Justia Tax Law Opinion Summaries

Outdoor Cap Co., Inc., a headwear company, had been paying ad valorem personal-property taxes in Benton County since 1976. In 2011, Outdoor Cap sought a refund of certain taxes paid in 2008 and 2009 that Outdoor Cap asserted were exempt under the “manufacturer’s exemption” pursuant to Ark. Code Ann. 26-26-1102. Benton County denied the request for a refund. The circuit court also found that Outdoor Cap was not entitled to a refund of any portion of the 2008 and 2009 personal-property taxes it had paid. The Supreme Court affirmed, holding that the circuit court did not err in (1) finding that the personal-property tax was not exempt from taxation; (2) determining the personal property was not erroneously assessed; and (3) applying the voluntary payment doctrine. View "Outdoor Cap Co. v. Benton County Treasurer" on Justia Law

The property at issue in this case was transferred to Deadwood Stage Run, LLC (Developer) in early 2006. On December 18, 2006, the City of Deadwood created Tax Incremental District Number Eight (the District) out of the property. After the City and Developer entered into a contract for private development of the District, Lawrence County sent its 2007 assessment of the property reflecting the most recent assessment of $934,520. The Developer sought a declaratory judgment prospectively establishing the 2006 assessed valuation of the District as the appropriate tax incremental base rather than the 2007 assessed valuation, arguing that the Department of Revenue incorrectly calculated the tax incremental base for the District in the City by using the County’s November 1, 2006 annual assessment rather than the Department’s August 25, 2006 annual Certificate of Assessment, Equalization, and Levy. The circuit court granted summary judgment in favor of the Department. The Supreme Court affirmed, holding that, in calculating the tax incremental base for a tax incremental district, the Department is statutorily required to use the last aggregate assessed valuation certified by the Department prior to the date of creation of the tax incremental district. View "Deadwood Stage Run, LLC v. Dep’t of Revenue" on Justia Law

The property at issue in this case was transferred to Deadwood Stage Run, LLC (Developer) in early 2006. On December 18, 2006, the City of Deadwood created Tax Incremental District Number Eight (the District) out of the property. After the City and Developer entered into a contract for private development of the District, Lawrence County sent its 2007 assessment of the property reflecting the most recent assessment of $934,520. The Developer sought a declaratory judgment prospectively establishing the 2006 assessed valuation of the District as the appropriate tax incremental base rather than the 2007 assessed valuation, arguing that the Department of Revenue incorrectly calculated the tax incremental base for the District in the City by using the County’s November 1, 2006 annual assessment rather than the Department’s August 25, 2006 annual Certificate of Assessment, Equalization, and Levy. The circuit court granted summary judgment in favor of the Department. The Supreme Court affirmed, holding that, in calculating the tax incremental base for a tax incremental district, the Department is statutorily required to use the last aggregate assessed valuation certified by the Department prior to the date of creation of the tax incremental district.View "Deadwood Stage Run, LLC v. Dep’t of Revenue" on Justia Law

This case involved three establishments (collectively, Establishments) that ran promotional programs intended to attract patrons to their casinos. In essence, if the patrons joined an establishment’s club, they received coupons or credits called “free play” that allowed them to play slot machines without using any of their personal money. The Establishments sued the South Dakota Department of Revenue and Regulation requesting a declaration that free play was not part of adjusted gross proceeds and was therefore not subject to gaming tax. The circuit court granted summary judgment for the Department, ruling that free play was not a deductible event in the calculation of adjusted gross revenue. The Supreme Court reversed, holding that the relevant statutes and regulations do not include the value of free play for slot machines in the calculation of an establishment’s adjusted gross revenue, and therefore, the circuit court erred in ruling that the Establishments must remit gaming tax for the value of free play. View "First Gold, Inc. v. Dep’t of Revenue and Regulation" on Justia Law

This case involved three establishments (collectively, Establishments) that ran promotional programs intended to attract patrons to their casinos. In essence, if the patrons joined an establishment’s club, they received coupons or credits called “free play” that allowed them to play slot machines without using any of their personal money. The Establishments sued the South Dakota Department of Revenue and Regulation requesting a declaration that free play was not part of adjusted gross proceeds and was therefore not subject to gaming tax. The circuit court granted summary judgment for the Department, ruling that free play was not a deductible event in the calculation of adjusted gross revenue. The Supreme Court reversed, holding that the relevant statutes and regulations do not include the value of free play for slot machines in the calculation of an establishment’s adjusted gross revenue, and therefore, the circuit court erred in ruling that the Establishments must remit gaming tax for the value of free play.View "First Gold, Inc. v. Dep’t of Revenue and Regulation" on Justia Law

Plaintiff, which owns a residential co-op complex with 1,674 residential apartments, was incorporated in 1961 as a Mitchell-Lama cooperative housing corporation pursuant to the Limited-Profit Housing Companies Law. In 2007, Plaintiff terminated its participation in the Mitchell-Lama program and reconstituted itself as a corporation under the Business Corporation Law by amending its certification of incorporation. In 2010, the New York City Department of Finance issued a notice of determination to Plaintiff of a tax deficiency in the amount of $21,149,592, concluding that Plaintiff had engaged in a transaction that qualified as a conveyance of the underlying real property, and therefore, Plaintiff was required to pay a real property transfer tax (RPTT). Plaintiff commenced this action seeking a declaratory judgment that the RPTT was inapplicable. The Appellate Court ruled in favor of Plaintiff, concluding that the conversion from a Mitchell-Lama cooperative housing corporation to a cooperative housing corporation under the Business Corporation Law does not constitute a conveyance that is subject to the RPTT. The Court of Appeals affirmed, holding that no taxable event occurred in this case. View "Trump Vill. Section 3, Inc. v. City of New York" on Justia Law

Plaintiff, which owns a residential co-op complex with 1,674 residential apartments, was incorporated in 1961 as a Mitchell-Lama cooperative housing corporation pursuant to the Limited-Profit Housing Companies Law. In 2007, Plaintiff terminated its participation in the Mitchell-Lama program and reconstituted itself as a corporation under the Business Corporation Law by amending its certification of incorporation. In 2010, the New York City Department of Finance issued a notice of determination to Plaintiff of a tax deficiency in the amount of $21,149,592, concluding that Plaintiff had engaged in a transaction that qualified as a conveyance of the underlying real property, and therefore, Plaintiff was required to pay a real property transfer tax (RPTT). Plaintiff commenced this action seeking a declaratory judgment that the RPTT was inapplicable. The Appellate Court ruled in favor of Plaintiff, concluding that the conversion from a Mitchell-Lama cooperative housing corporation to a cooperative housing corporation under the Business Corporation Law does not constitute a conveyance that is subject to the RPTT. The Court of Appeals affirmed, holding that no taxable event occurred in this case.View "Trump Vill. Section 3, Inc. v. City of New York" on Justia Law

During a traffic stop, police saw evidence of possible identity theft in plain view. A vehicle search revealed mail addressed to people unrelated to Earnest or his passenger, 39 debit cards, $4,000 in cash, and documents containing names, birth dates, Social Security numbers, and addresses for 1,000 individuals, plus their online tax return personal information and debit card account numbers. Hundreds of fraudulent tax returns had been filed, seeking $1.8 million in refunds; the IRS paid out $840,000. Many refunds were loaded onto debit cards. Earnest was linked to residences where the returns were filed and was photographed using the unauthorized debit cards. Tax returns were filed from Earl's IP addresses; he also was recorded using thecards. Both were convicted of conspiracy to commit fraud against the government, conspiracy to use unauthorized access devices, use of unauthorized access devices, and aggravated identity theft. Earnest also was convicted of possessing 15 or more unauthorized access devices. Earl was sentenced to 84 months’ imprisonment. Earnest was sentenced to 172 months. Belizaire recruited people to provide addresses , exchanged identification information of victims, filed fraudulent returns, and used the debit cards; he pleaded guilty to conspiracy to defraud the government and aggravated identity theft and was sentenced to 129 months’ imprisonment. The Eleventh Circuit affirmed both convictions and all sentences. View "United States v. Baldwin" on Justia Law

Petitioners donated a conservation easement to a land trust and claimed a $10,524,000 charitable deduction for the asserted value. The Tax Court held that the easement did not qualify as a charitable contribution and petitioners were not entitled to the deduction. The Tax Code and Treasury Regulations together make clear that 26 U.S.C. 170(h)(2)(C) means that a charitable deduction may be claimed for the donation of a conservation easement only when that easement restricts the use of the donated property in perpetuity. In this case, because the easement fails to meet this requirement, it is ineligible to form the basis of a charitable deduction under section 170(h)(2)(C). The court rejected petitioners' contention that the court should reject this straightforward application of statutory text and affirmed the judgment. View "Belk, Jr. v. CIR" on Justia Law

After the IRS made an assessment against defendant for the 1996 tax year, the government filed a complaint seeking to reduce the assessment to judgment and to foreclose tax liens against two parcels of property. The district court determined that the government's collection suit was not barred by the ten-year statute of limitations pursuant to 26 U.S.C. 6502(a)(1). The court held that the tolling period provided for in section 6330(e)(1) includes the time during which a taxpayer could file an appeal to the Tax Court, even if he does not actually file such an appeal. Applying Chevron, the court concluded that the Treasury Department's issuance of 26 C.F.R. 301.6330-1(g)(1) was a permissible construction of section 6330(e)(1). Therefore, the government's collection action against defendant was not barred by the statute of limitations and the court affirmed the judgment. View "United States v. Kollman" on Justia Law