Justia Tax Law Opinion Summaries

Respondent, the New Hampshire Department of Revenue Administration (DRA), appealed a Superior Court ruling. Money distributions from the Lyme Timber Company (Lyme) paid to limited partners that lived in New Hampshire were not considered taxable income under the state tax code. The court reasoned that the Lyme partners' interests were not "transferable shares" within the meaning of the tax code, and therefore not taxable. On appeal to the Supreme Court, the DRA argued that the trial court misinterpreted and misapplied the tax regulations, and failed to consider portions of the Lyme partnership agreement. In its review, the Supreme Court engaged in defining the pertinent terms of the tax code and the Lyme partnership agreement. The Court concluded that the trial court did misinterpret many of the pertinent terms that were the basis of this appeal. The Court reversed the trial court and remanded the case for further proceedings.