Justia Tax Law Opinion Summaries

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

FICA tax includes social security tax and hospital insurance tax, 26 U.S.C. 3101(a)–(b). Balestra was a United Airlines pilot from 1979 until his 2004 retirement. He was eligible for life-long retirement benefits through a nonqualified deferred compensation plan that was a nonaccount balance plan, starting the day of his retirement. United withheld $4,199.22 in hospital insurance tax from Balestra in 2004 based on statutory tax rate applied to the present value of the deferred compensation that Balestra was to receive under the plan. United’s obligation to pay the benefits was eventually discharged in bankruptcy. United ceased paying Balestra’s benefits in 2010. Balestra actually received only $63,032.09 in benefits, although he paid hospital tax based on $289,601.18 in benefits, and sought a refund of $3,285.26—the amount of tax paid on compensation he will never receive. The IRS and Claims Court rejected the claim. The Federal Circuit affirmed. The term “amount deferred” is not defined by statute, but a Treasury regulation defines it in terms of deferred compensation’s “present value,” without consideration of an employer’s financial condition. While the regulation may seem unfair in a specific instance, in balancing the desire for simplicity against the ideal of ultimate comprehensiveness, the agency has a reasonable degree of discretion. View "Balestra v. United States" on Justia Law

The manufacturer sells telecommunications equipment to telephone companies, which pay for the equipment, written instructions on using the equipment, a copy of the computer software that makes the equipment work, and the right to copy that software onto the equipment’s hard drive and use the software to operate the equipment. An almost identical transaction was previously found to satisfy the requirements of California’s technology transfer agreement statutes (Rev. & Tax. Code 6011(c)(10) & 6012(c)(10)), so that the manufacturer was responsible for paying sales taxes only on tangible portions of the transaction (equipment and instructions), but not the intangible portions (software and rights to copy and use it). The State Board of Equalization nonetheless assessed a sales tax. The manufacturer paid the taxes and sought a refund. The court of appeal held that the Board’s assessment of the sales tax was erroneous. The manufacturer’s decision to give the telephone companies copies of the software on magnetic tapes and compact discs (rather than over the Internet) does not turn the software or the rights to use it into “tangible personal property” subject to the sales tax. View "Lucent Techs., Inc. v. State Bd. of Equalization" on Justia Law

WCI was owned by WB Acquisition, which was owned by WBPartners, which in turn was owned by Daren Barone’s and Gregory Watkins’s holding corporations. WCI and WB Partners formed a joint venture called the NTC Joint Venture. The joint venture’s structure had significant federal income tax consequences. While the NTC project was ongoing, WCI sold its assets to Kuranda. WB Partners, WB Acquisition, and Barone's holding corporation (collectively, Taxpayers) challenged certain tax deficiencies identified by the Commissioner. In three consolidated decisions, the Tax Court found that the NTC Joint Venture was not a valid partnership for tax purposes, and therefore that all of the joint venture’s profits were taxable income to WCI. The Tax Court determined that all of the proceeds from the noncompetition agreement were income to WCI as well. Because WCI had substantially understated its income, the Tax Court upheld the Commissioner’s assessment of accuracy-related penalties. The court concluded that income from the NTC Project attributed to WB Partners was in fact income to WCL; proceeds from the noncompetition agreement were income to WCI rather than WB Partners; and the Tax Court properly assessed accuracy-related penalties. Accordingly, the court affirmed the judgment. View "DJB Holding Corp. v. Commissioner" on Justia Law

This case was before the Supreme Court on appeal from a circuit court judgment validating a proposed bond issue. The Court affirmed the circuit court’s decision to validate the bonds but remanded with instructions for the circuit court to require Leon County Energy Improvement District to amend the financing agreement to remove all references to judicial foreclosure. The financing agreement was virtually identical to the financing agreement in Thomas v. Clean Energy Coastal Corridor, also decided today. The Court wrote further in order to recede from its decision in Meyers v. City of St. Cloud, in which the Court concluded that citizens and taxpayers who failed to appear in the bond validation proceedings in circuit court nonetheless had the right to appeal from the trial court’s decision. The Court held that the conclusion reached by Meyers cannot be sustained and that citizens and taxpayers are not entitled to appeal without having formally participated in the trial proceedings. View "Reynolds v. Leon County Energy Improvement Dist." on Justia Law

Clean Energy Coastal Corridor, whose purpose is to finance through the issuance of bonds certain qualifying improvements to real property as authorized by the Property Assessed Clean Energy (PACE) Act, adopted a bond resolution authorizing the issuance of revenue bonds in an amount not to exceed $500,000,000 for the purpose of financing qualifying improvements. Clean Energy filed a complaint to validate those bonds. The only argument relevant to this appeal regarding Clean Energy’s authority to issue the bonds was that the bonds could not be validated because the financing agreement to be signed by Clean Energy and property owners participating in the PACE Program purported to authorize a remedy for the collection of unpaid assessments that was not authorized by Florida law. After a show-cause hearing, the circuit court validated the proposed bond issue. The Supreme Court affirmed the circuit court’s final judgment validating the bonds but remanded for the circuit court to require Clean Energy to amend the financing agreement, as the financing agreement’s references to judicial foreclosure were inconsistent with its requirement that the collection of non-ad valorem assessments must be accomplished pursuant to Fla. Stat. 197’s uniform method. View "Thomas v. Clean Energy Coastal Corridor" on Justia Law

In 2013, defendant-respondent, City of Ontario, with the consent of defendant-respondent, City of Rancho Cucamonga, established the Greater Ontario Tourism Marketing District (the GOTMD). The GOTMD was comprised of all lodging businesses operating in the two cities, and its mandate was to market and promote the businesses as "tourist, meeting and event destinations" with assessments imposed on the businesses based on their room rates and rental volumes. Plaintiff-appellant, The Inland Oversight Committee (IOC), sued the cities to invalidate the assessments on the ground they were a "tax" that was not approved by a majority or supermajority of the cities' voters as article XIII C of the California Constitution required. IOC claimed the assessments were either a general tax requiring majority voter approval or a special tax requiring supermajority voter approval. The trial court sustained demurrers, without leave to amend, on the ground that neither IOC nor any of its members had standing to challenge the validity of the assessments. IOC appealed. The cities filed a motion to dismiss the appeal along with their respondent's brief, claiming that the Court of Appeal lacked jurisdiction to consider the merits of IOC's appeal because IOC's notice of appeal was filed more than 30 days after the judgment was entered. The Court of Appeal agreed that IOC's notice of appeal was untimely filed, and it accordingly lacked jurisdiction to consider the merits of the appeal. View "Inland Oversight Com. v. City of Ontario" on Justia Law