Justia Tax Law Opinion Summaries

The Nebraska Department of Revenue and the acting Tax Commissioner denied, in part, the requested refunds of Farmers Cooperative and Frontier Cooperative Co. (collectively, the Cooperatives). The district court affirmed. The Cooperatives sought refunds of sales and use taxes paid on the purchase of repairs and parts for agricultural machinery and equipment under Neb. Rev. Stat. 77-2708.01. At issue in these consolidated appeals was how the phrase “depreciable repairs or parts” within section 77-2708.01 should be interpreted. The Supreme Court affirmed, holding that the district court did not err in affirming the partial denial of the Cooperatives’ requested refunds based upon its interpretation of section 77-2708.01. View "Farmers Cooperative v. State" on Justia Law

This case involved the interpretation, and application of Water Code section 51200 and articles XIII C and XIII D of the California Constitution, as approved by California voters in 1996 as Proposition 218, and the interplay between them. Defendants and cross-complainants Reclamation District No. 17 and Governing Board of Reclamation District 17 (collectively "Reclamation") maintained levees and other reclamation works within the district’s boundaries. Plaintiff and cross-defendant Manteca Unified School District (School) owned real property within Reclamation’s boundaries. School filed an action for declaratory relief, arguing section 51200 exempted it from paying assessments to Reclamation and Proposition 218 did not confer such authority. School also sought recovery of over $299,000 previously collected by Reclamation. Reclamation answered and cross-complained for declaratory relief. The trial court found the assessments levied by Reclamation were invalid under section 51200 but denied recovery of assessment payments made during the pendency of the action and concluded School’s action was not barred by the statute of limitations. Reclamation appealed, arguing section 51200 and Proposition 218 allowed assessments against school district property unless the district could show through clear and convincing evidence that the property received no special benefit. School cross-appealed, contending the trial court erred in denying recovery for assessments paid during the pendency of the case. The Court of Appeal concluded the trial court erred in declining to apply the constitutional mandate of Proposition 218 to the statutory exemption from assessments provided by section 51200. Accordingly, the Court reversed the judgment and dismissed the cross-appeal. View "Manteca Unified Sch. Dist. v. Reclamation Dist. No. 17" on Justia Law

At dispute in this case was the taxable value of Macy’s Retail Holdings, Inc.’s downtown Minneapolis property. Macy’s challenged the Minneapolis Assessor’s valuation of the property for the 2008, 2009, and 2010 tax years. After a trial, the tax court valued the property at figures lower than the assessor’s original valuation of the property for each of the years in question but not to the extent urged by the testimony and appraisal report of Macy’s expert witness. The Supreme Judicial Court affirmed, holding that the tax court (1) did not clearly err in its determination of the property’s highest and best use and in its consideration of comparable-sales data; (2) did not abuse its discretion when it declined to strike portions of the appraisal report and testimony of the County’s expert witness as a sanction for a discovery violation; and (3) did not clearly err in disregarding the sale of a nearby commercial property when it evaluated the comparable-sales data provided by the parties. View "Macy’s Retail Holdings, Inc. v. County of Hennepin" on Justia Law

Myria Holdings, Inc. is a Delaware corporation with its primary place of business in Texas. Myria held an ownership interest in two subsidiaries doing business in Iowa. The Iowa Department of Revenue issued a final order concluding that Myria was ineligible to join a consolidated tax return with its subsidiaries because it did not derive taxable income from within Iowa under Iowa Code 422.33(1). The district court affirmed. The Supreme Court affirmed, holding that Myria lacked a taxable nexus with the State of Iowa, and therefore, the Department correctly concluded that Myria lacked taxable income from within the State. View "Myria Holdings Inc. v. Iowa Department of Revenue" on Justia Law

Defendant divorced his wife in order to transfer assets fraudulently and avoid some tax liability. The district court set aside the separation agreement as a fraudulent transfer and proceeded to redivide and reallocate certain assets applying Massachusetts law. The government’s tax liens attached directly to any assets allocated to Defendant, but the government argued that its tax liens also attached indirectly to certain assets allocated to Defendant’s wife. This appeal concerned the district court’s allocation of two assets that the district court divided more or less evenly. The First Circuit vacated in part and affirmed in part, holding (1) with regard to funds that were directly traceable to the tax shelter that Defendant used to reduce his taxable income for several years, it was not clear whether the district court considered fourteen factors required by Massachusetts law in order to arrive at an equitable division of the parties’ assets; and (2) the government was not entitled to Defendant’s wife’s half of the proceeds from the sale of property owned by Defendant and his wife in Massachusetts on a lien-tracing theory. Remanded. View "United States v. Baker" on Justia Law

Plaintiffs filed suit under 26 U.S.C. 7431 against the IRS, after the IRS sent a report containing plaintiffs' names, social security numbers, and financial information to the wrong person. The government conceded liability and acknowledged that plaintiffs were entitled to $1,000 each in statutory damages for the disclosure of the report. Plaintiffs argued, however, that they were entitled to statutory damages of $1,000 not just for the disclosure of the report but for the disclosure of each item of information contained in the report. Plaintiffs also sought punitive damages. The district court granted the government's motion for summary judgment. The court found no ambiguity in the statute, and held that the statute clearly provided an aggrieved taxpayer $1,000 in statutory damages for ʺeach actʺ of unauthorized disclosure, not for each item of information disclosed. To the extent that there was any doubt, the court explained that it must resolve the matter in favor of the government. In regard to punitive damages, the court agreed with the district court that no reasonable jury could find, on the record presented, that the disclosure resulted from anything other than ordinary negligence. Accordingly, the court affirmed the judgment. View "Minda v. United States" on Justia Law

Plaintiff (Carle Foundation) owns four Urbana parcels of land that are used in connection with the operation of plaintiff’s affiliate, Carle Foundation Hospital. Before 2004, the parcels were deemed exempt from taxation under the Property Tax Code (35 ILCS 200/15-65(a) because their use was for charitable purposes. From 2004-2011, the Cunningham Township assessor terminated plaintiff’s charitable-use tax exemption. For tax years 2004-2008, plaintiff filed unsuccessful applications with the county board of review to exempt the parcels. Plaintiff filed no applications for tax years 2009-2011. In 2007, plaintiff filed suit. In 2012, Public Act 97-688 (section 15-86) took effect, establishing a new charitable-use exemption specifically for hospitals. Plaintiff argued that section 15-86 applies retroactively. The court agreed, but held that it was “obvious that resolution of the question of whether the standard established by section 15-86(c) applies to plaintiff’s claims will not resolve the merits of those claims.” The appellate court reversed, finding that section 15-86 violated the Illinois Constitution. The Illinois Supreme Court vacated, holding that the court lacked appellate jurisdiction because the trial court erred in entering an order under Rule 304(a). Plaintiff’s exemption claims and plaintiff’s request for a declaration as to what law governs those claims matters are “so closely related that they must be deemed part of a single claim for relief.” View "Carle Foundation v. Cunningham Township" on Justia Law

In 2012, the assessor for the city of Attleboro determined that Shrine of Our Lady of La Salette Inc. (Shrine) owed property taxes in the amount of $92,292.98. The Shrine filed an application for abatement, which the city’s board of assessors denied. The Shrine appealed, arguing its property was exempt under Mass. Gen. Laws ch. 59, 5, Eleventh (Clause Eleventh), the exemption for “houses of religious worship.” The Appellate Tax Board divided the Shrine’s property into eight distinct portions, determined that the first four portions of the property were exempt under Clause Eleventh, that the fifth portion was only partially exempt, and that the last three were fully taxable. The Shrine appealed these latter four determinations. The Supreme Judicial Court affirmed in part and reversed in part, holding (1) the board erred when it found that the Shrine’s welcome center and maintenance building were not exempt under Clause Eleventh; and (2) the former convent that the Shrine leased to a nonprofit organization for use as a safe house for battered women and the wildlife sanctuary that was exclusively managed by the Massachusetts Audubon Society in accordance with a conservation easement were not exempt under Clause Eleventh. View "Shrine of Our Lady of La Salette Inc. v. Board of Assessors of Attleboro" on Justia Law

Petitioner and the Government cross-appealed the tax court's orders relating to petitioner's underreporting of income in his 2003 tax return, principally in connection with a $2 million payment he received from Delta Currency Trading for his role in a now-defunct tax shelter scheme. While petitioner's deficiency proceeding was pending losses reported by Mercato - a partnership of which petitioner was a member - were disallowed in a partnership tax proceeding. The tax court held that it lacked jurisdiction over the added income tax deficiency because I.R.C. 6230 required the Commissioner to apply the results of the Mercato proceeding to petitioner by computational adjustment, rather than in his deficiency proceeding. The tax court also held that petitioner owed the self-employment tax and corresponding penalty. The court held that the tax court erred in concluding that it lacked jurisdiction over the additional income‐tax deficiency attributable to the $2 million Delta payment; section 6751(b)(1) requires written approval of the initial penalty determination no later than the date the IRS issues the notice of deficiency (or files an answer or amended answer) asserting such penalty; and compliance with section 6751(b) is part of the Commissioner's burden of production and proof in a deficiency case in which a penalty is asserted. Therefore, the court vacated the tax court's jurisdictional ruling; remanded to the tax court to enter a revised decision upholding the additional income-tax deficiency, because petitioner concedes that the $2 million payment was fully taxable; affirmed the portion of the tax court's order upholding the self-employment tax deficiency; and reversed the portion of the tax court's order upholding the accuracy-related penalty. View "Chai v. Commissioner" on Justia Law

This case involved the differences between how ad valorem taxes are determined in South Carolina for railroad property and how they are determined for most other commercial and industrial property. CSXT filed suit against the State, alleging that the property taxes imposed for the 2014 tax year will discriminate against CSXT. CSXT sought a judgment declaring that excluding CSXT from the benefit of the caps of the South Carolina Real Property Valuation Reform Act (SCVA), S.C. Code 12-37-3140(B), violates the Railroad Revitalization and Regulatory Reform Act of 1976, 49 U.S.C. 11501(b)(4), which prohibits the imposition of "another tax that discriminates against a rail carrier." CSXT also sought preliminary and permanent injunctions. The district court ultimately rejected CSXT's section 11501(b)(4) challenge. The court explained that Congress designed section 11501(b)(4) to prohibit taxes that discriminate against railroads. In this case, CSXT alleged that if it is not allowed to benefit from the SCVA cap, its 2014 property tax will be just such a tax. The court concluded that there was no basis for precluding CSXT from proving the claim it alleged – discrimination – and requiring CSXT instead to fit its challenge into a provision that does not even address discrimination and that required proof of facts CSXT has not even alleged. Therefore, the court vacated and remanded for further proceedings because the district court granted judgment against CSXT without ever reaching the question of whether the challenged tax was discriminatory. View "CSX Transportation, Inc. v. South Carolina Department of Revenue" on Justia Law