Justia Tax Law Opinion Summaries

This appeal arose out of a decision by the Town of Middlebury Development Review Board (DRB) to approve appellee Jolley Associates, LLC's application for a Planned Unit Development (PUD) to add a car wash to an existing gas station and convenience store within the Town limits. Appellant MDY Taxes, Inc. operated an H&R Block tax franchise in property rented in a shopping center adjacent to the Jolley lot. Appellant Village Car Wash, Inc. operated a car wash located approximately one-quarter of a mile from the Jolley lot. Appellants did not participate in the DRB proceeding, but sought to challenge the approval of the PUD through an appeal to the Environmental Division of the Superior Court. The environmental court dismissed the appeal for lack of jurisdiction. The court concluded that appellants did not have standing, to appeal the DRB decision because they had not participated in the proceedings before the DRB as required by statute, and because they did not meet any of the exceptions to that statutory requirement. On appeal, appellants argued that a procedural defect prevented them from appearing before the DRB, and that it would be manifestly unjust if they are not afforded party status to appeal. Finding no reversible error, the Supreme Court affirmed. View "In re Appeal of MDY Taxes, Inc., & Village Car Wash, Inc." on Justia Law

For tax year 2004, the State of Montana, Department of Revenue (DOR) centrally assessed property owned by Omimex Canada Ltd. and classified it under class nine. Omimex contested the assessment, claiming that it did not operate a “single and continuous property,” and therefore, its properties should be locally assessed and subject to the lower tax rate under class eight. The district judge entered an order in 2007 finding that Omimex’s properties operated as a single and continuous property. The Supreme Court reversed, concluding that Omimex’s property was not subject to classification under class nine, regardless of whether it was centrally assessed. For the tax year 2011, DOR again centrally assessed Omimex’s property and classified it under class nine. Ommimex filed a declaratory action arguing that it did not operate a single and continuous property. The district court granted partial summary judgment for DOR, concluding that the doctrine of issue preclusion barred Omimex from relitigating the issue. The Supreme Court reversed, holding that the court erred when it concluded that the district court’s 2007 finding precluded Omimex from litigating the issue of whether it operated a single and continuous property because Omimex demonstrated the existence of genuine questions of material fact regarding whether the issue in the current litigation was identical to the issue in the 2007 litigation. View "Omimex Canada, Ltd. v. State Dep’t of Revenue" on Justia Law

At issue in this appeal was the constitutionality of the statutory framework under which Iowa taxes the delivery of natural gas at variable tax rates depending on volume and the taxpayer’s geographic location within the state. Plaintiff filed with the Iowa Department of Revenue a claim for a refund of replacement tax Plaintiff paid for certain tax years, asserting that the replacement tax in Iowa Code 437A.5(2) violates the federal Equal Protection Clause, Iowa Const. art. I, 6, and the dormant Commerce Clause because it is based on the natural gas competitive service area in which a taxpayer is located. An administrative law judge denied Plaintiff’s refund claims and rejected the constitutional challenges to the replacement tax. The district court also denied each of Plaintiff’s constitutional challenges. The Supreme Court affirmed, holding (1) a rational basis exists for the variable excise tax imposed on the delivery of natural gas under section 437A.5, and therefore, Plaintiff failed to establish a violation of the Fourteenth Amendment or Iowa Const. art. I, 6; and (2) the natural gas delivery tax framework does not violate the dormant Commerce Clause. View "LSCP, LLLP v. Kay-Decker" on Justia Law

Mark and Tammy Davis owned property that secured a credit line deed of trust held by Huntington National Bank. The Davises failed to pay their 2005 and 2006 real property taxes, resulting in a notice of delinquency being published. The Davises subsequently filed for Chapter 7 bankruptcy. A second notice of delinquency was then published announcing that the tax lien would be sold. A notice of the tax lien sale was mailed to the Davises but was returned undeliverable. The Davises received a discharge in bankruptcy, after which the tax lien was sold. No party redeemed the property, and the tax deed was issued to Rebuild America, Inc. The Davises then filed this action seeking to set aside the tax sale. The circuit court granted relief, finding that the issuance of the two statutory notices of delinquency while the Davises were under the protection of a bankruptcy stay voided the tax deed. The Supreme Court affirmed, holding that the bankruptcy stay rendered the statutory notices void ab initio, and therefore, the tax lien sale did not comply with the required statutory procedure. Accordingly, the tax deed issued in this matter must be set aside. View "Rebuild America v. Davis" on Justia Law

The Court of Federal Claims ruled that MassMutual and ConnMutual were legally authorized to deduct policyholder dividends from their 1995, 1996, and 1997 tax returns in the year before the dividends were actually paid. The government agreed that both companies may deduct the policyholder dividend payments, but argued that the deduction may only be taken in the year when the dividends were actually distributed to the policyholders, because the liability to pay the dividends was contingent on other events, such as a policyholder’s decision to maintain his policy through the policy’s anniversary date. Even if the liability was fixed, the government alleged, these payments still could not have been deducted until the year they were actually paid because the dividends did not qualify as rebates or refunds, which would meet the recurring item exception to the requirement that economic performance or payment occur before a deduction may be taken (26 C.F.R. 1.461-5(b)(5)(ii)). The Federal Circuit affirmed. Because the policyholder dividends were fixed in the year the dividends were announced, they were premium adjustments, and that premium adjustments are rebates, thereby satisfying the recurring item exception. View "Mass. Mut. Life Ins. Co. v. United States" on Justia Law

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