Justia Tax Law Opinion SummariesArticles Posted in Oregon Supreme Court
Estate of Evans v. Dept. of Rev.
The estate of Helene Evans, a deceased Oregon resident, challenged the Oregon Tax Court’s determination that the Department of Revenue lawfully included in Evans’s taxable Oregon estate the principal assets of a Montana trust, of which Evans had been the income beneficiary. Although Evans had a right to receive income generated by those assets during her lifetime and potentially had the right to tap the assets themselves, the estate claimed she had not owned, and did not have control over the assets. Under those circumstances, plaintiff argued, Oregon did not have the kind of connection to the trust assets that the Due Process Clause of the Fourteenth Amendment to the United States Constitution required for a state to impose a tax on a person, property, or transaction. The Oregon Supreme Court concluded that Oregon’s imposition of its estate tax on the trust assets in this case comported with the requirements of due process. It, therefore, affirmed the judgment of the Tax Court. View "Estate of Evans v. Dept. of Rev." on Justia Law
Level 3 Communications, LLC v. Dept. of Rev.
Taxpayer Level 3 Communications, LLC (Level 3) challenged the Oregon Tax Court’s determination of the real market value of its tangible and intangible property for the 2014-15, 2015-16, and 2016-17 tax years. Level 3 argued that the Tax Court held that the central assessment statutory scheme permitted taxation of the entire enterprise value of the company, contrary to the wording of applicable statutes that permit taxation only of a centrally assessed corporation’s property. According to Level 3, the Tax Court applied that erroneous holding to incorrectly accept the Department of Revenue’s (the department’s) valuations of Level 3’s property for the relevant tax years. The Oregon Supreme Court concluded Level 3 misconstrued the Tax Court’s decision, and the Tax Court did not err by accepting the department’s valuations. Accordingly, the Tax Court’s judgment was affirmed. View "Level 3 Communications, LLC v. Dept. of Rev." on Justia Law
Bert Brundige, LLC v. Dept. of Rev.
At Tax Court, the parties disagreed about what types of equipment fall within the definition of "logging equipment" exempt from ad valorem property taxation under ORS 307.27. Specifically, they disagreed about what types of equipment used for logging road work - logging road construction, maintenance, reconstruction, improvement, closure, or obliteration - fell within the definition. Plaintiff Bert Brundige, LLC argued that all types of equipment used for logging road work fell within the definition. Defendant, the Oregon Department of Revenue, argued that excavators were the only type of equipment used for logging road work that fell within the definition. The Tax Court agreed with defendant and entered a judgment in its favor. Plaintiff appealed. Finding no reversible error, the Oregon Supreme Court affirmed. View "Bert Brundige, LLC v. Dept. of Rev." on Justia Law
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
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
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