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Plaintiff, for 22 years, contested in administrative proceedings a California Franchise Tax Board ruling that he owed close to $7.4 million in taxes, penalties, and interest. The Ninth Circuit affirmed the district court's dismissal of plaintiff's action under 42 U.S.C. 1983, which arose from his administrative proceedings. The panel held that the Tax Injunction Act, 28 U.S.C. 1341, barred plaintiff's suit because plaintiff could either pay now and litigate later, or the pay-then-protest remedy provided plaintiff a speedy remedy, even if the protest-then-pay remedy had not. The court also held that, if plaintiff pays and then protests, the California state courts would likely allow plaintiff to add constitutional claims to a state court action challenging the tax. View "Hyatt v. Yee" on Justia Law

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The Supreme Court vacated the decision of the Board of Tax Appeals (BTA) that denied a tax exemption for real property leased to a community school. The tax commissioner determined that for tax years 2008 through 2010, because the property owner had collected “substantial market-rate rent,” the property was leased “with a view to profit” for purposes of former Ohio Rev. Code 5709.07(A)(1), and therefore, no exemption was available. The BTA affirmed on the basis that the school’s rental payments exceeded the lessor’s expenses under the lease. The Supreme Court vacated the BTA’s decision and remanded the case, holding (1) the key inquiry in determining whether property is lease with a view to profit focuses on the intention of the lessor; and (2) the BTA unreasonably ignored evidence of the lessor’s intent in this case. View "Breeze, Inc. v. Testa" on Justia Law

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The Supreme Court reversed the decision of the Board of Tax Appeals (BTA) affirming the tax commissioner’s denial of 2350 Morse LLC’s application for tax exemption of real property leased to a community school, holding that the BTA unreasonably ignored evidence of 2350 Morse’s intent in leasing the property. Morse sought an exemption for the property for tax year 2010 under both Ohio Rev. Code 5709.07 and 5709.121. The commissioner decided that 2350 Morse was not entitled to an exemption because the property had been leased “with a view to profit” for purposes of former section 5709.07(A)(1). The BTA affirmed. The Supreme Court reversed, holding that no reasonable reading of the record could support a finding that 2350 Morse leased the property with a view to profit. View "2350 Morse, LLC v. Testa" on Justia Law

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The Supreme Court affirmed the decision of the Board of Tax Appeals (BTA) determining that a corporate executive’s supplemental executive retirement plan (SERP) was not subject to the city of Cleveland’s income tax. Upon retirement, the executive became entitled to receive benefits from the SERP, which was to be paid from an annuity over the court of his and his spouse’s lives. Cleveland sought to tax the present value of those future payments at the time of the retirement. The Supreme Court held that because a Cleveland ordinance exempts “pensions” from the city income tax and because the SERP constitutes a pension, the city income tax does not apply. View "MacDonald v. Cleveland Income Tax Board of Review" on Justia Law

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The money that a homosexual man paid to father children through in vitro fertilization—and in particular, to identify, retain, compensate, and care for the women who served as an egg donor and a gestational surrogate—was not spent "for the purpose of affecting" his body's reproductive "function" within the meaning of I.R.C. 213. In this case, the Eleventh Circuit held that it was constrained by I.R.C. 213's plain language where taxpayer's own function within the human reproductive process was to produce and provide healthy sperm, and because taxpayer was and remained capable of performing that function without the aid of IVF-related treatments, those treatments did not affect any function of his body and did not qualify as deductible "medical care" within the meaning of Section 213(a). The court also held that the IRS's disallowance of taxpayer's claimed deduction neither violated any fundamental right nor discriminated on the basis of any suspect (or quasi-suspect) characteristic. View "Morrissey v. United States" on Justia Law

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Linda Dunn appealed a district court’s judgment affirming the Idaho State Tax Commission’s deficiency determination. The Commission issued a deficiency against Linda after determining that her one-half community interest in her husband’s, Barry Dunn (“Husband”), out-of-state earnings should have been included as Idaho taxable income for 2000–01, 2003–05, and 2007–10 (the “Taxable Years”). Linda was married to Husband during the Taxable Years. During the Taxable Years, Husband lived primarily in Texas, employed by a Texas offshore drilling company. All of the earnings at issue were earned by Husband personally as a wage earner in Texas, Alaska, or Washington and were directly deposited into his bank account in Tomball, Texas. Husband never worked or was domiciled in Idaho during the Taxable Years. Throughout the Taxable Years, Linda temporarily lived with Husband at his work location, but always returned to Idaho to operate a horse farm. She was a resident of Idaho for all of the Taxable Years. Linda and Husband’s tax filing status was “married filing jointly.” Linda relied on Texas law for her argument that her interest in Husband’s earnings were immune from Idaho income tax. The Commission maintained Linda, as an Idaho resident, was taxed on all income she received during the Taxable Years while domiciled in Idaho, even if that income was derived from Texas. Finding no reversible error in the district court’s affirmance of the Commission’s decision, the Idaho Supreme Court affirmed. View "Dunn v. Idaho Tax Commission" on Justia Law

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The Supreme Court reversed the decision of the Board of Tax Appeals (BTA), which adopted $8,492,910 as the property value for a thirty-seven-acre parcel of real property for tax years 2011 through 2013. The BTA based its decision on the purchase price that Buckeye Terminals, LLC, the landowner, reported on a June 2011 conveyance fee statement. On appeal, Buckeye Terminals argued that the reported price did not accurately reflect the true value of the real property. The Supreme Court held that the BTA’s decision to retain the Board of Revision’s valuation for tax years 2011 through 2013, based solely on the June 2011 conveyance fee statement rather than an independent determination of the value of the property, was unreasonable and unlawful. View "Buckeye Terminals, LLC v. Franklin County Board of Revision" on Justia Law

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ICN, a religious nonprofit, operates a Nashville mosque and a school. In 2008, it began building a new school building, financed by an ijara agreement, to avoid “running afoul of the Islamic prohibition on the payment of interest.” The bank essentially bought the property, leased it back to ICN, and then sold it back to ICN, with the lease payments substituting for interest payments. The agreement lasted until October 2013; the property was “continuously occupied by [ICN] and physically used solely for exempt religious educational purposes.” The transfer of title prompted the tax assessor to return the property to the tax roll. In February 2014, ICN applied for a property tax exemption, seeking retroactive application. The Tennessee State Board of Equalization’s designee regranted ICN's exemption, but not for the time during which the bank had held title. An ALJ and the State Board’s Assessment Appeals Commission upheld the decision. ICN did not seek review in the chancery court, but filed suit in federal court under the federal Religious Freedom Restoration Act; the federal Religious Land Use and Institutionalized Persons Act; the federal Elementary and Secondary Education Act; and the Establishment Clause. The court dismissed for lack of subject-matter jurisdiction, citing the Tax Injunction Act, 28 U.S.C. 1341. The Sixth Circuit affirmed. Tennessee’s statutory provision for state-court appeal provides a plain, speedy, and efficient alternative to federal-court review, so the Tax Injunction Act bars ICN’s suit in federal court. View "Islamic Center of Nashville v. State of Tennessee" on Justia Law

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The Supreme Court affirmed the decision of the Board of Tax Appeals (BTA) that adopted an allocated portion of a bulk-sale price as the property value for tax year 2011 for two parcels of property along the Ohio River. The owner of the property appealed, arguing that the BTA erred in not reducing the sale price by an amount that was contractually allocated to goodwill. The Supreme Court disagreed, holding (1) the landowner’s burden was to show a proper sale-price allocation; (2) the BTA reasonably applied the evidentiary standard; (3) the BTA reasonably rejected the landowner’s appraisal; and (4) the landowner failed to state a constitutional claim. View "Cincinnati School District Board of Education v. Hamilton County Board of Revision" on Justia Law

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The Supreme Court affirmed the Board of Equalization’s decision affirming the ruling of the Wyoming Department of Revenue against PacifiCorp, Inc., which sought a ruling that its purchases of certain chemicals used in the process of generating electricity in coal-fired electrical generation facilities in Wyoming qualified for either the manufacturers’ sales tax exemption or the wholesalers’ sales tax exemption. The court held (1) The Board erred when it concluded that PacifiCorp is not a manufacturer under Wyo. Stat. Ann. 39-15-105(a)(iii)A); (2) the Board did not err when it held that certain chemicals necessary to treat water and sulfur dioxide emissions during the coal combustion processes that generate electricity are not “used directly” to generate electricity and are therefore not exempt from sales tax under section 39-15-105(a)(iii)(A); and (3) the Board did not err when it held that PacifiCorp’s purchases of certain chemicals and catalysts do not constitute wholesale purchases exempt from taxation under section 39-15-105(a)(iii)(F). View "PacifiCorp, Inc. v. Department of Revenue" on Justia Law