Justia Tax Law Opinion Summaries

In 2013, TracFone Wireless, Inc. sought refunds of the difference between the sales tax it paid on its sales to Missouri residents and the use tax it believes it should have paid, arguing that it qualified for the “in commerce” exemption from sales tax set out in section 144.030.1. The Director of Revenue denied the requested refunds. The Administrative Hearing Commission upheld the decision, finding that TracFone’s sales were subject to sales tax under Mo. Rev. Stat. 144.020.1(4) and that TracFone was not entitled to claim the “in commerce” sales tax exemption because the true object of the transactions was the sale of access to telecommunications services in Missouri, and the equipment was merely incidental to the sale of access to those services in Missouri. TracFone filed a petition for review, asserting that, while the sales at issue may be retail sales under section 144.020.1, they qualified for the “in commerce” exemption set out in section 144.030.1. The Supreme Court affirmed, holding that the transactions at issue did not qualify for the exemption set out in section 144.030.1 for sales “in commerce” between states. View "TracFone Wireless, Inc. v. Director of Revenue" on Justia Law

This case concerned the taxable status of Schulmaier Hall, a building owned by the Vermont College of Fine Arts (VCFA), two-thirds of which VCFA rented to agencies of the State of Vermont (State) during the 2013 and 2014 tax years. The City Assessor of the City of Montpelier (City) found the property nonexempt for those tax years. In response, VCFA brought a motion for declaratory judgment in the trial court, and both parties moved for summary judgment. Granting summary judgment for the City, the court found: (1) that VCFA had failed to exhaust its administrative remedies before moving for declaratory judgment but also (2) that the property was not exempt on the merits. Finding no reversible error in the trial court's judgment, the Supreme Court affirmed. View "Vermont College of Fine Arts v. City of Montpelier" on Justia Law

Plaintiffs each owned real property in Van Buren County, Michigan in but failed to pay property taxes for 2011. In 2012, the properties became subject to forfeiture and foreclosure. In 2014, the circuit court issued a foreclosure judgment; title to the properties passed in fee simple absolute to the county. Months later, the county sold the properties at an auction. The minimum bid for each of the properties was calculated by totaling “[a]ll delinquent taxes, interest, penalties, and fees due on the property” plus the “expenses of administering the sale, including all preparations for the sale.” Wayside Church’s former property had a minimum bid of $16,750, but sold for $206,000. The minimum bid for the Stahl property was $25,000; the property sold for $68,750. The Hodgens property required a minimum bid of $5,900, but sold for $47,750. Plaintiffs sought return of the surplus funds, citing 42 U.S.C. 1983, and alleging that they had a cognizable property interest in their foreclosed properties and in the surplus proceeds generated by the sales, so that Defendants were required to pay just compensation under the Fifth Amendment. The Sixth Circuit vacated dismissal for failure to state a claim and remanded for dismissal for lack of subject matter jurisdiction. the district court erred in finding that the claims were not barred by the Tax Injunction Act, 28 U.S.C. 1341, and the doctrine of comity. View "Wayside Church v. Van Buren County" on Justia Law

Bey, a self-described “Aboriginal Indigenous Moorish-American,” sought to enjoin state and county officials from taxing his Marion County real estate, a refund of taxes he has paid, and $11.5 billion in compensation. The Seventh Circuit affirmed dismissal, rejecting Bey’s claim to be a “sovereign citizen” who cannot lawfully be taxed by Indiana or its subdivisions in the absence of a contract between them and him. The court explored the history of the “sovereign citizen” movement and its connection to some members the Moorish Science Temple of America (MSTA). Proponents argue, “without any basis in fact,” that as a result of eighteenth-century treaties the United States has no jurisdiction over its Moorish inhabitants, who are therefore under no obligation to pay taxes. Bey “is a U.S. citizen and therefore unlike foreign diplomats has no immunity from U.S. law … his suit is frivolous and … he was lucky to be spared sanctions.” View "Bey v. Indiana" on Justia Law

The Commission determined that Charles and Mary Harter improperly calculated their income eligibility for purposes of the Property Tax Credit (PTC), under sections 135.010 to 135.035 of RSMO Supp., and found that the entire amount of Mr. Harter's social security and annuity payments should be included in their “income” for PTC purposes under section 135.010(5). The Harters seek judicial review of the Commission's finding that the Harters were eligible only for a reduced PTC for the 2010 tax year under section 135.030.2 and that they were not eligible for any PTC for the years 2011-13 because their income exceeded the “maximum upper limit” of income eligibility under section 135.030.1(1). The court concluded that the Commission properly determined the Harters' PTC where the Harters met the disability eligibility criterion and the Commission properly calculated the Harters' "income" for PTC purposes. The court also concluded that the Commission did not err in refusing to estop the Director, and the Commission did not err in granting summary decision. Accordingly, the court affirmed the judgment. View "Harter v. Director of Revenue" on Justia Law

This appeal concerned a dispute between taxpayers from the Incline Village and Crystal Bay areas of Washoe County and Nevada State Board of Equalization concerning the State Board’s failure to equalize property values as required by Nev. Rev. Stat. 361.395 for tax years 2003 through 2005. The district court dismissed the taxpayers’ petition for judicial review of the State Board’s interlocutory administrative order requiring reappraisals of properties around Incline Village and Crystal Bay for the tax years in question. The Supreme Court reversed and instructed the district court to grant, in part, the petition for judicial review and vacated the State Board’s interlocutory administrative order directing reappraisals of the properties, holding (1) this Court has jurisdiction to consider the district court’s dismissal of the petition for judicial review; and (2) the district court erred when it dismissed the petition for judicial review because the State Board exceeded its statutory authority to order reappraisals pursuant to section 361.395. View "Village League To Save Incline Assets, Inc. v. State, Board of Equalization" on Justia Law

In a felony complaint, the prosecution charged Blake Hudson with three counts of willfully failing to timely file tax returns for three consecutive years with the intent to evade paying a tax. A magistrate presided over a preliminary hearing in which an Franchise Tax Board (FTB) agent testified as the prosecution’s sole witness. The agent testified that generally a person must file tax returns by either April 15, or October 15, for the prior taxable year. Generally, a crime occurs when a person commits a wrongful act with the requisite criminal intent. In California, it is a crime when a person willfully fails to timely file a state tax return with the intent to evade paying the taxes that are owed. Hudson had filed returns in other years and the FTB had repeatedly notified Hudson of his duty to file his tax returns. As a result, the magistrate bound Hudson over for trial; and the superior denied his motion to set aside the information. Hudson argues that there was insufficient evidence to show his intent to evade paying taxes. Hudson argued that in order to prove his intent, the prosecution needed to show an additional affirmative act of fraud. The Court of Appeal found that Hudson’s argument was based on a United States Supreme Court opinion interpreting a federal tax law. But unlike the California state statute, the federal tax law at issue did not explicitly make the failure to timely file a tax return a criminal act. "That distinction is ultimately fatal to Hudson’s claim." The Court concluded there was a rational basis for the magistrate to assume that Hudson harbored the requisite intent to evade paying his taxes when he failed to timely file his tax returns. View "Hudson v. Super. Ct." on Justia Law

Plaintiff filed a class action against HealthPort in state court seeking damages and injunctive relief, asserting several statutory consumer protection claims and common law claims. Specifically, plaintiff challenges HealthPort’s collection of $23 in sales tax on the sale of medical records. HealthPort removed the case to federal court. The court concluded that the Tax Injunction Act, 28 U.S.C. 1341, and the related principle of federal-state comity operate to deprive the court of jurisdiction. Therefore, the court vacated the judgment of dismissal and remanded to the district court with instructions to return the action to state court. View "Gwozdz v. Healthport Technologies, LLC" on Justia Law

Appellant, a coal producer that reports the taxable value of its coal to the Department of Revenue using the proportionate profits valuation method, challenged two of the Departments determinations, arguing (1) the Department improperly applied Wyoming law when it set the point of valuation for its coal for production years 2009 through 2011; and (2) the Department improperly categorized certain government-imposed and environmental expenses in the tax valuation formula. The Board of Equalization upheld the Board’s determinations. The Supreme Court affirmed, holding (1) the Board correctly upheld the Department’s decision on the point of valuation; and (2) the Board’s decision on the categorization of the environmental and government-imposed expenses was not final, and the issue was not ripe for judicial review. View "Wyodak Resources Development Corp. v. Wyoming Department of Revenue" on Justia Law

Diversified filed suit seeking a declaratory judgment that the Interstate Income Act (IIA), 15 U.S.C. 381, deprives Ohio of jurisdiction to assess and collect the Commercial Activity Tax (CAT) on Diversified's sales of goods manufactured and shipped from outside Ohio to locations in Ohio, and an order enjoining the State Tax Commissioner from asserting that jurisdiction. The district court dismissed the suit as barred by the Tax Injunction Act (TIA), 28 U.S.C. 1341, and by long-standing principles of comity. The court held that the TIA applies to a suit in federal court seeking to enjoin assessment, levy or collection of a state tax “where a plain, speedy and efficient remedy may be had in the courts of such State.” Here, Diversified's argument that the Ohio CAT does not provide a "plain" state court remedy is without merit. In this case, the Ohio Revenue Code provides taxpayers an appeal of right to an Ohio appellate court which will “hear and decide” a claim that a state tax has been invalidly assessed or collected. The court explained that this obviously includes authority to decide that imposing the CAT on Diversified’s out-of-state transactions violates the IIA, regardless of the Ohio Legislature’s contrary intention. The court further concluded that its decision that the TIA effectively transferred jurisdiction over Diversified’s equitable claims to the Ohio state courts is not at odds with comity principles. Accordingly, the court affirmed the judgment. View "Diversified Ingredients v. Testa" on Justia Law