the activity of irrigation; (2) the occupation tax did not result in a commutation of taxes; and (3) section 2-3226.05 was not special legislation. The Supreme Court affirmed, holding (1) the judgment in Garey v. Nebraska Department of Natural Resources did not bar this action under the doctrine of res judicata; and (2) the landowners did not meet their burden of establishing that the occupation tax was unconstitutional.

Appellee Betty Vandenberg owned a parcel of land which she leased to individuals who farmed the land. The parcel contained a well, a pump, motor, gear box, and pipe, all of which were used to irrigate the land. The central issue of this case involves the irrigation pump, which hanged inside a cased well and was secured to the land with a cement cap and bolts. The County assessor determined that the pump was taxable as Appelleeâs personal property. She appealed to the Tax Equalization and Review Commission (TERC) which reversed the assessor and called the pump a fixture on the land. The County appealed TERCâs decision. The Supreme Court found that the pump is a trade fixture, a fixture that is taxed as personal property. The Court reversed TERCâs determination and remanded the case for further proceedings on the assessment of tax.