Justia Tax Law Opinion Summaries

The Supreme Court granted Petitioner's petition for review of the decision of the court of appeals affirming the decision of the trial court granting the City of Austin's plea to the jurisdiction and dismissing this case brought by Plaintiff alleging that the City provided taxpayer money to abortion-assistance organizations in violation of Texas law, holding that the case must be remanded.The trial court granted the City's plea to the jurisdiction without explaining its reasons and dismissed with prejudice Petitioner's claim that the City's budget violated Texas law and dismissed with prejudice Petitioner's claim that the City's 2019 budget violated the Gift Clause. The court of appeals affirmed, relying on the Supreme Court's holding in Roe to conclude that Petitioner's claim could not proceed. Petitioner petitioned for review. After briefing was complete, the United States Supreme Court issued its opinion in Dobbs v. Jackson Women's Health Organization, 142 S. Ct. 2228 (2022). The Supreme Court granted Petitioner's petition for review without regard to the merits and vacated the judgments below, holding that, because Dobbs overruled Roe, remand was required for consideration of the effect this change in the law and any intervening factual developments on Petitioner's claims. View "Zimmerman v. City of Austin" on Justia Law

The Supreme Court affirmed the judgment of the circuit court holding that International Paper Co. had established, by a preponderance of the evidence, that the County of Isle of Wight's tax scheme violated the requirement of the Virginia Constitution that taxation be uniform, holding that the circuit court did not err.In 2017, the County Board of Supervisors adopted a resolution authorizing an "economic development retention grant program" that would benefit certain taxpayers. International Paper filed a refund action alleging that the County's tax and retention grant scheme violated the uniformity requirement of the Virginia Constitution. The circuit court granted judgment in favor of International Paper, concluding that the County's tax scheme created an unconstitutional non-uniform tax. View "County of Isle of Wight v. International Paper Co." on Justia Law

The Supreme Judicial Court affirmed the decision of the appellate tax board permitting an abatement requested by a nondomiciliary seller, holding that 830 Code Mass. Regs. 64H.1.7 did not by its plain terms permit the Commissioner of Revenue to apply the Court's new rule, which replaced a bright-line rule, to the tax period at issue in this case.The bright-line rule was adhered to by the United States Supreme Court as it pertained to the constitutional limits of a State's authority to impose an obligation on a nondomiciliary seller to collect and remit a sales or use tax when a consumer purchases goods or services for use or consumption in the state. In 2018, the Court concluded that the rule's requirement that the nondomiciliary seller have a "physical presence" was no longer required. Here, the Commissioner argued that the pre-2018 regulation at issue in this case incorporated the Court's new rule retroactively. The Supreme Court disagreed and affirmed the appellate tax board's decision, holding (1) the regulation incorporated the bright-line rule set forth in pre-2018 jurisprudence and did not permit the Commissioner to apply the new rule to this case; and (2) the existence of what the Commissioner described as "electrons" in the Commonwealth did not satisfy the applicable physical presence test. View "U.S. Auto Parts Network, Inc. v. Commissioner of Revenue" on Justia Law

Plaintiffs Gulf Shores City Board of Education and Kelly Walker appealed a circuit court's dismissal of their complaint seeking certain declaratory and mandamus relief against the Superintendent of the Alabama State Board of Education; the Revenue Commissioner of Baldwin County; certain Baldwin County Commissioners; the Baldwin County Board of Education; a Baldwin County Circuit Judge; the Baldwin County District Attorney; and Coastal Alabama Community College ("CACC"). This case involved the interplay among § 16-13-31(b), § 40-12-4, and § 45-2-244.077, Ala. Code 1975, a part of § 45-2-244.071 et seq., Ala. Code 1975 ("the local-tax act"), which authorized the Baldwin County Commission to levy a 1% sales tax in Baldwin County paralleling the state sales tax found in § 40-23-1 through § 40-23-4, Ala. Code 1975. In 2017, the Gulf Shores Board was created to oversee an independent city school district pursuant to a resolution adopted by the City of Gulf Shores. The Gulf Shores Board and the Baldwin County Board entered into negotiations that resulted in a separation agreement pursuant to which the Gulf Shores Board obtained certain assets and assumed certain liabilities of the Baldwin County Board. Additionally, the separation agreement provided that taxes collected specifically to fund public schools in Baldwin County would be apportioned according to the apportionment provisions in § 16-13-31(b) and § 40-12-4(b) so as to include the Gulf Shores Board as a recipient. However, the separation agreement did not address apportionment of the proceeds of the local tax. The president of the Gulf Shores Board stated in his affidavit that the "parties specifically agreed to disagree [as to] whether the [local] tax was required to be apportioned." The Gulf Shores Board demanded but did not receive a share of the local-tax proceeds. Plaintiffs filed their initial complaint against the superintendent, the revenue commissioner, and the county commissioners, seeking mandamus relief requiring that the local-tax proceeds be apportioned to include the Gulf Shores Board as a recipient and/or a judgment declaring that the local-tax act was unconstitutional. The Alabama Supreme Court concluded the Gulf Shores Board lacked standing to bring its constitutional claim, and Walker could not show that the local tax was a levy of special taxes on her as a citizen of a definite locality expended in some other locality. Accordingly, dismissal was affirmed. View "Gulf Shores City Board of Education, et al. v. Mackey, et al." on Justia Law

The Court of Appeals affirmed the reversal of the decision of the Comptroller of Maryland denying a pass-through entity's claim for a refund of estimated tax payments it made during the 2012 tax year when the pass-through entity determined that it had no tax liability, holding that there was no error.Under Maryland laws, FC-GEN Operations Investments, LLC (FC-GEN) met the definition of "pass-through entity." Based on its projected 2012 income, FC-GEN made quarterly estimated tax payments. FC-GEN sought a refund of its estimated payments after determining that it had a taxable loss attributable to Maryland for the 2012 tax year. The Comptroller denied the refund request, concluding that the statute of limitations had expired. The Tax Court reversed. The appellate court affirmed. The Court of Appeals granted certiorari and held (1) in connection with judicial review of a Tax Court decision in which a party alleges an error of law, where the reviewing court determines that it is appropriate to give a degree of deference to an agency’s interpretation of tax laws, the agency to whom deference is owed is the Comptroller, as the agency responsible for administering the tax laws and promulgating regulations for that purpose, not the Tax Court; and (2) FC-GEN was a claimant that was entitled to a refund. View "Comptroller v. FC-GEN Operations Investments LLC" on Justia Law

Division purchased two office buildings from the city that included a short-term leaseback at below-market rent. Division alleged that the assessor failed to take the leaseback into account when valuing the buildings for property tax purposes and claims this violated Revenue and Taxation Code section 402.1. After failing to persuade the City’s Assessment Appeals Board, Division filed suit. The trial court dismissed, holding that the lease did not constitute an “enforceable restriction” under section 402.1.The court of appeal affirmed, noting that Division paid $53 million, a price discounted to reflect the leaseback. While a purchase price may play a significant role in the reassessment of property upon its sale, that price is only the beginning of the inquiry; one factor that may skew the purchase price and make it an unreliable indicator of fair market value is an agreement containing restrictions on the buyer’s use of the property. Such restrictions do not bind the assessor. Government-imposed land use restrictions must be taken into account when a property is valued for assessment purposes but under section 402.1 “enforceable restrictions” are land use restrictions imposed by the government under its police power, not restrictions agreed to by a public entity selling property to a private buyer in an ordinary arm’s-length transaction. View "290 Division (EAT), LLC v. City and County of San Francisco" on Justia Law

The Supreme Court reversed the decision of the business court concluding that the sales of printed materials produced by Petitioner, which was based in Wisconsin, out of state and shipped to its North Carolina customers and their designees lacked a sufficient nexus to North Carolina for the imposition of state sales tax, holding that the business court erred.At issue on appeal was whether the Supreme Court of the United States' decision in McLeod v. J.E. Dilworth Co., 322 U.S. 327 (1944), remained controlling precedent or if subsequent Supreme Court decisions provided an alternative method for determining the constitutionality of North Carolina's sales tax regime. The Supreme Court held (1) the formalism doctrine established in Dilworth did not survive the decisions of the United States Supreme Court in Complete Auto Transit Inc. v. Brady, 430 U.S. 274 (1977) and South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018) so as to render the sales tax regime of North Carolina in violation of the Commerce Clause and Due Process Clause; and (2) North Carolina's imposition of sales tax on the transactions at issue was constitutional under Complete Auto. View "Quad Graphics, Inc. v. N.C. Dep't of Revenue" on Justia Law

Taxpayers, who did not dispute that they had in fact been paid substantial wages in tax years 2016-18, contended at Tax Court that they owed no Oregon income tax for those years. The Tax Court concluded their arguments in support of that contention were frivolous and therefore warranted a penalty under ORS 305.437. Accordingly, the court ordered taxpayers to pay the Department of Revenue (department) a penalty of$4,000. Taxpayers appealed, challenging only the penalty award. Finding no reversible error, the Oregon Supreme Court affirmed the Tax Court’s judgment. View "Jimenez v. Dept. of Rev." on Justia Law

The Supreme Court reversed the opinion of the court of appeals affirming the decision of the circuit court concluding that with Century Aluminum of Kentucky, GP's interpretation of the statutes which categorize tangible personal property as either tax-exempt "supplies" or taxable "repair, replacement, or spare parts" was incorrect, holding that that the Kentucky Claims Commission's final order was supported by substantial evidence.In the proceedings below, the Commission agreed with Century's interpretation of the relevant statutes and rejected the interpretation of the Department of Revenue. The circuit court and court of appeals reversed, agreeing with the Department's interpretation. The Supreme Court reversed, holding (1) a tax-exempt "supply" is consumed within the manufacturing process and has a useful life of less than one year; (2) a taxable "repair, replacement, or spare part" does not necessarily have a known, limited useful life; and (3) the Commission's final order in this case was supported by substantial evidence in the record. View "Century Aluminum of Ky., GP v. Department of Revenue" on Justia Law

The Supreme Court affirmed the judgment of the district court upholding the Tax Commissioner's conclusion that Taxpayers failed to prove that they abandoned their domicile in Florida, holding that competent evidence supported the district court's factual findings and that its decision conformed to the law.The audit period in this case covered the calendar-year tax years from 2010 to 2014. Taxpayers, who filed income tax returns as married filing jointly, filed Nebraska income tax returns claiming status as nonresidents of Nebraska. The Department sent Taxpayers notices of proposed deficiency determinations for each tax year of the audit period, and the Commissioner denied Taxpayers' petitions for redetermination. The district court affirmed, determining that Taxpayers were residents of Nebraska during the audit period because they were domiciled in Nebraska in each of those years. The Supreme Court affirmed, holding that the district court's decision conformed to the law, was supported by competent evidence, and was neither arbitrary, capricious, nor unreasonable. View "Acklie v. Neb. Department of Revenue" on Justia Law