Justia Tax Law Opinion Summaries

The Supreme Court affirmed in part and reversed in part the judgment of the Ohio Board of Tax Appeals (BTA) that some of Taxpayer's equipment used in fracking was subject to Ohio's sales and use tax, holding most of the equipment at issue was exempt from taxation.While Ohio law generally exempts from taxation equipment used direction in oil and gas production not everything in the production of oil and gas qualifies for the exemption. After Taxpayer purchased equipment for use in its fracking operations the tax commissioner issued use-tax assessments, one for each piece of equipment. The commissioner then canceled about half the assessments. The BTA affirmed. The Supreme Court reversed in part, holding that equipment consisting of blenders, hydration units, chemical-additive units, t-belts, and sand kings are tax exempt. View "Stingray Pressure Washing, L.L.C. v. Harris" on Justia Law

An Ohio tax lien on real property is enforced through a foreclosure action, which may result in a sale of the property at auction. If such a sale occurs and the price exceeds the amount of the lien, the excess funds may go to junior lienholders or the owner. If the tax-delinquent property is abandoned, an auction may not be required; the property may be transferred directly to a land bank, free of liens. When that happens, the county gives up its right to collect the tax debt, and any junior lienholders and the owner get nothing. The properties at issue were transferred directly to county land banks. US Bank owned one foreclosed property and claims to have held mortgages on the other two. US Bank alleges that at the time of the transfers, the fair market value of each property was greater than the associated tax lien and that the transfers to the land banks constituted takings without just compensation.The Supreme Court of Ohio affirmed the dismissals of the suits. US Bank lacks standing in one case; it did not hold the mortgage at the time of the alleged taking. As to the other properties, US Bank had adequate remedies in the ordinary course of the law. It could have redeemed the properties by paying the taxes; it could have sought transfers of the foreclosure actions from the boards of revision to the common pleas courts; it could have appealed the foreclosure adjudications to those courts. View "US Bank Trust, National Association v. Cuyahoga County" on Justia Law

The Supreme Court reversed in part the decision of the Board of Tax Appeals (BTA) affirming a final assessment imposed by the tax commissioner determining that NASCAR owed taxes, interest, and penalties in the amount of $549,520, holding that the bulk of the tax assessment was unlawful.The Ohio Department of Taxation conducted an audit and determining that NASCAR had improperly failed to pay Ohio's commercial-activity tax (CAT), Ohio Rev. Code 5751.91 et seq., from 2005 to 2010 and owed Ohio more than in back taxes and penalties. The BTA affirmed the assessment, determining that for the four revenue streams under review - broadcast, media, licensing, and sponsorship - the receipts were properly situated to Ohio. NASCAR appealed, arguing that its broadcast revenue, media revenue, licensing revenue, and sponsorship revenue were not subject to the CAT. The Supreme Court reversed the tax assessment as to NASCAR's broadcast revenue, media revenue, licensing fees, and sponsorship fees, holding (1) the broadcast revenue was not based on the right to use NASCAR's property in Ohio; and (2) the media revenue, licensing fees, and sponsorship fees situated to Ohio were not "based on the right to use" NASCAR's property in Ohio. View "NASCAR Holdings, Inc. v. McClain" on Justia Law

The Supreme Court affirmed the decision of the Board of Tax Appeals (BTA) upholding the decision of the tax commissioner denying Colonial, Inc.'s application for a tax refund, holding that there was no error.In its application, Colonial argued that it was entitled to a refund of $269,432 in resort-area taxes that it paid from 2011 through 2016. Specifically, Colonial sought to recover a locally-imposed resort-area gross receipts excise tax that the village of Put-in-Bay originally enacted in 1995, arguing that, under Ohio Rev. Code 5739.101, the village must react the resort-area tax after each decennial census. The tax commissioner denied the refund claim, and the BTA affirmed. The Supreme Court affirmed, holding that the BTA correctly affirmed the tax commissioner's denial of Colonial's application for a refund. View "Colonial, Inc. v. McClain" on Justia Law

The Supreme Court affirmed in part and vacated in part the decision of the Board of Tax Appeals (BTA) upholding the tax commissioners denial of Appellant's claim for a sales tax refund, holding that the BTA erred in part.Appellant Cincinnati Federal Savings & Loan Co. filed a refund claim seeking recovery of $57,412.58, claiming that it purchased nontaxable accounting services or, alternatively, nonntaxable customized software. The tax commissioner denied the claim. The BTA affirmed. The Supreme Court affirmed in part and vacated in part the BTA's decision, holding (1) with respect to the customization of software, the BTA erred by failing to apply the true-object test to the charges at issue; and (2) Appellant's remaining propositions of law were without merit. View "Cincinnati Federal Savings & Loan Co. v. McClain" on Justia Law

The Supreme Court reversed in part the judgment of the Board of Tax Appeals (BTA) abating a tax penalty imposed against Appellee by the Tax Commissioner of Ohio, holding that the BTA's abatement of the penalty was clearly erroneous.The tax commissioner assessed unpaid tax in the amount of $4,821 as against Appellee and exercised his statutory discretion to impose a fifteen percent penalty amounting to $723. The BTA upheld the tax assessment against Appellee but found that the tax commissioner had abused his discretion in assessing a penalty. The Supreme Court reversed in part, holding that the BTA's holding that the tax commissioner abused his discretion and that the BTA's order abating the penalty were clearly erroneous. View "Karr v. McClain" on Justia Law

The Supreme Court denied the writ of mandamus sought by Pike County Convention and Visitor's Bureau (Relator) against Pike County Board of Commissioners and the Pike County auditor ordering them to disburse to the bureau the proceedings of a "bed tax," a county-imposed sales tax on hotel lodging, holding that Relator was not entitled to the writ.In 2020, the county commissioners for Pike County enacted a resolutions that redirected the bureau's portion of the bed-tax proceeds to the chamber "acting as a Convention and Visitors Bureau, as defined by law," stating as justification the bureau's "financial mismanagement." The bureau brought this action seeking disbursement of bed-tax proceeds that had been withheld by the county. The Supreme Court denied the writ, holding that the county commissioners' action lay within their discretion. View "State ex rel. Pike County Convention & Visitor's Bureau v. Pike County Board of Commissioners" on Justia Law

The Supreme Court held that a tax imposed solely upon a small number of billboard operators is a discriminatory tax that violates the rights to freedom of speech and a free press protected by the First Amendment to the United States Constitution.The City of Cincinnati imposed a tax on outdoor advertising signs, but through definitions and exemptions within the city's municipal code, the tax burdens feel predominantly on two billboard operators only. The two billboard operators (Appellants) sought a declaration that the tax violated their constitutional rights to free speech and a free press and requesting an injunction against the tax's enforcement. The trial court permanently enjoined the City from enforcing the tax. The court of appeals reversed in part. The Supreme Court reversed and reinstated the injunction, holding that the billboard tax did not survive strict scrutiny and therefore impermissibly infringed on Appellants' rights to free speech and a free press. View "Lamar Advantage GP Co. v. City of Cincinnati" on Justia Law

The Supreme Court reversed the decision of the Board of Tax Appeals (BTA) dismissing these appeals of final determinations of the tax commissioner on the grounds that they were untimely, holding that Am.Sub.H.B. No. 197 tolled the time limitation for filing the appeals, and Appellant filed the notices of appeal with both the tax commissioner and the BTA during the tolling period.On April 29, 2020, the tax commissioner journalized his final determinations upholding the tax assessments in each case. Service was completed by certified mail on May 4, 2020. Appellant delivered a notice of appeal to the tax department on June 26, 2020. The next day Appellant filed the notices of appeal with the BTA. The BTA dismissed both appeals as untimely. The Supreme Court reversed, holding that section 22(A)(1)(c) of H.B. 197 tolled Appellant's appeal period and that Appellant's appeals were timely filed. View "Chapman Enterprises, Inc. v. McClain" on Justia Law

The Supreme Court affirmed the decision of the Board of Tax Appeals (BTA) affirming the City of Cleveland's taxation of Hazel Willacy's stock-option income that she realized in 2016, holding that Willacy's propositions of law lacked merit.Willacy earned the disputed stock options in 2007 from her former employer while she was working in Cleveland. In 2009, Willacy retired and moved to Florida without having exercised any of the options. In 2014 and 2015, Willacy exercised the majority of the options and immediately resold the shares. In 2016, Willacy exercised the remaining options. Her former employer withheld her municipal-income-tax obligation and paid it to Cleveland. Willacy sought a refund on the grounds that she did not live or work in Cleveland. The refund was denied, and the BTA affirmed the denial. The Supreme Court affirmed, holding that Cleveland's taxation of Willacy's 2016 compensation was required under municipal law and did not violate her due process rights under either the United States or Ohio constitutions. View "Willacy v. Cleveland Board of Income Tax Review" on Justia Law