Justia Tax Law Opinion Summaries

Taxpayer Leslie Scott appealed a tax court judgment that dismissed his appeal for lack of jurisdiction. In 2012, the Department of Revenue issued notices of deficiency assessments against taxpayer relating to his personal income taxes for the tax years 2007 and 2008. Taxpayer appealed, and the Magistrate Division of the Tax Court determined that taxpayer had substantiated some claimed deductions that the department had disputed, but also that he had additional unreported income. Following the proceedings in the Magistrate Division, the department assessed additional income taxes for 2007 and 2008, and issued notices of liability balances to that effect. Taxpayer appealed to the Regular Division. The Tax Court received taxpayer’s complaint, a declaration of mailing, a motion for a stay of the requirement to pay the taxes owed, and the filing fee for the complaint. The Tax Court did not, however, receive an affidavit, with the complaint, alleging that payment of the disputed amounts pending appeal would cause him undue hardship. The department moved to dismiss taxpayer’s complaint on the ground that the court lacked jurisdiction over the subject matter because taxpayer had not complied with the requirements of ORS 305.419 and TCR 18 C. Taxpayer opposed the department’s motion and submitted a declaration by his counsel that, according to counsel’s recollection, he had printed and assembled a packet for mailing to the Tax Court that included a complaint, a declaration of mailing, a motion for a stay, a hardship declaration, and a filing fee. Ultimately, the Tax Court granted the department’s motion. The Supreme Court reversed. "We hesitate to deem as jurisdictional a statutory requirement that is designed to allow someone without funds access to the courts to pursue their statutory appeal rights. […] what makes the taxpayer’s complaint subject to dismissal is the failure to establish undue hardship, not the failure to file an affidavit with the complaint." The Supreme Court concluded the Tax Court erred in dismissing taxpayer’s appeal on that ground. View "Scott v. Dept. of Rev." on Justia Law

For the 2006 tax year, taxpayers Mike and Sheri Hillenga claimed, among other things, a deduction based on a net operating loss carryover from their 2004 tax return. The Department of Revenue challenged the 2006 deduction, contending that taxpayers did not actually have a net operating loss in 2004 that could be applied against their 2006 taxes. The Tax Court held that the department could not challenge the 2004 deductions that resulted in the net operating loss carryover, because the 2004 tax year was closed by the statute of limitations. The department appealed. On appeal, the Supreme Court agreed with the department: by attempting to carry over their 2004 net operating loss to apply against their 2006 tax liability, taxpayers put the validity of their 2004 net operating loss at issue. Because the department was not trying to assess a deficiency for 2004, the statute of limitations did not apply. View "Hillenga v. Dept. of Rev." on Justia Law

In 2006, the Department of Revenue issued a notice of deficiency against Tektronix, Inc. for $3.7 million in additional tax for the 1999 tax year. Tektronix contended that: (1) the statute of limitations barred the department from assessing that deficiency; and (2) the department had incorrectly calculated its tax liability. The Tax Court granted partial summary judgment for Tektronixs on both grounds. The Department appealed that decision. Finding that the Department indeed incorrectly calculated taxpayer's tax liability, and the Supreme Court affirmed the Tax Court. View "Tektronix, Inc. v. Dept. of Rev." on Justia Law

The issue before the Supreme Court in this appeal was whether a taxpayer could satisfy its obligation to "pay annually to the state" the $75,000 corporate minimum tax under ORS 3 317.090(2), by claiming on its corporate excise tax return a $75,000 "Business Energy Tax Credit" (BETC) under ORS 315.354. The Tax Court concluded that the taxpayer, Con-Way, could satisfy its tax liability under ORS 317.090(2) by claiming a BETC on its return. The Department of Revenue (department) appealed, arguing that the Tax Court's conclusion was inconsistent with ORS 317.090(2), on the ground that a tax credit cannot be used to pay or otherwise satisfy the minimum tax imposed under ORS 2 317.090(2). Upon review, the Supreme Court affirmed. View "Con-Way Inc. & Affiliates v. Dept. of Rev." on Justia Law

The primary question in this case was whether the Oregon Department of Revenue properly classified income resulting from the sale of Crystal Communication's assets as "business income." Crystal operated as a multistate business providing wireless cellular telecommunications services and, in the relevant tax years, sold its assets related to those services. It reported the gain from the asset sale as "nonbusiness income" and allocated that gain to Florida, its state of commercial domicile. On audit, the department reclassified the gain as apportionable "business income." Crystal challenged the reclassification, and the Tax Court granted summary judgment in favor of the department and entered judgment accordingly. Crystal appealed to this court. Finding no error in the classification, the Supreme Court affirmed. View "Crystal Communications, Inc. v. Dept. of Revenue" on Justia Law

CenturyTel operated as a multistate, unitary business that, until 2002, provided both wireless and wireline telecommunications services. In 2002, CenturyTel sold its assets related to its wireless services but continued to provide wireline services. As in "Crystal Communications, Inc. v. Dep't of Revenue," (___ P3d ___ (decided March 7, 2013), CenturyTel reported the gain from the sale of its wireless assets as "nonbusiness income" and allocated that gain to its state of commercial domicile. On audit, the Department of Revenue reclassified the gain as apportionable "business income." CenturyTel challenged the department's reclassification, and the Tax Court, relying on its decision in "Crystal," granted summary judgment in favor of the department. CenturyTel appealed. Consistent with its decision in "Crystal," the Supreme Court affirmed the Tax Court's decision. View "CenturyTel, Inc. v. Dept. of Revenue" on Justia Law

Ann Sacks Tile and Stone, Inc.; Canac Kitchen US Limited; and Koehler Rental Power, Inc. appealed a general tax judgment against them directly to the Supreme Court. The Department of Revenue responded with a motion to determine jurisdiction, asking the Court to determine whether a defect in the manner in which the companies had served their notice of appeal on the department deprived the Supreme Court of authority to decide the appeal. The companies asserted that the defects did not deprive the court of jurisdiction. Upon review, the Supreme Court concluded it indeed lacked jurisdiction over the case, and accordingly dismissed the appeal. View "Ann Sacks Tile and Stone, Inc. v. Dept. of Rev." on Justia Law

This tax case arose on direct review of a Tax Court decision that awarded attorneys' fees to the taxpayer, Village at Main Street Phase II, LLC after its successful challenge to the Clackamas County Assessor's property tax assessment on improvements to its property. The Tax Court issued an order and supplemental judgment naming the county as the judgment debtor, but requiring the Department of Revenue to pay the attorney fees. Both the County and the Department appealed that decision. Upon review, the Supreme Court found that the Tax Court erred in its interpretation of Oregon case law in awarding attorneys' fees to the Village and reversed the supplemental judgment. View "Clackamas Cty Assessor v. Village at Main Street" on Justia Law