Justia Tax Law Opinion Summaries

The Eighth Circuit held that the Indian Gaming Regulatory Act does not preempt the imposition of statewide tax on the gross receipts of a nonmember contractor for services performed in renovating and expanding the Tribe's gaming casino located on the Reservation. The court reversed the district court's grant of summary judgment for the Tribe and held that the Tribe has failed to show that the tax has more than a de minimis financial impact on federal and tribal interests. Furthermore, the State's legitimate interests in raising revenues for essential government programs that benefit the nonmember contractor-taxpayer in this case, as well as its interest in being able to apply its generally applicable contractor excise tax throughout the State, were sufficient to justify imposing the excise tax on the construction services performed on the Casino's realty. Finally, the court granted the State's motion to dismiss the State Treasurer and remanded for further proceedings. View "Flandreau Santee Sioux Tribe v. Haeder" on Justia Law

The IRS searched Ellis’s apartment and found personal identifying information for more than 400 people on printouts from the Alabama Department of Corrections’ database and in a TurboTax database on laptops seized from Ellis’s bedroom. Her computers had been used to file hundreds of electronic tax returns in 2008-2012. Ellis was charged with devising a scheme to submit fraudulent tax returns in “2012,” including eight counts of wire fraud, 18 U.S.C. 1343, and eight counts of aggravated identity theft, 18 U.S.C. 1028A(a)(1), (c)(5) and 18 U.S.C. 2. After the government admitted that some of Agent Ward’s grand jury statements had been wrong, Ellis unsuccessfully moved to dismiss the indictment. The court found that the “inaccurate statements did not have a substantial influence" given "overwhelming other evidence he presented.” Agent Ward testified that the intended loss from Ellis’s scheme was approximately $700,000, based on the total requested refunds, not the actual refunds. The court agreed and applied a 12-step ioffense level increase (U.S.S.G. 2B1.1(b)(1)(H)), with a resulting Guidelines range for the wire fraud counts of 51-71 months. The court imposed a 48-month sentence for wire fraud and a consecutive, mandatory, 24-month sentence for aggravated identity theft and ordered forfeiture of $11,670, the total of the eight tax returns for which Ellis was convicted. The court imposed the government’s requested $352,183.20, in restitution to governmental entities. The Sixth Circuit affirmed the denial of the motion to dismiss, the calculation of the forfeiture, and the restitution order, rejecting arguments that the government had not presented evidence that all of the refunds used to calculate restitution were part of the same scheme and that some of that amount was tied to conduct that occurred outside of the limitations period. View "United States v. Ellis" on Justia Law

SSI Food Services Inc. (SSI) appealed the district court’s decision rejecting the Board of Tax Appeal’s (BTA) 2016 assessed value of SSI’s food processing facility in favor of the Canyon County Assessor’s (Canyon County) significantly higher valuation. On appeal, SSI argued the district court erred when it modified the BTA’s valuation because: (1) Canyon County did not meet its burden of proving that the BTA’s valuation was erroneous; (2) the modified valuation was not supported by substantial and competent evidence; and (3) the conclusions of law contained in the district court’s findings of fact and conclusions of law are inadequate. SSI also appealed the district court’s decision to allow Canyon County’s expert to testify on rebuttal. Canyon County cross-appealed the district court’s decision that SSI was not obligated to pay penalties and interest on the unpaid amount of property taxes. Finding no reversible error or abuse of discretion, the Idaho Supreme Court affirmed the district court. View "Stender v. SSI Food Services, Inc." on Justia Law

The Supreme Judicial Court affirmed the judgment of the superior court concluding that the Department of Administrative and Financial Services (DAFS) had issued correct decisions regarding Somerset County's two requests for public records submitted pursuant to Maine's Freedom of Access Act (FOAA), Me. Rev. Stat. 1, 400-414, holding that the court properly concluded that one set of records was subject to disclosure and the other set was not subject to disclosure.In December 2016 and October 2017 the County submitted its requests seeking records concerning valuation information that Blue Sky West, LLC had submitted to Maine Revenue Services as part of the State's assessment of taxes on property that Blue Sky owned in the County. DAFS determined that the records responsive to the County's 2016 request were public records subject to disclosure but that the records responsive to the 2017 request were confidential by statute and thus were not public records. The Supreme Court affirmed, holding that the court did not err by concluding that the 2016 records were subject to inspection and copying by the public but that the 2017 records comprised clearly labeled proprietary information protected from disclosure pursuant to FOAA. View "Blue Sky West, LLC v. Maine Revenue Services" on Justia Law

Amazon filed a petition in the tax court challenging the IRS's valuation of a buy-in payment for pre-existing intangibles related to the company's contribution to a cost sharing arrangement, whereby Amazon and a holding company for the European subsidiaries would be treated as co-owners of the intangibles. The tax court ruled primarily with Amazon and the Commissioner appealed.The Ninth Circuit affirmed the tax court's decision and held that the definition of "intangible" in the applicable transfer pricing regulations did not include residual-business assets. Although the language of the definition is ambiguous, the panel held that the drafting history of the regulations shows that "intangible" was understood to be limited to independently transferable assets. View "Amazon.com v. Commissioner" on Justia Law

The Supreme Court affirmed the judgment of the trial court determining that a money judgment against Department of Transportation had been satisfied, holding that the Department satisfied its judgment to White Oak Corporation.White Oak was awarded a money judgment in the amount of $8,362,308 against the Department after an arbitration proceeding. The Office of the State Comptroller paid the judgment on behalf of the Department and withheld $1,642,312 for taxes White Oak had owed to the state. White Oak filed a motion asserting that the doctrine of collateral estoppel precluded the comptroller from reducing the payment by any amount for taxes owed because, during a prior arbitration proceeding between the parties, the Department had alleged but failed to prove its claim for taxes owed to the state. The trial court rejected White Oak's claim. The Supreme Court affirmed, holding that Conn. Gen. Stat. 12-39g imposed a mandatory obligation on the comptroller to reduce the amount paid to White Oak by the amount of taxes owed to the state, as those taxes were not the subject of a timely filed administrative appeal. View "Department of Transportation v. White Oak Corp." on Justia Law

Taxpayers filed suit alleging that their dividends derived from interest on government bonds were unconstitutionally taxed. The Court of Appeal held that Article XIII of the California Constitution exempts interest on state and local bonds from personal taxable income. However, Article XIII is silent on exempt interest dividends paid to shareholders. Therefore, based on its plain language, the court held that there was no conflict between the constitutional exemption and California Revenue and Taxation Code section 17145, which purports to tax interest income on bonds exempted from taxation under Article XIII. Furthermore, the court held that Brown v. Franchise Tax Bd.'s suggestion that distributions to a shareholder made by a regulated investment company retain their tax-exempt status as interest was inapplicable here. View "Mass v. Franchise Tax Board" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the tax court allowing a second set of deductions sought by Robert and Wendy Steiner on their tax returns but disallowing the first set of deductions, holding that neither set of deductions was mandated by the United States Constitution or the Utah Tax Code.The Utah State Tax Commission disallowed the tax deductions claimed the Steiners on their tax returns. The Steiners challenged that determination in the tax court, asserting that the Dormant Commerce Clause and the Dormant Foreign Commerce Clause mandated the Utah allow their claimed deductions relating to income earned in the United States but outside of Utah and income earned in foreign countries. The Steiners cited Utah Code 59-10-115(2) in support of their latter claim. The tax court agreed in part with the Steiners. The Supreme Court disagreed, holding that the Steiners were not entitled to their claimed deductions. View "Steiner v. Utah State Tax Commission" on Justia Law

The Supreme Court affirmed the decision of the Minnesota Tax Court holding that the Minnesota Legislature incorporated the federal "minimum base amount" limitation into Minnesota's research and development (R&D) tax credit statute, Minn. Stat. 290.068, and that for the 2011 tax year, the term "aggregate gross recipes" referred to federal aggregate gross receipts, not Minnesota aggregate gross receipts, holding that the tax court's conclusions were without error.Specifically, the Court held (1) to calculate Minnesota's R&D tax credit, Minnesota incorporates the "minimum base amount" limitation set forth in I.R.C. 41(c)(2); and (2) the plain language of Minn. Stat. 290.068, subd. 2(c) and its incorporation of the term "aggregate gross receipts" through the term "base amount" referred to federal aggregate gross receipts for the 2011 tax year, and therefore, the tax court did not err in concluding that federal aggregate gross receipts must be used in the fixed-base-percentage formula contained with the base amount calculation for General Mills, Inc.'s 2011 Minnesota R&D tax credit. View "General Mills, Inc. v. Commissioner of Revenue" on Justia Law

The Supreme Court affirmed the decision of the tax court holding that the Minnesota Legislature incorporated the federal "minimum base amount" limitation into Minnesota's research and development (R&D) tax credit statute, Minn. Stat. 290.068, and that for the 2011 tax year the term "aggregate gross receipts" referred to federal aggregate gross receipts, not Minnesota aggregate gross receipts, holding that the reasoning from the Court's opinion in General Mills v. Commissioner of Revenue, __ N.W.2d __, filed today, governed this case as well.At issue was whether the Legislature's incorporation of the federal tax code's definition of the term "base amount" in the tax credit statute includes the federal "minimum base amount" limitation and whether the term "aggregate gross receipts" as used in the Internal Revenue Code formula for calculating the R&D credit refers to Minnesota or federal aggregate gross receipts. The Supreme Court affirmed the tax court's decision, holding (1) to calculate the Minnesota R&D tax credit, section 290.068, subd. 2(c) incorporates the "minimum base amount" limitation contained within I.R.C. 41(c)(2); and (2) the plain language of section 290.068, subd. 2(c) and its incorporation of the term "aggregate gross recipes" through the term "base amount" referred to federal aggregate gross receipts for the 2011 tax year. View "International Business Machines Corp. v. Commissioner of Revenue" on Justia Law