Justia Tax Law Opinion Summaries

Appellant purchased property in 2004 for $7.4 million. For the tax-year 2006, the County auditor set the value at $8 million. Appellant filed a complaint with the County Board of Revision (BOR) seeking a decrease in value to $5 million, an amount close to the sale price of the property in 2003. After a hearing, the BOR reduced the property value from $8 million to the 2004 sale price of $7.4 million. Appellant appealed to the Board of Tax Appeals (BTA). The BTA upheld the $7.4 million sale price as the best evidence of value. The Supreme Court affirmed, holding that the BTA’s decision to adopt the $7.4 million sale price from 2004 as the property’s value for the tax-year 2006 was not unreasonable or unlawful.View "HIN, LLC v. Cuyahoga County Bd. of Revision" on Justia Law

In 1995, a number of government agencies opened investigations into the dealings of Fresenius Medical Care Holdings, Inc. with various federally funded health-care programs. In 2000, Fresenius entered into a series of criminal plea and civil settlement agreements with the government. The civil settlement agreements released several claims against Fresenius, including claims made under the False Claims Act (FCA). Those agreements eschewed any tax characterization. Thereafter, the parties began disputing the tax treatment of the balance of the civil settlements. Fresenius commenced a tax refund action for the purpose of determining the deductibility of the amount in dispute. The district court concluded that where the parties had eschewed any tax characterization, the critical consideration in determining deductibility was the extent to which the disputed payment was compensatory as opposed to punitive. At trial, the court’s jury instructions embodied this conclusion. The jury found that a large chunk of the settlement was deductible. The court accepted this finding and ordered tax refunds totaling more than $50,000,000. The First Circuit affirmed, holding that, “in determining the tax treatment of an FCA civil settlement, a court may consider factors beyond the mere presence or absence of a tax characterization agreement between the government and the settling party.” View "Fresenius Med. Care Holdings, Inc. v. United States" on Justia Law

The issue before the Supreme Court in this case involved the assessed value of the Trans-Alaska Pipeline System for property tax purposes. The parties disputed the method used to assess the pipeline's value as well as the specific deductions made for functional and economic obsolescence. Finding no reversible error, the Supreme Court affirmed the superior court's valuation. View "BP Pipelines (Alaska) Inc. v. Alaska" on Justia Law

The Commissioner of Revenue informed Sharon Soyka by a notice that it would file a tax return on her behalf for the 2008 tax year and asserting that Soyka owed $2,201 in income taxes, interest, and penalties. Exactly sixty-one days after the Commissioner mailed the notice, Soyka mailed her notice of appeal to the Minnesota Tax Court. The tax court dismissed Soyka’s appeal, concluding that it was untimely under Minn. Stat. 271.06(2), which generally requires a notice of appeal to be filed within sixty days after notice of an order by the Commissioner. At issue before the Supreme Court was whether, when the Commissioner serves notice of an order by United States mail, Minn. R. Civ. P. 6.05 extends the sixty-day statutory deadline for filing an appeal with the tax court. The Supreme Court reversed and directed the tax court to reinstate Soyka’s appeal, holding that Rule 6.05 applies and extends the statutory filing deadline by three days when the Commissioner serves the notice by United States mail.View "Soyka v. Comm’r of Revenue" on Justia Law

Petitioner purchased an apartment building on Staten Island. Petitioner’s parents lived in the building, and Petitioner stayed in their apartment on occasion to attend to their medical needs. Petitioner leased the other two apartments in the building to tenants. For the tax years in question, Petitioner filed nonresident income tax returns in New York. The Department of Taxation and Finance later issued a notice of deficiency, determining that Petitioner owed additional New York income taxes because he maintained a “permanent place of abode” at the Staten Island property during the relevant years. The Tax Appeals Tribunal sustained the deficiency, concluding that in order to qualify as a statutory resident under the Tax Law, a taxpayer need not actually dwell in the permanent place of abode but need only maintain it. Petitioner challenged the Tribunal’s determination, contending that the standard to be applied when determining whether a person “maintains a permanent place of abode” in New York should turn on whether he maintained living arrangements for himself to reside at the dwelling. The Court of Appeals agreed with Petitioner, holding that in order for an individual to qualify as a statutory resident, there must be some basis to conclude that the dwelling was utilized as the taxpayer’s residence.View "Gaied v. N.Y. State Tax Appeals Tribunal" on Justia Law

In 2010, Nassau County passed Local Law 18, which shifted the obligation to pay real property tax refunds from the County to its individual taxing districts. Various interested parties filed three actions seeking a declaration that Local Law 18 was null, void and unenforceable because its violated the Municipal Home Rule Law (MHRL) provisions limiting the powers of local government and the State Constitution’s home rule and taxation articles. Supreme Court effectively granted summary judgment to the County in all three actions. The Appellate Division reversed, entering a declaratory judgment that Local Law 18 violated the Constitution and the MHRL. The Court of Appeals affirmed, holding that the County exceeded its statutory and constitutional authority in its attempt to supersede a special State tax law.View "Baldwin Union Free Sch. Dist. v. County of Nassau" on Justia Law

This property tax appeal centered on the valuation of five electrical substations, seven transmission lines, a fiber-optic line, land, and utility easements located within the Town of Vernon. Taxpayer Vermont Transco LLC challenged a decision of the state appraiser fixing the 2011 listed value of taxpayer’s utility property in the Town at $92 million. Taxpayer argued: (1) the state appraiser should have used an alternative nonlinear depreciation schedule (the “Iowa Curve” method) because that method was previously approved by the Supreme Court in reviewing the method of property tax appraisal; (2) the state appraiser’s decision on fair market value was not supported by a sufficient analysis of the “core factual issues, including whether fair market value is best estimated by the economic or physical life of the assets, and what those lives are;” (3) the state appraiser’s decision to follow the Town’s appraiser in not depreciating assets during the first year of service was wrong; and (4) the state appraiser’s decision to include an appraised value for the utility easements was also wrong. Upon review, the Supreme Court reversed and remanded the case for further findings regarding the lifespan of the property to be used in calculating depreciation. View "Vermont Transco, LLC v. Town of Vernon" on Justia Law

In a case of first impression, the issue this case presented to the Mississippi Supreme Court was whether money a corporation received as prepayment for future services was subject to franchise taxation during the year in which it was received. The Mississippi Department of Revenue (MDOR) assessed additional franchise tax against Fishbelt Feeds, Inc. for its failure to include a "deferred revenue" account, which represented money it had received through prepaid contracts, in its franchise tax base. Fishbelt appealed MDOR’s order to the chancery court, and the chancellor granted summary judgment to MDOR. On appeal to the Supreme Court, Fishbelt argued that the chancery court erred in granting summary judgment to MDOR and should have conducted a full evidentiary hearing on the issues presented. Fishbelt also argued that its "deferred revenue" account is excepted from franchise taxation. Finding no reversible error, the Supreme Court affirmed the award of summary judgment to MDOR. View "Fishbelt Feeds, Inc. v. Mississippi Department of Revenue" on Justia Law

The Mississippi Department of Revenue (MDOR) audited Mississippi Power Company and assessed use taxes attributed to Mississippi Power’s purchase and installation of low-NOx burners. After unsuccessfully pursuing administrative remedies, Mississippi Power appealed to the chancery court. The chancery court reversed and granted summary judgment in favor of Mississippi Power. The MDOR appealed, arguing: (1) the chancery court lacked jurisdiction over Mississippi Power’s amended petition for appeal and review; and (2) (assuming the chancery court had appellate jurisdiction over Mississippi Power’s appeal) the court erred in finding the definition of “pollution control equipment” in Mississippi Code Section 27-65-101(1)(w)) was unambiguous, and failed to afford deference to the MDOR’s interpretation of “pollution control equipment” in Mississippi Administrative Code 35.IV.7.03(302). The Supreme Court found: (1) the chancery court had jurisdiction over the appeal; and (2) the chancellor correctly concluded that Mississippi Administrative Code 35.IV.7.03(302) was an invalid regulation. The chancellor further was correct that the low-NOx burners qualified for the tax exemption under the plain language of Section 27-65-101(1)(w) and the evidence produced by Mississippi Power. Therefore, the chancellor correctly ordered that the MDOR refund Mississippi Power the use taxes assessed on the low-NOx burners, plus penalties and interest. View "Mississippi Department of Revenue v. Mississippi Power Company" on Justia Law

The Mississippi Department of Revenue assessed taxes, penalties, and interest against Isle of Capri Casino, Inc. and its affiliated entities for tax years 2004, 2005, 2006, and 2007. The Department based the assessment on the application of the license fees as a credit, claiming that only the tax liability of four Isle of Capri entities that actually held the licenses were eligible for offset, and could not benefit the affiliated group as a whole. Isle of Capri appealed the Department's assessment first to the Board of Review and then to the Board of Tax Appeals; both affirmed the assessment with minor changes. Isle of Capri appealed again, and the chancery court granted summary judgment in its favor. The Department subsequently appealed. Finding no error in the chancery court's decision, the Supreme Court affirmed. View "Mississippi Department of Revenue v. Isle of Capri Casino, Inc." on Justia Law