Justia Tax Law Opinion Summaries

Appellants Benedict J. Frederick, III, Matthew W. Wyskiel, III, and Stacie Teal-Locust challenged the Baltimore City Board of Elections' decision to reject a proposed charter amendment petition sponsored by Renew Baltimore. The proposed amendment sought to cap Baltimore City's real property tax rate, decreasing it incrementally over seven years. The current tax rate is $2.248 per $100 of assessed value, and the amendment aimed to reduce it to $1.20 per $100 by fiscal year 2032.The Election Director for the City Board approved the petition format but did not assess its legality. Renew Baltimore submitted the petition with 23,542 signatures, exceeding the required 10,000. However, the Election Director later deemed the amendment deficient, citing a conflict with section 6-302(a) of the Tax-Property Article, which grants the Mayor and City Council the authority to set property tax rates. The Circuit Court for Baltimore City upheld this decision, ruling that the amendment was not proper charter material and violated section 6-302(a).The Supreme Court of Maryland reviewed the case and affirmed the Circuit Court's decision. The Court held that the proposed charter amendment was impermissible because it violated section 6-302(a) of the Tax-Property Article by allowing citizens to establish the tax rate, which is a power vested in the Mayor and City Council. Additionally, the Court noted that section 49 of Article II of the Baltimore City Charter prohibits voters from initiating legislation related to property taxation. Therefore, the proposed amendment could not be presented on the November 2024 general election ballot. View "Frederick v. Balt. City Bd. of Elections" on Justia Law

The case involves a dispute over a renewable energy technologies income tax credit (RETITC) claimed by Blake and Blanca Goodman for solar energy systems installed on their home in 2012. The Goodmans claimed $17,250 in RETITC on their Hawai‘i income tax return using Form N-342. Despite having no excess tax credit (their tax credit did not exceed their tax liability), they were required to make an irrevocable election on how to treat the tax credit as either refundable or nonrefundable.The Department of Taxation audited the Goodmans' return and issued a Final Assessment reducing their claimed RETITC by 30%, resulting in an additional tax assessment of $5,416.50. The Goodmans appealed to the Board of Taxation Review, which ruled in their favor, allowing them to amend their elections. The Department then appealed to the Tax Appeal Court, which granted summary judgment for the Department, ruling that the Goodmans' election was irrevocable and that they owed additional taxes.The Intermediate Court of Appeals (ICA) vacated the Tax Appeal Court's decision, holding that the court exceeded its jurisdiction by increasing the Goodmans' tax liability beyond the Department's assessment. However, the ICA affirmed the Department's Final Assessment, finding that Form N-342 and its instructions were consistent with the statute.The Supreme Court of Hawai‘i reviewed the case and held that Form N-342 and its instructions were inconsistent with HRS § 235-12.5(f)-(h). The court found that the statute's provisions for refundable or nonrefundable elections only apply when a taxpayer's tax credit exceeds their tax liability. Since the Goodmans did not have excess tax credit, they should not have been required to make such elections. The court vacated the ICA's judgment and reversed the Tax Appeal Court's final judgment, ruling that the Goodmans are entitled to the $17,250 RETITC they claimed. View "Suganuma v. Goodman" on Justia Law

Plaintiff Steve Rogers filed a lawsuit against the City of Redlands, alleging that the rates for the City’s solid waste collection included a surcharge for a City program to repair roads, which he claimed violated Vehicle Code section 9400.8. The trial was bifurcated into two phases. In phase one, the trial court determined that section 9400.8 was violated. In phase two, the court ruled that refunds were limited to those who paid under protest pursuant to Health and Safety Code section 5472. Both the City and Rogers appealed these rulings.The Superior Court of San Bernardino County initially reviewed the case. In phase one, the court found that the surcharge for the City’s pavement accelerated repair implementation strategy (PARIS) program constituted a charge for the privilege of using the City’s streets, thus violating section 9400.8. In phase two, the court concluded that Health and Safety Code section 5472 limited refunds to those who paid under protest, denying Rogers the retrospective remedies he sought.The Court of Appeal of the State of California, Fourth Appellate District, Division Three, reviewed the case. The appellate court affirmed the trial court’s rulings. It agreed that the surcharge for the PARIS program was indeed a charge for the privilege of using the City’s streets, prohibited by section 9400.8. The court also upheld the trial court’s application of Health and Safety Code section 5472, which limited refunds to those who paid under protest. The appellate court found no error in the trial court’s decisions and affirmed the judgment in its entirety. View "Rogers v. City of Redlands" on Justia Law

Owners of timeshare estates in a resort sued the County of Riverside, challenging the legality of an annual fee charged for separate property tax assessments. The owners argued that the fee exceeded the reasonable cost of providing the assessment, constituting a tax that required voter approval, which had not been obtained. The trial court rejected the owners' argument and ruled in favor of the County.The Superior Court of Riverside County entered judgment for the County, finding that the fee did not exceed the reasonable cost of providing the separate assessment. The court considered various costs, including those related to a new computer system and assessment appeals, even though these costs were not included in the original budget used to set the fee.The Court of Appeal, Fourth Appellate District, Division One, State of California, reversed the trial court's decision. The appellate court held that the County did not meet its burden to prove that the $23 fee was not a tax requiring voter approval under Article XIII C of the California Constitution. The court found that the County's methodology for setting the fee was flawed, as it included costs unrelated to the specific service of providing separate timeshare assessments and did not accurately reflect the actual cost of the service. The court also ruled that the trial court erred in considering costs incurred after the fiscal year used to set the fee.The appellate court remanded the case for further proceedings to determine the appropriate refund amount and to decide on the declaratory, injunctive, and/or writ relief sought by the owners. The County must prove the reasonable and necessary costs of providing the separate assessment service, excluding costs for valuing the timeshare project as a whole. View "Scott v. County of Riverside" on Justia Law

T-Mobile sought a refund for statutory service fees paid to the Kentucky Commercial Mobile Radio Service Emergency Telecommunications Board, arguing that the fees did not apply to prepaid cellular customers based on a prior court decision. The Board denied the refund request, leading T-Mobile to file a lawsuit in Franklin Circuit Court. The trial court ruled against T-Mobile, stating that it did not meet the common law refund requirements as outlined in Inland Container Corporation v. Mason County, which necessitates that payments be involuntary or made under misrepresentation.The Court of Appeals affirmed the trial court's decision, agreeing that T-Mobile's payments were voluntary and not subject to refund. T-Mobile then sought discretionary review from the Supreme Court of Kentucky. The Supreme Court granted review, heard oral arguments, and examined the record.The Supreme Court of Kentucky affirmed the Court of Appeals' decision. The court held that T-Mobile was not entitled to a common law refund because the payments were voluntary and not made under misrepresentation. The court emphasized that the payments were not collectible by summary process or fine and imprisonment, and T-Mobile had the opportunity to challenge the fees in court before paying them. Additionally, the court found no evidence of actual misrepresentation by the Board. Therefore, T-Mobile's claim for a common law refund was denied. View "Powertel Memphis, Inc. v. Commercial Mobile Radio Service Emergency Telecommunications Board" on Justia Law

Aramark Corporation provides food services to clients in various industries, purchasing food, labor, and materials from third-party vendors. Under management-fee contracts, clients reimburse Aramark for these purchases and pay a management fee. Aramark sought a refund for the commercial-activity tax (CAT) it paid on these reimbursements, arguing that it acted as an agent for its clients and thus the reimbursements should be excluded from gross receipts under the CAT statute.The Tax Commissioner denied Aramark's refund claim, determining that Aramark did not meet the requirements for the gross-receipts exclusion. The Board of Tax Appeals affirmed this decision, concluding that Aramark failed to establish an agency relationship with its clients as required by the statute. The board found that Aramark did not have the authority to bind its clients to its activities with third-party vendors and that the reimbursements constituted gross receipts.The Supreme Court of Ohio reviewed the case and affirmed the Board of Tax Appeals' decision. The court held that Aramark did not qualify for the gross-receipts exclusion under the CAT statute because it did not act as an agent for its clients. The court found that Aramark kept the reimbursements for itself and did not hold them on behalf of its clients. Additionally, the court disapproved of the approach used in a previous case, Willoughby Hills, which required a showing of actual authority to establish an agency relationship for CAT purposes. The court concluded that the reimbursements Aramark received from its clients were taxable gross receipts and rejected Aramark's alternative argument that the reimbursements did not contribute to the production of gross income. View "Aramark Corp. v. Harris" on Justia Law

A limited partnership, owning an apartment complex in Norman, Oklahoma, transferred its general and limited partnership interests to new owners in 2022. The Cleveland County Assessor subsequently increased the fair cash value of the property from $18,437,401 in 2022 to $42,500,000 in 2023, exceeding the constitutionally allowed 5% annual increase for ad valorem taxation. The partnership, Icon, protested this increase, arguing that the transfer of partnership interests did not constitute a transfer of property title.The Cleveland County Board of Equalization denied Icon's protest, and the Oklahoma Court of Tax Review granted summary judgment in favor of the Assessor, concluding that the transfer of partnership interests was equivalent to a transfer of property title, thus lifting the 5% cap on valuation increases. Icon appealed this decision.The Supreme Court of the State of Oklahoma reviewed the case de novo, focusing on whether the transfer of partnership interests should be treated as a transfer of property title under Okla. Const. art. 10, §8B. The court held that the transfer of partnership interests was a transfer of personal property, not real property, and did not constitute a transfer, change, or conveyance of the property title. Therefore, the 5% cap on annual increases in property valuation for ad valorem taxation should not have been lifted. The court vacated the Oklahoma Court of Tax Review's order and remanded the case. View "THE ICON AT NORMAN APTS, LP v. DOUGLAS WARR, CLEVELAND COUNTY ASSESSOR" on Justia Law

Walter F. Scott III filed an appeal against the Alabama Department of Revenue, challenging the Jefferson County Board of Equalization's valuation of 176 parcels of real property for property-tax purposes. Scott identified himself as "Agent for Owners" in his notice of appeal. The Department, Jefferson County, and the Board moved to dismiss Scott's appeal, arguing that he had incorrectly filed the tax appeal and had not paid the necessary filing fees.The Jefferson Circuit Court granted the motion to dismiss, reasoning that Scott was improperly attempting to aggregate 176 separate and distinct parcels of property into one lawsuit for the purpose of appealing tax assessments on each parcel. The court concluded that each parcel required a separately filed lawsuit accompanied by the appropriate filing fees. Scott then appealed the judgment of dismissal to the Supreme Court of Alabama.The Supreme Court of Alabama reviewed the case de novo and concluded that the circuit court erred in dismissing the tax appeal. The court held that the relevant statutes, §§ 40-3-24 and 40-3-25, Ala. Code 1975, do not require a taxpayer to appeal each assessment separately. The court found that the language of the statutes allows for multiple contested assessments to be included in a single appeal to the circuit court. The court also noted that consolidating challenges to multiple parcels into one appeal is consistent with the liberal joinder allowed by the Alabama Rules of Civil Procedure.The Supreme Court of Alabama reversed the circuit court's judgment and remanded the case for further proceedings consistent with its opinion. The court did not address whether multiple owners could use a single appeal to contest the assessments of multiple parcels, as this issue had not been sufficiently explored at this point in the action. View "Scott v. Alabama Department of Revenue" on Justia Law

In 2012, Jennifer Zuch and her then-husband Patrick Gennardo filed late 2010 federal tax returns. Gennardo's return showed a significant balance due, which he addressed by submitting an offer in compromise, involving $50,000 in estimated tax payments. The IRS applied these payments to Gennardo's account. Zuch later amended her return, reporting additional income and resulting in $28,000 in taxes due. She argued that the $50,000 should be credited to her account, entitling her to a refund, but the IRS disagreed and placed a levy on her property. Zuch requested a collection due process hearing, which upheld the levy. She appealed to the Tax Court.The Tax Court initially reviewed the case but dismissed it as moot after Zuch's tax liability was reduced to zero through overpayments applied by the IRS. The court ruled it lacked jurisdiction since there was no longer a basis for a levy. Zuch appealed to the Third Circuit, which vacated the dismissal, holding that the IRS's abandonment of the levy did not moot the proceedings, as the Tax Court could still address the underlying tax dispute.The Supreme Court of the United States reviewed the case and held that the Tax Court lacks jurisdiction under 26 U.S.C. §6330 to resolve disputes when the IRS is no longer pursuing a levy. The Court reasoned that the Tax Court's jurisdiction is limited to reviewing the determination of whether a levy may proceed. Once the levy is no longer in question, the Tax Court cannot address the underlying tax liability. The Supreme Court reversed the Third Circuit's decision and remanded the case for further proceedings consistent with this opinion. View "Commissioner v. Zuch" on Justia Law

From 2016 to 2021, Irene Michelle Fike worked at an accounting firm and later as an independent contractor for a client, J.M., and J.M.'s family. Fike used her access to J.M.'s financial accounts to pay her personal credit card bills and make purchases from online retailers. She concealed her fraud by misrepresenting J.M.'s expenditures in financial reports. Fike defrauded J.M. of $363,657.67 between April 2018 and September 2022.Fike pleaded guilty to wire fraud and aggravated identity theft in 2024. The United States District Court for the Eastern District of Kentucky sentenced her to thirty-six months' imprisonment and three years of supervised release. The court also ordered her to pay $405,867.08 in restitution, which included the principal amount stolen and $42,209.41 in prejudgment interest. Fike appealed, arguing that the Mandatory Victims Restitution Act (MVRA) does not authorize prejudgment interest and that the interest calculation was speculative.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court held that the MVRA allows for prejudgment interest to ensure full compensation for the victim's losses. The court found that the district court did not abuse its discretion in awarding prejudgment interest, as it was necessary to make J.M. whole. The court also determined that the district court had a sufficient basis for calculating the interest, relying on J.M.'s declaration of losses, which was submitted under penalty of perjury and provided a reliable basis for the award. The Sixth Circuit affirmed the district court's decision. View "United States v. Fike" on Justia Law