Justia Tax Law Opinion Summaries

Equifax, Inc. appealed the State Tax Commission's income tax assessment. Equifax contended its Mississippi taxable income was zero; after an audit, the Commission found that the standard apportionment method prescribed by regulation did not fairly reflect Equifax's business in the state. The Commission used an alternative method and then issued assessments against Equifax. After exhausting administrative remedies, Equifax petitioned the Chancery Court for relief. The Court affirmed the Commission's decision, but the Court of Appeals reversed. Upon review, the Supreme Court concluded that the Chancery Court did not err, and that the alternative apportionment method was not a violation of the State Administrative Procedures Act. Accordingly, the Court reversed the Court of Appeals and reinstated the Chancery Court's judgment. View "Equifax, Inc. v. Mississippi Department of Revenue" on Justia Law

The Illinois Tax Delinquency Amnesty Act established a period, October 1, 2003 until November 17, 2003, during which "all taxes due" from 1983 through the first half of 2002 could be paid without interest or penalties. Tax liabilities not paid within the amnesty period would incur interest at 200%. Illinois Department of Revenue regulations provided that a taxpayer participating in the program must pay its entire tax liability regardless of whether that liability was known to the Department or the taxpayer. Those who were unsure of their tax liability were to pay a good-faith estimate during the amnesty period. An audit of the plaintiffs’ federal tax returns for 1998 and 1999 began in 2000 and ended in 2004, after the amnesty period expired and caused changes in their Illinois tax liability. The plaintiffs paid the taxes, along with single interest, but the Department assessed an interest penalty of 200%, (more than $2 million), which they paid under protest before filing suit. The circuit and appellate courts ruled in favor of plaintiffs. The Illinois Supreme Court reversed in favor of the Department. The phrase “all taxes due” means taxes due when initial returns are required to be filed, rather than taxes known to be due during the amnesty period. Taxpayers who were under IRS audit and were, therefore, uncertain about their ultimate Illinois tax liability could participate in the amnesty program by making a good-faith estimate pursuant to the regulations and making payment based on it. There was no constitutional violation because those in the plaintiffs’ position had an opportunity to avoid 200% interest by making a good-faith estimate of tax liability and paying it during the amnesty period, with the possibility of a refund. View "Metro. Life Ins. Co. v. Hamer" on Justia Law

Appellants John Sherman and Christopher D. Eichler appealed a trial court’s judgment confirming and validating a bond issuance by the City of Atlanta. At the bond validation hearing, the City successfully disputed Appellants’ standing to become parties and raise objections in this case, because no competent evidence was admitted to show that either Appellant was a Georgia citizen and Atlanta resident, which were the prerequisites to becoming a party under the Revenue Bond Law. Appellants appealed, but the Supreme Court affirmed. View "Sherman v. City of Atlanta" on Justia Law

Appellants brought quiet title actions challenging tax liens filed by the IRS against certain commercial and residential properties. Appellants held legal title to these properties. The liens arose from assessments against taxpayers based on the IRS's claim that appellants held the relevant properties as nominees of taxpayers on the assessment dates. On appeal, appellants argued that California did not recognize nominee ownership. The court held, however, that California law did recognize a nominee theory of property ownership; the district court did not err in concluding that appellants held title to the McCall and Fourth properties as nominees of taxpayers; and the district court rejected appellants' joinder claim under Federal Rule of Civil Procedure 19(a) where appellants have not established that the absent entities at issue were necessary parties under Rule 19(a) and the district court properly resolved appellants' ownership interests in the McCall and Fourth properties in their absence. Accordingly, the court affirmed the judgment. View "Fourth Investment LP v. United States" on Justia Law

The Director of Revenue determined that Jonathan Eilian underpaid his 2006 Missouri taxes because he used his federal "net operating loss" (NOL) to offset income that was taxable under Missouri law but not taxable under federal law. Eilian brought a complaint before the Administrative Hearing Commission challenging the Director's decision. The Commission ruled in favor of Eilian. The Supreme Court reversed, holding that Brown Group Inc. v. Administrative Hearing Commission was dispositive of the legal issues in this appeal and precluded Eilian from using his NOL to offset all of his Missouri-taxable income. Remanded to the Commission to recalculate Eilian's Missouri tax liability for 2006. View "Eilian v. Dir. of Revenue" on Justia Law

The issue before the Supreme Court in this case centered on whether federal law preempted state law from taxing medical equipment sold to individuals covered by the Federal Employees Health Benefits Plan or its participating insurance carriers. The Court concluded that the state tax on Mobility Medical Inc.'s gross sales was not a tax on the Plan or any other health-benefits plan. View "Mobility Medical, Inc. v. Mississippi Dept. of Revenue" on Justia Law

Respondent Town of Danville appealed a Superior Court order abating "land use change tax" (LUCT) assessments issued to petitioners Maplevale Builders, LLC, Hoyt Real Estate Trust, and John H. and Maryann Manning, on the basis that the LUCT bills were untimely under RSA 79-A:7 (Supp. 2006) (amended 2009, 2010, 2012). Upon review, the Supreme Court concluded that the superior court erred in ruling that all of the lots of the subdivision in question changed in use in 2009, when the Planning Board granted final subdivision approval. Because the trial court did not follow the caselaw in its consideration of when each lot changed in use, the Supreme Court vacated its abatement order. The parties did not ask the Court to determine on appeal when each lot changed in use or whether the exception in RSA 79-A:7, V(a) applied. Thus, the Court remanded for a redetermination of when each lot changed in use, and whether in light of the change in use date, the LUCT bills were timely. The Court concluded that the amended version of RSA 79-A:7, II(c) applied to any notice or discovery of change in use occurring on or after April 1, 2009. View "Maplevale Builders, LLC v. Town of Danville" on Justia Law

In 2010, Plaintiff was negotiating the sale of three limited liability companies of which he was the sole shareholder. The companies were S Corporations. Plaintiff retained an Accounting Firm to advise him on his tax liability from the contemplated sale. Altaview Concrete, one of the companies, was named as the client. Jeffrey Bickel, a partner at the Accounting Firm, advised Plaintiff that he could restructure the deal to reduce his tax liability to $663,000. The buyer agreed to the restructuring proposals, and the sale closed. Later Bickel and the Accounting Firm (collectively, Defendants) discovered they had greatly underestimated Plaintiff's tax liability. Plaintiff filed a professional negligence claim in district court. The district court granted Defendants' motion for summary judgment, finding that Plaintiff's claim failed to satisfy the writing requirement of Utah Code 58-26-602, which provides that accountants are not liable to third parties unless the accountant identified in writing to the client that the professional services were intended to be relief upon by the third party. The Supreme Court reversed, holding that Defendants were liable to Plaintiff as a third party under section 602 because Defendants identified in writing that the professional services were intended to be relied upon by Plaintiff. View "Reynolds v. Bickel" on Justia Law

The Empire Zones Program Act offered state tax incentives designed to enhance business development in the state. In 2009, the program was amended to introduce two new criteria businesses must meet to retain their certificates for the program. Plaintiffs were five businesses which were certified under the program prior to 2008. In 2009, Plaintiffs were decertified from the program for failing to meet the new criteria. Supreme Court granted summary judgment for the James Square plaintiffs, concluding that the state defendants acted without legal authority when they applied the new criteria for the program retroactively. The legislature subsequently clarified its intention, stating that the 2009 amendments to the program were to be applied retroactively to January 1, 2008. Supreme Court adhered to its prior determination, declaring that the legislature's clarification as applied was unconstitutional. The Appellate Division affirmed. Regarding the additional plaintiffs, the Appellate Division modified Supreme Court's holding to the extent of granting Plaintiff's petitions seeking a declaration that the 2009 amendments could not be applied retroactively to January 1, 2008. The State appealed. The Court of Appeals affirmed the Appellate Division's determinations in all five cases that the 2009 amendments should not be applied retroactively. View "James Square Assocs. LP v. Mullen" on Justia Law

The issue on appeal before the Supreme Court in this case centered on whether an out-of-state internet retailer, Barnesandnoble.com LLC (bn.com), which has no physical presence in New Mexico other than through stores owned by a sister corporation, Barnes & Noble Booksellers, Inc., is subject to New Mexico gross receipts tax on its sales to New Mexico residents without offending the federal Commerce Clause. The answer to this question depended on whether Booksellers engaged in activities in New Mexico on behalf of bn.com that were significantly associated with bn.com's ability to establish and maintain a market for its sales in New Mexico, thus creating a substantial nexus between bn.com and New Mexico. Upon review, the Supreme Court concluded that Booksellers did engage in such activities, which included: (1) Booksellers' promotion of bn.com through sales of gift cards redeemable at bn.com and bearing bn.com's name; (2) Booksellers' policy of sharing customers' email addresses with bn.com; (3) Booksellers' implicit endorsement of bn.com through the companies' shared loyalty program and Booksellers' return policy; and (4) Booksellers' in-state use of Barnes & Noble logos and trademarks, which bn.com also used. Therefore, the Court held that Booksellers' in-state activities were sufficient to create a substantial nexus between bn.com and New Mexico, so that the state could tax bn.com's sales to customers in New Mexico without offending the federal Commerce Clause. View "N.M. Taxation & Revenue Dep't. v. Barnesandnoble.com, LLC" on Justia Law