Justia Tax Law Opinion Summaries

Plaintiffs, limited liability entities that owned property in the Town of Coventry, filed suit seeking declaratory and injunctive relief challenging the legality of sewer assessments assessed by Coventry. A hearing justice dismissed Plaintiffs’ complaint for their failure to follow the correct administrative appeal process. The Supreme Court vacated the judgment of the superior court dismissing Plaintiffs’ complaint, holding (1) the hearing justice erred in granting Defendants’ motion to dismiss on the grounds that Plaintiffs had not followed the R.I. Gen. Laws 44-5-26 tax appeal process, as section 44-5-26 did not apply in this case; and (2) the appeal process set forth in section 19 of Coventry’s sewer enabling act is the process by which residents of Coventry may appeal sewer assessments or charges levied by Coventry pursuant to its authority under the enabling act.View "Commerce Park Assocs. 1, LLC v. Houle" on Justia Law

The Patient Protection and Affordable Care Act requires almost everyone to have health insurance and is enforced by a tax that most businesses must pay if they fail to provide insurance as a benefit, or that anyone not covered by an employer’s plan must pay in lieu of purchasing insurance, 26 U.S.C.4980H, 5000A. The Internal Revenue Service has stated that it will collect the tax in 2014 from uninsured persons, but not from certain businesses. Plaintiffs, a physician and an association of physicians, claimed violation of the separation of powers and the Tenth Amendment. Because they did not complain about their own taxes, the district court dismissed for lack of standing. The Seventh Circuit affirmed. Rejecting an argument that the challenged policies change demand for plaintiffs’ services, the court noted that plaintiffs “appear to believe” that insurance is free to workers--that wages do not adjust to reflect pensions, insurance, and other benefits. By the same logic, they could litigate any tax policy. In a market economy everything is connected to everything else through the price system. To allow a long, intermediated chain of effects to establish standing is to abolish the standing requirement. The Constitution’s structural features are not open to litigation by persons who do not suffer particularized injuries. Plaintiffs, who do not accept insured patients, want to reduce, not increase the number of persons who carry health insurance. Someone else would be more appropriate to argue that the IRS has not done what it should to accomplish the statute’s goal of universal coverage. View "Ass'n of Am. Physicians & Surgeons, Inc. v. Koskinen" on Justia Law

In consolidated property tax appeals, taxpayers challenged the valuation of their real property by the Clackamas County Assessor. In their appeals to the Magistrate Division of the Tax Court, they challenged only the valuation of the improvements on their land, not the valuation of the land itself. The Magistrate Division affirmed. Taxpayers then appealed to the Regular Division of the Tax Court, again challenging only the valuation of their improvements. In the pendency of that appeal, the legislature had enacted ORS 305.287. Under that new statute, even if a taxpayer challenged only one aspect of a property tax assessment, any other party to an “appeal” may challenge other aspects of the assessment as well. Relying on that statute, the county asserted for the first time before the Regular Division of the Tax Court that it had erroneously undervalued taxpayers’ land. The Tax Court concluded, however, that challenges before the Regular Division were not “appeals” for the purposes of that statute. As a result, the court ruled that the county could not challenge the valuation of taxpayers’ land. The issue before the Supreme Court was whether the Tax Court correctly concluded that ORS 305.287 did not apply to appeals to the Regular Division of the Tax Court. After review, the Supreme Court concluded that the Tax Court erred in ruling that the statute did not apply and that the county could not challenge its own land valuations. View "Village at Main Street Phase II v. Dept. of Rev." on Justia Law

Appellants filed suit in federal court seeking a declaration that Nevada’s Live Entertainment Tax (NLET) was facially unconstitutional for violating the First Amendment. The federal court dismissed the suit. Appellants then filed a de novo action (Case 1) in a Nevada district court seeking similar remedies to those sought in federal court and asserting an as-applied challenge to NLET. While Case 1 was pending, Appellants filed individual tax refund requests with the Nevada Department of Taxation on the grounds that NLET is facially unconstitutional. The Department denied refunds, and the Nevada Tax Commission affirmed. Appellants then filed a second de novo action (Case 2) challenging the administrative denials of their refund requests and asserting an as-applied challenge to NLET. The district court (1) dismissed Appellants’ as-applied challenge in Case 1; and (2) dismissed the entirety of Case 2 for lack of subject matter jurisdiction because Appellants failed to file a petition for judicial review after the completion of their administrative proceedings. This appeal challenging the district court’s dismissal of Case 2 followed. The Supreme Court affirmed the district court’s dismissal of the case for lack of subject matter jurisdiction, as Nevada law required Appellants to file a petition for judicial review. View "Deja Vu Showgirls of Las Vegas, LLC v. Nev. Dep't of Taxation" on Justia Law

In 2003, the Nevada Legislature enacted the Live Entertainment Tax (NLET), which imposes an excise tax on business transactions completed at facilities providing live entertainment. Appellants, exotic dancing establishments, filed suit arguing that NLET was unconstitutional on its face and as applied. The district court ultimately (1) dismissed the as-applied challenge for lack of subject matter jurisdiction based on Appellants’ failure to exhaust their administrative remedies; and (2) concluded that NLET did not facially violate the first Amendment. The Supreme Court (1) affirmed the district court’s dismissal of Appellants’ as-applied challenge because Appellants failed to raise their as-applied challenge to NLET before the Nevada Department of Taxation; and (2) concluded that NLET does not violate the First Amendment as related to speech (i.e., dance), and therefore affirmed the district court’s summary judgment as to this issue. View "Deja Vu Showgirls of Las Vegas, LLC v. Nev. Dep't of Taxation" on Justia Law

The United Hospital Center, Inc. appealed from the State Tax Commissioner’s ruling regarding the 2011 assessment of ad valorem property taxes for the Hospital’s newly-constructed facility located in Bridgeport, asserting that, given the charitable purpose of its operations, it was entitled to exemption from property taxes. The circuit court granted summary judgment for Respondents, concluding that the Hospital was not entitled to a property tax exemption because the Bridgeport location was not physically housing and treating patients on July 1, 2010, the date used by law for property tax assessment purposes. The Supreme Court reversed, holding that a healthcare corporation that qualifies as a charitable organization under federal law, whose construction of a replacement hospital facility is substantially complete on the legal date of assessment, and who has significant departmental staff on site, comes within the spirit, purpose, and intent of exempting charitable organizations from ad valorem taxation under the statutory exemptions at issue. View "United Hosp. Ctr. v. Romano" on Justia Law

Petitioners sought review and eventually eliminate the federal estate tax deficiency assessed against the Estate by the Commissioner. The deficiency resulted solely from the Commissioner's disallowance of the "fractional-ownership discount" applied by the Estate in determining the taxable values of decedent's pro rata shares of the jointly stipulated fair market values of 64 original works of art in which decedent owned only fractional interests at his death. The court affirmed and agreed in large part with the Tax Court's underlying analysis and discrete factual determinations, including its rejection of the Commissioner's zero-discount position. The court reversed, however, the Tax Court's analysis that led it not only to reject the quantums of the Estate's proffered fractional ownership discounts but also to adopt and apply one of its own without any supporting evidence. The court held that the taxable values of decedent's fractional interests in the works of art are the net amounts reflected for each on Exhibit B of the Tax Court's opinion. The court affirmed in part, reversed in part, and rendered judgment in favor of petitioners for a refund of taxes overpaid in the amount of $14,359,508.21, plus statutory interest. View "Estate of James A. Elkins, Jr., et al. v. CIR" on Justia Law

In 2006, the Comptroller of Maryland issued assessments of tax and interest against Petitioners, two out-of-state subsidiary corporations, based on Petitioners’ relationship with their Maryland parent, Petitioners’ substance as corporations, and all of the entities’ activity in Maryland. The tax court affirmed. Petitioners appealed, arguing, among other things, that Maryland did not have the authority to tax Petitioners because they did not have a sufficient nexus with Maryland for the Comptroller’s assessment of taxes to be constitutional. The court of special appeals upheld the Comptroller’s assessments. The Supreme Court affirmed, holding that the tax court did not err in (1) concluding that the Comptroller had authority to tax Petitioners under the Court’s holding in Comptroller of the Treasury v. SYL, Inc., which allows the Comptroller and tax court to find nexus when a subsidiary lacks economic substance, because Petitioners did not have economic substance as separate business entities; and (2) upholding the apportionment formula used by the Comptroller in its assessment of Petitioners. View "Gore Enter. Holdings, Inc. v. Comptroller of Treasury" on Justia Law

Debtors, William M. "Trip" Hawkins - the cofounder of EA and his wife, filed a declaratory action against the IRS and the FTB seeking a determination that their unpaid taxes were covered by the bankruptcy plan discharge. The IRS and FTB counterclaimed, alleging that the tax debts were excepted from discharge under 11 U.S.C. 523(a)(1)(c). The district court and the bankruptcy court held that specific intent to evade taxes was not required in order to except a tax debt from discharge under section 523(a)(1)(C) and the courts relied in large part on debtors' spending beyond their income as the basis for denying tax debt discharge. The court held that the denial of discharge for willfully attempting, in any manner to evade or defeat a tax debt requires that the acts be taken with the specific intent to evade the tax. In this case, neither the district court nor the bankruptcy court had the benefit of the court's holding and therefore, the court vacated and remanded for the courts to reanalyze the case using a specific intent standard. View "Hawkins v. FTB" on Justia Law

Prince George’s County enacted a resolution creating the Victoria Falls Special Taxing District (District) under authority granted by a State enabling act (Act). Taxpayers challenged the resolution and sought tax refunds. The tax court denied the Taxpayers’ claims. The circuit court and intermediate appellate court affirmed. The Supreme Court affirmed, holding (1) the tax court properly upheld the County’s resolution creating the District, where changes in land ownership within the District occurred after the time of application for creation of the District but before final action on the application, as the State Legislature did not intend to require that the County determine whether any change in land ownership may have affected the super-majority landowner requirement expressed in the Act for applying for the District; and (2) the tax court properly ruled that the County’s approval of the request to create the District that did not include twenty-five of the 609 lots contained within the planned Victoria Falls community was lawful under the Act’s requirement that the District be used to finance infrastructure improvements in “any defined geographic region within the county.”View "Victoria Falls Comm. for Truth in Taxation, LLC v. Prince George's County" on Justia Law