Justia Tax Law Opinion Summaries

At issue in this case was whether the Marion County Assessor could obtain a correction to the tax rolls concerning the valuation of the real property of taxpayer Willamette Estates II, LLC from the Department of Revenue. The Tax Court concluded that the assessor was authorized by administrative rule to seek such a correction and that the department was authorized by statute to allow it. The taxpayer appealed, arguing the Tax Court's decision essentially sanctioned an assessor's unlawful appeal of his own assessment. In the alternative, taxpayer argued that the Tax Court's decision conflicted with the Oregon Supreme Court's precedents. Finding no reversible error, the Supreme Court affirmed. View "Willamette Estates II, LLC v. Dept. of Rev." on Justia Law

Prairie County, Montana, and Greenlee County, Arizona sought additional payments under the Payment in Lieu of Taxes Act (PILT), 31 U.S.C. 6901–6907. PILT was enacted to “compensate[ ] local governments for the loss of tax revenues resulting from the tax-immune status of federal lands located in their jurisdictions, and for the cost of providing services related to these lands” and directs the Department of the Interior to “make a payment for each fiscal year to each unit of general local government in which entitlement land is located.” PILT provides two alternative formulas for calculating the amount of payment, but provides that “[n]ecessary amounts may be appropriated to the Secretary of the Interior to carry out this chapter. Amounts are available only as provided in appropriation laws.” During the years at issue, Congress did not appropriate sufficient funds to provide for full payments to all eligible local governments according to PILT formulas. Interior followed the relevant regulation and proportionally reduced PILT payments to each local government. The Claims Court dismissed. The Federal Circuit affirmed. The statute limits the government’s liability under PILT to the amount appropriated by Congress. View "Prairie Cnty, v. United States" on Justia Law

This appeal arose out of the tax sale of a piece of property located in the City of Horn Lake in DeSoto County. Until August 2003, Millennium of Mississippi, LLC, owned the property in question. On August 4, 2003, Millennium conveyed the property to DeSoto County Development, LLC, by warranty deed. At that time, DeSoto Development granted Marshall Investments Corporation, and Fred Spencer, as trustee, a deed of trust lien and mortgage on the property. Marshall Investments then appointed Franklin Childress Jr., Spencer Clift III, and K. David Waddell as substitute trustees for the deed of trust. Subsequently, DeSoto Development defaulted on its mortgage, and Marshall Investments foreclosed on the property. Marshall Investments purchased the property at the foreclosure sale and, in December 2007, executed a substitute trustee's deed to MIC-Rocky, LLC. DeSoto County and the City of Horn Lake levied $520,508 in ad valorem taxes on the property for the tax year ending December 31, 2007. These taxes were never paid and became delinquent on February 1, 2008. The property was offered for sale at public auction by the DeSoto County tax collector on August 25, 2008, to collect the delinquent taxes. SASS Muni-V, LLC was the successful bidder at the auction. No purported property owner or lienholder attempted to redeem the property within the two-year statutory redemption period. Approximately a year after the expiration of the redemption period, SASS filed a complaint in DeSoto County Chancery Court, asking the court to declare the tax sale void and to order a refund of the purchase price. SASS Muni-V appealed the Chancery Court's order dismissing its complaint seeking to void its 2008 tax-sale purchase of real property. Because the trial court erred in finding that SASS Muni-V lacked standing to pursue its claims, the Supreme Court reversed the dismissal of SASS's complaint and remanded this case for further proceedings. View "Sass Muni-V, LLC v. DeSoto County" on Justia Law

Curtis, a lawyer, filed 1996-1997 returns reporting tax obligations of $218,983 and $248,236, but made no payments. His partner had taken $600,000 from the practice and declared bankruptcy; Curtis underwent an expensive divorce. Curtis failed to file a return for 1998. Curtis entered into an installment agreement. He filed a return for 2000 but failed to pay $90,000. He entered into a second agreement, but filed returns for 2003 and 2004 reflecting unpaid tax liabilities of $176,802 and $61,000. Curtis did not make estimated payments and stopped making installment payments. He filed returns for 2007, 2008 and 2009, but paid nothing. Curtis was charged with misdemeanor willfully failing to pay taxes owed for 2007, 2008 and 2009, 26 U.S.C. 7203. The court allowed evidence under Rule 404(b), of Curtis’s history of failing to pay his taxes and his withdrawals of money from his law practice for personal expenses. Curtis did not object, but objected to the government’s proposed evidence that he failed to pay payroll taxes for his employees in 2013, arguing that any violations after the charged years did not bear on his state of mind during the time of the charged offenses. Although the court gave Curtis’s proposed instruction on good faith, it declined to modify the pattern instruction to include a requirement for bad motive, with respect to willfulness. The Seventh Circuit affirmed his convictions. View "United States v. Curtis" on Justia Law

In 2009, John Sherman, a resident and taxpayer of Fulton County, filed suit, on behalf of himself and all others similarly situated, against the Fulton County Board of Assessors (“FCBOA”), along with its Chief Appraiser and each of its members in their official capacities, to challenge the FCBOA’s method of valuing leasehold estates arising from a sale-leaseback bond transaction involving the Development Authority of Fulton County (“DAFC”). Sherman claimed that this so-called “50% ramp-up” methodology results in the valuation of the developers’ leasehold estates at less than fair market value, in violation of defendants’ statutory and constitutional duties to ensure that ad valorem taxes are assessed uniformly and at fair market value. In October 2009, the trial court granted the defendants’ motion to dismiss/motion for judgment on the pleadings, and, on appeal, the Georgia Supreme Court reversed, holding that the case was not subject to dismissal because, while there was no dispute as to the valuation methodology employed, there was no way to conclusively determine at that stage of the proceedings that such methodology actually resulted in a fair valuation of the leasehold estate. After remand, SJN Properties, LLC was added as a plaintiff in the action. The plaintiffs filed an amended and restated class action petition, again seeking declaratory, injunctive, and mandamus relief with respect to the valuation methodology, and adding a claim seeking declaratory, injunctive, and mandamus relief with respect to a subset of DAFC-owned properties involved in these bond transactions, which, according to the plaintiffs, have improperly been treated as tax-exempt. Thereafter, the parties filed cross-motions for summary judgment, and the trial court granted the defendants’ motions. Though the Supreme Court found the trial court erred i striking two of SJN's affidavits, it nonetheless affirmed the grant of summary judgment in favor of defendants. View "SJN PROPERTIES, LLC. v. FULTON COUNTY BOARD OF ASSESSORS et al" on Justia Law

Between 2004 and 2009, Valpak of Omaha, LLC (“Valpak”) paid more than $5.5 million to Val-pak Direct Marketing Systems, Inc. (“Direct Marketing”) to print direct mail advertisements and distribute them around Omaha, Nebraska. The Nebraska Department of Revenue assessed use taxes on that amount. Valpak asked the Tax Commissioner for a redetermination that no taxes were due, arguing that its payments to Direct Marketing were not transactions that were subject to use taxes under Nebraska law. The Tax Commissioner denied Valpak’s petitions for redetermination, concluding that Valpak was subject to use taxes under the Department’s sales and use tax regulations. The district court affirmed. The Supreme Court also affirmed, holding that Valpak was an advertising agency and was liable for use taxes on its payment to Direct Marketing. View "Valpak of Omaha, LLC v. Neb. Dep’t of Revenue" on Justia Law

Powerex Corporation wholesales natural gas and electricity to purchasers throughout the western part of North America. The issue on appeal was how much of Powerex's income was taxable in Oregon. This case turned on whether Powerex’s sales of electricity and natural gas occurred "in this state." The rules for making that determination differed depending on whether the sales are sales of "tangible personal property" or other types of sales. Generally, sales of tangible personal property are "in this state" if "[t]he property is delivered or shipped to a purchaser * * * within this state regardless of the f.o.b. point or other conditions of the sale." In the Tax Court, the parties agreed that natural gas was tangible personal property. They disagreed whether, in selling natural gas, Powerex shipped or delivered natural gas to purchasers "within this state." The Tax Court found that Powerex shipped gas to purchasers in other states through a hub in Malin where two pipelines intersected. It concluded that, in doing so, Powerex had not shipped or delivered gas to purchasers within Oregon. Regarding Powerex’s sales of electricity, the parties disagreed whether electricity is tangible personal property. The Tax Court ruled that electricity is not tangible personal property and that, because the greater part of the activity that produced the income from Powerex’s electricity sales occurred in British Columbia, those sales were not attributable to Oregon. The Tax Court accordingly concluded that, for the tax years at issue here, neither Powerex’s sales of electricity nor its sales of natural gas were "in this state." The Department of Revenue appealed that decision. Upon review, the Supreme Court concluded the Tax Court correctly held that Powerex's natural gas sales were not "in this state." With regard to electricity, the Court reversed the Tax Court, and remanded the case to that court for consideration of whether electric transmission systems functioned in the same way that natural gas pipelines did: "[i]f the Tax Court makes that finding on remand, then our conclusion regarding Powerex’s natural gas sales presumably will control how most of Powerex’s electricity sales will be allocated." View "Powerex Corp. v. Dept. of Rev." on Justia Law

Great Oaks, a water retailer, challenged a fee imposed on water it draws from wells on its property. The power to impose such a fee is vested in the Santa Clara Valley Water Management District under the Santa Clara County Water District Act, to prevent depletion of the acquifers from which Great Oaks extracts water. The trial court awarded a refund of charges paid by Great Oaks, finding that the charge violated the provisions of the District Act and Article XIII D of the California Constitution, which imposes procedural and substantive constraints on fees and charges imposed by local public entities. The court of appeal reversed, finding that: the fee is a property-related charge for purposes of Article 13D and subject to some of the constraints of that enactment; it is also a charge for water service, and, therefore, exempt from the requirement of voter ratification; pre-suit claims submitted by Great Oaks did not preserve any monetary remedy against the District for violations of Article 13D; and the court failed to apply a properly deferential standard of review to the question whether the District’s setting of the fee, or its use of the resulting proceeds, complied with the District Act. View "Great Oaks Water Co. v. Santa Clara Valley Water Dist." on Justia Law

The State Director of Taxation retroactively assessed ten online travel companies for unpaid general excise tax (GET) and transient accommodations tax (TAT) for periods beginning between 1999 and 2001 and continuing until 2011. The Director also assessed penalties. The online travel companies appealed the assessments. The tax court (1) ruled in favor of the Director with regard to the GET assessments; but (2) ruled in favor of the online travel companies with regard to the TAT assessments. The Supreme Court affirmed in part and vacated in part the judgment in regard to the GET assessments and penalties and affirmed in regard to the TAT assessments, holding (1) the GET apportioning provision was misapplied in this case; and (2) the TAT was not applicable to the online travel companies in the assessed transactions. Remanded. View "In re Tax Appeal of Travelocity.com, L.P." on Justia Law

The issue this appeal presented for the Supreme Court's review centered on a superior court's validation of roughly $200 million in municipal bonds (the "2014 NSP Bonds") that were to be issued by the Atlanta Development Authority d/b/a Invest Atlanta ("Invest Atlanta"). Invest Atlanta and the Geo. L. Smith II Georgia World Congress Center Authority (collectively, the "New Stadium Entities") proposed to have the 2014 NSP Bonds issued for the purpose of funding a portion of the cost of developing, constructing, and operating a new stadium facility in downtown Atlanta for the Atlanta Falcons professional football team. Additional funding for the NSP would have been provided by the Atlanta Falcons Stadium Company, LLC ("StadCo"), a company associated with the Atlanta Falcons Football Club, LLC, as well as through the sale of personal seat licenses. On February 4, 2014, the State filed a Petition for Bond Validation in the superior court to authorize the issuance of the 2014 NSP Bonds. Several individuals moved to intervene in the proceedings to file objections to the bond validation, and the trial court allowed them to do so. Among other things, the intervenors contended that OCGA 48-13-51 (a) (5) (B) was an unconstitutional special law. The trial court ultimately entered a Validation Order and Final Judgment validating the 2014 NSP Bonds and overruling all objections. One of the intervenors appealed that ruling. However, finding no reversible error in the trial court's judgment, the Supreme Court affirmed. View "Cottrell v. Atlanta Dev. Authority" on Justia Law