Justia Tax Law Opinion Summaries

Relator was at all times relevant to this case employed by the National Basketball Association as a referee. Relator did not file Minnesota income tax returns for the 2003 and 2004 tax years but subsequently filed a 2003 state tax return as a part-year Minnesota resident. The Commissioner of Revenue determined that Relator was a full-time, legal resident of Minnesota during the relevant tax years. Relator appealed, asserting that, in 2003, he established his domicile in Florida. The Commissioner again determined that Relator was a full-time Minnesota resident during the 2003 and 2004 tax years, and the tax court affirmed. The Supreme Court affirmed, holding that sufficient evidence supported the tax court's decision, and the court correctly concluded that Relator failed to carry his burden of overcoming the legal presumption that he remained domiciled in Minnesota during the 2003 and 2004 tax years. View "Mauer v. Comm'r of Revenue" on Justia Law

Vento co-founded a technology company, OSI. When OSI was sold, the Ventos, their daughters, and Vento-controlled entities realized $180 million in capital gains for the 2001 tax year. The Ventos previously lived in and still maintain homes in the U.S., but first visited the Virgin Islands in 2001 and bought a residence there. Residents of the Virgin Islands pay income taxes to the Virgin Islands Bureau of Internal Revenue (VIBIR) rather than the Internal Revenue Service (IRS). All of the Ventos filed 2001 income tax returns with the VIBIR. The United States claims that they should have filed those returns with the IRS and assessed deficiencies and penalties that totaled over $9 million more than those assessed by the VIBIR. The district court found that the Ventos were not bona fide residents of the Virgin Islands as of December 31, 2001. The Third Circuit reversed in part, concluding that the parents were bona fide residents of the Virgin Islands, but that the daughters, who were not dependents, were not. View "Vento v. Dir. of VI Bureau of Internal Revenue" on Justia Law

Plaintiff asked the district court for a declaratory judgment that the Montana Department of Revenue (DOR) used improper or illegal methods of assessing Plaintiff's Montana properties for property tax purposes in 2009 and 2010. The court granted summary judgment in favor of DOR on Plaintiff's claims, ruling that Plaintiff's substantive arguments could not be brought directly in a Montana district court without first appealing to the administrative tax appeals boards. The Supreme Court affirmed, holding (1) Plaintiff's challenges to the methods and procedures of assessment used by DOR to assess Plaintiff's property must be raised through the administrative tax appeal process; (2) Plaintiff's claim that DOR failed to equalize its valuation of Plaintiff's property is the type of challenge that must be pursued administratively; and (3) the district court did not err when it granted DOR summary judgment on Plaintiff's claim that the 2009 assessment of its property was illegal or improper because the assessment was made too late. View "CHS, Inc. v. State Dep't of Revenue" on Justia Law

Mortgage Electronic Registration Systems, as nominee for two lenders (collectively, Plaintiffs), held mortgages on Lot 456. For the property owner's failure to pay his water bill, the Pawtucket Water Supply Board (PWSB) auctioned the lot. PWSB issued a deed conveying the title in the property to Amy Realty. Amy Realty subsequently discovered that the property PWSB had intended to auction had been mistakenly listed as Lot 486 on the tax sale notices and deed. Amy Realty then obtained a corrective deed from the PWSB conveying title to Lot 456. Amy Realty subsequently filed a petition to foreclose on Plaintiffs' rights of redemption in Lot 456. Plaintiffs filed this action seeking to vacate the final decree of disclosure, alleging that the corrective deed changing the lot number from 486 to 456 was invalid and this infirmity rendered the foreclosure decree void. The superior court granted summary judgment for Plaintiffs. The Supreme Court affirmed, holding (1) the corrective deed obtained in this case was null and void because it was not recorded within sixty days of the tax sale; and (2) the final foreclosure decree may be vacated because the tax sale was invalid. View "Mortgage Elec. Registration Sys., Inc. v. DePina" on Justia Law

In 2006, the Iowa Department of Revenue assessed the value of Qwest Corporation's Iowa operating property. Qwest protested the assessment by challenging the general assembly's previous decision to tax the personal property of incumbent local exchange carriers (ILECs) but not competitive long distance telephone companies (CLDTCs) or wireless providers operating in Iowa. Specifically, Qwest argued that the tax scheme which taxed ILECs for the value of their personal property but not CLDTCs and wireless providers violated Qwest's equal protection rights. The State Board of Tax Review (Board) concluded that Qwest's constitutional rights were not violated. The district court reversed. The Supreme Court reversed the district court and upheld the Board's assessment on Qwest, holding that imposing a tax on Iowa-based personal property of ILECs but not on that of CLDTCs or wireless service providers did not violate the Iowa Constitution, as the differential tax treatment of these enterprises is rationally related to legitimate state interests in encouraging the development of new competitive telecommunications infrastructure while raising revenue from those providers that historically had a regulated monopoly and continue to enjoy some advantages of that monopoly. View "Qwest Corp. v. State Bd. of Tax Review" on Justia Law

The City of Nashua appealed a New Hampshire Board of Tax and Land Appeals (BTLA) ruling that taxpayer Marijane Kennedy was entitled to an "elderly exemption" under RSA 72:39-a (2012) for the 2011 tax year. Upon review of the applicable statute and the facts on record in this case, the Supreme Court found that the BTLA erred in its interpretation and accordingly reversed. View "Appeal of City of Nashua" on Justia Law

Appellees John Apland and others (collectively, Apland) and the Butte County Director of Equalization (Director) were involved in a dispute over the method Director used to calculate the value of Apland's rangeland property for tax purposes. In Apland I, the Supreme Court held that Director failed to comply with the Constitutional requirements of equality and uniformity and remanded with direction to Director to re-determine the property values after giving appropriate consideration and value to appurtenant and nontransferable water rights. On remand, the trial court entered a judgment in favor of Apland, concluding that Director failed to comply with the directives in Apland I. The Supreme Court reversed and remanded, holding that Director properly executed the directives of Apland I but that the record did not allow the Court to determine whether Director's method of valuation of Apland's property resulted in an equal and uniform assessment. View "Apland v. Bd. of Equalization for Butte County" on Justia Law

The Maryland Economic Development Corporation (MEDCO) is a public corporation established by the legislature to aid in promoting the economic development of the State. This litigation arose from MEDCO's involvement in the development of a technology development center. MEDCO sought a loan with Bank to finance the center. MEDCO executed a leasehold deed of trust with Bank requiring MEDCO to pay all recording costs and fees in connection with filing the loan documents. MEDCO subsequently presented the deed of trust for recording in Montgomery County, claiming an exemption from the recordation tax based on Md. Code Ann. Econ. Dev. 10-129(a), which granted MEDCO a tax exemption "from any requirement to pay taxes or assessments on its properties or activities." The county transfer office denied the exemption and required MEDCO to pay recordation tax. The county department of finance denied MEDCO's recordation tax refund claim. The tax court denied MEDCO's petition for appeal. The circuit court reversed, and the court of special appeals reversed the circuit court. The Court of Appeals reversed, holding that, based on the plain language of section 10-129(a), the legislature intended to exempt MEDCO from paying the recordation tax at issue in this case. View "Md. Econ. Dev. Corp. v. Montgomery County" on Justia Law

Kerman founded Kenmark. By 2000 its annual sales of eyeglass frames approached $35 million. Kerman’s personal net worth topped $12.5 million. Kerman was Kenmark’s sole owner until 2000, when Kerman sold 27 percent of his stock for $6.1 million to Kenmark’s employee stock ownership plan, realizing a taxable gain of $5.4 million. Kerman consulted his financial advisor and pursued a “Custom Adjustable Rate Debt Structure,” tax-saving strategy. A British company (not subject to U.S. tax law) borrowed foreign currency from a foreign bank; the U.S. taxpayer would receive some of the borrowed currency, would agree to be jointly liable for the entire loan, and would exchange his portion of the foreign currency for dollars. A currency exchange is taxable. The taxpayer would claim that the currency’s basis was the full loan amount, not the small amount of currency actually purchased. Because of the inflated basis, the taxpayer would claim a loss. The dollars would be deposited in the same foreign bank with the balance of the foreign currency and be used to pay off the loan. The IRS disallowed the deduction and imposed a penalty, 26 U.S.C. 6662(e), 6662(h). The tax court and Sixth Circuit affirmed, finding that the transaction lacked economic substance and Kerman lacked good faith to believe that it did. View "Kerman v. Comm'r of Internal Revenue" on Justia Law

The Texas legislature enacted two distinct "e911 fee" statutes to help fund the State's 911 emergency networks. The first statute, enacted in 1997, imposed on wireless subscribers a monthly emergency service fee, collected on the customer's bill. The second statute, enacted in 2010, imposed on prepaid wireless subscribers a flat fee collected by the retail seller when a consumer buys prepaid service. Before 2005, prepaid providers paid $2.3 million in e911 fees under the 1997 law. When the prepaid providers concluded that tax-preparation errors caused them erroneously to remit millions, they sought refunds of the amounts already paid. The Commission on State Emergency Communications (CSEC) initiated a case against the providers to determine the 1997 law's applicability to prepaid services. The CSEC adopted the ALJ's proposal for decision, which construed the 1997 law as imposing the e911 fee on prepaid wireless. After the legislature enacted the 2010 statute, the prepaid providers sought review. The trial court ordered refunds, holding that prepaid wireless was not covered by the 1997 law. The court of appeals reversed. The Supreme Court reversed, holding that the pre-2010 statute does not tax prepaid service. View "TracFone Wireless, Inc. v. Comm'n on State Emergency Commc'ns" on Justia Law