Justia Tax Law Opinion Summaries

The Supreme Court affirmed in part and reversed in part the judgment of the tax court allowing a second set of deductions sought by Robert and Wendy Steiner on their tax returns but disallowing the first set of deductions, holding that neither set of deductions was mandated by the United States Constitution or the Utah Tax Code.The Utah State Tax Commission disallowed the tax deductions claimed the Steiners on their tax returns. The Steiners challenged that determination in the tax court, asserting that the Dormant Commerce Clause and the Dormant Foreign Commerce Clause mandated the Utah allow their claimed deductions relating to income earned in the United States but outside of Utah and income earned in foreign countries. The Steiners cited Utah Code 59-10-115(2) in support of their latter claim. The tax court agreed in part with the Steiners. The Supreme Court disagreed, holding that the Steiners were not entitled to their claimed deductions. View "Steiner v. Utah State Tax Commission" on Justia Law

The Supreme Court affirmed the decision of the Minnesota Tax Court holding that the Minnesota Legislature incorporated the federal "minimum base amount" limitation into Minnesota's research and development (R&D) tax credit statute, Minn. Stat. 290.068, and that for the 2011 tax year, the term "aggregate gross recipes" referred to federal aggregate gross receipts, not Minnesota aggregate gross receipts, holding that the tax court's conclusions were without error.Specifically, the Court held (1) to calculate Minnesota's R&D tax credit, Minnesota incorporates the "minimum base amount" limitation set forth in I.R.C. 41(c)(2); and (2) the plain language of Minn. Stat. 290.068, subd. 2(c) and its incorporation of the term "aggregate gross receipts" through the term "base amount" referred to federal aggregate gross receipts for the 2011 tax year, and therefore, the tax court did not err in concluding that federal aggregate gross receipts must be used in the fixed-base-percentage formula contained with the base amount calculation for General Mills, Inc.'s 2011 Minnesota R&D tax credit. View "General Mills, Inc. v. Commissioner of Revenue" on Justia Law

The Supreme Court affirmed the decision of the tax court holding that the Minnesota Legislature incorporated the federal "minimum base amount" limitation into Minnesota's research and development (R&D) tax credit statute, Minn. Stat. 290.068, and that for the 2011 tax year the term "aggregate gross receipts" referred to federal aggregate gross receipts, not Minnesota aggregate gross receipts, holding that the reasoning from the Court's opinion in General Mills v. Commissioner of Revenue, __ N.W.2d __, filed today, governed this case as well.At issue was whether the Legislature's incorporation of the federal tax code's definition of the term "base amount" in the tax credit statute includes the federal "minimum base amount" limitation and whether the term "aggregate gross receipts" as used in the Internal Revenue Code formula for calculating the R&D credit refers to Minnesota or federal aggregate gross receipts. The Supreme Court affirmed the tax court's decision, holding (1) to calculate the Minnesota R&D tax credit, section 290.068, subd. 2(c) incorporates the "minimum base amount" limitation contained within I.R.C. 41(c)(2); and (2) the plain language of section 290.068, subd. 2(c) and its incorporation of the term "aggregate gross recipes" through the term "base amount" referred to federal aggregate gross receipts for the 2011 tax year. View "International Business Machines Corp. v. Commissioner of Revenue" on Justia Law

Appellant asked to proceed anonymously before the tax court when challenging the IRS's denial of his application for a whistleblower award, but the tax court denied the request.Determining that it had jurisdiction to hear this interlocutory appeal under the collateral order doctrine, the DC Circuit held that the tax court abused its discretion because identifying the appellant was not necessary to enable the public to gauge the extent to which serial filers affect the work of the tax court or whether any particular petitioner was a serial filer. Accordingly, the court remanded for the tax court to reconsider whether appellant has otherwise made out a fact-specific basis for protecting his identity under Tax Court Rule 345(a). View "In re: Sealed Case" on Justia Law

The issue this case raised for the Oregon Supreme Court’s review centered on the proper valuation, for property tax purposes, of a shopping center that did not have an anchor tenant on the assessment date. The Tax Court accepted taxpayer’s valuation that significantly decreased the value of the shopping center because it was missing an anchor tenant and was more than 50 percent vacant on the relevant date. On appeal, the Department of Revenue contended the Tax Court erred. According to the department, the shopping center was required to be valued the same as a shopping center that did have an anchor tenant and was only 8-10 percent vacant. The Oregon Supreme Court rejected the Department’s argument and affirmed the Tax Court’s judgment. View "Powell Street I v. Multnomah County Assessor" on Justia Law

The Eleventh Circuit affirmed the tax court's order denying taxpayer's motion to restrain collection to the extent it related to the gross valuation-misstatement penalty. At issue was whether, under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), a tax court presiding over partner-level deficiency proceedings has jurisdiction over a gross valuation-misstatement penalty previously determined to be applicable at the partnership level where the partnership was determined to be a "sham" and "lacking economic substance."The court held that the Internal Revenue Code, as in effect during the relevant time, applicable regulations, and Supreme Court precedent make clear that the valuation-misstatement penalty at issue here relates to an adjustment to a partnership item and, consequently, is explicitly excluded from the tax court's deficiency jurisdiction. Accordingly, the court held that the tax court presiding over partner-level deficiency proceedings does not have jurisdiction over gross valuation misstatement penalties imposed against a partnership previously determined to be a "sham" and "lacking economic substance." View "Highpoint Tower Technology Inc. v. Commissioner" on Justia Law

In 2006, taxpayer University Ventures, LLC purchased a vacant lot in Charleston County, South Carolina (the Property). In 2008, Taxpayer received building permits to construct a hotel and pool on the Property. Construction began, and the hotel and pool were completed in April 2009, at which time a certificate of occupancy was issued. As a result of the completed improvements and pursuant to law, the Charleston County Assessor (the Assessor) reappraised the Property, which resulted in an increase in the value of the Property, which in turn increased the Taxpayer's 2010 property tax bill. The Taxpayer paid the increased 2010 tax bill without objection. This case centered on Taxpayer's challenge to the 2011 tax bill. In 2011, the Assessor continued to value the Property as an improved lot, which it in fact was. The Taxpayer protested and claimed its 2011 tax bill should have been based on the Property's value as a vacant lot as of December 31, 2008. The court of appeals rejected the Taxpayer's argument, finding it would be absurd to value the Property as a vacant lot after improvements were completed. The South Carolina Supreme Court found, consistent with South Carolina's statutory scheme, that when the value set by a reassessment program's uniform date of value conflicts with the value set by the completion of improvements to property, the improvement value controls. View "Charleston County Assessor v. University Ventures" on Justia Law

Political subdivisions of the State of Colorado challenged Colorado’s Taxpayer Bill of Rights (“TABOR”) under the Colorado Enabling Act and the Supremacy Clause, contending that TABOR contradicted the Enabling Act’s requirement that Colorado maintain a “republican form of government.” TABOR allowed the people of Colorado to raise or prevent tax increases by popular vote, thereby limiting the power of Colorado’s legislative bodies to levy taxes. The issue currently before the Tenth Circuit Court of Appeals was whether certain school districts, a special district board, and/or a county commission had standing to challenge TABOR. On a motion to dismiss for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1), the district court held that plaintiffs had Article III standing but that they lacked political subdivision standing and prudential standing. Accordingly, the court dismissed the complaint. The Tenth Circuit concluded that it could not properly reach its conclusions at this stage of litigation. Because the Court held the political subdivision plaintiffs were not barred by standing requirements, the district court was reversed. View "Kerr v. Hickenlooper" on Justia Law

The Supreme Court reversed the judgment of the circuit court upholding Augusta County's tax assessments against McKee Foods Corporation for the years 2011 through 2014 and remanded the matter for a new trial, holding that the assessments were not entitled to a presumption of validity.McKee filed an application for relief from erroneous assessment for real property taxes, alleging that the assessments were above the property's fair market value, were not uniform in application, and were otherwise invalid or illegal. After a trial, the circuit court upheld the assessments. The Supreme Court reversed, holding (1) because the appraiser did not properly use any of the three generally accepted approaches to valuation the Supreme Court erred in applying the presumption of validity to his 2011 assessment; (2) the 2012 and 2013 assessments were based on the same improper methodology and were not entitled to the presumption of correctness; and (3) the 2014 assessment was not entitled to a presumption of validity because it was based on a single approach to the determination of market value. View "McKee Foods Corp. v. County of Augusta" on Justia Law

The Supreme Court affirmed the decision of the tax court dismissing petitions filed by Wal-Mart Real Estate Business Trust (the Trust) challenging Anoka County's assessment of the Trust's three parcels of land in the county, holding that the tax court properly found that the properties were "income-producing" and that the Trust's disclosures were inadequate.Each parcel at issue in this case had a Walmart retail store, operated by Walmart, Inc. The Trust was a wholly-owned subsidiary of Walmart. The tax court dismissed the Trust's petitions challenging the Trust's assessment of the parcels because the Trust failed to disclose certain information before the deadline set forth in Minn. Stat. 278.05, subd. 6(a). The Trust appealed, arguing that it was not subject to the mandatory disclosure rule because Walmart stores are not "income-producing" within the meaning of the tax statute's mandatory-disclosure provision. The Supreme Court affirmed, holding that the properties were income-producing and that the Trust's disclosures were inadequate. View "Wal-Mart Real Estate Business Trust v. County of Anoka" on Justia Law