Justia Tax Law Opinion Summaries

Swift County filed suit against Fannie Mae, Freddie Mac, and FHFA, alleging that the federal agencies violated state law by failing to pay taxes on the transfers of deeds to real property. The court affirmed the district court's grant of the federal agencies' motion to dismiss because the Exemption Statutes, 12 U.S.C. 1723a(c)(2) and 12 U.S.C. 1452(e), established an exemption from all state taxation. The court concluded that the Exemption Statutes are a valid exercise of Congress's power under the Commerce Clause and the federal agencies are federal instrumentalities, not privately-held corporations.View "Vadnais, et al. v. Federal National Mortgage, et al." on Justia Law

This direct appeal involved a constitutional challenge to the Town of Hilton Head Island's business license tax ordinance, which required businesses within the Town to pay an annual license fee based upon a business's classification and gross income. "Kigre has clothed its many arguments in the premise that the Ordinance is not sound policy," but the Supreme Court found that none rose to the level to sufficiently challenge the ordinance's constitutionality. Accordingly, the Court affirmed the trial court. View "Town of Hilton Head Island v. Kigre, Inc." on Justia Law

At issue in this appeal was a tax credit that offset federal tax owed on income earned in the operation of a business in Puerto Rico. The credit remained available to taxpayers under section 936 of the Internal Revenue Code during the ten-year transition period after section 936 was repealed. During the transition period, the taxable income an eligible claimant could claim in computing its credit was capped at an amount approximately equal to the average of the amounts it had previously claimed, but the cap could be adjusted for a taxpayer’s purchases and sales of businesses that had generated credit-eligible income. In this case, Appellant-corporation, a U.S. taxpayer, sold a line of businesses in Puerto Rico to a foreign corporation that did not pay U.S. corporate income taxes. Appellant argued it was not required to reduce its cap because the buyer had no credit cap to increase. The district court granted summary judgment for the government. The First Circuit reversed, holding (1) the reduction in a seller’s cap as a result of the sale of a business line is appropriate only in the event of a corresponding increase in the buyer’s cap; and (2) therefore, the transfers did not reduce Appellant’s credit cap. View "OMJ Pharms., Inc. v. United States" on Justia Law

For the tax year 2011, the county assessor decided to assess property taxes on parcel of land owned by Central Nebraska Public Power and Irrigation District (Central) but leased to private parties. Central protested the tax assessment, and the Board of Equalization recommended not taxing the land. The Tax Equalization and Review Commission (TERC) affirmed, concluding that the parcels should not be taxed because Central had already made a payment in lieu of tax pursuant to Neb. Const. art. VIII, 11 for the relevant tax year. The Supreme Court (1) affirmed TERC’s finding that Central was not subject to property taxes for tax year 2011 because it had already made a payment in lieu of tax for that year; but (2) vacated the portion of TERC’s order that could be interpreted to mean that a lessee’s property tax obligation is included in Central’s payment in lieu of tax, as the issue of a lessee’s liability was not before TERC. View "Conroy v. Keith County Bd. of Equalization" on Justia Law

Paul Nelson Farm (“Appellee”) operated an all-inclusive hunting lodge in South Dakota. The Department of Revenue and Regulation conducted an audit on Appellee and determined that Appellee owed unpaid use tax on food, beverages, and ammunition. Appellee argued that it was not required to pay use tax on those items because the food, beverages, and ammunition were not purchased for end use by Appellee but were instead purchased for resale to hunting lodge customers in Appellee’s ordinary course of business. The circuit court affirmed in part and reversed in part, concluding that Appellee was not required to remit use tax on the food but was required to remit use tax on the beverages and ammunition. The Supreme Court held that use tax was not properly imposed on any of the goods because the items were purchased for resale to Appellee’s customers in the regular course of business, and therefore, Appellee’s control and possession of the items did not constitute “use” as defined by S.D. Codified Laws 10-46-1(17).View "Paul Nelson Farm v. S.D. Dep’t of Revenue" on Justia Law

East Bank Condominiums II, LLC filed valuation complaints challenging the county auditor’s assessment of twenty-one units in a condominium complex owned by East Bank. The county auditor valued each unit as a separate parcel. The Dublin City Schools Board of Education filed countercomplaints seeking to retain the auditor’s valuations. The Board of Revision (BOR) disagreed with the assessment and accepted the bulk-appraisal valuation that East Bank submitted. The Board of Tax Appeals (BTA) reinstated the county auditor’s valuations. The Supreme Court reversed the BTA, holding that the BTA erred in reverting back to the auditor’s determination of value. The school board moved for reconsideration. The Supreme Court granted in part the school board’s motion, holding (1) the BTA was correct in rejecting East Bank’s bulk-appraisal valuation for the units; but (2) the BTA was incorrect in adopting the auditor’s valuations. Remanded to the BTA for an independent determination of value.View "Dublin City Schs. Bd. of Educ. v. Franklin County Bd. of Revision" on Justia Law

New England Forestry Foundation, Inc. (NEFF) was a nonprofit corporation organized under Mass. Gen. Laws ch. 180 and the record owner of a parcel of forest land in the town of Hawley. The Board of Assessors for Hawley denied NEFF’s application for a charitable tax exemption on the parcel. The Appellate Tax Board (Board) also denied the application on the grounds that NEFF did not show that it occupied the land for a charitable purpose within the meaning of Mass. Gen. Laws ch. 59, 5, Third (Clause Third). The Supreme Judicial Court reversed the Board’s opinion, holding that the Board erred in concluding that NEFF did not meet its burden to show that it occupied the property within the meaning of Clause Third.View "New England Forestry Found., Inc. v. Bd. of Assessors of Hawley" on Justia Law

James Navratil Development Company (JNDC) filed a valuation complaint. The Board of Tax Appeals (BTA) remanded the cause and ordered the Medina County Board of Revision to dismiss the complaint for lack of jurisdiction because JNDC did not properly identify itself as the owner of the property on the face of the complaint. JNDC appealed. While the parties were filing briefs in the appeal, the Supreme Court issued its decision in Groveport Madison Local Schs. Bd. of Educ. v. Franklin County Bd. of Revision, in which the Court held that it is not a jurisdictional requirement to correctly name the owner of the subject property in a valuation complaint. On the authority of Groveport Madison, the Supreme Court reversed the BTA’s decision, holding that the defect in the complaint was not jurisdictional, and the BTA erred in holding that it was. Remanded.View "James Navratil Dev. Co. v. Medina County Bd. of Revision" on Justia Law

In consolidated appeals, the issue before the Supreme Court concerned the attorney’s fees and costs awarded in the 2006 Trans-Alaska Pipeline System tax assessment case. The superior court decided that the Fairbanks North Star Borough, the City of Valdez, and the North Slope Borough were prevailing parties for purposes of attorney’s fees and costs because they had prevailed on the main issues of the case. The superior court also applied the enhancement factors to raise the presumptive award from 30 percent to 45 percent of the prevailing parties’ reasonable attorney’s fees. The owners of the Trans-Alaska Pipeline System appealed, arguing the superior court should have applied Alaska Appellate Rule 508 instead of Civil Rules 79 and 82. In the alternative, they contended: (1) that the three municipalities did not prevail as against the owners; (2) that fees should have been allocated between separate appeals; (3) that none of the prevailing parties were entitled to enhanced attorney’s fees; and (4) that the Fairbanks North Star Borough’s award should have been reduced as recommended by a special master. The Fairbanks North Star Borough and the City of Valdez cross-appealed, arguing that the superior court should have viewed this case as one involving a money judgment for purposes of an attorney’s fees award under Rule 82(b)(1) and, in the alternative, that they were entitled to a greater enhancement of their fees. Finding no reversible error, the Supreme Court affirmed. View "BP Pipelines (Alaska) Inc. v. Alaska, Dept. of Revenue" on Justia Law

This case centered on whether someone could form an out-of-state limited liability company (LLC) for the purpose of avoiding payment of Louisiana sales tax. The Louisiana Department of Revenue assessed a sales tax against plaintiff Robert Thomas, who is a Louisiana resident and admitted he formed a Montana LLC solely to avoid the Louisiana sales tax for the purchase of a recreational vehicle. Although the Board of Tax Appeals affirmed the assessment against Thomas, the District Court reversed the assessment. The Court of Appeal upheld the reversal, finding Thomas’s appeal met the Department’s procedural requirements, and the Department failed to show the veil of the Montana LLC should be pierced and further failed to show Thomas should be held individually liable. The Supreme found this issue involved policy considerations that should be addressed by the Louisiana Legislature rather than resolved by the Court. "Our function is to merely interpret the laws passed by the legislature, not to make laws." View "Thomas v. Bridges " on Justia Law