Justia Tax Law Opinion Summaries

The Supreme Judicial Court affirmed the order entered in the business and consumer docket granting summary judgment approving the method of the State Tax Assessor for calculating Express Scripts Inc.'s Maine tax liability and denied the Assessor's cross appeal, holding that the trial court did not err.Specifically, the Supreme Judicial Court held (1) the trial court applied an improper standard in evaluating whether Express Scripts established its primary facie case for counts one and two of the petition for review; (2) under the proper legal standard, summary judgment was still appropriate; and (3) the trial court did not err in allowing Express Scripts to file certain information under seal and a later order denying the Assessor's motion to unseal. View "Express Scripts Inc. v. State Tax Assessor" on Justia Law

The Supreme Court reversed the decision of the circuit court granting summary judgment for Lakota Lakes and denying Emily Bialota's cross-motion for summary judgment in this quiet title action, holding that Bialota accomplished valid service on the Minnesota Secretary of State.Bialota brought an action to quiet title in Pennington County, alleging that she had fee simple ownership in real property previously owned by Lakota Lakes but later sold at a tax sale. In its summary judgment motion, Lakota Lakes claimed that it had not been validly served with the notice of intent to take tax deed, rendering the tax deed void. In her cross-motion for summary judgment, Bialota argued that service upon Lakota Lakes was proper and that Pennington County had correctly issued a tax deed based upon her affidavit of completed service. The Supreme Court reversed, holding (1) South Dakota law controlled this Court's determination whether Bialota personally served the Secretary as Lakota Lakes' registered agent; (2) Bialota accomplished valid service on the Secretary; and (3) Bialota was entitled to the tax deed to the property. View "Bialota v. Lakota Lakes, LLC" on Justia Law

Plaintiff’s CPA failed to file Plaintiff’s tax returns for three consecutive years: 2014 through 2016. In 2019, the IRS assessed Plaintiff with over seventy thousand dollars in penalties for violating Section 6651(a) of the Internal Revenue Code and barred him from applying his 2014 overpayment to taxes owed for 2015 and 2016. Plaintiff sued, arguing that his failure to file was due to reasonable cause. He also sought a refund of the penalties. The district court granted summary judgment for the government, concluding that United States v. Boyle foreclosed Plaintiff’s claims. Plaintiff appealed.   The Eleventh Circuit affirmed. The court explained that if Plaintiff’s CPA had failed to file paper tax returns, there would be no question that Boyle would have precluded a reasonable cause defense and a refund. However, the court explained that no circuit court has yet applied Boyle to e-filed tax returns. The court decided that Boyle’s bright line rule applies to e-filed returns. Thus, the court concluded that Plaintiff’s reliance on his CPA does not constitute “reasonable cause” under Section 6651(a)(1). View "Wayne Lee v. USA" on Justia Law

Proposition 39 established a program to promote the creation of clean energy jobs. Under Proposition 39, a multistate business must apportion its tax based on a single factor—in-state sales. The proposition further provided for cable companies spending $250 million or more in California on certain expenditures to exclude half of their in-state sales when apportioning, thus lowering their tax burden under the single factor tax regime. Paintiff One Technologies, LLC, a Texas-based provider of credit score and credit reporting services, paid tax to California calculated under the single-factor method. Plaintiff then filed a complaint for refund against Defendant Franchise Tax Board (the Board). Plaintiff alleged Proposition 39 was invalid under the single-subject rule for ballot initiatives. The trial court disagreed and sustained the Board’s demurrer.   The Second Appellate District affirmed. The court held that Proposition 39 did not violate the single-subject rule. The purpose of the proposition was to fund a clean energy job creation program by raising taxes on some multistate businesses. The provisions of the proposition were both reasonably germane and functionally related to that purpose because those provisions established a funding mechanism and the means of directing that funding to clean energy job creation. The special rules for cable companies reflect a determination by the proposition’s drafters that some businesses should bear the funding burden more than others, but that is still within the scope of the proposition’s purpose. View "One Technologies, LLC v. Franchise Tax Bd." on Justia Law

Petitioner FlightSafety International, Inc. appeals from the judgment entered after the trial court denied its two consolidated petitions for writs of mandate. The trial court found that FlightSafety was not entitled to mandamus relief because it had an adequate remedy at law, which it had bypassed. FlightSafety contended in the trial court that it was entitled to a decision by the Los Angeles County Assessment Appeals Board (AAB) on its assessment appeal applications within the two-year period specified in Revenue and Taxation Code section 1604, subdivision (c). FlightSafety argued the extensions had expired as a matter of law two years from the date of filing. It argued it therefore had not received timely hearings on its applications. FlightSafety asked the trial court to order the AAB to schedule hearings forthwith and, in the meantime, enter its own opinion of the value of its property on the tax assessment rolls. The trial court found writ relief was not available. Plaintiff contends the trial court erroneously found the extension agreements valid and mandamus relief unavailable.   The Second Appellate District affirmed. The court explained that none of the four cases relied upon by Petitioner considered whether the applicant had an adequate remedy for the AAB’s refusal to place the applicant’s opinion of value on the assessment rolls. Thus, none of the cases stand for the proposition that a tax refund action is an inadequate remedy in all cases seeking relief for an AAB’s action (or inaction) under section 1604. View "FlightSafety International v. L.A. County Assessment Appeals Bd." on Justia Law

The City of Austin, Texas, issued an ordinance (1) declaring that the shoreline properties are within the city’s full purpose jurisdiction; (2) repealing a 1986 ordinance that putatively declared the shoreline properties to be within the city’s limited purpose jurisdiction but promised not to tax those properties until the city made city services available to them; and (3) announcing that the shoreline properties are subject to taxation by the city, albeit without providing city services. The owners asserted claims under the due process, equal protection, takings and ex post facto clauses of the Constitution, together with state law claims, and sought various declarations, injunctions, and writs of mandamus. They alternatively sought just compensation for the taking of their properties’ jurisdictional status. The district court dismissed all claims without prejudice as barred by the Tax Injunction Act. 28 U.S.C. Section 1341 Plaintiffs appealed that judgment.   The Fifth Circuit affirmed in part, reversed in part, and remanded. The court explained that apart from two minor exceptions, Plaintiffs do not ask the district court to “enjoin, suspend or restrain the assessment, levy or collection of any tax under State law.” Their claims thus fall outside the TIA. The court explained that Plaintiffs here seek the invalidation of the 2019 ordinance and a declaration that their properties are within the city’s extraterritorial or limited purpose jurisdiction. Although the ordinance authorized the taxation of Plaintiffs’ properties, the county tax assessor had to add their properties to the Travis County Appraisal District’s rolls, appraise the properties, determine their tax liabilities, levy the taxes, collect the taxes, and remit those payments to the city. View "Harward v. City of Austin" on Justia Law

The Supreme Court affirmed the judgment of the trial court denying the Indiana Trial Rule 60(B)(6) motion filed by James and Phyllis Crowe seeking relief from the judgment of the trial court granting Savvy IN, LLC's petition to issue tax deeds for certain properties, holding that Savvy IN's certified and first-class mailed notice letters notifying the Crowes that Savvy IN purchased their properties at a tax sale satisfied the minimum requirements under the Fourteenth Amendment's Due Process Clause and Indiana law.In 2019, the Crowes received notice that their properties were sold in a tax sale due to their failure to pay 2018 property taxes. Savvy IN purchased the properties at a tax sale. When the Crowes passed the deadline to redeem the properties Savvy IN petitioned the trial court to direct the county auditor to issue tax deeds for the properties. The trial court granted the motion. The Crowes moved for relief from the judgment under Rule 60(B)(6) on the grounds that they did not receive notice letters, thus rendering the judgment and tax deeds void. The trial court denied the motion. The Supreme Court affirmed, holding that Savvy IN was entitled to the tax deeds issued by the trial court because the mailed notices satisfied the constitutional and statutory requirements. View "Crowe v. Savvy IN, LLC" on Justia Law

At issue in this appeal was whether the Oregon Department of Revenue erred in declining to reduce the assessed value of taxpayer’s property for tax years 2018-2019 and 2019-2020. After persuading the Department that the valuation methodology it used to assess the property in 2020-2021 was flawed, the taxpayer asked the Department to use the corrected methodology to re-assess the two previous tax years. The Department denied the request, finding the statute the taxpayer used as grounds, ORS 306.115, did not authorize the Department to change its value opinion for the earlier tax years because another statute, ORS 308.624(4), expressly precluded the Department from making that change. The Oregon Tax Court agreed with the Department, and the taxpayer appealed, contending the Department and Tax Court misinterpreted the applicable statutes. The Oregon Supreme Court found no misinterpretation and affirmed. View "D. E. Shaw Renewable Investments, LLC v. Dept. of Rev." on Justia Law

Over the last five decades, California voters have adopted several initiatives limiting the authority of state and local governments to impose taxes without voter approval, including adding Article XIII C of the California Constitution, which requires local and regional governmental entities to secure voter approval for new or increased taxes and defines taxes broadly to include any charges imposed by those entities unless they fall into one of seven enumerated exceptions. The second exception covers charges for services or products that do not exceed reasonable costs. Boyd contends that the electricity rates charged by a regional governmental entity, 3CE, are invalid because they are taxes under Article XIII C that voters have not approved.The court of appeal affirmed the dismissal of the suit; 3CE’s rates are taxes under Article XIII C’s general definition of taxes, but they fall within the second exception because 3CE proved that its rates do not exceed its reasonable costs. View "Boyd v. Central Coast Community Energy" on Justia Law

The Supreme Court reversed the judgment of the decision of the court of appeals reversing the judgment of the superior court dismissing Appellant's lawsuit seeking a declaratory judgment and damages, holding that the superior court erred in dismissing the suit.Appellant brought suit against the Town of Richmond challenging tax assessments imposed on her. The superior court dismissed her complaint on the ground that there was no underlying cause of action to support Appellant's request for a declaratory judgment and that she could not collect damages because she failed to exhaust her administrative remedies. The Supreme Court vacated the judgment below, holding (1) a taxpayer who has been taxed on property that the taxpayer claims is not taxable because the person does not own that property within the meaning of a municipality's statutory authority to tax may challenge the tax on that property either through the statutory abatement process or a declaratory judgment action; and (2) both counts of Appellant's complaint stated a claim. View "Oakes v. Town of Richmond" on Justia Law