Justia Government & Administrative Law Opinion Summaries

Petitioner Andrew Campbell was a lifelong Michigan resident. For many years, petitioner claimed and enjoyed a principal residence exemption (PRE) on his Michigan residence. In late 2016, petitioner purchased a second home in Surprise, Arizona. Respondent Michigan Department of Treasury (Treasury), reviewed and denied petitioner’s PRE claim for his Michigan property for the 2017 tax year. In the ensuing dispute, the issue this case presented for the Michigan Supreme Court's review was whether a property owner was entitled to claim a PRE under Michigan tax law when the owner received a similar tax benefit for a home in another state. To this the Supreme Court concluded that petitioner was not entitled to the PRE. Specifically, under MCL 211.7cc(3)(a), a property owner “is not entitled to [the PRE] in any calendar year in which . . . [t]hat person has claimed a substantially similar exemption, deduction, or credit, regardless of amount, on property in another state.” Accordingly, the Court reversed the judgment of the Court of Appeals and reinstated the Department of Treasury’s October 2, 2018 decision and order of determination denying petitioner’s PRE for the 2017 tax year. View "Campbell v. Department Of Treasury" on Justia Law

Regulus, an LLC solely owned by Klug, is the holding company for all the rights, transactions, and income related to Klug’s literary works, which include several internationally-received legal fiction novels. In 2018, Klug filed a Virginia income tax return, attaching thereto a Schedule C to indicate that he derived business income in Charlottesville. The city could not locate a business license issued to Klug or to Regulus and requested information about Klug’s business and his income therefrom for the tax years 2015-2018. Klug responded that Charlottesville’s Ordinance does not apply to him because he “offer[s] no goods or services to the public[,]” has “no physical storefront or shingle[,]” “do[es] not advertise[,]” has no employees, has no inventory, and offers a “product” that is intangible intellectual property.The Virginia Supreme Court held that a freelance writer’s business does not provide a service and is not covered by the ordinance’s catchall provision. The court did not reach the question of whether the ordinance is unconstitutionally vague as applied to the freelance writer. The court affirmed the circuit court’s decision to order the city to refund Klug his tax payments but concluded that the circuit court erred by awarding costs not essential for the prosecution of the suit. View "City of Charlottesville v. Regulus Books, LLC" on Justia Law

In June 2019, Plaintiffs submitted a FOIA request to the IRS seeking disclosure of the terms of a third-party authentication process set forth within IRM Sec. 21.1.3.3, pertaining to the tax professional authentication process. in August 2019, the IRS denied Plaintiffs' request citing the material was properly withheld pursuant to 5 U.S.C. Sec. 552(b)(7)(E), and then plaintiffs filed an action in federal court.The district court granted the IRS’s motion for summary judgment, rejecting Plaintiffs' request for an in-camera review of the documents.The Eighth Circuit reversed, remanding for the district court to conduct an in-camera inspection of the documents. To meet its burden under 5 U.S.C. Sec. 552(b)(7)(E), the IRS must prove the withheld material was “compiled for law enforcement purposes." Here, to effectively determine whether the IRS meets the requirements of 5 U.S.C. Sec. 552(b)(7)(E), an in-camera review is necessary. Thus, the district court erred in failing to hold an in-camera review. View "T. Keith Fogg v. Internal Revenue Service" on Justia Law

The Supreme Court reversed the judgment of the court of appeals dismissing this case asserting that the city of Houston's house mayor and city council members acted ultra vires in spending tax revenue in Fiscal Year 2020 on anything other than the drainage fund, holding that the taxpayers had standing to assert their claims and sufficiently pleaded ultra vires acts.Plaintiffs, two Houston taxpayers, brought this case alleging that City officials misallocated tax revenue because the City Charter requires a certain amount of tax revenue to be allocated to a fund exclusively for drainage and street maintenance and that the officials acted ultra vires in spending the revenue on anything else. The officials filed a plea to the jurisdiction asserting governmental immunity. The trial court denied the plea. The court of appeals reversed, concluding that the taxpayers lacked standing. The Supreme Court reversed, holding (1) Plaintiffs alleged an illegal expenditure sufficient to support taxpayer standing; and (2) the City officials were not entitled to dismissal of Plaintiffs' ultra vires claim on governmental immunity grounds at this time. View "Jones v. Turner" on Justia Law

Plaintiffs-appellants The 2009 Metropoulos Family Trust, The Evan D. Metropoulos 2009 Trust, and the trusts’ trustee, the J.P. Morgan Trust Company of Delaware (the trustee), appealed the grant of summary judgment entered in favor of the California Franchise Tax Board (FTB) on plaintiffs’ complaint seeking a refund of 2014 income taxes. Plaintiffs argued their pro-rata share of income received from an S corporation’s November 2014 sale of a wholly-owned subsidiary was not subject to California income tax. The plaintiff trusts, who were shareholders in the S corporation Pabst Corporate Holdings, Inc. (Pabst), argued the income was derived from the sale of intangible property, namely goodwill associated with the subsidiary’s business, whose taxation was governed by Revenue & Taxation Code section 17952 and its corresponding regulation. The trial court denied plaintiffs’ motion and granted the FTB’s, ruling: (1) because the S corporation had characterized the income as business income on its return, the trusts were bound to treat their respective shares of that income the same way on their federal and California tax returns; and (2) even if section 17952 applied, the trusts’ income would still be taxable since the S corporation’s corporate headquarters were in California, the underlying businesses based marketing and sales departments in California, and the S corporation localized the goodwill in connection with its California business, giving the goodwill a “business situs” in California. Finding no reversible error in the trial court's judgment, the Court of Appeal affirmed. View "2009 Metropoulos Family Trust v. California Franchise Tax Board" on Justia Law

Hudye Group LP (“Hudye”) appealed a district court judgment affirming the Ward County Board of Commissioners’ decision to deny Hudye’s applications for abatement or refund of taxes as untimely. Hudye filed applications for abatement or refund of taxes relating to 85 acres of property that had been divided into 92 parcels which were located in Ward County, North Dakota. Hudye argued the failure to consider abatement requests received by the City Assessor’s Office on the first business day following the November first deadline resulted in an unjust outcome. Finding no reversible error, the North Dakota Supreme Court affirmed. View "Hudye Group v. Ward Cty. Bd. of Commissioners" on Justia Law

In 2016, nearly 80% of Illinois voters voted to amend the Illinois Constitution; section 11, titled “Transportation funds,” was added to the state revenue article and provides that money generated from taxes, fees, excises, and license taxes on transportation infrastructure or operations shall only be spent on transportation purposes. Plaintiffs, contracting firms in the public transportation construction and design industry, sought declaratory and injunctive relief, alleging that Cook County, a home-rule unit, was violating the Amendment by diverting “revenue from transportation-related taxes and fees to the County’s Public Safety Fund” and impermissibly spending the revenue on non-transportation related purposes.The circuit court dismissed the complaint, finding that the plaintiffs lacked standing and that the complaint failed to state a violation of the Amendment. The appellate court reversed on the issue of standing but affirmed that no violation of the Amendment had been stated. The Illinois Supreme Court reversed the dismissal. The plaintiffs have associational standing and the money derived from the Cook County Transportation Taxes is subject to the Amendment. The Amendment did not create an exemption for home-rule units, home-rule taxes, or home-rule expenditures. The court found no issue with the manner in which home-rule units have had their power limited in the transportation context. View "Illinois Road and Transportation Builders Association v. County of Cook" on Justia Law

The Supreme Court affirmed the decision of the Board of Tax Appeals (BTA) upholding the decision of the tax commissioner denying Colonial, Inc.'s application for a tax refund, holding that there was no error.In its application, Colonial argued that it was entitled to a refund of $269,432 in resort-area taxes that it paid from 2011 through 2016. Specifically, Colonial sought to recover a locally-imposed resort-area gross receipts excise tax that the village of Put-in-Bay originally enacted in 1995, arguing that, under Ohio Rev. Code 5739.101, the village must react the resort-area tax after each decennial census. The tax commissioner denied the refund claim, and the BTA affirmed. The Supreme Court affirmed, holding that the BTA correctly affirmed the tax commissioner's denial of Colonial's application for a refund. View "Colonial, Inc. v. McClain" on Justia Law

Corporate taxpayer Raytheon Company's 2012 income tax return was due on March 15, 2013. Raytheon filed its return on September 27, 2013, after securing an authorized extension of the deadline. Raytheon later discovered that the return overstated the company's annual income based upon the inadvertent inclusion of Arizona property sales. The company filed an amended 2012 return on September 27, 2016, claiming a refund of $321,444.00. The Oklahoma Tax Commission denied the refund claim, reasoning taxpayer submitted its demand more than three years after paying the taxes. An administrative law judge found the claimed refund was time barred under 68 O.S.2011, section 2373, and the Commissioners affirmed this finding. The company appealed, and after review the Oklahoma Supreme Court reversed, finding the taxpayer timely brought the claim for refund, having paid taxes to the Oklahoma Tax Commission upon filing its amended original return with a proper extension. View "In the matter of the Income Tax Protest of Raytheon Company" on Justia Law

In Case No. S21A0899, Lynnette Riley, the former State Revenue Commissioner, appealed the partial grant of summary judgment in favor of petitioner Georgia Association of Club Executives (“GACE”), contending that the trial court erred by permanently enjoining the enforcement of OCGA 15-21-201(1)(B) – one of the definitions of “adult entertainment establishment” – based on the court’s ruling that the provision was unconstitutionally vague. In Case No. S21X0900, GACE cross-appealed, contending the trial court erred in granting partial summary judgment in Riley’s favor on the remaining claims of GACE’s petition, arguing that OCGA 15-21-209, by imposing an annual assessment on adult entertainment establishments, violated constitutional due process and free speech protections. Although these appeals presented challenges to the constitutionality of state statutes, the Georgia Supreme Court did not address the merits of the appellant’s or the cross-appellant’s claims of error. Instead, the Court vacated the trial court’s summary judgment order and subsequent final judgment because the Court determined GACE’s action against Riley was moot when the trial court ruled. "Because Riley was no longer Revenue Commissioner at the time the trial court entered its summary judgment order and subsequent final judgment, an injunction against her in her individual capacity could not give GACE the relief it seeks. ... A court may not address the constitutionality of the tax at issue absent the presence of a proper defendant in the action." View "Riley v. Georgia Assn. of Club Executives., Inc." on Justia Law