Justia Tax Law Opinion Summaries

Plaintiff, a fraternal organization and tax exempt not-for-profit corporation, owns and operates, a Macon nursing home that s licensed by the Illinois Department of Public Health, with a permit to enter into life care contracts under 210 ILCS 40/1. In 2002, the Department of Public Aid directed plaintiff to pay the “Nursing Home License Fee” of $1.50 for each licensed nursing bed day for each calendar quarter, 305 ILCS 5/5E-10. The Department then claimed that plaintiff was delinquent since 1993 and owed $244,233 in back fees plus $237,890 in penalties. Plaintiff paid under protest and sought a declaratory judgment, alleging that the fee was unconstitutional as applied to it because the fee’s purpose is to fund Medicaid-related expenditures that are neither precipitated by nor paid to plaintiff. The trial court granted plaintiff summary judgment under the uniformity clause The Illinois Supreme Court reversed. The taxing classification “every nursing home,” bears some reasonable relationship to the object of the legislation and to public policy. The object of the fee is not simply Medicaid reimbursement; all fees are deposited into the Long-Term Care Provider Fund, which may be used for Medicaid reimbursement, administrative expenses of the Department and its agents, enforcement of nursing home standards, the nursing home ombudsman program, expansion of home-and community-based services, and the General Obligation Bond Retirement and Interest Fund. View "Grand Chapter, Order of the E. Star of Ill. v. Topinka" on Justia Law

The law firm challenged the validity and scope of Proposition Q, which amended the Payroll Expense Tax Ordinance of the City and County of San Francisco (San Francisco Bus. & Tax Reg. Code, article 12-A, 901). Plaintiff paid the payroll expense tax calculated under Proposition Q, and the city rejected its Administrative claim. The firm sought a refund of that portion of the tax that it paid on the profits distributed to its equity partners. The court of appeal dismissed an appeal, ruling that some portion of the firm’s profit distributions to its equity partners represents “compensation for services,” to be included in the payroll expense tax base and that Proposition Q does not violate either article XIIIC of the California Constitution. View "Coblentz, Patch, Duffy & Bass, LLP v. City & Co. of San Francisco" on Justia Law

A property owner appealed a valuation of its real property. After the Board of Tax Appeals issued its decision on August 29, 2013, the property owner appealed. The notice of appeal was filed on September 30, 2013, but the property owner failed to initiate service of the notice of appeal on the tax commissioner. On October 24, 2013, the property owner served the tax commissioner with the appeal. On November 4, 2013, the appeal was returned from mediation to the regular docket. That order specified that Appellant’s brief was due forty days from the date of the order. On November 12, 2013, the school board filed a motion to dismiss. The Supreme Court dismissed the appeal for lack of jurisdiction because the property owner failed to initiate service of the notice of appeal on the tax commissioner, a necessary party, within the thirty-day appeal period. View "Columbus City Schs. Bd. of Educ. v. Franklin County Bd. of Revision" on Justia Law

Taxpayer Blimar Team Cleaners appealed a superior court decision to uphold the Burlington Board of Tax Appeals' appraisal of its property at 150 Shelburne Road in Burlington at a value of $193,500. Taxpayer contended on appeal that: (1) there was sufficient evidence that the property was not assessed at fair market value to overcome the city appraisal's presumption of validity; and (2) the City of Burlington failed to meet its burden of proof demonstrating the property was assessed at fair market value. Finding no reason to disturb the appraisal or the superior court's decision, the Supreme Court affirmed. View "In re Bilmar Team Cleaners" on Justia Law

These six consolidated appeals arose out of a Congressional exemption from taxation granted to the federal entities. Appellants contend that the state taxes normally imposed on real estate transfers apply when the federal entities transfer real property in their respective states. The federal entities have not paid the transfer taxes based on their Congressional charter exemptions from "all taxation." The district courts found that the statutory exemptions do apply to preclude taxation and are constitutional. The district court also found that statutory exceptions for taxation of real property contained in the federal statutes did not apply to allow appellants to impose the transfer tax. The court affirmed and agreed with its sister circuits, who have held that the charter exemptions do apply in this context, and are constitutional under the Commerce, Necessary and Proper, and Supremacy Clauses. View "Montgomery Cnty. Comm'n v. FHFA" on Justia Law

In 2010, Alberici Constructors, Inc. sought a use tax refund for use taxes paid on out-of-state crane and welder rentals it used to install and construct manufacturing equipment at a new cement manufacturing plant in Missouri. Alberici also sought a use tax refund for the delivery of one of the cranes to the manufacturing job site. The Administrative Hearing Commission (AHC) denied Alberici’s claim for a refund of use taxes paid, finding, inter alia, that the cranes and welder were exempt from the imposition of use tax under Mo. Rev. Stat. 144.030.2(5). The Supreme Court affirmed, holding (1) Alberici owed use taxes on the rentals of the cranes and the welder because the the term “materials” in section 144.030.2(5) does not include machinery such as cranes and welders; and (2) the delivery service was a part of the crane rental, and therefore, the delivery charge was subject to the use tax. View "Alberici Constructors, Inc. v. Dir. of Revenue" on Justia Law

In 2001, Southwestern Bell Telephone Company ("SWBT") created Southwestern Bell Texas Holdings, Inc., ("Holdings") a new Delaware corporation, which created Southwestern Bell Telephone Texas LLC. SWBT then converted to a Texas limited partnership and named Southwestern Bell Telephone LP (“LP”). Holdings was the sole owner of LP. In 2007, the Director of Revenue conducted an audit and determined that Holdings was engaged in business in Missouri in 2003-2005 through its interest in LP. The Administrative Hearing Commission (AHC) determined that Holdings was not subject to Missouri franchise taxes for this period. At issue before the Supreme Court was whether a foreign corporation that has been engaged in business in Missouri and paying Missouri franchise taxes for decades can escape liability for franchise taxes, even though it continues to be engaged in the same business in the same locations using the same assets, by merely inserting a wholly owned limited partnership to own and operate those assets. The Supreme Court vacated the AHC’s determination, holding that Holdings was engaged in business in the state from 2003-2005 and, as a result, was subject to franchise taxes for those years. View "Southwestern Bell Tel. Co. v. Dir. of Revenue" on Justia Law

Beemer Construction Company and Seal-O-Matic Paving Company moved to set aside a tax sale of certain real property to Realty Acquisition, LLC, arguing that they had mechanic’s liens on the property and that the Director of Collection’s failure to give them prior personal notice of the tax sale violated their due process rights. The trial court set aside the tax sale as null and void. The Supreme Court affirmed, holding (1) a mechanic’s lien constitutes a substantial property interest, which is subject to due process protection; and (2) because Beemer and Seal-O-Matic, who had valid mechanic’s liens on the property, did not receive personal notice by mail of the tax sale, the trial court properly set aside the tax sale in question. View "In re Foreclosure Liens for Delinquent Taxes by Action in rem" on Justia Law

Respondent was a Missouri corporation that sold rock base and asphalt from its quarries and asphalt plants to paving companies to be used to construct and resurface roads and parking lots. Respondent petitioned the Director of Revenue for a sales tax refund under Mo. Rev. Stat. 144.054.2, claiming that the resurfacing process qualified for the exemption. The Director denied the refund. The Administrative Hearing Commission (AHC) reversed and entered a decision in favor of Respondent. The Supreme Court reversed, holding that the AHC misapplied section 144.054.2 when it determined that the paving companies were engaged in “manufacturing,” “processing,” “compounding,” or “producing” roads and parking lots, and therefore, Respondent was not entitled to a refund of sales tax paid on the products it sold to the paving companies. View "Fred Weber, Inc. v. Dir. of Revenue" on Justia Law

In 2012, after auditing Cloud Peak Energy Resources, LLC’s Montana Coal Tax payments for years 2005-2007, the Department levied a deficiency assessment for additional taxes owing from sales involving non-arm’s length (NAL) agreements. Cloud Peak filed a complaint alleging that the Department’s methodology for determining market value was illegal and that it had also illegally assessed taxes on coal additives for the years 2005-2007. The district court (1) held in Cloud Peak’s favor on the first issue, concluding that the market value of coal sold under NAL agreements is determined by comparing its price with that of coal sold under arm’s length contracts negotiated in a similar timeframe; and (2) ruled in the Department’s favor on the issue regarding additives. The Supreme Court affirmed in part and reversed in part, holding that the district court (1) correctly found that market value is properly based upon similarly negotiated contracts, but the additional language included in the order was inappropriate; and (2) did not err in holding that coal additives used from 2005-2007 are subject to Montana Coal Taxes. View "Cloud Peak Energy Res., Inc. v. Dep’t of Revenue" on Justia Law