Justia Tax Law Opinion SummariesArticles Posted in Oregon Supreme Court
Powell Street I v. Multnomah County Assessor
The issue this case raised for the Oregon Supreme Court’s review centered on the proper valuation, for property tax purposes, of a shopping center that did not have an anchor tenant on the assessment date. The Tax Court accepted taxpayer’s valuation that significantly decreased the value of the shopping center because it was missing an anchor tenant and was more than 50 percent vacant on the relevant date. On appeal, the Department of Revenue contended the Tax Court erred. According to the department, the shopping center was required to be valued the same as a shopping center that did have an anchor tenant and was only 8-10 percent vacant. The Oregon Supreme Court rejected the Department’s argument and affirmed the Tax Court’s judgment. View "Powell Street I v. Multnomah County Assessor" on Justia Law
DISH Network Corp. v. Dept. of Rev.
In 2009, DISH Network Corporation (DISH) received an assessment order from the Oregon Department of Revenue showing that its property in Oregon for tax purposes was valued at an amount that exceeded the previous year’s valuation by nearly 100 percent. The increase came about because the department had subjected DISH’s property to central assessment and thus, also, to “unit valuation,” a method of valuing property that purported to capture the added value associated with a large, nationwide business network that, by statute, was available for central, but not local, assessments. Although DISH objected to the change from local to central assessment, the department insisted that central assessment was required because DISH was using its property in a “communication” business. When DISH was forced to concede defeat on that issue based on DIRECTV, Inc. v. Dept. of Rev., 377 P3d 568 (2016), another issue arose: whether the drastic increase in the assessed value of DISH’s property starting in the 2009-10 tax year violated Article XI, section 11 of the Oregon Constitution. The department argued that, because DISH’s property had been newly added to the central assessment rolls in 2009, the property fell into an exception to the three-percent cap on increases in assessed value - for “new property or new improvements to property.” The Tax Court rejected the department’s “new property” theory and held that the department’s assessments of DISH’s property in the tax years after 2008-09 was unconstitutional. The Oregon Supreme Court agreed with the department that the exception applied and therefore reversed the Tax Court’s decision to the contrary. View "DISH Network Corp. v. Dept. of Rev." on Justia Law
Posted in: Civil Procedure, Constitutional Law, Government & Administrative Law, Oregon Supreme Court, Tax Law
Seneca Sustainable Energy, LLC v. Dept. of Rev.
In 2009, Seneca Sustainable Energy LLC (Seneca) began construction of a biomass cogeneration facility on property that it owned outside of Eugene, Oregon. In this direct appeal of the Regular Division of the Tax Court, the Department of Revenue argued the Tax Court erred in concluding that it had jurisdiction to consider a challenge brought by Seneca to the department’s determination of the real market value of Seneca’s electric cogeneration facility and the notation of the real market value on the assessment roll for two tax years, 2012-13 and 2013-14. The department also argued that the Tax Court erred in concluding that the department’s determinations of the property’s real market values for the 2012-13 and 2013-14 tax years were incorrect and in setting the values at significantly lower amounts. Finding no reversible error, the Oregon Supreme Court affirmed the Tax Court’s rulings. View "Seneca Sustainable Energy, LLC v. Dept. of Rev." on Justia Law
Posted in: Civil Procedure, Government & Administrative Law, Oregon Supreme Court, Real Estate & Property Law, Tax Law
Work v. Dept. of Rev.
A magistrate court granted a taxpayer part of the relief requested. The magistrate accepted the property values that taxpayer requested for the two most recent tax years but did not accept the values that taxpayer requested for the first four tax years. Taxpayer appealed the magistrate’s decision by filing a timely complaint in the regular division of the tax court. The Department of Revenue (the department) did not appeal or seek any affirmative relief from the magistrate’s decision. Instead, the department moved to dismiss the complaint that taxpayer had filed in the tax court. The tax court granted the department’s motion, dismissed taxpayer’s complaint, and entered a judgment that gave effect to the magistrate’s decision. Taxpayer appealed from the tax court’s judgment to the Oregon Supreme Court, and the department has cross-appealed. The primary question presented for the Supreme Court’s review was whether the tax court erred in giving effect to the magistrate’s decision granting taxpayer’s requested relief for the two most recent tax years. Finding no reversible error, the Supreme Court affirmed the tax court. View "Work v. Dept. of Rev." on Justia Law
Comcast Corp. v. Dept. of Rev.
Comcast Corporation challenged the Oregon Tax Court's construction of the statutory formula by which Oregon calculated the portion of its income taxable by Oregon. Based in part on those statutes, the Oregon Department of Revenue calculated that taxpayer had underpaid Oregon taxes for the tax years 2007-2009 and sent notices of deficiency, which Comcast appealed to the Tax Court. The Tax Court agreed with the department’s construction of the income-apportionment statutes and granted the department partial summary judgment on that part of Comcast's appeal. The Tax Court also entered a limited judgment to permit this appeal. After review, the Oregon Supreme Court concluded the Tax Court correctly construed the statutes that governed income-apportionment for interstate broadcasters, and affirmed the limited judgment. View "Comcast Corp. v. Dept. of Rev." on Justia Law
Capital One Auto Finance, Inc. v. Dept. of Rev.
Capital One Auto Finance, Inc. (taxpayer) filed consolidated Oregon corporate excise tax returns as part of a group that included two corporate affiliates. Taxpayer disputed the Department of Revenue’s contention that it owed additional taxes. Ultimately, the issue in this case was whether taxpayer’s corporate affiliates, which did not have a physical presence in this state, were subject to either Oregon’s corporate excise tax or its corporate income tax for the tax years 2006-2008. Preliminarily, taxpayer also asserted the department lacked the authority to assert for the first time in the Tax Court that the affiliates were subject to corporate income tax. Ruling on cross-motions for summary judgment, the Tax Court concluded that the affiliates were subject to the corporate income tax and entered judgment in favor of the department. The Oregon Supreme Court concluded: (1) the department timely raised the corporate income tax issue; and (2) the corporate affiliates were subject to the corporate income tax based on “income derived from sources within this state.” View "Capital One Auto Finance, Inc. v. Dept. of Rev." on Justia Law
AAA Oregon/Idaho Auto Source v. Dept. of Rev.
In 2017, the Oregon legislature enacted a law that imposed a tax imposed on each vehicle dealer "for the privilege of engaging in the business of selling taxable motor vehicles at retail in this state.” The issue in this case was whether that tax was subject to Article IX, section 3a, of the Oregon Constitution. As relevant here, Article IX, section 3a, provided that taxes “on the ownership, operation or use of motor vehicles” “shall be used exclusively for the construction, reconstruction, improvement, repair, maintenance, operation and use of public highways, roads, streets and roadside rest areas in this state.” Petitioners AAA Oregon/Idaho Auto Source, LLC (Auto Source), AAA Oregon/Idaho, and Oregon Trucking Associations, Inc. argued the Section 90 tax fell within paragraph (1)(b) because it was a tax “on the owner- ship *** of motor vehicles.” Specifically, petitioners contended that taxes “on the ownership *** of motor vehicles” included taxes levied on the exercise of any of the rights of ownership, including the rights to sell and use. Petitioners posited that the voters would have understood “the concept of ownership” to include “multiple segregable rights or incidents, principal among which were the rights to sell and to use,” and, therefore, it is likely that the voters would have understood taxes levied “on the ownership *** of motor vehicles” to include taxes levied on the sale or use of motor vehicles. The Oregon Supreme Court disagreed with petitioners' contention: the Section 90 and Section 91 taxes worked together, so that the Section 91 privilege tax could be imposed on in-state vehicle dealers without placing them at a competitive disadvantage to out-of-state vehicle dealers, which supported the conclusion that the Section 90 tax was a business privilege tax. Therefore, the Court held the Section 90 tax was not a tax “on the ownership, operation or use of motor vehicles,” as that phrase is used in Article IX, section 3a. View "AAA Oregon/Idaho Auto Source v. Dept. of Rev." on Justia Law
Ellison v. Dept. of Rev.
In the underlying property tax appeal, the Tax Court rejected a request by the Department of Revenue and the county assessor to increase the real market value of taxpayer’s property, and the court later awarded taxpayer attorney fees against the department under ORS 305.490(4)(a). The department appealed the attorney fee award only. The Oregon Supreme Court determined that even though the Tax Court also rejected the taxpayer’s request for a reduction in real market value, the legal prerequisite for a discretionary attorney fee award under that statute was met. The Supreme Court also concluded that the Tax Court did not err in applying most of the factors on which it relied in making the fee award. However, the Court concluded that the lower court’s use of one factor was erroneous, thus bringing into question the court’s overall exercise of discretion. Accordingly, the fee award was vacated and the matter remanded for the court to exercise its discretion without considering that factor. View "Ellison v. Dept. of Rev." on Justia Law
Posted in: Government & Administrative Law, Oregon Supreme Court, Real Estate & Property Law, Tax Law
Delta Logistics, Inc. v. Employment Dept. Tax Section
Delta Logistics, Inc. was a "for-hire carrier" licensed by the federal government to transport goods interstate. Delta did not own any trucks; rather, it leased trucks from owner-operators, who operated, furnished, and maintained the trucks. The Oregon Employment Department assessed Delta unemployment insurance taxes on the funds that Delta paid the owner-operators, on grounds the owner-operators did not come within the exemption in ORS 657.047(1)(b) because the leases that the owner-operators entered into with Delta were not "leases" within the meaning of the statute: to come within the exemption, the owner must be the only person operating the truck. An administrative law judge (ALJ) agreed and issued a final order upholding the assessment. Delta appealed. The Court of Appeals was not persuaded by the Department's arguments and overturned the ALJ's decision, finding ORS 657.047(2) made clear that the exemption included owners who hire employees to help operate their trucks. Considering the text, context, and legislative history of ORS 657.047(1)(b), the Oregon Supreme Court did not agree with the department that Delta owed unemployment taxes on owner-operators who hired employees to help them operate the motor-vehicles they leased to Delta. The Court of Appeals was affirmed that the final of the ALJ was reversed. View "Delta Logistics, Inc. v. Employment Dept. Tax Section" on Justia Law
Posted in: Government & Administrative Law, Labor & Employment Law, Oregon Supreme Court, Tax Law, Transportation Law
Boardman Acquisition LLC v. Dept. of Rev.
This case involved ad valorem property taxes: the land at issue had been exempted from some property taxes because it was specially assessed as nonexclusive farm use zone farmland. When that special assessment ends, the property ordinarily has an additional tax levied against it. The question here was whether an exception created by ORS 308A.709(5) applied to excuse the payment of that additional tax. The Tax Court agreed with the Department of Revenue and concluded that the exception was not available. The Port of Morrow appealed. The Oregon Supreme Court concluded that the statutory text on which this case turned, “the date the disqualification [from special assessment] is taken into account on the assessment and tax roll,” meant the date the disqualification became effective on the assessment and tax roll. As a result of that holding, the Supreme Court affirmed. View "Boardman Acquisition LLC v. Dept. of Rev." on Justia Law
Posted in: Government & Administrative Law, Oregon Supreme Court, Real Estate & Property Law, Tax Law