Justia Tax Law Opinion Summaries

The property of Riverboat Corporation, an ad valorem taxpayer, was subject to assessment by the Harrison County Board of Supervisors (“the Board”) because Riverboat owned certain personal and real property in Harrison County. The Mississippi Supreme Court was asked "to abandon the common law of this state, pronouncements of this Court, and customs and practices of trial courts across this state, all dating back to the nineteenth century, under the guise that today’s issue has not yet been squarely before" it and to "overrule a learned trial judge who, [. . .] determined a jury trial should be had in an appeal of a county’s ad valorem tax assessment." When Riverboat appealed its tax assessment, the Board requested a jury trial. Riverboat then moved for a bench trial, averring that there was no right to a jury trial in tax appeals. The trial court denied Riverboat's motion. The Supreme Court declined to rule against Mississippi precedent, and affirmed the trial court's denial of Riverboat's motion. View "Riverboat Corporation of Mississippi v. Harrison County Board of Supervisors" on Justia Law

At issue in this case was property owned by Innkeeper Ministries, Inc. that contained two large residential buildings and various recreational amenities. Innkeeper’s mission was to invite religious leaders to stay at the property at no charge and to enjoy the amenities and free meals as a type of spiritual retreat. Innkeeper filed an exemption application in 2008 seeking an exemption for, inter alia, charitable use. The tax commissioner denied exemption, stating, as for charitable use, that the activity at issue did not meet the charity standard. The Board of Tax Appeals (BTA) reversed. The Supreme Court reversed, holding that, given the residential use of the property by a caretaker couple, the BTA erred by failing to require proof of the primacy of charitable hospitality. View "Innkeeper Ministries, Inc. v. Testa" on Justia Law

At issue in this case was Hennepin County’s assessment of the market value of two bulk-distribution warehouses for two assessment dates in 2009 and 2010. The tax court adopted market valuations that were far lower than the recent sale price of each subject property. The County appealed, arguing that the tax court provided inadequate reasons for rejecting the County’s sales comparison analysis and for rejecting a large portion of the County’s income capitalization analysis. The Supreme Court reversed the portion of the tax court’s decision rejecting the County’s sales comparison analysis and vacated the tax court’s order, holding that the tax court (1) did not err in rejecting portions of the County’s income capitalization analysis, but (2) failed adequately to explain its reasons for rejecting the County’s sales comparison analysis. Remanded. View "Archway Marketing Servs. v. County of Hennepin" on Justia Law

Bombardier operated a fractional-aircraft-ownership program called “Flexjet.” In this appeal, Bombardier claims it is not required to remit federal excise tax on fees collected from participants in Flexjet. The court concluded that the district court's interpretation of 26 U.S.C. 6415(a) is consistent with the statute’s plain language and with authority from this and other circuits; this outcome does place an additional burden on entities already saddled with the responsibility of collecting the tax, but it also prevents unjust enrichment; and it was proper for the district court to dismiss Bombardier’s refund claim. The court also concluded that Bombardier is in possession, command, and control of the means of transportation, and is therefore required to submit section 4261 tax on fees collected from Flexjet participants. The court further concluded that the district court did not err in concluding that the fees collected by Bombardier, including the monthly management fees, are subject to section 4261 excise tax. Finally, the IRS did not violate any duty of clarity it owed to Bombardier, and the unfair competitive disadvantage principle has no application in this case. The district court did not err in denying Bombardier's motion to supplement the complaint. Accordingly, the court affirmed the district court's judgment in the Government's favor. View "Bombardier Aerospace Corp. v. United States" on Justia Law

MediMarts, a nonprofit collective, paid the Marijuana Business Tax (MBT) for a year, then began submitting returns showing no money due. The City of San Jose sent notices and found that MediMarts owed $58,788.53 as of August 2012, plus future penalties and interest. MediMarts owed $215,111.17 as of November 2013. The city sued MediMarts and its president, Armstrong, for $767,058.60. Defendants filed a cross-complaint under 42 U.S.C. 1983 and 1988, arguing that payment of the MBT would subject them to self-incrimination because it “forces [defendants] to admit to the sale or possession for sale of marijuana.” The tax also violated defendants’ due process rights by failing to provide for notice or a hearing before declaring MediMarts a nuisance and forcing it to cease operations. Armstrong was not afforded a hearing on his personal liability for the taxes. Finally, the cross-complaint alleged that the MBT “unjustly treats collectives and medical marijuana patients differently from other similarly situated individuals and organizations.” Applying the “collective entity rule,” the court determined that neither MediMarts nor Armstrong was entitled to assert the Fifth Amendment to resist the tax. The court of appeal affirmed. Neither assertion of Armstrong’s constitutional rights nor their accommodation would abate MediMarts’s duty to pay the tax. View "City of San Jose v. MediMarts, Inc." on Justia Law

Washington resident Stuart Etter was an aircraft dispatcher for Horizon Air Industries, Inc. who worked almost entirely in Portland. To work as a dispatcher, however, he had to spend five hours each year riding along in the cockpit for each aircraft group that he dispatched. Taxpayer argued that, pursuant to 49 USC § 40116(f), that flight time exempted him from paying Oregon income tax in the tax year 2000. The Oregon Tax Court concluded that taxpayer did not meet the requirements of the federal statute and denied his exemption. On appeal, taxpayer renewed his arguments. Finding no reversible error, the Oregon Supreme Court affirmed. View "Etter v. Dept. of Rev." on Justia Law

King, now deceased, was a lawyer. For several years he failed to pay his quarterly payroll taxes. The IRS stated that it would grant his request for an installment payment plan, but requested additional financial information to determine his eligibility. Eventually, the IRS decided that King had enough income and assets to pay the taxes when they were due, plus penalties and interest that had accrued. He paid the taxes in October 2011 but requested abatement of interest accrued after the date on which the IRS told him it would honor his request for an installment plan. He argued that had the IRS informed him from the outset that he would not be allowed an installment plan, he would have paid the taxes sooner and would have owed less interest. The IRS denied the request. Although 26 U.S.C. 6404(a) allows abatement under certain circumstances, the IRS determined that the interest was “not excessive” and “was not erroneously or illegally assessed.” The Tax Court abated interest for two months, holding that the “failure to communicate … the deficiencies … was unfair.” The Seventh Circuit reversed, finding the Tax Court’s approach inconsistent with a Treasury Department regulation, 26 C.F.R. 301.6404–1(a), which eliminates the vagueness of “excessive” and leaves no room for consideration of “unfairness.” View "King v. Comm'r of Internal Revenue" on Justia Law

Appellant, a property owner, applied to exempt real property used as a public community school for tax year 2010. The tax commissioner denied the exemption to the property that Appellant leased to the community school. Appellant appealed, arguing that because it was wholly owned by a 501(c)(3) nonprofit corporation whose members include the community school to whom the property is leased, the property should qualify for exemption under the public-schoolhouse exemption and an exemption for exclusive charitable use. The Board of Tax Appeals (BTA) affirmed the denial of an exemption, concluding that the record showed a “view to profit” on the part of the lessor. The Supreme Court affirmed, holding that the record contained sufficient support for the BTA’s view-to-profit finding. View "250 Shoup Mill, LLC v. Testa" on Justia Law

Taxpayer C&S Wholesale Grocers, Inc. disputed sales tax assessed by the Vermont Department of Taxes on the purchase of reusable fiberglass freezer tubs used in the transport of perishable items, as well as the Department’s refusal to refund sales tax paid on diesel fuel used to power refrigeration systems mounted on taxpayer’s tractor trailers. Taxpayer also contested the penalty assessed by the Commissioner of the Department of Taxes, arguing that it was unreasonable. Finding no reversible error, the Supreme Court affirmed the Department of Taxes. View "C & S Wholesale Grocers, Inc. v. Dept. of Taxes" on Justia Law

The Oregon Tax Court set aside a determination by the Department of Revenue (the department) that taxpayer DIRECTV’s property in Oregon was subject to central assessment under ORS 308.505 to 308.665. The department argued that, contrary to the Tax Court’s opinion, DIRECTV was a “communications” business whose property is subject to central assessment under ORS 308.515(1). The Supreme Court agreed and, therefore, reversed and remanded. View "DIRECTV, Inc. v. Dept. of Rev." on Justia Law