Justia Tax Law Opinion Summaries

Articles Posted in New York Court of Appeals

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In this N.Y. C.P.L.R. 78 proceeding, the Court of Appeals held that Tax Appeals Tribunal of the State of New York (the Tribunal) rationally determined that the information services receipts at issue in this case were not excluded from the sales tax imposed by N.Y. Tax Law 1105(c)(1). Tax law 1105(c)(1) imposes sales tax on certain information services but excludes the furnishing of information that is personal or individual in nature. The New York State Department of Taxation and Finance (the Department) conducted an audit of the sales and use tax liability of Wegmans Food Markets, Inc., a regional supermarket chain, and determined that Wegmans's purchases of competitive price audits (CPAs) of its competitors and corresponding reports from RetailData, LLC were taxable receipts under Tax Law 1105(c)(1). Accordingly, the Department imposed additional sales tax. Wegmans petitioned the Division of Tax Appeals, arguing that RetailData's services qualified as an exempt information service that was personal and individual in nature. An ALJ denied the petition. The Tribunal affirmed. The Appellate Division annulled the Tribunal's determination, concluding that the tax exclusion applied. The Court of Appeals reversed, holding that the information RetailData furnished to Wegmans was not personal or individual in nature. View "In re Wegmans Food Markets, Inc. v. Tax Appeals Tribunal of State of New York" on Justia Law

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The Court of Appeals reversed the decision of the Appellate Division reversing the judgment of Supreme Court granting summary judgment in favor of Plaintiffs, individual tenants of rented apartments owned by Defendants, on their complaint seeking a declaration that their apartments were subject to rent stabilization, holding that apartments in buildings receiving tax benefits pursuant to N.Y. Real Prop. Tax law (RPTL) 421-g are not subject to luxury deregulation. Plaintiffs' apartments were located in building receiving tax benefits subject to RPTL 421-g. Defendants argued that Plaintiffs' apartments were exempt from rent regulation under the luxury deregulation provisions added to the Rent Stabilization Law (RSL), Administrative Code of City of New York 26-504.1, as part of the Rent Regulation Reform Act of 1993. The Appellate Division agreed and granted Defendants' motions for summary judgment to the extent of declaring that Plaintiffs' apartments were properly deregulated and were not subject to rent stabilization. The Court of Appeals reversed, holding that Plaintiffs' apartments were not subject to the luxury deregulation provisions of the RSL. View "Kuzmich v. 50 Murray St. Acquisition LLC" on Justia Law

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The Court of Appeals affirmed the order of the Appellate Division granting Respondents' motion to dismiss Petitioner's petitions challenging real property assessments, holding that Petitioner lacked standing to bring an action seeking judicial review of property tax assessments under N.Y. Real Prop. Law (RPTL) 7 because Petitioner was a non-owner with no legal authorization or obligation to pay the real property taxes and, therefore, was not an aggrieved party with in the meaning of RPTL 7. Petitioner was a family-owned corporation that operated a restaurant on the property at issue. The real property was owned by two individuals. For four tax years Petitioner filed administrative grievance complaints challenging the real property assessments. The board of assessment review confirmed the tax assessments. Thereafter, Petitioner commenced tax certiorari proceedings pursuant to RPTL article 7. Supreme Court denied Respondents' motion to dismiss the petitions. The Appellate Division reversed and granted Respondents' motions to dismiss, concluding that, while Petitioner had standing as an aggrieved party, Petitioner failed to satisfy a condition precedent to the filing of the petitions. The Court of Appeals affirmed on other grounds, holding that Petitioner lacked standing. View "Larchmont Pancake House v. Board of Assessors" on Justia Law

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The Court of Appeals held that N.Y. Real Prop. Law 339-y(4) allows a standing authorization issued by a condominium unit owner to confer authority upon a condominium board of managers to act on behalf of that owner for the tax year in which that authorization was issued and in all subsequent tax years. At issue were various tax assessments made with respect to property that consisted of individually-owned condominium units. The condominium units were assessed for four tax years during which Petitioner, the condominium board of managers, acting as the agent for individual owners, filed a grievance complaint with Respondents with respect to those assessments. Respondents denied the complaints. Acting as agent for each of the unit owners, Petitioner filed one petition for each of the tax years, alleging that Respondents had incorrectly assessed the units. Supreme Court ruled that the only unit owners who would receive a refund would be those who subscribed to a separate authorization for each of the separate tax years at issue. The Court of Appeals reversed, holding that where an owner subscribes to a standing agency authorization conferring authority on a board of managers to act on behalf of that owner, section 339-y(4) allows that authorization to remain effective until it is cancelled or retracted. View "Eastbrooke Condominium v. Ainsworth" on Justia Law

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The Court of Appeals affirmed the order of the Appellate Division determining that certain telecommunications equipment was taxable property pursuant to N.Y. Real Prop. Tax Law (RPTL) 102(12)(i), holding that the Appellate Division properly found that the equipment was taxable under the statute. The equipment at issue was certain large cellular data transmission equipment owed by T-Mobile Northeast, LLC and mounted to the exterior of buildings throughout T-Mobile’s service area in Mount Vernon. T-Mobile brought this hybrid declaratory judgment action and N.Y. C.P.L.R. 78 proceeding seeking a declaration that the property was not taxable. Supreme Court dismissed the proceeding, holding that the property was taxable under the RPTL. The Appellate Division affirmed. The Court of Appeals affirmed, holding that T-Mobile’s arguments on appeal lacked merit. View "T-Mobile Northeast, LLC v. DeBellis" on Justia Law

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Because N.Y. Tax Law 471, which imposes requirements on Indian retailers located on reservation land to pre-pay the tax on cigarette sales to individuals who are not members of the Seneca Nation of Indians, does not operate as a direct tax on the retailers or upon members of the Seneca Nation, it does not conflict with either the Buffalo Creek Treaty of 1842 or N.Y. Indian Law 6. Plaintiffs brought this action seeking a declaration that Tax Law 471 is unconstitutional and a permanent injunction enjoining Defendants from enforcing the law against them. Supreme Court dismissed the complaint for failure to state a cause of action. The Appellate Division reinstated the complaint to the extent it sought a declaration and then granted judgment in favor of Defendants. The Court of Appeals affirmed, holding (1) Tax Law 471 does not constitute a tax on an Indian retailer; and (2) therefore, Tax Law 471 does not violate the plain language of the Treaty or Indian Law 6. View "White v. Schneiderman" on Justia Law

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The owner commenced tax certiorari proceedings against the City of Rye, challenging assessments for tax years 2002-2010. for Lot 9 and Lot 10. Lot 10 is within the Rye City School District. Lot 9, which the owner believed to be within that district, actually lies within Rye Neck Union School District. Under RPTL 708, within 10 days of service of the notice and petition on a municipality in a tax certiorari proceeding, a petitioner must mail a copy of those documents to the superintendent of schools of any district within which the assessed property is located. The owner did not comply with that requirements before reaching an agreement with the City. Before that tentative settlement was finalized, the owner recognized its error, notified the Rye District, mailed the petition and notice, and sought the Rye District's consent to settle. The District instead intervened. The court dismissed the petitions with prejudice for failure to comply with RPTL 708. The Appellate Division clarified that dismissal pertained to Lot 9, noting that the action may not be recommenced under CPLR 205(a). The Court of Appeals affirmed. A petitioner who ignores the RPTL 708 mailing requirements and denies a school district the opportunity to economically address a tax certiorari proceeding is not permitted to recommence a proceeding dismissed based upon such noncompliance; to do so would undermine the goals that prompted amendments to RPTL 708. View "Westchester Joint Water Works v Assessor of City of Rye" on Justia Law

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Petitioner applied for the partial ten-year exemption for certain improvements made to real property - known as the business investment exemption - in 2008. After the city assessor valued Petitioner’s property, Petitioner challenged the assessed value of the property and the amount of the exemption. Supreme Court granted summary judgment to Petitioner on the amount of the exemption and recalculated the exemption for years 2008 through 2014. Supreme Court ordered the Schenectady City School District to issue refunds of any excess taxes it collected during the 2009 through 2014 calendar years due to the prior incorrect calculation of Petitioner’s exemption. The Appellate Division modified by reversing the portion of the order directing the School District to issue refunds for the 2009 through 2011 assessment rolls, concluding that unless Petitioner filed annual challenges to the assessment while the initial 2008 petition was pending, Petitioner failed to preserve its challenge. The Court of Appeals reversed, holding that there is no requirement that a taxpayer who challenges the amount of the business investment exemption file annual petitions while the initial petition is pending in order to compel compliance with a resulting court order. View "Highbridge Broadway, LLC v. Assessor of the City of Schenectady" on Justia Law

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In 2012, the Attorney General (AG) filed a complaint resulting in a civil enforcement action by the AG, alleging that Sprint knowingly violated the New York Tax Law, engaged in fraudulent or illegal acts, and submitted false documents to the State pursuant to the New York False Claims Act (FCA). Sprint moved to dismiss the complaint for failure to state a cause of action. Supreme Court denied the motion, and the Appellate Division affirmed. The Court of Appeals affirmed, holding (1) the New York Tax Law imposes sales tax on interstate voice service sold by a mobile provider along with other services for a fixed monthly charge; (2) the statute is unambiguous; (3) the statute is not preempted by federal law; (4) the AG’s complaint sufficiently pleads a cause of action under the FCA; and (5) the damages recoverable under the FCA are not barred by the ex post facto clause of the United States Constitution. View "People v. Sprint Nextel Corp." on Justia Law

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Plaintiffs here were a group of travel companies that enable customers to make online travel arrangements, including hotel reservations. Plaintiffs brought a declaratory judgment action challenging the constitutionality of Local Law 43, a hotel room occupancy tax applicable to online travel companies. Alternatively, Plaintiffs contended that the law did not apply to them because their service fees were not "rent" within the meaning of the state enabling legislation. Supreme Court held (1) the law was constitutional, and (2) the plain language of the state statute authorized the City's tax. The Appellate Division reversed, holding (1) the enabling legislation did not provide the City with broad taxation powers to tax Plaintiffs' fees, and (2) the City's tax was unconstitutional. The Court of Appeals reversed, holding that the City had the authority to enact the tax and that the Appellate Division erred when it declared the tax unconstitutional. View "Expedia, Inc. v. City of New York Dep't of Fin." on Justia Law