Justia Tax Law Opinion Summaries

Articles Posted in Tennessee Supreme Court

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In this case regarding the proper distribution of liquor-by-the-drink (LBD) tax proceeds between a county and a municipality within the county, the Supreme Court affirming the decision of the court of appeals affirming the judgment of the trial court granting summary judgment against the county on its claim that the LBD tax distribution statute, Tenn. Code Ann. 57-4-306, required cities to distribute the tax proceeds as the counties distribute the county property tax schools, holding that that the city was not required to share those proceeds with the county or the county schools. The county in this case had not approved the LBD sales, but the city had. The Commissioner of the Tennessee Department of Revenue distributed tax proceeds to the city in accordance with section 57-4-306. The city distributed half its tax proceeds to its own city school system and did not share the proceeds with the county. The trial court granted summary judgment in favor of the city. The court of appeals affirmed. The Supreme Court affirmed, holding that the statute directed the city to distribute the education portion of its LBD tax proceeds in support of its own municipal school system and did not require the city to share the proceeds with the county or its schools. View "Bradley County School System v. City of Cleveland, Tennessee" on Justia Law

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In this case regarding the proper distribution of liquor-by-the-drink (LBD) tax proceeds between a county and a municipality within the county, the Supreme Court affirmed the decision of the court of appeals affirming the judgment of the trial court granting summary judgment against the county on its claim that the LBD tax distribution statute, Tenn. Code Ann. 57-4-306, required cities to distribute the tax proceeds as the counties distribute the county property tax schools, holding that that the city was not required to share those proceeds with the county or the county schools. The county in this case had not approved the LBD sales, but the city had. The Commissioner of the Tennessee Department of Revenue distributed tax proceeds to the city in accordance with section 57-4-306. The city distributed half its tax proceeds to its own city school system and did not share the proceeds with the county. The trial court granted summary judgment in favor of the city. The court of appeals affirmed. The Supreme Court affirmed, holding that the distribution statute directed the city to distribute the education portion of its LBD tax proceeds in support of its own municipal school system and did not require that the city share those proceeds with the county. View "Sullivan County, Tennessee v. City of Bristol, Tennessee" on Justia Law

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In this case regarding the proper distribution of liquor-by-the-drink (LBD) tax proceeds between a county and a municipality within the county, the Supreme Court affirmed the court of appeals' decision reversing the trial court's grant of summary judgment in favor of the county on its claim that the LBD tax distribution statute, Tenn. Code Ann. 57-4-306, required cities to distribute the tax proceeds as the counties distribute the county property tax schools, holding that that the city was not required to share those proceeds with the county or the county schools. The county in this case had not approved the LBD sales, but the city had. The Commissioner of the Tennessee Department of Revenue distributed tax proceeds to the city in accordance with section 57-4-306. The city distributed half its tax proceeds to its own city school system and did not share the proceeds with the county. The trial court concluded that the city was required to distribute the tax proceeds pro rata among all schools in the county. The court of appeals reversed. The Supreme Court affirmed, holding that the distribution statute directed the city to distribute the education portion of its LBD tax proceeds in support of its own municipal school system. View "Washington County School System v. City of Johnson City, Tennessee" on Justia Law

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In this case regarding the proper distribution of liquor-by-the-drink (LBD) tax proceeds between a county and a municipality within the county, the Supreme Court reversed the decision of the court of appeals reversing the judgment of the trial court granting summary judgment against the county on its claim that the liquor-by-the-drink (LBD) tax distribution statute, Tenn. Code Ann. 57-4-306, required cities to distribute the tax proceeds as the counties distribute the county property tax schools, holding that that the city was not required to share those proceeds with the county. The county in this case had not approved the LBD sales, but the city had. The Commissioner of the Tennessee Department of Revenue distributed the tax proceeds to the city. The city distributed half its tax proceeds to its own city school system. The court of appeals concluded that section 57-4-306 required the city to distribute half of its LBD tax proceeds pro rata among all schools in the county. The Supreme Court reversed, holding (1) the distribution statute directed cities to distribute half of their LBD tax proceeds for the benefit of the city's own school system; and (2) the city in this case was not required to share its LBD tax proceeds with the county or the county schools. View "Coffee County Board of Education v. City of Tullahoma" on Justia Law

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In this case regarding the proper distribution of liquor-by-the-drink (LBD) tax proceeds between a county and a municipality within the county, the Supreme Court affirmed the Court of Appeals' decision affirming the trial court's grant of summary judgment against the county and in favor of the two defendant cities, holding that the LBD statute, Tenn. Code Ann. 57-4-306, did not require the Commissioner of the Tennessee Department of Revenue to pay half of the cities' LBD tax proceeds to the county. The recipient cities distributed half of their tax proceeds to its own city school system and did not share the proceeds with the county. The counties sued the cities, arguing that section 57-4-306 required the cities to distribute the tax proceeds pro rata among all schools in the county based on average daily attendance. The trial court granted summary judgment for the cities. The trial court held that the statute required counties to distribute their LBD tax proceeds pro rata among all schools in the county, even though it did not require the same of cities. The court of appeals affirmed. The Supreme Court affirmed, holding holding that the distribution statute directed the cities to distribute the education portion of their LBD tax proceeds in support of their own municipal school systems. View "Blount County Board of Education v. City of Maryville, Tennessee" on Justia Law

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Tenn. Code Ann. 67-1-901, et seq., rather than Tenn. Code Ann. 67-1-1801, et seq., apply to a suit to recover municipal taxes, and under section 67-1-901(a) the alcoholic beverage retailers in this case were required to have paid under protest the disputed taxes before filing suit. From 2011-2014, the City of Morristown charged alcoholic beverage retailers higher inspection fees than was authorized by the city ordinance. Plaintiffs, a group of alcoholic beverage retailers, paid the excess fees but not under protest. Plaintiffs requested refunds, but the city denied the requests. Plaintiffs then sued for recovery of the excess collections and other damages. The trial court awarded Plaintiffs a judgment for the overpayments. The court of appeals affirmed. The Supreme Court reversed, holding that because Plaintiffs did not pay the taxes under protest, they were not entitled to refunds. View "Chuck's Package Store v. City of Morristown" on Justia Law

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Five separate groups of Pennsylvania-domiciled insurance companies (collectively, “Claimants”) were authorized to provide workers’ compensation coverage in Tennessee. As a result of an audit conducted by the State of Tennessee, Claimants were required, under Tennessee’s retaliatory tax statute, to recalculate their Tennessee taxes to include certain Pennsylvania workers’ compensation charges, file amended tax returns, and remit payment of the additional taxes totaling over $16 million. Claimants paid the taxes under protest. Each Claimant subsequently filed a complaint with the Tennessee Claims Commission (the “Commissioner”) seeking a refund of the retaliatory taxes paid under protest. The Commissioner issued five identical judgments, each granting summary judgment in favor of the State. The Court of Appeals affirmed. The Supreme Court reversed, holding that because the Pennsylvania workers’ compensation assessments were no longer paid by the insurance companies but were imposed on the employer-policyholders in conjunction with their premium payments, the administrative task of collecting and remitting those payments did not qualify as a burden on the insurance companies for purposes of the retaliatory tax. View "Chartis Casualty Co. v. State" on Justia Law