Justia Tax Law Opinion Summaries

Westmoreland Resources Inc. (WRI) mines coal owned by the Crow Tribe and pays coal severance and gross proceeds taxes to the Tribe. In 2005, WRI filed a tax return with the Department of Revenue for coal produced and sold at its Absaloka Mine, located on the Crow Reservation, during tax year 2004. The return deducted the coal severance and gross proceeds taxes it had paid to the Tribe. The Department disallowed WRI’s deduction. WRI filed a complaint with the State Tax Appeal Board. WRI and the Department later filed a joint petition for an interlocutory adjudication of a substantive question of law with the district court. At issue was whether WRI’s coal severance and gross proceeds deduction was proper. The district court held in favor of the Department, concluding that WRI may not deduct taxes paid to the Tribe as “taxes paid on production” from the “contract sales price” when calculating the Resource Indemnity Trust and Ground Water Assessment Tax. The Supreme Court affirmed, holding that the phrase “any tax paid to the federal, state, or local governments” within Mont. Code Ann. 15-35-102(11) does not include those taxes WRI pays to the Tribe. View "Westmoreland Res., Inc. v. Dep’t of Revenue" on Justia Law

Petitioner-taxpayer CAVU Company was the owner of a twenty-six-acre school campus in Santa Fe that was developed and improved beginning in 1997 solely for operation as a school. Since opening its doors over fifteen years ago, the Property has been used for educational purposes by several schools and has never been used for any other purpose. The following time line indicates the changes in occupancy of the Property since its development for use as a school. Taxpayer purchased the Property in 2004, when the New Mexico Academy for Science and Mathematics (NMASM) was experiencing financial difficulties. Taxpayer leased the Property to NMASM for $1.00 per year for several academic years and supported the school with donations in an effort to help NMASM succeed. In August 2007, Taxpayer raised the rent to $10,000 per month, although by November 2007 it was clear that NMASM could not afford that rate. At this point, Taxpayer allowed the school to occupy the building rent free until June 2008, when it closed. Throughout the remainder of 2008 and all of 2009, Taxpayer actively sought to lease the Property to various other educational tenants, negotiating in particular with Desert Academy. Taxpayer listed the Property for sale on the residential or commercial market but refused to lease the building to anyone other than an educational tenant. In March 2010, shortly after Taxpayer began temporarily leasing the Property to a training school for dogs and their owners, the Santa Fe County Assessor discovered the Property’s sale listing. Although the Assessor was apparently aware that the Property had been vacant, it was the sale listing that motivated the Assessor to put the Property on the tax rolls and issue Taxpayer a notice of valuation for $6,689,750 for the 2010 tax year. Taxpayer filed an application for an educational use exemption for 2010, which the Assessor denied because “on January 1st of 2009 and 2010” the property “was not used directly and immediately for educational purposes.” Following a March 2011 hearing before the Santa Fe County Valuation Protests Board, the Board reinstated Taxpayer’s exemption for 2010. On Assessor’s appeal, the District Court reversed the Board’s decision and denied the exemption pursuant to NMSA 1978, Section 7-38-7 (1997) because the Property was not “currently and actively used as an educational facility” specifically on January 1, 2010, the Property had been listed for sale to residential or commercial buyers, and no showing of fraud or intentional discrimination entitled the Property to an exemption under Article VIII, Section 1(A). Soon after the district court’s ruling, Taxpayer sold the Property to Desert Academy. The New Mexico Supreme Court held that the appropriate inquiry into the validity of a property’s educational exemption from taxation under the exemption provision of Article VIII, Section 3 of the New Mexico Constitution was whether use during the tax year furthered the exempt purpose. Because the taxpayer in this case had only used the property for educational purposes, had declined to use it for noneducational purposes, and was actively negotiating with schools capable of relocating to his campus property during the relevant tax year when the property was temporarily vacant, the Court reversed the conclusions of the lower courts that the property could not qualify for an educational use exemption. The case was remanded to the Santa Fe County Valuation Protests Board for further consideration. View "CAVU Co. v. Martinez" on Justia Law

Taxpayer Ugo Quazzo appealed a superior court decision to uphold a determination by the Commissioner of Taxes that he failed to prove a change of domicile for purposes of obtaining an income-sensitive homestead property tax adjustment on his Vermont residence for the years 2007 through 2009. He argued that the Commissioner erred in treating this case as one involving a change of domicile, rather than maintenance of domicile, so that taxpayer had the burden of proving by clear and convincing evidence that he had changed domicile to Vermont, even though he had declared (and the Department of Taxes did not challenge) his Vermont domicile years earlier. He also argued that the Commissioner’s findings are insufficient to support her conclusions. Finding no reversible error, the Supreme Court affirmed. View "Quazzo v. Department of Taxes" on Justia Law

The Commissioner issued a Notice of Final Partnership Administrative Adjustment to TKOP for the 2006 tax year. TKOP deposited the amount required by 26 U.S.C. 6226(e) with the IRS and then commenced this action seeking readjustment of partnership items, which was consolidated with seven lawsuits. On appeal, TKOP challenged the district court's determination that the transfer of certain overriding royalty interests through a complicated transaction was an invalid attempt to assign income. The court affirmed the judgment, concluding that the record amply supported this finding and supported the district court's conclusion that the income was taxable to TKOP for the 2006 tax year. View "Salty Brine 1, Ltd, et al. v. United States" on Justia Law

The issue before the Supreme Court in this case was whether the execution of a lease of tangible personal property constitutes "use" for purposes of the Use Tax Act (UTA). Petitioner purchased an aircraft from one company and immediately executed a five-year lease to another company that already had possession of the aircraft. The Department of Treasury assessed a use tax against petitioner based on the lease transaction, and the Michigan Tax Tribunal ultimately upheld the assessment. The Court of Appeals reversed, holding that petitioner did not “use” the aircraft because it ceded total control of the aircraft to the lessee by virtue of the lease and the lessee had uninterrupted possession of the aircraft before and during the lease. The Supreme Court concluded that because the right to allow others to use one’s personal property is a right incident to ownership, and a lease is an instrument by which an owner exercises that right, it follows that the execution of a lease is an exercise of a right or power over tangible personal property incident to the ownership of the property. Therefore, that constitutes "use" for purposes of the UTA. Accordingly, petitioner "used" the aircraft in question for purposes of the UTA when it executed a lease of the aircraft in Michigan, regardless of whether it ever had actual possession of the aircraft. View "NACG Leasing v. Dept. of Treasury" on Justia Law

When the Respondent City of Myrtle Beach transferred $302,545 of accommodations tax (A-Tax) funds into the City's general fund and bypassed the Act's provisions, Appellant Tourism Expenditure Review Committee (TERC) invoked its authority under section 6-4-35(B) and certified those expenditures as "noncomplian[t] to the State Treasurer." The Administrative Law Court (ALC) reversed TERC's noncompliance certification. Upon review of the matter, the Supreme Court concluded the ALC's acceptance of the City's characterization of the funds as "general funds" was error, because the City's internal documents unmistakably revealed that it "decided to sweep accommodations tax funds to the General Fund to cover tourism related public services." View "City of Myrtle Beach v. Tourism Expenditure Review Committee" on Justia Law

The County appealed the district court's order preliminarily enjoining it from foreclosing upon certain real property owned by the Cayuga Nation in order to recover uncollected ad valorem property taxes. The court affirmed the district court's injunction where the court declined, as has the Supreme Court, to read a "commercial activity" exception into the doctrine of tribal sovereign immunity from suit. In the absence of a waiver of immunity by the tribe, unless Congress has authorized the suit, precedents demand that the court affirm the district court's injunction of the County's foreclosure proceedings against the Cayuga Nation's property. Accordingly, the court affirmed the judgment of the district court. View "Cayuga Indian Nation of New York v. Seneca County, New York" on Justia Law

Two retail stores offered customers the opportunity to finance their purchases through private label credit cards. The cards were issued by banks that paid to the retailer at the time of the sale the full amount of the purchase, including sales tax, for each transaction made using the credit cards. The retailer then remitted the applicable sales tax to the State. If a customer failed to pay his or her credit card debt, the issuing bank took any tax write off. The retailers in this case separately applied for refunds of the sales tax that the banks had written off. The Director of Revenue denied both requests. The Administrative Hearing Commission reversed and allowed the retailers to claim their respective sales tax refunds. The Supreme Court reversed, holding that because, at the time of the initial transaction, the banks fully reimbursed the retailers for both the amount of the sales tax and the amount of the purchase on which that tax was based, the retailers were not entitled under statute to seek a refund of taxes the banks subsequently wrote off. View "Circuit City Stores, Inc. v. Dir. of Revenue" on Justia Law

The plaintiffs in this case, Jimmie Jackson, E. Simms Hardin, and KSD Properties, LLC, untimely paid ad valorem taxes to the City of New Orleans on their respective properties, and were assessed penalties, fees, and interest thereon for various tax years between 2003 and 2009. Plaintiffs filed a class action suit against the City, seeking a declaration that Ordinance Number 22207, and the collection of any penalties, fees, and interest collected thereunder, violated the statutes and constitution of Louisiana, and that the application of Ordinance Number 22207 to this case violated U.S. Constitutional guarantees of due process and equal protection. The district court issued rulings on the City's exceptions and on the plaintiffs' motion for summary judgment, which: granted the City's exception of no cause of action as to Jackson and Hardin, dismissing these plaintiffs (for failing to comply with the city ordinance requiring payment under protest); denied the City's objections of no cause of action and prescription as to plaintiff KSD; and granted KSD's motion for summary judgment (upon a finding of unconstitutionality as to Ordinance Number 22207). Both plaintiffs and the City filed motions for new trial. The City's motion was granted in part, to dismiss KSD's claims as to its 2008 tax penalty and fees for failure to state a cause of action and to amend the judgment accordingly (for KSD's failure to timely assert a protest as to the penalty and fees assessed for that year's delinquent tax payment); the motions for new trial were denied in all other respects. On appeal to the Supreme Court, the City argued the district court erred in granting summary judgment by declaring Ordinance Number 22207 unconstitutional. After review of the district court record and the applicable law, the Supreme Court affirmed the district court's decision and remanded the case for further proceedings.View "Jackson v. City of New Orleans" on Justia Law

The Town of Monkton brought a consolidated appeal from decisions of the state appraiser in three property tax cases challenging the Town's 2011 assessment. At issue was the manner in which the Town assessed land that had the potential for subdivision and further development. The state appraiser ruled that the Town had treated taxpayers inequitably by adding additional "home-site values" to undeveloped parcels that are subject to a permitted and recorded subdivision plan. The Town did not add this additional element of appraised value to other undeveloped parcels that may be eligible for subdivision without a permit due to their history or configuration. The Town argued it acted fairly in applying different valuation methods to properties with different characteristics. From the Town’s perspective, the appraised value of a parcel of land with a permit for more than one home should reflect additional development value, and land that could be subdivided but is not the subject of a permit is not similarly situated for purposes of tax appraisal. After review, the Supreme Court agreed with the Town's arguments and reversed the state appraiser. View "Lathrop v. Town of Monkton" on Justia Law