Justia Tax Law Opinion Summaries

The Supreme Court reversed the judgment of the trial court in favor of Defendant Barbara Lembo in this action brought by beneficiaries of an inter vivos trust and their mother alleging that Defendant breached her fiduciary duty as trustee, holding that the allegations in the complaint stated a legally sufficient claim for breach of a trustee's fiduciary duties under Connecticut law.The will of the decedent bequeathed the residue of his estate to an amended and restated revocable trust benefitting his three children. At issue was the proper administration of a portion of the decedent's residuary estate that had not yet been distributed to the trust. Plaintiffs brought this action alleging that Defendant, among other things, breached her fiduciary duty by failing to protect and collect trust property. The trial court concluded that Defendant, as a trustee, had no duty to take any action prior to the distribution of the residuary assets. The Supreme Court reversed, holding (1) a genuine issue of material fact remained as to whether Defendant owed the trust beneficiaries a duty to collect and protect the prospective trust property in the residuary estate; and (2) the complaint sufficiently alleged a cause of action against Defendant for breach of her fiduciary duty as trustee. View "Barash v. Lembo" on Justia Law

The Supreme Court affirmed the decision of the Administrative Hearing Commission determining that Walmart Starco LLC was exempt from use tax for its purchase and use of information technology equipment pursuant to Mo. Rev. Stat. 144.018.1 and 144.615(6), holding that the Commission correctly concluded that the equipment was exempt from use tax.The Commission ultimately determined that Starco's use of the information technology equipment at issue was exempt from use tax under sections 144.018.1 and 144.615(6). The Supreme Court affirmed, holding (1) Starco showed that it held the equipment solely for resale pursuant to section 144.615(6); and (2) the second argument raised on appeal was unpreserved for appellate review. View "Walmart Starco LLC v. Director of Revenue" on Justia Law

The Supreme Court affirmed the decision of the Board of Equalization affirming the Wyoming Departments of Audit and Revenue's mineral tax audit assessments of Chesapeake Operating, LLC's oil and gas production, holding that the State Board of Equalization did not misinterpret Wyo. Stat. Ann. 39-14-203(b)(iv) when it found that Chesapeake's field facilities did not qualify as processing facilities.On appeal, Chesapeake argued that the Board erred in concluding that Chesapeake's facilities qualified as processing facilities under the mineral tax statutes and that the proper point of valuation for its gas production was at the custody transfer meters. The district court certified the case directly to the Supreme Court, which affirmed, holding that the Board correctly interpreted and applied Wyo. Stat. Ann. 39-14-201(a)(xviii) when it found that the seven facilities at issue were not processing facilities. View "Chesapeake Operating, LLC v. State, Dep't of Revenue" on Justia Law

The Supreme Judicial Court affirmed the order entered in the business and consumer docket granting summary judgment approving the method of the State Tax Assessor for calculating Express Scripts Inc.'s Maine tax liability and denied the Assessor's cross appeal, holding that the trial court did not err.Specifically, the Supreme Judicial Court held (1) the trial court applied an improper standard in evaluating whether Express Scripts established its primary facie case for counts one and two of the petition for review; (2) under the proper legal standard, summary judgment was still appropriate; and (3) the trial court did not err in allowing Express Scripts to file certain information under seal and a later order denying the Assessor's motion to unseal. View "Express Scripts Inc. v. State Tax Assessor" on Justia Law

The Supreme Court reversed the decision of the circuit court granting summary judgment for Lakota Lakes and denying Emily Bialota's cross-motion for summary judgment in this quiet title action, holding that Bialota accomplished valid service on the Minnesota Secretary of State.Bialota brought an action to quiet title in Pennington County, alleging that she had fee simple ownership in real property previously owned by Lakota Lakes but later sold at a tax sale. In its summary judgment motion, Lakota Lakes claimed that it had not been validly served with the notice of intent to take tax deed, rendering the tax deed void. In her cross-motion for summary judgment, Bialota argued that service upon Lakota Lakes was proper and that Pennington County had correctly issued a tax deed based upon her affidavit of completed service. The Supreme Court reversed, holding (1) South Dakota law controlled this Court's determination whether Bialota personally served the Secretary as Lakota Lakes' registered agent; (2) Bialota accomplished valid service on the Secretary; and (3) Bialota was entitled to the tax deed to the property. View "Bialota v. Lakota Lakes, LLC" on Justia Law

Plaintiff’s CPA failed to file Plaintiff’s tax returns for three consecutive years: 2014 through 2016. In 2019, the IRS assessed Plaintiff with over seventy thousand dollars in penalties for violating Section 6651(a) of the Internal Revenue Code and barred him from applying his 2014 overpayment to taxes owed for 2015 and 2016. Plaintiff sued, arguing that his failure to file was due to reasonable cause. He also sought a refund of the penalties. The district court granted summary judgment for the government, concluding that United States v. Boyle foreclosed Plaintiff’s claims. Plaintiff appealed.   The Eleventh Circuit affirmed. The court explained that if Plaintiff’s CPA had failed to file paper tax returns, there would be no question that Boyle would have precluded a reasonable cause defense and a refund. However, the court explained that no circuit court has yet applied Boyle to e-filed tax returns. The court decided that Boyle’s bright line rule applies to e-filed returns. Thus, the court concluded that Plaintiff’s reliance on his CPA does not constitute “reasonable cause” under Section 6651(a)(1). View "Wayne Lee v. USA" on Justia Law

Proposition 39 established a program to promote the creation of clean energy jobs. Under Proposition 39, a multistate business must apportion its tax based on a single factor—in-state sales. The proposition further provided for cable companies spending $250 million or more in California on certain expenditures to exclude half of their in-state sales when apportioning, thus lowering their tax burden under the single factor tax regime. Paintiff One Technologies, LLC, a Texas-based provider of credit score and credit reporting services, paid tax to California calculated under the single-factor method. Plaintiff then filed a complaint for refund against Defendant Franchise Tax Board (the Board). Plaintiff alleged Proposition 39 was invalid under the single-subject rule for ballot initiatives. The trial court disagreed and sustained the Board’s demurrer.   The Second Appellate District affirmed. The court held that Proposition 39 did not violate the single-subject rule. The purpose of the proposition was to fund a clean energy job creation program by raising taxes on some multistate businesses. The provisions of the proposition were both reasonably germane and functionally related to that purpose because those provisions established a funding mechanism and the means of directing that funding to clean energy job creation. The special rules for cable companies reflect a determination by the proposition’s drafters that some businesses should bear the funding burden more than others, but that is still within the scope of the proposition’s purpose. View "One Technologies, LLC v. Franchise Tax Bd." on Justia Law

Petitioner FlightSafety International, Inc. appeals from the judgment entered after the trial court denied its two consolidated petitions for writs of mandate. The trial court found that FlightSafety was not entitled to mandamus relief because it had an adequate remedy at law, which it had bypassed. FlightSafety contended in the trial court that it was entitled to a decision by the Los Angeles County Assessment Appeals Board (AAB) on its assessment appeal applications within the two-year period specified in Revenue and Taxation Code section 1604, subdivision (c). FlightSafety argued the extensions had expired as a matter of law two years from the date of filing. It argued it therefore had not received timely hearings on its applications. FlightSafety asked the trial court to order the AAB to schedule hearings forthwith and, in the meantime, enter its own opinion of the value of its property on the tax assessment rolls. The trial court found writ relief was not available. Plaintiff contends the trial court erroneously found the extension agreements valid and mandamus relief unavailable.   The Second Appellate District affirmed. The court explained that none of the four cases relied upon by Petitioner considered whether the applicant had an adequate remedy for the AAB’s refusal to place the applicant’s opinion of value on the assessment rolls. Thus, none of the cases stand for the proposition that a tax refund action is an inadequate remedy in all cases seeking relief for an AAB’s action (or inaction) under section 1604. View "FlightSafety International v. L.A. County Assessment Appeals Bd." on Justia Law

The City of Austin, Texas, issued an ordinance (1) declaring that the shoreline properties are within the city’s full purpose jurisdiction; (2) repealing a 1986 ordinance that putatively declared the shoreline properties to be within the city’s limited purpose jurisdiction but promised not to tax those properties until the city made city services available to them; and (3) announcing that the shoreline properties are subject to taxation by the city, albeit without providing city services. The owners asserted claims under the due process, equal protection, takings and ex post facto clauses of the Constitution, together with state law claims, and sought various declarations, injunctions, and writs of mandamus. They alternatively sought just compensation for the taking of their properties’ jurisdictional status. The district court dismissed all claims without prejudice as barred by the Tax Injunction Act. 28 U.S.C. Section 1341 Plaintiffs appealed that judgment.   The Fifth Circuit affirmed in part, reversed in part, and remanded. The court explained that apart from two minor exceptions, Plaintiffs do not ask the district court to “enjoin, suspend or restrain the assessment, levy or collection of any tax under State law.” Their claims thus fall outside the TIA. The court explained that Plaintiffs here seek the invalidation of the 2019 ordinance and a declaration that their properties are within the city’s extraterritorial or limited purpose jurisdiction. Although the ordinance authorized the taxation of Plaintiffs’ properties, the county tax assessor had to add their properties to the Travis County Appraisal District’s rolls, appraise the properties, determine their tax liabilities, levy the taxes, collect the taxes, and remit those payments to the city. View "Harward v. City of Austin" on Justia Law

The Supreme Court affirmed the judgment of the trial court denying the Indiana Trial Rule 60(B)(6) motion filed by James and Phyllis Crowe seeking relief from the judgment of the trial court granting Savvy IN, LLC's petition to issue tax deeds for certain properties, holding that Savvy IN's certified and first-class mailed notice letters notifying the Crowes that Savvy IN purchased their properties at a tax sale satisfied the minimum requirements under the Fourteenth Amendment's Due Process Clause and Indiana law.In 2019, the Crowes received notice that their properties were sold in a tax sale due to their failure to pay 2018 property taxes. Savvy IN purchased the properties at a tax sale. When the Crowes passed the deadline to redeem the properties Savvy IN petitioned the trial court to direct the county auditor to issue tax deeds for the properties. The trial court granted the motion. The Crowes moved for relief from the judgment under Rule 60(B)(6) on the grounds that they did not receive notice letters, thus rendering the judgment and tax deeds void. The trial court denied the motion. The Supreme Court affirmed, holding that Savvy IN was entitled to the tax deeds issued by the trial court because the mailed notices satisfied the constitutional and statutory requirements. View "Crowe v. Savvy IN, LLC" on Justia Law