Justia Tax Law Opinion Summaries

Vincent Castigliola, a Mississippi resident, bought a yacht in Florida from Mark Fallon, an Ohio resident. Fallon, who is not in the business of buying or selling boats, sold the boat to Castigliola, who also is not in the boat trade. This transaction involved marketing services from Galati Yacht Sales, a yacht broker, which Fallon hired. Castigliola did not pay sales tax on the boat in Florida or use tax in Mississippi. Aggrieved, MDOR audited Castigliola and subsequently assessed use tax and penalties regarding the boat purchase, totaling $7,588. Castigliola challenged the tax, exhausted his administrative remedies without relief, and ultimately appealed to the Chancery Court. Before the chancery court, Castigliola filed a motion for summary judgment, arguing that the sale was a casual sale and therefore not subject to Mississippi use tax. The Court denied his motion, and Castigliola appealed. This case presented two issues: (1) who has the burden to prove use tax is applicable to a transaction; and (2) does the use of a broker make a casual sale taxable? The Supreme Court held that: (1) the Department of Revenue (MDOR) had the burden to prove that a tax applied, and the taxpayer had the burden to prove an exemption from tax applied; and (2) casual sales are excluded from sales and use tax in Mississippi. In this case, because MDOR’s argument for taxation was not supported by its own regulations and relied on an improper and erroneous application of Florida law, the Supreme Court found MDOR’s position was arbitrary and capricious. Furthermore, MDOR admitted the sale was from one individual to another, not in the ordinary course of business. Accordingly, the Court reversed summary judgment and render judgment in favor of Castigliola. View "Castigliola v. Mississippi Dept. of Rev." on Justia Law

Appellant, a retired professional football player, was employed by the Indiana Colts of the National Football League (NFL) during the taxable year of 2008. During the 2008 season, Appellant neither played in nor attended the one game the Colts played in Cleveland. The Colts nevertheless withheld an amount of Cleveland municipal income tax from Appellant’s 2008 compensation and paid it to the city. Appellant sought from Cleveland’s tax administration authority a refund of income tax withheld and remitted to Cleveland for tax year 2008, arguing that the city had no authority to impose its tax on the income of a nonresident who did not work within Cleveland’s city limits during the taxable year. Appellant’s claim for a full refund was denied. The City of Cleveland Board of Review and the Board of Tax Appeals upheld the denial. The Supreme Court reversed, holding that Cleveland lacked authority under its city ordinance and its regulations to impose a tax on Appellant’s income, given that none of the services for which he was compensated were performed in Cleveland during 2008. Remanded with instructions that Appellant be granted a full refund of Cleveland municipal income tax paid for 2008. View "Saturday v. Cleveland Bd. of Review" on Justia Law

Appellant, a former linebacker for the Chicago Bears, filed applications for refunds of income taxes paid to Cleveland for tax years 2004 through 2006. A nonresident of Cleveland, Appellant asserted that Cleveland had adopted an unlawful method of computing the amount of his compensation that was subject to its city income tax. Appellant’s applications were denied. The City of Cleveland Board of Review and the Board of Tax Appeals upheld the denials. The Supreme Court reversed, holding that although Cleveland has the right to tax the compensation earned by a nonresident professional athlete for his work performed in Cleveland, the city’s method of allocating income violates the due-process rights of National Football League players such as Appellant. View "Hillenmeyer v. Cleveland Bd. of Review" on Justia Law

In 2009, the Montana Department of Revenue (Department) began the process of reappraising Montana agricultural properties. In 2010, Petitioners filed a petition for declaratory judgment and writ of mandate seeking a declaration that the Department improperly assessed their agricultural property for tax uses. The district court granted the Department’s motion for summary judgment. The Supreme Court affirmed, holding (1) the district court correctly interpreted the plain language of section 15-7-111 and complied with the rules of statutory construction; and (2) the Department followed the rule-making mandate of section 15-7-111(2), the Department’s application of section 15-7-111 was not unlawful, and the Department is capable of implementing the district court’s interpretations of section 15-7-111. View "Lucas Ranch, Inc. v. Mont. Dep’t of Revenue" on Justia Law

Eagan, Minnesota, assisted in apprehending Procknow, who had absconded while serving supervised release imposed by a Wisconsin state court for forgery. Authorities had received information that Procknow and his girlfriend were staying at an Eagan hotel. The girlfriend was registered at the hotel. Officers spotted Procknow’s car, chased Procknow through the lobby, and arrested him. Through the windows of Procknow’s car, they saw a scanner or copier. Learning of the arrests, the hotel manager stated that the their stay was being terminated and asked the officers to collect a dog, believed to be in their room and ensure that there were no other occupants. Officers knocked, and announced. No one answered, so they used a hotel key and found a dog. Entering to ensure that there were no other occupants, officers saw, in plain view, an electric typewriter, a credit card issued in the name of “Smith,” and financial forms bearing various names and social security numbers. Officer photographed the room, sealed it, and obtained search warrants for the room and car. They seized blank W‐2 forms, partially completed tax forms, lists of business employer identification numbers, and prepaid debit cards (tax refunds) in the names of different people. Further investigation revealed that Procknow had obtained the personal identifying information of at least 40 individuals, which he used to file fraudulent tax returns and claim refunds. Procknow pleaded guilty to theft of government money and aggravated identify theft. The Seventh Circuit affirmed denial of a motion to suppress evidence obtained by the warrantless entry into the hotel room and evidence obtained by grand jury subpoena following the withdrawal of IRS administrative summonses requesting the same information. View "United States v. Procknow" on Justia Law

The Texas Student Housing Authority (TSHA) had title to the Cambridge at College Station, a student-residential facility near two college campuses. In the summers of 2005 to 2008, TSHA provided lodging at the Cambridge to non-college students attending university-sponsored instructional programs. The Brazos County Appraisal District (BCAD) voided TSHA’s property-tax-exempt status for the years 2005 to 2008 and assessed millions of dollars of back taxes. The trial court affirmed, concluding that TSHA forfeited the exemption once the Cambridge hosted people who were not students, faculty or staff members of an institution of higher learning. The court of appeals affirmed. The Supreme Court reversed, holding that TSHA did not forfeit its exemption under Tex. Educ. Code Ann. 53.46 by housing summer program participants at the Cambridge because the statute imposes no conditions but rather declares the property-tax exemption in absolute terms. View "Tex. Student Housing Auth. v. Brazos County Appraisal Dist." on Justia Law

Taxpayers claimed a $220,800 charitable deduction on their 2003 and 2004 returns that corresponded to the purported value of a historic preservation facade easement on their Boston home, which they donated to the Trust of Architectural Easements. The Commissioner of Internal Revenue disallowed the deduction. The Tax Court found that the actual value of the easement was zero and that Taxpayers were liable under applicable IRS regulations for a forty percent accuracy-related penalty for making a gross valuation misstatement. The First Circuit affirmed, holding (1) the Tax Court’s finding that Taxpayers were liable for accuracy-related penalties was sound as a legal matter and not clearly erroneous as a factual matter; and (2) Taxpayers' second argument on appeal was waived. View "Kaufman v. Comm’r of Internal Revenue" on Justia Law

Pursuant to the Nebraska Advantage Act, Archer Daniels Midland (ADM) entered an agreement with the Tax Commissioner with the aim of using incentives set forth in the Act for a project in Platte County. ADM sought a personal property tax exemption for the year 2010 under the Act for property involving agricultural processing equipment. The Department denied the exemption on the grounds that the personal property tax exemption claim had not been timely filed. The Tax Equalization Review Commission (TERC) affirmed. The Supreme Court affirmed, holding (1) ADM did not timely file its claim for a personal property tax exemption for the subject property, and therefore ADM was not entitled to the exemption; and (2) TERC did not err when it affirmed the order of the Tax Commission denying ADM’s protest. View "Archer Daniels Midland Co. v. State" on Justia Law

After voters in School District rejected a bond proposal to construct an addition to existing high school building, School District entered into a lease-purchase agreement with Bank, which agreed to finance the project. Appellants, residents and taxpayers in the school district, sought declaratory and injunctive relief contending that the agreement violated Neb. Rev. Stat. 79-10,105. The trial court denied relief, concluding (1) under section 79-10,105, lease-purchase agreements may be used to make school improvements without the voters’ approval if the project is not funded by bonded debt; and (2) School District in this case did not fund the project through bonded indebtedness. The Supreme Court affirmed, holding (1) Appellants’ claims were moot because, as of the time of this appeal, the addition had been completed, but the public interest exception to the mootness doctrine applied; and (2) section 79-10,105 does not prohibit a school district from entering into a lease-purchase agreement to finance a capital construction project if it has not created a nonprofit corporation to issue bonds for the school district, and because there was no evidence that this occurred in this case, School District did not violate section 79-10,105 by entering into the lease-purchase agreement with Bank. View "Nebuda v. Dodge County Sch. Dist. 0062" on Justia Law

Taxpayers Don and Mary Frankenberg made improvements to their home in 2001. The Garvin County Assessor did not increase the fair cash value of the property for the improvements until 2012 when she visually inspected the property and discovered the improvements. The Assessor notified the Taxpayers of a new assessed fair cash value, which was a substantial increase from the previous valuation in 1999. The Taxpayers protested the assessment, arguing that under Art. X, section 8B of the Oklahoma Constitution, the fair cash value of the property could not be increased more than 5% in any year. The district court granted summary judgment in favor of the Taxpayers, and the Assessor appealed. Upon review, the Supreme Court found the exception to the 5% cap for improvements to a property existed only for the year the improvements were made to the property and did not apply in the year when the Assessor first discovers the improvements. Accordingly, the Court affirmed. View "Frankenberg v. Strickland" on Justia Law