Justia Tax Law Opinion Summaries

Articles Posted in South Dakota Supreme Court
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The Supreme Court affirmed the decision of the circuit court affirming the decision of the Oglala Lakota County Commission denying Wings as Eagles Ministries, Inc.'s petition seeking an abatement of its property taxes for 2014 and 2015, holding that the circuit court did not err.Wings applied for property tax exempt status for the 2014 and 2015 tax years. The applications were denied and became final determinations of the property's exempt status for those years. Wings then filed its abatement petition, which the Commission denied. The circuit court affirmed, concluding that Wings was unable to meet the threshold eligibility element for an abatement because the final determinations denying exempt status conclusively established that Wings was not exempt for the 2014 and 2015 tax years. The Supreme Court affirmed, holding (1) the circuit court did not err when it concluded that Wings did not qualify for an abatement under S.D. Codified Laws 10-18-1(3); and (2) Wings' estoppel argument was unreviewable on appeal. View "Wings As Eagles Ministries, Inc. v. Oglala Lakota County" on Justia Law

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The Supreme Court affirmed the judgment of the circuit court concluding that Plaintiffs had standing to bring this declaratory judgment action challenging ad valorem property taxes that Day County assessed against them and upholding the disputed taxes, holding that the circuit court did not err.Plaintiffs were the Pickerel Lake Outlet Association, a South Dakota domestic non-profit corporation, and forty non-Indian owners of permanent improvements around Pickerel Lake. Plaintiffs claimed that federal law preempted taxation because their structures were on land held in trust for the Sisseton-Wahpeton Oyate or its members. The State defended the County's authority to levy the taxes, arguing that preemption did not apply and challenging Plaintiffs' standing to sue. The circuit court concluded that Plaintiffs had standing and upheld the County's authority to assess the taxes. The Supreme Court affirmed, holding (1) Plaintiffs satisfied all the prerequisites for standing; and (2) the County was neither explicitly nor implicitly preempted by the provisions of 25 U.S.C. 5108 from assessing ad valorem taxes against Plaintiffs. View "Pickerel Lake Outlet Ass'n v. Day County" on Justia Law

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The Supreme Court affirmed the decision of the circuit court affirming the assessed value of Appellants' agricultural land by the Meade County Commission sitting as a board of equalization (the Board), holding that the circuit court did not err.Before the Board, Appellants argued that the director of equalization incorrectly applied statutory provisions to determine their land's production value. The Board further adjusted the assessment from an average of $519 per acre down to an average of $512 per acre. Appellants appealed the Board's decision to circuit court. After a trial de novo, the circuit court affirmed the Board's tax assessment of the property. The Supreme Court affirmed, holding that the circuit court did not err when it determined that (1) the Board complied with the statutory provisions for evaluating agricultural land in their assessment of Appellants' property; and (2) the Board's tax assessment of the property did not violate provisions of the South Dakota Constitution that require uniform taxation at no more than its actual value. View "Trask v. Meade County Commission" on Justia Law

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The Supreme Court affirmed the decision of the circuit court affirming Meade County's denial of Hunt Companies, Inc.'s request for an abatement and refund of taxes overpaid, holding that, although the County overvalued Hunt's leasehold interest in a housing development, the circuit court did not err by denying Hunt's application for abatement and refund under S.D. Codified Laws 10-18-1.Hunt built the housing development at issue on land leased from the United States government. Hunt paid taxes assessed by the County on the property for 2011 through 2013. Hunt successfully challenged the County's valuations in circuit court, but the County denied Hunt's request for an abatement and refund. The Supreme Court affirmed, holding that the County was not required to grant Hunt's application for abatement and refund of taxes overpaid for the tax years at issue where Hunt chose not to use the pay-and-protest provisions of S.D. Codified Laws 10-27-2. View "In re Tax Refund Of Hunt Companies, Inc." on Justia Law

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The Supreme Court affirmed the decision of the circuit court affirming in part and reversing in part the decision of the South Dakota Department of Revenue issuing Carsforsale.com a certificate of assessment for alleged use tax violations, holding that Carsforsale was not entitled to an advertising exemption or a sale-for-resale exemption.Carsforsale was a web-based business that offered dealers and individuals an online forum to advertise their vehicle for sale and also provided website hosting, social media integration, and other services. The Department found that Carsforsale was not entitled to an advertising exemption on disputed services and dismissed Carsforsale’s argument that the purchases of domain names were exempt under the sale-for-resale exemption. The Supreme Court held (1) Carsforsale was not entitled to the advertising exemption; and (2) Carsforsale was not entitled to the sale-for-resale exemption. View "Carsforsale.com v. South Dakota Department of Revenue" on Justia Law

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The Supreme Court affirmed the circuit court’s judgment affirming a hearing examiner’s decision that an exemption from taxation for real property be increased to 100 percent but reversed the award of attorney fees, holding that the circuit court correctly upheld the hearing examiner’s decision but erred in its award of attorney fees.The Pennington County Board of Equalization established an exemption of thirty-two percent for the 2017 tax year for real property owned by American Legion Home Association Post 22. On American Legion’s administrative appeal, the hearing examiner concluded that the real property qualified for a 100 percent exemption under S.D. Codified Laws 10-4-9.2. The Supreme Court held that the circuit court (1) did not err in affirming the hearing examiner’s decision that the property was entitled to a 100 percent exemption under the statute; but (2) awarded attorney fees without sufficient information to determine a reasonable fee. The Court remanded the attorney fee issue. View "American Legion Home Ass’n Post 22 v. Pennington County" on Justia Law

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After the United States Supreme Court vacated the judgment of the Supreme Court affirming the circuit court’s summary judgment in favor of Defendants, the Supreme Court reversed the circuit court’s grant of summary judgment and remanded the case for proceedings consistent with the United States Supreme Court’s opinion.In 2017, the Supreme Court affirmed the circuit court’s summary judgment in favor of Defendants, holding that the statutory scheme requiring internet sellers with no physical presence in South Dakota to collect and remit sales tax violated the Commerce Clause. The United States Supreme Court vacated the judgment and remanded the case. The State subsequently filed a motion requesting the Supreme Court to remand the matter for further proceedings. Defendants filed no response. Accordingly, the Supreme Court dispositively remanded this case for further proceedings not inconsistent with the United States Supreme Court’s opinion. View "State v. Wayfair Inc." on Justia Law

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The Supreme Court affirmed the circuit court’s judgment affirming a certificate of assessment issued by the Department of Revenue requiring Valley Power Systems, Inc. to pay alternate contractor’s excise tax, use tax, interest, and a penalty.Valley Power contracted with Black Hills Power, Inc. (BHP) to install new exhaust manifolds on five mobile power units that were used by a utility company to provide supplemental power at one of its power plants, but Valley Power did not pay any tax with respect to the transaction. Instead BHP paid use tax on the transaction. After an audit of both companies, the Department refunded BHP’s use tax and issued a certificate of assessment requiring Valley Power to pay $54,404. An administrative hearing examiner and the circuit court affirmed the assessment. The Supreme Court affirmed, holding that the Department did not err in concluding that Valley Power was required to pay excise and use tax. View "Valley Power Systems v. S.D. Department of Revenue" on Justia Law

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The Supreme Court affirmed the judgment of the circuit court granting summary judgment for certain Internet sellers (Sellers) and enjoining the State from enforcing 2016 legislation extending the obligation to collect and remit sales tax to sellers with no physical presence in the state. Pursuant to the legislation, the State brought this declaratory judgment action seeking a declaration that Sellers, who had no physical presence in the state, must comply with the requirements of the 2016 legislation. The circuit court enjoined the State from enforcing the obligation to collect and remit sales tax against Sellers, observing its obligation to adhere to Supreme Court precedent prohibiting the imposition of an obligation to collect and remit sales tax on sellers with no physical presence in the State. The Supreme Court affirmed, holding that the circuit court correctly applied the law when it granted Sellers’ motion for summary judgment. View "State v. Wayfair Inc." on Justia Law

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The Department of Revenue subjected several corporations owned by North American Truck & Trailer, Inc. (collectively, Taxpayers) to a sales-and-use-tax audit, which uncovered errors regarding Taxpayers’ reporting of use tax. Thereafter, the Department assessed Taxpayers for unpaid use taxes. Taxpayers paid the assessment under protest and requested an administrative hearing. At the hearing, Taxpayers argued that the shop supplies assessed were exempt from use tax and offered exhibits in support of their position. The hearing examiner declined to consider a sales invoice offered by Taxpayers demonstrating a typical transaction that involved the cost of supplies because Taxpayers submitted it more than sixty days after the audit began, in violation of S.D. Codified Laws 10-59-7. The Supreme Court affirmed, holding that the hearing examiner did not err when it (1) affirmed the Department’s refusal to consider the sales invoice; and (2) affirmed the Department’s certificate of assessment of use tax due and owing on transactions where shop supplies, purchased without payment of sales tax, were used and consumed. View "Black Hills Truck & Trailer, Inc." on Justia Law