Justia Tax Law Opinion Summaries

Articles Posted in Rhode Island Supreme Court
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In these actions challenging the assessment of alleged illegal real estate taxes on several properties and property owners, the Supreme Court affirmed the judgment of the superior court in favor of Defendants in the declaratory judgment action and denied and dismissed the appeal in the tax appeal action, holding that the Plaintiff did not have standing in either action. Defendants were various officials of the Town of Barrington, Rhode Island; Sweetbriar, LP; and East Bay Community Development Corporation. Plaintiff was the owner of property located in Barrington. Plaintiff filed a complaint appealing the assessment of his property (tax appeal action) and filed a separate declaratory judgment action. In essence, Plaintiff argued that he was forced to pay a higher amount on his taxes because of Sweetbriar's favorable tax treatment under R.I. Gen. Laws 44-5-12 and 44-5-13.11. The hearing justice ruled that Plaintiff lacked standing to bring either action. The Supreme Court affirmed, holding (1) Plaintiff lacked standing to bring the declaratory judgment action; and (2) the hearing justice did not err in determining that Plaintiff lacked standing to challenge Barrington's application of section 44-5-12 and 44-5-13.11 to the Sweetbriar development, along with another project. View "Morse v. Minardi" on Justia Law

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The Supreme Court affirmed the judgment of the superior court granting Defendants' motion to dismiss this action challenging the assessment of alleged illegal taxes, holding that the hearing justice did not err in granting Defendants' motion to dismiss pursuant to Rule 12(b)(6) of the Superior court Rules of Civil Procedure. Plaintiff, Bluedog Capital Partners, LLC, filed this action against the tax collector, the tax assessor, and the finance director for the City of Providence, alleging that Defendants had illegal assessed a parcel of property in Providence and seeking injunctive relief against the sale of the parcel pursuant to a tax sale. The hearing justice granted Defendants' motion to dismiss, concluding that the suit would need to sound in equity and was therefore time-barred and that there was nothing to enjoin because the property had already been sold. The Supreme Court affirmed, holding that because Plaintiff failed to comply with the taxing statutes, its complaint failed as a matter of law, and even assuming for purposes of Defendants' motion to dismiss that Plaintiff had alleged an illegal tax, Plaintiff's complaint was untimely under the statute of limitations in R.I. Gen. Laws 44-5-27. View "Bluedog Capital Partners, LLC v. Murphy" on Justia Law

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At issue was whether Plaintiffs, a group of taxpayers in the Town of Portsmouth, were required to base their tax appeals on the fair market value of their properties as of December 31 in the year of the last update or revaluation. The value of Plaintiffs’ properties decreased in 2008 and 2009. The trial justice found that Plaintiffs could challenge the Portsmouth tax assessor’s (Defendant) tax assessments for tax years 2009 and 2010 using the fair market values of their properties as of December 31, 2008 and December 31, 2009, respectively, thus concluding that Plaintiffs were not confined to December 31, 2007 valuations. The Supreme Court affirmed, holding that Plaintiffs were authorized under chapter 5 of title 44 of the Rhode Island General Laws to challenge Defendant’s assessments for tax years 2009 and 2010 by employing the fair market values of their properties as of December 31, 2008 and December 31, 2009, respectively. View "Balmuth v. Dolce" on Justia Law

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The Supreme Court affirmed the judgment of the superior court granting the City of Providence’s motion for summary judgment in this lawsuit filed by Lehigh Cement Co. seeking to recover approximately $500,000 in real estate taxes billed and collected by the city from 2006 to 2009. The court held (1) the hearing justice did not err in granting summary judgment on Lehigh’s claim under R.I. Gen. Laws 44-5-23, as the statute does not provide relief to a taxpayer; (2) summary judgment on Lehigh’s claim under the fair distribution clause of the Rhode Island Constitution was appropriate; and (3) the hearing justice did not err in granting summary judgment on Lehigh’s claim under R.I. Gen. Laws 44-5-27. View "Lehigh Cement Co. v. Quinn" on Justia Law

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Plaintiffs filed three petitions for relief from property tax assessments on their home for the tax years 2009 through 2011. The petitions and appeals were consolidated. The trial justice granted judgment in favor of Plaintiffs in all three appeals, concluding that Plaintiffs sustained their burden of proving that their property was overvalued by the tax assessor. The Supreme Court affirmed, holding (1) the trial justice did not err in determining that Plaintiffs met their burden of proving that the tax assessor’s valuation was above the fair market value; (2) there was sufficient evidence to support the trial justice’s valuation; and (3) the trial justice should have dismissed Plaintiffs’ third petition challenging their 2011 assessment based on Plaintiffs’ failure to timely file an account. Remanded. View "Whittemore v. Thompson" on Justia Law

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Plaintiffs allowed a wind turbine to be built on their property in North Kingstown. None of the electricity produced by this wind turbine was sold to the public but, rather, was sold directly to National Grid. The Town of North Kingstown assessed the wind turbine at a value of $1.9 and sought payment of annual tangible personal property taxes. Plaintiffs appealed the assessment, arguing that the wind turbine was tax exempt. Both the Northtown Tax Assessor and the North Kingstown Tax Board of Review denied Plaintiffs’ appeal. Plaintiffs subsequently brought this action against Defendant, in her capacity as the Town Tax Assessor. The superior court granted summary judgment in favor of Plaintiffs, concluding that the wind turbine was exempt from taxation. The Supreme Court affirmed, holding that Plaintiffs qualified for the exemption listed in R.I. Gen. Laws 44-3-3(22), which exempts manufacturing machinery and equipment acquired or used by a manufacturer from taxation. View "DePasquale v. Cwiek" on Justia Law

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Mortgage Electronic Registration Systems, as nominee for two lenders (collectively, Plaintiffs), held mortgages on Lot 456. For the property owner's failure to pay his water bill, the Pawtucket Water Supply Board (PWSB) auctioned the lot. PWSB issued a deed conveying the title in the property to Amy Realty. Amy Realty subsequently discovered that the property PWSB had intended to auction had been mistakenly listed as Lot 486 on the tax sale notices and deed. Amy Realty then obtained a corrective deed from the PWSB conveying title to Lot 456. Amy Realty subsequently filed a petition to foreclose on Plaintiffs' rights of redemption in Lot 456. Plaintiffs filed this action seeking to vacate the final decree of disclosure, alleging that the corrective deed changing the lot number from 486 to 456 was invalid and this infirmity rendered the foreclosure decree void. The superior court granted summary judgment for Plaintiffs. The Supreme Court affirmed, holding (1) the corrective deed obtained in this case was null and void because it was not recorded within sixty days of the tax sale; and (2) the final foreclosure decree may be vacated because the tax sale was invalid. View "Mortgage Elec. Registration Sys., Inc. v. DePina" on Justia Law

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Plaintiff, the State of Rhode Island Tax Administrator, filed this collection action against Defendants William J. and Marielle Reilly, in pursuit of more than $1 million in assessed-but-unpaid personal income taxes. In their answer, Defendants denied that they owed any personal income taxes for the assessed years. Eventually Plaintiff filed a motion for summary judgment, which was granted by a justice of the Superior Court. Defendants timely appealed to the Supreme Court, arguing that the motion justice erred because: (1) they were nonresidents who were not subject to Rhode Island income tax; (2) that the period of limitation for filing a tax collection action had expired; and (3) that the equitable doctrine of laches should bar the tax administrator's suit under the circumstances of this case. Upon review, the Supreme Court affirmed; Defendants were not entitled to judicial review of the tax administrator's assessment of taxes for the contested tax years because they failed to exhaust their administrative remedies. The Court agreed with Plaintiff that "a taxpayer cannot 'simply wait to be sued for the income tax to then raise objection to the assessment or payment in [the] collection proceeding.'" View "Sullivan v. Reilly" on Justia Law

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The City of Cranston, by and through its tax assessor, valued Plaintiff Narragansett Electric Company's tangible personal property located within that municipality at $23,290,814. Plaintiff appealed the tax assessment. The tax assessor and Tax Board of Review denied Plaintiff's appeal. Plaintiff then filed a complaint in the superior court, naming as defendants Cranston's finance director and its tax assessor. Defendants filed a motion to dismiss the complaint, contending that the superior court lacked subject matter jurisdiction because Plaintiff had not timely filed his appeal to the tax assessor. The hearing justice agreed and granted summary judgment in favor of Defendants. The Supreme Court vacated the judgment of the superior court, holding (1) because Defendants failed to plead as an affirmative defense Plaintiff's noncompliance with a condition precedent in accordance with R.I. Sup. Ct. 9(c), Defendants waived their contention that Plaintiff did not file its appeal with the tax assessor in a timely manner; and (2) therefore, the hearing justice should have exercised the superior court's subject matter jurisdiction and heard Plaintiff's appeal. View "Narragansett Elec. Co. v. Saccoccio" on Justia Law

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Because Property Owner failed to pay real estate taxes on his property, the Town held a tax sale of Property Owner's property. Buyer purchased the property after Property Owner defaulted on the action. The superior court subsequently granted Buyer's petition to foreclose Property Owner's right of redemption to the property. Subsequently, a judgment was entered declaring the prior tax sale void and vesting the property back to Property Owner. Property Owner then executed a warranty deed conveying the property to his Sister. Concurrently, a stipulation was entered as an order of the superior court vesting title in the property to Buyer. Thereafter, Property Owner and Sister filed the instant action, seeking a declaratory judgment invalidating the stipulation order. The superior court determined that Buyer was the proper record title holder of the property. The Supreme Court affirmed, holding that a superior court judgment cannot "re-vest" title to property back to a prior owner once that owner has been defaulted in a petition to foreclose his right of redemption and a final decree has been entered. View "Medeiros v. Bankers Trust Co." on Justia Law