Justia Government & Administrative Law Opinion Summaries

Articles Posted in Tax Law
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The case involves a dispute between developers of rent-restricted housing projects and the Lancaster County Board of Equalization. The Board sought permission from the Tax Equalization and Review Commission to use a different methodology than the statutorily provided income approach for assessing the value of the housing projects. The Board argued that the income approach did not result in actual value and sought to use a different, professionally accepted mass appraisal method. The developers appealed the Commission's decision to grant the Board's request.The Nebraska Supreme Court was asked to determine whether the Commission's decision was a "final decision" subject to appeal. The court concluded that the Commission's decision was not final because it did not approve a specific alternate methodology and did not determine the valuation of the properties. The court further reasoned that the decision could be rendered moot by future developments in the litigation, such as the Board's refusal to approve the County Assessor's proposed valuations. The court held that, because the developers' rights had not been substantially affected by the Commission's decision, it lacked appellate jurisdiction and dismissed the appeal. View "A & P II, LLC v. Lancaster Cty. Bd. of Equal." on Justia Law

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The Supreme Court of the State of Washington heard a case involving Assurance Wireless USA LP, a telecommunications company that provides wireless services to low-income consumers as part of the federal "Lifeline" program. Assurance contested the Department of Revenue's tax assessments on the reimbursements they received for their services, arguing that the transactions were not retail sales. The Board of Tax Appeals (BTA) upheld the tax assessments, finding that the transactions did constitute retail sales and that the tax burden fell on the Universal Service Administrative Company (USAC), the nonprofit appointed by the Federal Communications Commission (FCC) to administer the Lifeline program.The Supreme Court agreed that the transactions were retail sales and that USAC, not the Lifeline consumers or the FCC, bore the legal incidence of the tax. However, the Court concluded that USAC operates as an instrumentality of the federal government, meaning that the retail sales tax violated the intergovernmental tax immunity doctrine as applied in this case. The Court ultimately reversed the decision of the Court of Appeals and remanded the case to the BTA for further proceedings in line with this opinion. View "Assurance Wireless USA, LP v. Dep't of Revenue" on Justia Law

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This case involved a group of businesses (referred to collectively as Taxpayers) who filed applications for adjustments to the fair market value of their properties for tax year 2020 in the state of Utah. They claimed that their properties' values had decreased due to "access interruption" caused by the COVID-19 pandemic and associated government guidelines, which they argued constituted a circumstance beyond their control under Utah Code section 59-2-1004.6 (the Access Interruption Statute).The Utah State Tax Commission rejected this argument, maintaining that the pandemic did not qualify as an "access interruption event" under the Access Interruption Statute. It reasoned that the statute applies only if access was interrupted due to any of thirteen enumerated events or due to a similar event as determined by the Commission via administrative rule. Because the pandemic neither fit into any of the enumerated categories nor was included in the Commission's administrative rules, the Commission ruled that the statute did not apply.The Supreme Court of the State of Utah agreed with the Commission's reasoning, holding that the Access Interruption Statute allows only the Commission to add to the statute’s list of qualifying circumstances if the Commission determines by rule that the additional event is similar to the events enumerated in the statute. Because the pandemic was not an enumerated event and had not been added by administrative rule, the Supreme Court upheld the Commission's decision. View "Miller Theatres v. Tax Commission" on Justia Law

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The Arkansas Supreme Court reversed and remanded a decision of the Phillips County Circuit Court, which had found in favor of Kit and Jole Wilson in their dispute with the Arkansas Department of Finance and Administration (ADFA). The Wilsons had restored a building in Arkansas and were granted a historic-rehabilitation income-tax credit. The ADFA applied this credit to the Wilsons' 2015 tax return before apportionment, reducing their tax liability. The Wilsons protested, asserting that their tax liability should have been zero after applying the credit. The circuit court ruled in the Wilsons' favor, determining that the ADFA must apply the credit after apportioning the Wilsons’ tax due and that certain state codes conflicted with each other.However, the Supreme Court found that the ADFA correctly applied the tax credit before apportionment, in line with state law. The court also held that the state codes did not conflict with each other. The court concluded that the circuit court erred in its statutory interpretation and reversed its decision. View "STATE OF ARKANSAS, DEPARTMENT OF FINANCE AND ADMINiSTRATION v. WILSON" on Justia Law

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This case involves a dispute over the taxation of cell phones sold in California as part of a "bundled transaction," in which a consumer purchases the phone at a reduced price from a wireless service provider in exchange for signing a contract for future wireless service. The plaintiffs challenged a state regulation that calculates sales tax on the full, unbundled price of the phone, rather than the discounted price paid by the consumer. They argued that this regulation violated the Revenue and Taxation Code and was not properly adopted under the Administrative Procedures Act.The Court of Appeal of the State of California, Third Appellate District, rejected these arguments. It concluded that the Department of Tax and Fee Administration could allocate a portion of the contract price in a bundled transaction to the cell phone and tax it accordingly. It also found that the regulation was properly adopted under the Administrative Procedures Act.The court noted that, while services are not taxable under California law, the sale of a cell phone as part of a bundled transaction is not a true discount because the wireless service provider recoups the cost of the phone through the service contract. Therefore, the Department could reasonably allocate a portion of the contract price to the phone and tax it accordingly. The court also concluded that the regulation had been properly adopted under the Administrative Procedures Act, rejecting the plaintiffs' arguments that the Department had failed to properly assess the regulation's economic impact and provide adequate notice to the public.As a result, the court reversed the portion of the lower court judgment that invalidated the regulation and prohibited the Department from applying it to bundled transactions. It remanded the case with instructions to deny the plaintiffs' petition for a writ of prohibition. View "Bekkerman v. California Department Of Tax and Fee Administration" on Justia Law

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The case involves Toolpushers Supply Co., a Wyoming-based company with a retail location in Mississippi that sells supplies and items used in the oil-and-gas industry. In 2016, the Mississippi Department of Revenue (MDOR) audited Toolpushers’ sales and concluded that the company owed an additional $124,728 based on the failure to remit sales tax on certain sales. Toolpushers considered these sales wholesale and thus tax-exempt, but the MDOR determined they were not qualified as wholesale. Toolpushers appealed to the MDOR’s Board of Review, which affirmed the decision. The company then appealed to the Mississippi Board of Tax Appeals, which also affirmed. Toolpushers continued to appeal to the Hinds County Chancery Court, First Judicial District, and both Toolpushers and the MDOR sought summary judgment. The chancellor denied Toolpushers’ motion and granted the MDOR’s. Toolpushers then appealed to the Supreme Court of Mississippi.The Supreme Court of Mississippi stated that the chancery court correctly applied the de novo standard of review. The Supreme Court affirmed the decisions of the Court of Appeals and the chancery court, which in turn affirmed the MDOR’s decision. The Supreme Court agreed with the chancery court that Toolpushers could not establish its claim that the sales were wholesale. The court emphasized that the amended Mississippi Code Section 27-77-7(5) made it clear that the chancery court should give no deference to the decision of the Board of Tax Appeals, the Board of Review, or the Department of Revenue when trying the case de novo and conducting a full evidentiary judicial hearing on all factual and legal issues raised by the taxpayer. The court declared that the Court of Appeals' decision to discuss and apply caselaw addressing the pre-2015 version of Section 27-65-77, seemingly giving deference to the MDOR’s tax decision, was an error but was not reversible. View "Toolpushers Supply Co. v. Mississippi Department of Revenue" on Justia Law

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The Missouri Supreme Court ruled in a case involving the St. Louis County Assessor ("Assessor") and a group of St. Louis County commercial property owners, referred to as "Taxpayers." The Taxpayers alleged that their properties were assessed at a higher percentage of fair market value (FMV) than other commercial properties in the county. This claim is known as a "ratio discrimination" claim. The Taxpayers appealed their assessments to the local board of equalization ("BOE") and the Missouri State Tax Commission ("STC"). In some of the appeals, the BOE and STC did not change the Assessor's original FMV and assessed value, while in others, they ordered reductions in the estimated FMV of the property, resulting in a lower assessed value and decreased tax liability.The STC found that the Taxpayers did not provide substantial and persuasive evidence of discrimination. The Taxpayers then filed a petition for judicial review, and the circuit court reversed the STC's decision and order and remanded the case for retrial. The Assessor appealed to the Missouri Supreme Court, which found that the STC's decision was authorized by law and supported by substantial evidence. The Court agreed with the STC that the Taxpayers did not provide persuasive evidence of discriminatory assessment. The Court held that the actual assessment level used to analyze a claim of discriminatory assessment and taxation is based on the assessed value that actually determines the tax liability. The Court also found that the STC did not abuse its discretion by denying certain discovery requests and quashing subpoenas for the deposition of the Assessor and several staff appraisers. The circuit court's judgment was vacated, and the STC's decision and order was reinstated. View "Crown Diversified Industries Corp. v. Zimmerman" on Justia Law

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In the case before the Court of Appeal of the State of California First Appellate District Division Two, the appellant, Debra Abney, challenged the decision of the State Department of Health Care Services and the City and County of San Francisco to consider money garnished from her Social Security payments as income for the purposes of determining her eligibility for benefits under Medi-Cal.Abney's Social Security payments were being reduced by nearly $600 each month to satisfy a debt she owed to the IRS. The authorities considered this garnished money as income, which led to Abney being ineligible to receive Medi-Cal benefits without contributing a share of cost. Abney argued that the money being garnished was not income “actually available to meet her needs” under the regulations implementing the Medi-Cal program.The trial court rejected Abney's argument, and she appealed. The Court of Appeal affirmed the trial court's decision. The Court of Appeal held that the tax garnishment was "actually available" to meet Abney's needs because it benefitted her financially by helping to extinguish her debt to the IRS. Therefore, the garnished money was correctly considered as income for the purpose of calculating her eligibility for the Medi-Cal program. View "Abney v. State Dept. of Health Care Services" on Justia Law

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The Supreme Court of the State of Colorado reviewed a case involving a dispute over the methodology for implementing Tax Increment Financing (TIF) under Colorado's Urban Renewal Law (URL). The respondents, collectively known as AURA, argued that the methodology applied by the Colorado State Property Tax Administrator and the Arapahoe County Assessor was in violation of the URL because it differentiated between direct and indirect benefits when adjusting the base and increment values of blighted property in urban renewal areas. They contended that this methodology deprived urban renewal authorities of property tax revenues they should receive due to enhanced market perceptions of properties located in a TIF plan. The court of appeals agreed with AURA and reversed the district court's summary judgment favoring the Assessor. However, the Supreme Court held that the Administrator's methodology does not violate the URL. The URL does not prescribe a specific methodology but gives the Administrator broad authority to determine how to calculate and proportionately adjust the base and increment values. The court concluded that the Administrator's differentiation between direct and indirect benefits does not conflict with the URL, and therefore, reversed the portion of the division’s judgment concerning the Administrator’s methodology and affirmed that the district court correctly entered summary judgment. View "Kaiser v. Aurora Urban Renewal Authority" on Justia Law

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In South Dakota, McLane Western, Inc. and McLane Minnesota, Inc., South Dakota-licensed wholesalers of tobacco products, purchased Other Tobacco Products (OTP) from U.S. Smokeless Tobacco Brands, Inc. (UST Sales), who in turn purchased the products from U.S. Smokeless Tobacco Manufacturing Company, LLC (UST Manufacturing), a federally licensed tobacco manufacturer. McLane brought the OTP into South Dakota and paid the state's 35% tobacco tax. They calculated the tobacco tax they owed using the amount they paid to UST Sales for the OTP, a price higher than what UST Sales paid UST Manufacturing for the same OTP. McLane later submitted numerous refund requests to the South Dakota Department of Revenue, arguing that they overpaid their tax obligations as their tax should have been based on the price UST Sales paid UST Manufacturing.The Supreme Court of the State of South Dakota agreed that McLane overpaid its tobacco tax as it was based on the higher price it paid to UST Sales instead of the price at which UST Manufacturing sold tobacco products to UST Sales. However, the court also concluded that McLane was not entitled to a refund for the overpaid amounts. The court reasoned that although McLane overpaid its advance tax obligation, it fully recovered the advance tax it paid from the dealers to whom it subsequently sold the OTP. The dealers then recovered that tax from the consumers who purchased the OTP. Thus, McLane was made whole by its resale of the OTP and is not entitled to any refund. The court affirmed the Department’s denial of McLane’s request for a refund. View "Mclane Western, Inc. v. South Dakota Department Of Revenue" on Justia Law