Justia Tax Law Opinion Summaries

Robert Mesteller brought suit to challenge Gwinnett County and its Board of Commissioners' (County) Solid Waste Ordinance. He appealed a superior court's grant of summary judgment in favor of the County. Relying upon the Home Rule provision of the Georgia Constitution (among others), the County adopted the Solid Waste Collection and Disposal Ordinance of 2010. Under the Ordinance, the County was divided into five zones, each to be serviced by a private waste management company. The County collected fees for the waste collection services through annual tax assessment notices, which it then remits to the five service providers, minus the service fee. Mesteller received a property tax bill that showed a fee for solid waste collection services. Acting pro se, he sued the County and the members of its Board of Commissioners, individually and as members of the Board, alleging the assessment and collection of the fee violated the Georgia Constitution. After notice and a hearing, the superior court granted the County's motion for summary judgment. Mesteller contended on appeal that the County was without authority to use the annual property tax bill to assess or collect fees for solid waste services because by contracting with private waste management companies to collect solid waste, the County was not, in fact, "provid[ing] solid waste collection services" within the meaning of OCGA 12-8-39.3 (a), and therefore not authorized to place the collection fee on the tax bill of a property owner or to enforce the collection of the fee as set forth in the statute. The Supreme Court concluded that Mestellar's argument "reveal[ed] a misunderstanding of the precedents of [the] Court." As such, the Court affirmed the superior court's grant of summary judgment in favor of the County. View "Mestellar v. Gwinnett County" on Justia Law

To facilitate the transition to a competitive market for the supply of electricity, the Legislature provided that consumers would receive certain credits over the period of a year to mitigate a large projected increase in Baltimore Gas & Electric Company's (BGE) rates for the supply of electricity. The overall scheme involving credits, charges, and bond financing was known as the rate stabilization plan. Following passage of the rate stabilization law, BGE took the position that the legislation had the effect of deferring part of its franchise tax liability during the period that credits were applied to customers' bills. The Department of Assessments rejected BGE's position. BGE filed a refund claim, which was rejected. The tax court upheld the Department's denial. The circuit court concluded that the deferral credit affected BGE's distribution revenues for purposes of computing its franchise tax liability, that the tax court decision would subject BGE to double taxation, and that BGE was entitled to the claimed refund. The court of special appeals affirmed. The Court of Appeals reversed, holding that, in establishing the rate stabilization plan, the legislature neither intentionally nor inadvertently provided for the credits and charges to affect BGE's franchise tax liability. Remanded. View "Dep't of Assessments v. Baltimore Gas & Elec. Co." on Justia Law

On their 2007 Minnesota individual income tax return, John and Deborah Billion claimed a $55,904 deduction for carryover losses incurred in 2005 by a Minnesota subchapter S corporation in which John Billion was a shareholder. The Minnesota Commissioner of Revenue disallowed the Billions' deduction, resulting in an assessment of $3,736 in additional Minnesota income taxes for the 2007 tax year. The tax court upheld the assessment. The Supreme Court affirmed in part and reversed in part, holding (1) the Billions were entitled to a carryover net operating loss deduction of $7,834 on their 2007 individual income tax return; but (2) the tax court did not err in its judgment in all other respects. Remanded for recalculation of the Billions' Minnesota income tax liability for the 2007 tax year. View "Billion v. Comm'r of Revenue" on Justia Law

Roark Amusement & Vending owned and leased coin-operated amusement crane machines found in supermarkets, restaurants, and shopping malls. Roark sought a refund of the sales taxes it paid on the plush toys it purchased to stock its machines for a three-and-a-half year period, arguing that the toys were exempt under the Tax Code's sale-for-resale exemption. The Comptroller of Public Accounts disputed that the exemption applied. The trial court granted the Comptroller's motion for summary judgment and denied Roark's refund request. The court of appeals reversed, concluding that the toys were exempt, and remanded the case for a determination of the refund amount due Roark. The Supreme Court affirmed, holding the toys were "tangible personal property" acquired by Roark "fore the purpose of transferring" the toys "as an integral part of a taxable service", and therefore, Roark qualified for a sales-tax exemption on the toys that filled its crane machines. View "Combs v. Roark Amusement & Vending, LP" on Justia Law

The taxpayer in this case, a paper mill, requested a refund on taxes it paid on purchases of caustic soda, arguing that the chemical was used in the production of a product for resale and excluded from local and state taxation. An attorney for the tax collector denied the request, and gave no reason for the denial. The taxpayer made a second request for taxes inadvertently paid on caustic soda and sodium hydrosulfide, chemicals they argued, qualified for the tax exemption. The tax collector did not respond to the second request. The taxpayer then sent a third and fourth refund request, again for the purchase of raw materials. Again, the requests were denied with no grounds for the denial. The taxpayer then filed suit seeking the refunds it felt were due back from the tax collector. The district court found that the claims were untimely filed, and the court of appeal affirmed. The Supreme Court granted the taxpayer's writ application to clarify the proper procedure and time period for appeals when the tax collector has failed to act on a refund claim for overpayment of taxes after one year, and to determine whether the taxpayer was required to use a "payment under protest" procedure in this case in order to obtain a refund. After reviewing the record and the applicable law, the Court reversed the judgments of the lower courts dismissing the tax refund claims, and remanded the case to the district court for further proceedings. View "Tin, Inc. v. Washington Parish Sheriff's Office" on Justia Law

Wiest worked in Tyco’s accounting department for 31 years, until his termination in 2010. Beginning in 2007, Wiest refused to process reimbursement claims that he believed were unlawful or constituted “parties” at resorts. Wiest sued Tyco and its officers and directors under the whistleblower protection provisions in Section 806 of the Sarbanes-Oxley Act, 18 U.S.C. 1514A, and under Pennsylvania law. The district court dismissed the federal whistleblower claims and declined to exercise supplemental jurisdiction. The Third Circuit reversed in part, holding that the court erred in requiring that Wiest allege that his communications to his supervisors “definitively and specifically relate to” an existing violation of a particular anti-fraud law, as opposed to expressing a reasonable belief that corporate managers are taking actions that could run afoul of a particular anti-fraud law. View "Wiest v. Lynch" on Justia Law

Cocina Superior, LLC owned a restaurant in Birmingham that sold alcoholic beverages to the public. Cocina appealed two final assessments of the Jefferson County Department of Revenue. The assessments reflected that, for the years 2008-2010, Cocina owed money pursuant to the "Alabama Liquor Tax." The parties filed cross-motions for a summary judgment at the circuit court, agreeing that there were no disputed issues of fact and that the issue to be resolved was a question of law. Cocina argued that the applicable legislation called for the imposition of a tax on the gross receipts derived from the sale of "alcoholic beverages," but, it said, the Department's assessments were erroneously based upon the taxpayer's gross sales of mixed drinks that were composed of both alcoholic beverages and nonalcoholic mixing agents such as colas, sodas, and juices. Cocina asserted that its internal policy and procedure dictated that each mixed drink contain 1.25 ounces of alcohol, and, it maintained, the taxes were due only on the alcohol portion of the mixed drinks, exclusive of any nonalcoholic mixing agent. Cocina also argued that the Department's assessments denied it due process and equal protection of the law because its restaurant was a more upscale establishment with higher overhead expenses than many other facilities that sell alcoholic beverages and was therefore required to charge higher prices and, consequently, pay more taxes for the mixed drinks it sold. Upon review, the Supreme Court concluded that the circuit court correctly held that the plain meaning of "alcoholic beverage" was a beverage containing alcohol, and that the Department's assessments did not violate the restaurant's right to due process or equal protection of the law. View "Cocina Superior, LLC v. Jefferson County Dept. of Revenue " on Justia Law

The parties in this case were the City of Lumberton and four companies that ran promotional sweepstakes as part of their business plans. In 2010, the City amended its existing privilege license tax on businesses that utilized electronic machines to conduct sweepstakes. The prior tax for these companies was $12.50 per year. The new law made the minimum tax owed by these businesses $7,500. This change imposed a 59,900% minimum increase per business location. The trial court granted summary judgment in favor of the City, finding the new tax to be constitutional. Addressing the Just and Equitable Tax Clause of the North Carolina Constitution, the court of appeals affirmed, determining that the tax did not amount to a prohibition of the companies' businesses. The Supreme Court reversed, holding that the City's privilege license tax violated the Just and Equitable Tax Clause as a matter of law, as the present tax transgressed the boundaries of permissible taxation. View "IMT, Inc. v. City of Lumberton" on Justia Law

The primary question in this case was whether the Oregon Department of Revenue properly classified income resulting from the sale of Crystal Communication's assets as "business income." Crystal operated as a multistate business providing wireless cellular telecommunications services and, in the relevant tax years, sold its assets related to those services. It reported the gain from the asset sale as "nonbusiness income" and allocated that gain to Florida, its state of commercial domicile. On audit, the department reclassified the gain as apportionable "business income." Crystal challenged the reclassification, and the Tax Court granted summary judgment in favor of the department and entered judgment accordingly. Crystal appealed to this court. Finding no error in the classification, the Supreme Court affirmed. View "Crystal Communications, Inc. v. Dept. of Revenue" on Justia Law

CenturyTel operated as a multistate, unitary business that, until 2002, provided both wireless and wireline telecommunications services. In 2002, CenturyTel sold its assets related to its wireless services but continued to provide wireline services. As in "Crystal Communications, Inc. v. Dep't of Revenue," (___ P3d ___ (decided March 7, 2013), CenturyTel reported the gain from the sale of its wireless assets as "nonbusiness income" and allocated that gain to its state of commercial domicile. On audit, the Department of Revenue reclassified the gain as apportionable "business income." CenturyTel challenged the department's reclassification, and the Tax Court, relying on its decision in "Crystal," granted summary judgment in favor of the department. CenturyTel appealed. Consistent with its decision in "Crystal," the Supreme Court affirmed the Tax Court's decision. View "CenturyTel, Inc. v. Dept. of Revenue" on Justia Law