Justia Tax Law Opinion Summaries

n consolidated appeals, the issue central to all that was presented for the Supreme Court's review was whether petitioners, who sold their principal residences in arm’s-length transactions, were entitled to refunds of the real estate transfer tax under the real estate transfer tax exemption set forth in MCL 207.526(u) when the state equalized value of the properties at the time of sale was less than it was at the time of their original purchases. The Court held that petitioners were entitled to refunds under the real estate transfer tax exemption in these circumstances. The Court of Appeals was reversed and the cases remanded to the Tax Tribunal for further proceedings, including reinstatement of its judgments in favor of petitioners. View "Gardner v. Dept. of Treasury" on Justia Law

Petitioner appealed the Tax Court's decision assessing deficiencies and penalties for tax years 2004 and 2005, which arose from petitioner’s operation of a medical marijuana dispensary in San Francisco. The court concluded that the Tax Court properly concluded that I.R.C. 280E precludes petitioner from deducting, pursuant to I.R.C. 162(a), the ordinary and necessary business expenses associated with his operation of the dispensary because it is a trade or business consisting of trafficking in controlled substances prohibited by Federal law. Accordingly, the court affirmed the judgment. View "Olive v. Commissioner" on Justia Law

In 2009, Kent Cunningham filed an “Affidavit of Non-Ohio Domicile” for tax year 2008 declaring that he was “not domiciled in Ohio” at any during during the tax year. The tax commissioner issued Kent and his wife an assessment based upon the nonfiling and nonpayment of Ohio income tax for 2008. The Cunninghams filed a petition for reassessment. Noting a 2008 filing of an Ohio homestead-exemption application declaring that the Cunninghams’ Cincinnati, Ohio house was their principal place of residence, the commissioner concluded that the Cunninghams’ Affidavit of Non-Ohio Domicile contained a false statement and that the Cunninghams failed to rebut the presumption of Ohio domicile. The Board of Tax Appeals (BTA) reversed the commissioner’s determination with regard to Kent, concluding that Kent complied with the requirements of Ohio Rev. Code 5747.24(B)(1) and was, therefore, “irrefutably presumed to be not domiciled in Ohio for Ohio individual income tax purposes.” The Supreme Court reversed, holding (1) Kent’s explicit claim under section 5747.24(B)(1) to be domiciled outside Ohio did not bind the commissioner without regard to other statements and actions by Kent that indicated a domicile inside Ohio; and (2) the BTA erred by reversing the tax commissioner’s denial of the irrebuttable presumption created under section 5747.24(B)(1). View "Cunningham v. Testa" on Justia Law

Defendant-appellant Elizabeth Kupfer and her husband jointly filed federal income taxes for 2004-2006, but failed to report over $790,000 in gross income. The government charged defendant with three counts of tax evasion, one for each tax year. She admitted that she had failed to report a substantial amount of gross income, but denied that her under-reporting was willful. A jury disagreed and found defendant guilty on each of the three counts. Defendant appealed, arguing: (1) the trial court erred in instructing the jury; (2) the trial court erred in denying her request for a mistrial after she alleged a juror commented on other charges against defendant during jury deliberations; and (3) the trial court erred in calculating defendant's sentence. Upon review, the Tenth Circuit concluded that the trial court did miscalculate defendant's sentence. The sentence was vacated and the case remanded for resentencing. The Court affirmed the trial court in all other respects. View "United States v. Kupfer" on Justia Law

Landowners filed a complaint with the Auglaize County Board of Revision (BOR) challenging the auditor’s valuation of their property. The BOR notified Landowners that a hearing would be held. Neither Landowners nor anyone on their behalf appeared at the hearing. The BOR dismissed the valuation complaint for failure to prosecute based on Landowners’ failure to attend the scheduled hearing. The Board of Tax Appeals (BTA) reversed, concluding that the BOR had exceeded its discretionary authority in dismissing the complaint because the evidence presented raised the presumption that the sale furnished the criterion of value. The Supreme Court vacated the BTA’s decision, holding (1) BORs do not have the discretionary authority to dismiss a complaint based on the complainant’s failure to attend the scheduled meeting of the board; and (2) a BOR must make a determination of value whenever a complaint properly invokes its jurisdiction. Remanded. View "Ginter v. Auglaize County Bd. of Revision" on Justia Law

At issue in this case was whether the three-and-a-half year retroactive application of the 2010 amendments to N.Y. Tax Law 632(a)(2) were unconstitutional as applied to Plaintiffs under the due process clauses of the federal and state constitutions. Plaintiffs, Florida residents, brought this action claiming that the 2010 amendments retroactively imposed a tax on the 2007 sale of the stock of their subchapter S corporation in a deemed asset sale, for which they utilized the installment method of accounting for federal tax purposes, and seeking a declaration that the application of the amendments was unconstitutional as applied to them. Supreme Court granted summary judgment for Defendants, determining that the amendments were curative and, because Plaintiffs failed to show reasonable reliance on any relevant pre-amendment law, retroactive application of the statute was justified. The Appellate Division reversed. The Court of Appeals reversed, holding that retroactive application of the 2010 amendments did not violate Plaintiffs’ due process rights. View "Caprio v. New York State Dept. of Taxation & Fin." on Justia Law

Plaintiffs, several nonresident former owners and shareholders in an S corporation, filed the instant declaratory judgment action against the New York State Department of Taxation and Finance, challenging a tax imposed on their pro rata share of gains from the sale of the corporation’s stock. Specifically, Plaintiffs alleged that N.Y. Const. art. XVI, 3 absolutely precluded taxation of gains from the sale of a nonresident’s intangible personal property - in this case, the corporation’s stock. Supreme Court granted Defendant’s motion for summary judgment and declared that the statute is constitutional. The Court of Appeals affirmed, holding that there is no constitutional bar to taxation of a nonresident’s New York-source income earned from a stock sale. View "Burton v. New York State Dep’t of Taxation & Fin." on Justia Law

Petitioner owned and operated five commercial parking facilities for the purpose of furthering the goal of its sole member, a not-for-profit corporation, to revitalize downtown Jamaica, Queens. New York City Tax Commission revoked Petitioner’s real property tax exemption pursuant to N.Y. Real Prop. Tax Law 420-a(1)(a), determining that the use of the parking facilities, even for economic development of an underdeveloped area, did not constitute a “charitable” use and that the parking facilities were “not incidental to another recognized charitable purpose but [were] the very purpose for which the property [was] being used.” Supreme Court upheld the City’s revocation of the tax exemption. The Appellate Division reversed. The Court of Appeals reversed, holding that because Petitioner’s ownership and operation of the parking facilities was not incidental to a tax-exempt purpose, it was not entitled to a real property tax exemption under that statute. View "Greater Jamaica Dev. Corp. v. New York City Tax Comm’n" on Justia Law

George and Sandra Schussel filed no tax returns between 1989 and 2007. In 2007, George was convicted of federal conspiracy and tax evasion charges. Thereafter, the Commissioner of Revenue issued the Schussels a notice of failure to file Massachusetts income tax returns for the years 1993 to 1995. The Schussels filed tax returns for those years, but the Commissioner determined that the returns were “false or fraudulent” or to have been filed with an intent to evade taxes. Consequently, the Commissioner imposed a “double assessment” against the Schussels. The Commission denied the Schussels request for abatement of the double assessment. The Appellate Tax Board and the Appeals Court affirmed the Commissioner’s decisions. The Supreme Judicial Court affirmed, holding (1) the Board’s findings of fact were supported by substantial evidence; and (2) the Schussels’ claim that they were entitled to relief from the double assessment under an amnesty program established by the Commissioner in 2009 was not properly before the Court. View "Schussel v. Comm’r of Revenue" on Justia Law

VisionStream, Inc., a Missouri corporation that designed and constructed trade show exhibits and displays, filed for a refund of Missouri sales taxes it remitted for its sale of trade show displays that it produced and shipped in Missouri for customer use outside of Missouri. The Director of Revenue denied the refund request. On appeal, the Administrative Hearing Commission (AHC) affirmed, determining that VisionStream was not entitled to a sales tax refund on purchases shipped out of state. In so doing, the AHC rejected VisionStream’s argument that title of the displays did not transfer to customers until delivery outside the state. The Supreme Court affirmed, holding that the evidence supported the AHC’s finding that title transferred in Missouri. Therefore, the transactions were subject to Missouri sales tax. View "VisionStream, Inc. v. Dir. of Revenue" on Justia Law