Justia Government & Administrative Law Opinion Summaries

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

The Supreme Court affirmed the judgment of the district court affirming the decision of the Montana Department of Revenue (MDOR) denying Appellant's petition to adopt a proposed administrative rule construing Mont. Code Ann. 15-30-2605(3), holding that the MDOR correctly construed sections 15-30-2605(1) and (3) and did not capriciously, arbitrarily, or unlawfully preliminarily deny Appellant's petition for adoption of a proposed rule interpreting the section 15-30-2605(3).At issue were internal MDOR reviews initiated by clients of Appellant, a certified public accountant, regarding 2021 MDOR adjustment notices regarding their 2017 income tax returns. Appellant argued that the noticed MDOR adjustments were untimely beyond the three-year deadline set forth in section 15-30-2605(3) and petitioned MDOR to adopt a rule to clarify section 15-30-2605 based on his contrary interpretation of section 15-30-2605(3). MDOR denied the petition, and the district court affirmed. The Supreme Court affirmed, holding that the district court did not err in determining that MDOR's construction of section 15-30-2605(3) was correct and that Appellant failed to demonstrate that the denial of his rulemaking petition was arbitrary, capricious, or based on an erroneous conclusion of law. View "Wangerin v. Dep't of Revenue" on Justia Law

The Supreme Court reversed in part the decision of the Board of Tax Appeals (BTA) affirming a final assessment imposed by the tax commissioner determining that NASCAR owed taxes, interest, and penalties in the amount of $549,520, holding that the bulk of the tax assessment was unlawful.The Ohio Department of Taxation conducted an audit and determining that NASCAR had improperly failed to pay Ohio's commercial-activity tax (CAT), Ohio Rev. Code 5751.91 et seq., from 2005 to 2010 and owed Ohio more than in back taxes and penalties. The BTA affirmed the assessment, determining that for the four revenue streams under review - broadcast, media, licensing, and sponsorship - the receipts were properly situated to Ohio. NASCAR appealed, arguing that its broadcast revenue, media revenue, licensing revenue, and sponsorship revenue were not subject to the CAT. The Supreme Court reversed the tax assessment as to NASCAR's broadcast revenue, media revenue, licensing fees, and sponsorship fees, holding (1) the broadcast revenue was not based on the right to use NASCAR's property in Ohio; and (2) the media revenue, licensing fees, and sponsorship fees situated to Ohio were not "based on the right to use" NASCAR's property in Ohio. View "NASCAR Holdings, Inc. v. McClain" on Justia Law

The Fox and Puchlak filed purported class actions, alleging that Michigan counties seized property to satisfy property-tax delinquencies, sold the properties, and kept the difference between the sales proceeds and the tax debts.. The suits assert that the counties committed takings without just compensation or imposed excessive fines in violation of the Michigan and federal constitutions. Genesee County’s insurance, through Safety, precludes coverage for claims “[a]rising out of . . . [t]ax collection, or the improper administration of taxes or loss that reflects any tax obligation” and claims “[a]rising out of eminent domain, condemnation, inverse condemnation, temporary or permanent taking, adverse possession, or dedication by adverse use.”Safety sought a ruling that it owed no duty to defend or to indemnify. The district court entered summary judgment, finding no Article III case or controversy between Safety and Fox and Puchlak. The court also held that Safety owes Genesee County no duty to defend. The Sixth Circuit affirmed. Safety lacks standing to sue Fox and Puchlak over its duty to defend and its claim for the duty to indemnify lacks ripeness. Safety owes no duty to defend; the alleged tax-collection process directly caused the injuries underlying each of Fox’s and Puchlak’s claims. View "Safety Specialty Insurance Co. v. Genesee County Board of Commissioners" on Justia Law

The 2021 American Rescue Plan Act (ARPA), 42 U.S.C. 802, appropriated $195.3 billion in aid to the states and the District of Columbia. To get the money, states had to certify that they would comply with several conditions, including ARPA’s “Offset Provision,” which forbids a state from using the funds “to either directly or indirectly offset a reduction in the net tax revenue” that “result[s] from” a tax cut. Claiming that this condition amounted to a prohibition on tax cuts during ARPA’s “covered period,” and that such a condition would violate the Constitution in multiple respects, Ohio filed suit. The district court permanently enjoined enforcement of the Offset Provision on the ground that its terms are “unconstitutionally ambiguous” under the Spending Clause.The Sixth Circuit vacated the injunction, finding the case moot. The district court should not have reached the merits of the case, as Ohio failed to establish a justiciable controversy. Treasury later promulgated a regulation disavowing Ohio’s interpretation of the Offset Provision and explaining that it would not enforce the Provision as if it barred tax cuts per se. There is no reason to believe that Treasury will not abide by its disavowal of Ohio’s interpretation of the Offset Provision as it administers the statute. View "Ohio v. Yellen" on Justia Law

The 2021 American Rescue Plan Act (ARPA) set aside $195.3 billion in stimulus funds, to be distributed to states and the District of Columbia. Kentucky and Tennessee challenged ARPA’s requirement that states certify that they would comply with an “Offset Provision” that bars the states from enacting tax cuts and then using ARPA funds to “directly or indirectly offset a reduction" in net tax revenue resulting from such tax cuts. 42 U.S.C. 802(c)(2)(A). Because money is fungible, enacting any tax cut and then spending ARPA funds could be construed, the states argued, as impermissibly using those funds to “indirectly offset” a revenue reduction from the tax cut. A subsequent Treasury regulation (the Rule) offered a narrowing construction; the states asserted that this construction in no way follows clearly from the Offset Provision itself. The states argued they were coerced into relinquishing control over their sovereign taxing authority.The district court entered a permanent injunction. The Sixth Circuit vacated in part. Kentucky’s challenge is non-justiciable. After the promulgation of the Rule, the states offered no evidence of a concrete plan to violate the Rule. Kentucky offered no other theory of injury. Tennessee offered another theory of injury: that Treasury’s Rule burdened the state with compliance costs that it would not incur were enforcement of the Offset Provision enjoined. On the merits of Tennessee’s claim, the court affirmed the injunction; the Offset Provision is impermissibly vague under the Spending Clause. Treasury cannot use its Rule to impose compliance requirements that are not authorized by the Offset Provision itself. View "Kentucky v. Yellen" on Justia Law

The Supreme Court reversed the decision of the district court holding that three roadside services offered by Big Al's Towing and Recovery were taxable under Wyo. Stat. Ann. 37-15-103(a)(i)(J), holding that the Wyoming Board of Equalization correctly concluded that the roadside services were not taxable under the statute.At issue were Big Al's roadside services for jumping-starting a vehicle, unlocking a vehicle, and replacing a flat tire with a spare tire. The Wyoming Department of Revenue determined that Big Al's owed taxes and interest on the roadside assistance revenue it collected between 2016 to 2019. The Board reversed, concluding that the roadside services did not constitute a taxable event. The district court reversed, ruling that the services were taxable under section 39-15-103(a)(I)(J). The Supreme Court reversed, holding that the Board's decision that Big Al's roadside services were not taxable under the statute was in accordance with law. View "Big Al's Towing & Recovery v. State, Department of Revenue" on Justia Law

The Supreme Court reversed the judgment of the circuit court reversing the orders issued by Petitioner while sitting as the Berkeley County Board of Assessment Appeals arising from appeals of ad valorem assessments owned by Taxpayers, as determined by the Berkeley County Assessor for the 2019 tax year, holding that circuit court erred in reversing the Board.Although the two consolidated appeals dealt with different pieces of property owned by two different entities the Supreme Court concluded that resolution dependent on two overarching questions common to both appeals. The Court then held (1) Petitioner waived any objection to the Assessor not being named as a party to this action; and (2) the circuit court erred in determining the assessments as affirmed by the Board were not supported by substantial evidence or were otherwise in contravention of any regulation, statute, or constitutional provision. View "Berkeley County Council v. Government Properties Income Trust LLC" on Justia Law