Justia Tax Law Opinion Summaries

In 2012, the South Dakota Department of Revenue (Department) commenced an audit of Taxpayer’s excise tax and sales tax licenses for tax period 2009 through 2012. At issue in this case was whether Taxpayer’s construction management at-risk services provided to public and non-profit entities were subject to a contractor’s excise tax under S.D. Codified Laws 10-46A-1. Taxpayer did not remit excise tax on the gross receipts it received from its construction management at-risk services provided to public and non-profit entities. As a result of the audit, the Department issued Taxpayer a certificate of assessment for $43,020, which included excise tax and interest. The circuit court reversed the Department’s certificate of assessment, ruling that Taxpayer’s services were not subject to a contractor’s excise tax under section 10-46A-1. The Supreme Court reversed, holding that Taxpayer’s act of entering into a contract with a public entity to guarantee a satisfactorily completed public improvement project by a specific date for a specific cost was subject to excise tax under section 10-46A-1. View "Puetz Corp. v. S.D. Dep’t of Revenue" on Justia Law

The American Institute of Certified Public Accountants, a professional association of certified public accountants and their firms, challenged an IRS program that allows previously uncredentialed tax return preparers who take required courses and fulfill other prerequisites to obtain a “Record of Completion.” The program also requires them to have their names listed in the IRS’s online “Directory of Federal Tax Return Preparers.” The district court dismissed the complaint for lack of Article III standing, finding that the Institute lacks actual or imminent harm. The court concluded that the Institute has adequately alleged the program will subject its members to an actual or imminent increase in competition and that it therefore has standing to pursue its challenge. Accordingly, the court reversed the judgment. View "American Institute of Certified Public Accountants v. IRS" on Justia Law

Petitioners are subsidiaries of the Howard Hughes Corp., an entity involved in selling and developing commercial and residential real estate. Petitioners used the completed contract method of accounting in computing their gains from sales of property under long-term construction contracts. The IRS challenged the method and the Tax Court sided with the IRS. At issue was whether petitioners' contracts were “home construction contracts” within the meaning of I.R.C. 460(e)(6)(A), thereby making petitioners eligible to use the completed contract method of accounting. The court concluded that petitioners' construction contracts do not fall within the meaning of subsection (i) of section 460(e)(6)(A) or subsection (ii) of section 460(e)(6)(A). Because petitioners' contracts are not "home construction contracts," within the meaning of the statute, the court affirmed the Tax Court's judgment. View "Howard Hughes Co. v. Commissioner" on Justia Law

Five separate groups of Pennsylvania-domiciled insurance companies (collectively, “Claimants”) were authorized to provide workers’ compensation coverage in Tennessee. As a result of an audit conducted by the State of Tennessee, Claimants were required, under Tennessee’s retaliatory tax statute, to recalculate their Tennessee taxes to include certain Pennsylvania workers’ compensation charges, file amended tax returns, and remit payment of the additional taxes totaling over $16 million. Claimants paid the taxes under protest. Each Claimant subsequently filed a complaint with the Tennessee Claims Commission (the “Commissioner”) seeking a refund of the retaliatory taxes paid under protest. The Commissioner issued five identical judgments, each granting summary judgment in favor of the State. The Court of Appeals affirmed. The Supreme Court reversed, holding that because the Pennsylvania workers’ compensation assessments were no longer paid by the insurance companies but were imposed on the employer-policyholders in conjunction with their premium payments, the administrative task of collecting and remitting those payments did not qualify as a burden on the insurance companies for purposes of the retaliatory tax. View "Chartis Casualty Co. v. State" on Justia Law

In 2012, the Attorney General (AG) filed a complaint resulting in a civil enforcement action by the AG, alleging that Sprint knowingly violated the New York Tax Law, engaged in fraudulent or illegal acts, and submitted false documents to the State pursuant to the New York False Claims Act (FCA). Sprint moved to dismiss the complaint for failure to state a cause of action. Supreme Court denied the motion, and the Appellate Division affirmed. The Court of Appeals affirmed, holding (1) the New York Tax Law imposes sales tax on interstate voice service sold by a mobile provider along with other services for a fixed monthly charge; (2) the statute is unambiguous; (3) the statute is not preempted by federal law; (4) the AG’s complaint sufficiently pleads a cause of action under the FCA; and (5) the damages recoverable under the FCA are not barred by the ex post facto clause of the United States Constitution. View "People v. Sprint Nextel Corp." on Justia Law

Platinum Lodging, LLC, the former owner of the property at issue in this appeal, was a party throughout proceedings challenging a real property valuation for the tax year 2008. The Franklin County Board of Revision (BOR) reduced the valuation. Platinum Lodging and the current property owners appealed to the common pleas court. The common pleas court remanded the matter to the BOR. On remand, the BOR dismissed the complaint on the grounds that the complainant lacked standing. The Columbus City Schools Board of Education and Platinum Lodging appealed. The Board of Tax Appeals (BTA) dismissed the appeals on the grounds that, because the first appeal had been filed in the common pleas court, the BTA lacked jurisdiction to entertain an appeal from the BOR’s dismissal order on remand. The Supreme Court reversed the BTA’s order or dismissal as to Platinum Lodging, holding that Platinum Lodging acted properly in filing its notice of appeal at the BTA instead of in the common pleas court. Remanded to the BOR with instructions that it determine the value of the property in accordance with the earlier remand order issued by the common pleas court. View "Columbus City Schs. Bd. of Educ. v. Franklin County Bd. of Revision" on Justia Law

Appellees’ farm was condemned by the Board of Education for the purpose of building a school. On Appellees’ behalf, the Board paid the State agricultural land transfer tax and the County farmland transfer tax. Appellees requested from the County a refund of a portion of the County farmland transfer tax, arguing that the County, in calculating the County farmland transfer tax, was incorrect in concluding that the twenty-five percent State surcharge was not part of the combined transfer tax. The County denied the request for a refund. The Tax Court affirmed, concluding that the State surcharge was to be collected in addition to the State agricultural land transfer tax and the County farmland transfer tax. The circuit court reversed. The Court of Special Appeals certified the case to the Court of Appeals to answer a question of law. The Court of Appeals answered (1) the agricultural land transfer tax, as set forth in Md. Code Ann. Tax-Prop. 13-407(a)(2) and (3), includes the State surcharge imposed under Md. Code Ann. Tax-Prop. 13-303(d), and the State surcharge must be calculated into the tax ceiling on a county’s agricultural land transfer tax; and (2) therefore, Appellees were entitled to a refund in the amount of the overcharge of the County farmland transfer tax. View "Montgomery County v. Phillips" on Justia Law

The Florida Development Finance Corporation (FDFC), a corporate and political entity, filed a complaint in the circuit court of the Second Judicial Circuit in Leon County seeking to determine the validity of a series of bonds proposed to be issued to finance qualifying improvements pursuant to the Property Assessed Clean Energy Act (PACE Act). After a hearing, the circuit court validated the PACE bonds. The Florida Bankers Association (FBA) and Robert Reynolds, a property owner in Leon County, appealed the bond validation. The Supreme court (1) dismissed the appeal brought by FBA, as FBA had no standing to appear in this appeal; and (2) affirmed the circuit court’s amended final judgment validating the FDFC special assessment revenue bonds but remanded with instructions to require FDFC to amend the bond documents as set forth in this opinion. View "Fla. Bankers Ass’n v. Fla. Dev. Fin. Corp." on Justia Law

Plaintiffs filed suit challenging the Notices of Final Partnership Administrative Adjustment (FPAAs) the IRS issued disallowing all items they claimed on their partnership returns on the ground that partnerships constituted an abusive tax shelter designed to generate artificial, noneconomic tax losses desired by the taxpayer. The district court upheld the administrative adjustments to the partnerships’ returns and entered judgment for the Government. The court concluded that the district court's Memorandum Opinion and Order correctly resolved these questions; and therefore, the court affirmed on this basis. The district court concluded that the FPAAs properly found that the partnerships lacked economic substance and made adjustments accordingly. However, the FPAAs improperly imposed penalties. View "Kearney Partners Fund v. United States" on Justia Law

New Garden Restaurant, Inc. received “estimated audit assessments” from the Department of Revenue notifying New Garden that it owed $43,738 in unpaid sales tax. New Garden claimed it never received final assessment notices sent by the Department of Revenue. New Garden appealed the Director of Revenue’s tax assessments against it more than two weeks past the deadline. The Administrative Hearing Commission entered a summary decision dismissing New Garden’s appeal, ruling that it had no authority to hear New Garden’s appeal because the appeal was not filed within the time limitation for doing so. The Supreme Court affirmed, holding (1) under the circumstances of this case, there was no due process violation; (2) equitable estoppel does not excuse New Garden’s late filing; and (3) the Commission did not err in its findings. View "New Garden Restaurant, Inc. v. Dir. of Revenue" on Justia Law