Justia Tax Law Opinion Summaries

The Oregon Department of Revenue assessed taxpayers $5,595 for deficient taxes, plus additional penalties and interest, for tax year 2013. Taxpayers first appealed that determination to the Magistrate Division of the Tax Court. While the case was pending there, the parties jointly moved to hold the proceedings in abeyance pending the outcome of an Internal Revenue Service audit reconsideration. The parties also entered into an agreement extending the limitation period for the department to make “any adjustment necessary to arrive at the correct amount of Oregon taxable income and Oregon tax liability.” The limitation period expired April 30, 2019, and no new or modified assessment was sent. After the Magistrate Division proceedings were reinstated, taxpayers contended that the extension agreement voided the original assessment, and so the absence of a new assessment meant the court should grant summary judgment in their favor. The department countered that the original assessment remained valid and in effect. The magistrate agreed with the department and denied taxpayers’ motion, and later denied taxpayers’ two motions for reconsideration. After taxpayers repeatedly refused to comply with the department’s request for production of documents, the department moved to dismiss. The magistrate granted that motion, and taxpayers appealed that decision by filing a complaint with the Tax Court Regular Division. Taxpayers’ complaint sought relief from the 2013 assessment of deficient income taxes, and included a motion by taxpayers to stay the statutory requirement to pay the deficiency, together with an affidavit regarding their finances to support their claim that payment would impose an undue hardship. The Tax Court ultimately dismissed taxpayers' appeal for failing to either pay the assessed income tax or show that doing so would constitute an undue hardship. Finding no error in that judgment, the Oregon Supreme Court affirmed dismissal. View "Picker v. Dept. of Rev." on Justia Law

Taxpayers, who did not dispute that they had in fact been paid substantial wages in tax years 2016-18, contended at Tax Court that they owed no Oregon income tax for those years. The Tax Court concluded their arguments in support of that contention were frivolous and therefore warranted a penalty under ORS 305.437. Accordingly, the court ordered taxpayers to pay the Department of Revenue (department) a penalty of$4,000. Taxpayers appealed, challenging only the penalty award. Finding no reversible error, the Oregon Supreme Court affirmed the Tax Court’s judgment. View "Jimenez v. Dept. of Rev." on Justia Law

The issue on appeal in this case was whether taxpayer, Ooma, Inc., a California company, had sufficient contacts or nexus with Oregon to make it subject to local tax. The Oregon Tax Court concluded that Ooma’s contacts and nexus with Oregon were sufficient to satisfy the Due Process and Commerce Clauses, and granted summary judgment to the Department of Revenue. Finding no reversible error in that judgment, the Oregon Supreme Court affirmed the Tax Court. View "Ooma, Inc. v. Dept. of Rev." on Justia Law

Rami Khalaf (“taxpayer”) was in the business of buying products for customers in the United Arab Emirates, primarily all-terrain vehicles (ATVs). He sought to claim certain business deductions on his 2013 income tax return. As relevant here, those included travel expenses that taxpayer had incurred on trips to the Emirates, and the cost of a dune buggy that taxpayer had purchased for use as a demonstration model. The Department of Revenue rejected those deductions. The Tax Court agreed with the department on those points, holding that the travel expenses were not deductible, because they were not sufficiently documented, and that the dune buggy was not deductible because it counted as inventory. Taxpayer appealed, but finding no reversible error, the Oregon Supreme Court affirmed the Tax Court's judgment. View "Khalaf v. Dept. of Rev." on Justia Law

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

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

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

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

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

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