Justia Tax Law Opinion Summaries

Regency West Apartments sued the City of Racine to recover refunds from allegedly excessive taxation for tax years 2012 and 2013. The circuit court dismissed Regency West’s claims. The court of appeals affirmed. At issue before the Supreme Court was whether the City’s appraisals of Regency West’s property complied with Wisconsin law. The Supreme Court reversed, holding (1) the valuation methodologies the City used for the assessments at issue did not comply with Wisconsin law; (2) the lower courts erred in concluding that Regency West failed to overcome the presumption of correctness for the 2012 and 2013 tax assessments; and (3) Regency West proved that the City’s tax assessments for the tax years at issue were excessive. Remanded to the circuit court to calculate the amount of Regency West’s refund. View "Regency West Apartments LLC v. City of Racine" on Justia Law

Plaintiffs, two Arlington County taxpayers, challenged the County’s inclusion of transferrable development rights (TDRs) in their real estate assessment, arguing that the County had no authority assess and tax TDRs on their properties for tax years 2012 through 2015. The circuit court ruled in favor of the County. The Supreme Court reversed, holding (1) the County may not tax TDRs under Va. Code 15.2-2316.2 unless it enacts an ordinance that conforms to the detailed requirements of that statute; and (2) the County lacks the authority to tax TDRs under section 15.2-750 and its ordinance until it has approved and accepted a site plan. View "Johnson v. Arlington County" on Justia Law

At issue in this case was whether a certain governmental charge imposed on Indian tribes was a tax. After the legislature amended a statute to expand the types of tribal property that were eligible for a property tax: exemption, the Muckleshoot Indian Tribe applied for and received an exemption on its Salish Lodge property pursuant to the amendment. As required by statute, the tribe negotiated and paid an amount to the county in lieu of taxes. The issue before the Washington Supreme Court centered on the constitutionality of this payment in lieu of tax (PILT). The Court found that the PILT was not a tax at all but, rather, a charge that tribes pay to compensate municipalities for public services provided to the exempt property. View "City of Snoqualmie v. King County Exec. Constantine" on Justia Law

The Board of Equalization of Ada County (Ada County) appealed a district court’s ruling granting Evangelical Lutheran Good Samaritan Society (Society) a charitable property tax exemption. After review, the Supreme Court concluded that Society was not a charitable organization under the factors announced in "Appeal of Sunny Ridge Manor, Inc.," (675 P.2d 813 (1984)). Accordingly, the Court reversed and remanded the case for further proceedings. View "Evangelical Lutheran Good Samaritan Society v. Bd of Equalization of Ada County" on Justia Law

Plaintiff, the owner of a parcel of land in the Town of Colchester, challenged the Town’s assessment of the property for the tax year 2011. The Colchester Board of Assessment Appeals upheld the Town’s original valuation. Plaintiff appealed, arguing that the Town had used an improper method for valuing the property. The trial court upheld the Town’s original assessment, determining that Plaintiff had not established that it was aggrieved by the Town’s valuation because it found that Plaintiff’s expert was not credible. Plaintiff appealed, arguing that the trial court applied the incorrect legal standard of valuation to the subject property. The Supreme Court affirmed, holding that the trial court’s determination that Plaintiff failed to establish aggrievement was not clearly erroneous, and the trial court properly rejected Plaintiff’s appeal. View "Nutmeg Housing Development Corp. v. Colchester" on Justia Law

Oil producers (the Producers) challenged an administrative decision (the Decision) in which the Alaska Department of Revenue (DOR) decided to treat separate oil and gas fields operated by common working interest owners as a single entity when calculating the Producers’ oil production tax obligations. Relying on a statute that gave DOR the discretion to “aggregate two or more leases or properties (or portions of them), for purposes of determining [their effective tax rate], when economically interdependent oil or gas production operations are not confined to a single lease or property,” DOR concluded that operations on a number of smaller oil fields were economically interdependent with larger operations on the adjacent Prudhoe Bay oil field. The Producers argued that in interpreting the phrase “economically interdependent” in the Decision, DOR effectively promulgated a regulation without following the procedures established in the Alaska Administrative Procedure Act (APA) and, as a result, DOR’s Decision was invalid. After its review, the Supreme Court concluded that DOR’s Decision was not a regulation because it was a commonsense interpretation of the statute and, therefore, DOR was not required to comply with APA rulemaking requirements. The Court therefore affirmed the superior court’s decision upholding DOR’s decision. View "Chevron U.S.A., Inc. v. Dept. of Revenue" on Justia Law

Pursuant to the Internal Revenue Code, taxpayers receive credits against owed U.S. income tax for money paid to a foreign country for “taxable international business transactions of economic substance.” Some banks have engaged in transactions that generate a foreign tax credit in order to take advantage of the U.S. deductions. In this case, the IRS began disallowing the claim for foreign tax credits sought by Sovereign Bancorp, Inc., later acquired by Santander Holdings USA, Inc. (together, Sovereign), a U.S. taxpayer, and, in 2008, began imposing accuracy-related penalties. Sovereign brought suit to obtain a refund from the IRS, the amount of which was approximately $234 million in taxes, penalties, and interest. The transaction at issue complied on its face with then-existing U.S. statutory and regulatory requirements. The government opposed the refund, arguing that the transaction failed the common law economic substance test. The district court awarded summary judgment to Sovereign, concluding that the transactions had economic substance. The First Circuit reversed, holding that the government was entitled to summary judgment in its favor as to the economic substance of the transaction at issue. View "Santander Holdings USA, Inc. v. United States" on Justia Law

Micrins Surgical went out of business in 2009, without paying all of its taxes. Eriem Surgical was incorporated the same day, purchased Micrins’ inventory, took over its office space, hired its employees, used its website and phone number, and pursued the same line of business, selling surgical instruments. Teitz, the president and 40% owner of Micrins, continued to play a leading role in Eriem, though its sole stockholder is Teitz’s wife. Eriem uses “Micrins” as a trademark. The IRS treated Eriem as a continuation of Micrins and collected almost $400,000 of Micrins’ taxes from Eriem’s bank accounts and receivables. Eriem filed wrongful levy suit, 26 U.S.C. 7426(a)(1). The Seventh Circuit affirmed judgment in favor of the IRS, concluding that Eriem is a continuation of Micrins. The Supreme Court has never decided whether state or federal law governs corporate successorship when the dispute concerns debts to the national government; the Internal Revenue Code says nothing about corporate successorship. Illinois law uses a multi‐factor balancing standard to determine successorship. Rejecting an argument that the change in ownership should be dispositive, the court upheld the district court’s conclusion that Mrs. Teitz serves is proxy for her husband, so that there has not been a complete change of ownership. View "Eriem Surgical, Inc. v. United States" on Justia Law

Western Refining Yorktown, Inc. was the owner of a refinery that was subject to the machinery and tools tax. Western challenged the Commissioner of Revenue’s 2010 and 2011 assessments in the circuit court. The trial court upheld the valuation of the refinery’s machinery and tools for purposes of levying the machinery and tools tax, concluding that Western did not carry its burden of proof to show that the property in question was valued at more than its fair market value. The Supreme Court affirmed, holding (1) the trial court did not err in upholding the assessment; and (2) the County of York did not assume inconsistent positions in successive litigation. View "Western Refining Yorktown v. County of York" on Justia Law

The Mandels owned a home that, in 2011, was damaged by rainwater. Based on an post-casualty appraisal, the Mandels deducted $82,247 from their income reflected on their 2011 federal tax return. This deduction also affected the Mandels’ Minnesota taxable income. Following an audit, the Commissioner of Revenue disallowed much of the Mandels’ casualty-loss deduction by reducing the allowable tax deduction to the amount of the cost of the repairs the Mandels actually made to their home. The Mandels appealed. The tax court granted summary judgment in favor of the Commissioner. The Supreme Court affirmed, holding that the tax court did not err in determining that the Mandels’ post-casualty appraisal was not “competent” and did not err in granting the Commissioner’s motion for summary judgment. View "Mandel v. Commissioner of Revenue" on Justia Law