Justia Government & Administrative Law Opinion Summaries

The Supreme Judicial Court affirmed the decision of the Appellate Tax Board (the Board) upholding sales tax assessments for fees charged for subscriptions to use online software products, holding that the subscription fees were subject to sales tax.Appellant sold subscriptions for three online software products. The Commissioner of Revenue determined that Appellant's subscription fees constituted sales of software subject to sales tax and assessed sales tax against Appellant for the taxable periods April 2007 through June 2009 and October 2009 through December 2011. The Board upheld the sales tax assessments. The Supreme Judicial Court affirmed, holding that receipts from sales of subscriptions for the online software products were subject to Massachusetts sales tax. View "Citrix Systems, Inc. v. Commissioner of Revenue" on Justia Law

Walter and Mary Van Riper transferred ownership of their marital home to a single irrevocable trust. Walter passed away shortly after transfer of the property to the trust. Six years later, after Mary passed away, the trustee distributed the property to the couple’s niece. In this appeal, the issue presented for the New Jersey Supreme Court was whether the New Jersey Division of Taxation (Division) properly taxed the full value of the home at the time of Mary’s death. Walter and Mary directed that, if sold, all proceeds from the sale of their residence would be held in trust for their benefit and would be utilized to provide housing and shelter during their lives. Walter died nineteen days after the creation of the Trust. Mary died six years later, still living in the marital residence. Mary’s inheritance tax return reported one-half of the date-of-death value of the marital residence as taxable. However, the Division conducted an audit and imposed a transfer inheritance tax assessment based upon the entire value of the residence at the time of Mary’s death. Mary’s estate paid the tax assessed but filed an administrative protest challenging the transfer inheritance tax assessment. The Division issued its final determination that the full fair market value of the marital residence held by the Trust should be included in Mary’s taxable estate for transfer inheritance tax purposes. The Appellate Division affirmed the Tax Court’s conclusion, rejecting the estate’s argument that transfer inheritance tax should only be assessed on Mary’s undivided one-half interest in the residence. The Supreme Court agreed with both the Tax Court and the Appellate Division that the Division properly taxed the entirety of the residence when both life interests were extinguished, and the remainder was transferred to Marita. The property’s transfer, in its entirety, took place “at or after” Mary’s death, and was appropriately taxed at its full value at that time. “In light of the estate-planning mechanism used here, any other holding would introduce an intolerable measure of speculation and uncertainty in an area of law in which clarity, simplicity, and ease of implementation are paramount.” View "Estate of Mary Van Riper v. Director, Division of Taxation" on Justia Law

The Supreme Court affirmed the decision of the board of tax appeals (BTA), holding that Cleveland's taxation of Appellant's employment compensation in 2014 and 2015 was required under municipal law and did not violate Appellant's due process rights, despite the fact that Appellant did not work or live in the city of Cleveland during the tax years at issue.Appellant was employed by the Sherwin-Williams Company from 1980 until she retired in 2009 and moved to Florida. Sherwin-Williams compensated Appellant, in part, with stock options during her employment. Appellant exercised some of those options in 2014 and 2015, and Cleveland collected income tax on their value. Appellant sought refunds from the city based on the fact that she resided in Florida during the tax years at issue. Cleveland Board of Income Tax Review denied the refunds, and the BTA affirmed. The Supreme Court affirmed, holding that Appellant's arguments challenging the taxation failed. View "Willacy v. Cleveland Board of Income Tax Review" on Justia Law

The Louisiana Supreme Court granted certiorari to determine whether the lower courts correctly ruled an online marketplace was obligated as a "dealer" under La. R.S. 47:301(4)(l) and/or by contract to collect sales tax on the property sold by third party retailers through the marketplace’s website. Wal-Mart.com USA, LLC (“Wal-Mart.com”) operated an online marketplace at which website visitors could buy products from Wal-Mart.com or third party retailers. From 2009 through 2015, Wal-Mart.com reported its online sales in Jefferson Parish, Louisiana of its products and remitted the required sales tax to the Louisiana Department of Revenue and ex-officio tax collector, then Sheriff Newell Normand (Tax Collector). The reported sales amount did not include proceeds from online sales made by third party retailers through Wal-Mart.com’s marketplace. Following an attempted audit for this period, Tax Collector filed a “Rule for Taxes” alleging Wal-Mart.com “engaged in the business of selling, and sold tangible personal property at retail as a dealer in the Parish of Jefferson,” but had “failed to collect, and remit . . . local sales taxes from its customers for transactions subject to Jefferson Parish sales taxation.” In addition, Tax Collector alleged that an audit of Wal-Mart.com’s sales transactions was attempted, but Wal-Mart.com “refused to provide [Tax Collector] with complete information and records” of Jefferson Parish sales transactions, particularly, those conducted on behalf of third party retailers. In connection with online marketplace sales by third party retailers, Tax Collector sought an estimated $1,896,882.15 in unpaid sales tax, interest, penalties, audit fees, and attorney fees. The Supreme Court determined an online marketplace was not a “dealer” under La. R.S. 47:301(4)(l) for sales made by third party retailers through its website and because the online marketplace did not contractually assume the statutory obligation of the actual dealers (the third party retailers), the judgment of the trial court and the decision of the court of appeal were reversed and vacated. View "Normand v. Wal-Mart.com USA, LLC" on Justia Law

Lowe's Home Centers sought reimbursement of state sales taxes and Business and Occupation ("B&O") taxes from the Washington Department of Revenue ("DOR") because it contracted with banks to offer private-label credit cards to its customers, and agreed to repay the banks for losses it sustained when customers defaulted on their accounts. RCW 82.08.050 provided that a seller must collect and remit sales taxes to the State; for sellers unable to recoup sales taxes from buyers, RCW 82.08.037(1) provided that sellers could claim a deduction "for sales taxes previously paid on bad debts." In a split decision, the Court of Appeals affirmed the trial court's denial of reimbursement. After its review, the Washington Supreme Court held that although banks were involved in the credit transaction, Lowe's was still the seller burdened with the loss from its customers' defaults, including their nonpayment of the sales taxes. Accordingly, the Supreme Court reversed the Court of Appeals. View "Lowe's Home Ctrs., LLC v. Dep't of Revenue" on Justia Law

Plaintiff Ventas Realty Limited Partnership (Ventas), appealed a superior court order denying its request for an abatement of the real estate taxes it paid defendant City of Dover (City), for the 2014 tax year. The subject real estate consists of a 5.15-acre site containing a skilled nursing facility serving both short-term and long-term patients, two garages, and a parking lot. At issue was the City’s April 1, 2014 assessment of the real estate at a value of $4,308,500. Ventas alleged that it timely applied to the City for an abatement of its 2014 taxes. The City presumably denied or failed to act upon the request, and Ventas, thereafter, petitioned the superior court for an abatement pursuant to RSA 76:17 (Supp. 2018), alleging that the City had unlawfully taxed the property in excess of its fair market value. Expert witnesses for both sides opined the property’s highest and best use was as a skilled nursing facility. The experts also agreed that the most reliable method for determining the property’s fair market value was the income capitalization method, although the City’s expert also completed analyses under the sales comparison and cost approaches. Both experts examined the same comparable properties and they also used similar definitions of “fair market value.” The main difference between the approaches of the two experts is that the City's expert used both market projections and the property’s actual income and expenses from 2012, 2013, and 2014 to forecast the property’s future net income, while Ventas' expert did not. Ventas' expert used the property’s actual income and expenses for the 11 months before the April 1, 2014 valuation date, without any market-based adjustments. Despite their different approaches, the experts gave similar estimates of the property’s projected gross income for tax year 2014. The experts differed greatly in their estimates of the property’s projected gross operating expenses for tax year 2014. All of Ventas’ arguments faulted the trial court for finding the City's expert's valuations more credible than its own expert's valuations. The New Hampshire found the trial court made numerous, specific findings which were supported by the record as to why it rejected Ventas' expert's appraisal. Accordingly, the Supreme Court upheld the trial court’s determination that Ventas' expert's appraisal failed to meet Ventas’ burden of proof. View "Ventas Realty Limited Partnership v. City of Dover" on Justia Law

The Colorado Title Board set a title for Proposed Ballot Initiative 2019–2020 #3 (“Proposed Initiative”) that reads, in pertinent part, “An amendment to the Colorado constitution concerning the repeal of the Taxpayer’s Bill of Rights (TABOR), Article X, Section 20 of the Colorado constitution.” The Board also ultimately adopted an abstract that states, regarding the economic impact of the Proposed Initiative. A challenge to the Proposed Initiative was presented for the Colorado Supreme Court's review, and after such, the Court concluded the title and abstract were clear and not misleading, and that the phrase “Taxpayer’s Bill of Rights,” as used in the title, was not an impermissible catch phrase. Accordingly, the Court affirmed the decision of the Title Board. View "In re Proposed Ballot Initiative 2019" on Justia Law

In 2016, Chicago imposed a municipal tax on units of noncigarette “other tobacco products” purchased in the city. Entities with interests in tobacco products sought injunctive relief, arguing that the ordinance was preempted by the Illinois Municipal Code (65 ILCS 5/8-11-6a). The Illinois Supreme Court ruled in favor of the plaintiffs. Section 8-11-6a contains seven specific exemptions to its otherwise broad restrictions on a home rule unit’s power to tax, allowing those units to impose certain taxes on alcoholic beverages, cigarettes, or other tobacco products; motel or hotel rooms; sale or transfer of real property; lease receipts; food prepared for immediate consumption and alcohol sold by businesses that make food for immediate consumption on-site; and other taxes not based on the selling or purchase price or gross receipts from the use, sale, or purchase of tangible personal property. The tobacco products exemption refers to “a tax based on the number of units of cigarettes or tobacco products (provided, however, that a home rule municipality that has not imposed a tax based on the number of units of cigarettes or tobacco products before July 1, 1993, shall not impose such a tax after that date).” The statute allows only those municipal taxes on cigarettes or other tobacco products enacted prior to July 1, 1993. The city’s public policy arguments are better directed to the General Assembly, which has rejected prior requests to amend the statute. View "Iwan Ries & Co. v. City of Chicago" on Justia Law

Plaintiffs, two private citizens and eighteen states, filed suit challenging the individual mandate requirement of the Patient Protection and Affordable Care Act (ACA). The individual mandate required individuals to maintain health insurance coverage and, if individuals did not maintain this coverage, they must make a payment to the IRS called a shared responsibility payment.Plaintiffs argued that the individual mandate was no longer constitutional because: (1) Nat'l Fed'n of Indep. Bus. v. Sebelius, 567 U.S. 519, 538 (2012), rested the individual mandate's constitutionality exclusively on reading the provision as a tax; and (2) a 2017 amendment, which changed the amount of the shared responsibility payment to zero dollars, undermined any ability to characterize the individual mandate as a tax because the provision no longer generates revenue, a requirement for a tax. Plaintiffs further argued that the individual mandate was essential to, and inseverable from, the rest of the ACA and thus the entire ACA must be enjoined.The Fifth Circuit affirmed in part and vacated in part the district court's judgment, holding that there is a live case or controversy because the intervenor-defendant states have standing to appeal and, even if they did not, there remains a live case or controversy between plaintiffs and the federal defendants; plaintiffs have Article III standing to bring this challenge to the ACA because the individual mandate injures both the individual plaintiffs, by requiring them to buy insurance that they do not want, and the state plaintiffs, by increasing their costs of complying with the reporting requirements that accompany the individual mandate; the individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power; and, on the severability question, the court remanded to the district court to provide additional analysis of the provisions of the ACA as they currently exist. View "Texas v. United States" on Justia Law

Video Gaming Technologies, Inc. (VGT), appeals from the district court's grant of Tulsa County Assessor's motion to dismiss for lack of subject matter jurisdiction. VGT brought a claim for relief from assessment of ad valorem taxes. The Tulsa County Assessor moved to dismiss for lack of subject matter jurisdiction as VGT had not paid the past-due taxes pursuant to 68 O.S.2011 section 2884. The district court granted the motion to dismiss. The Oklahoma Supreme Court determined the underlying question to this case was whether title 68, section 2884 applied to appeals from the Board of Tax Roll Corrections pursuant to title 68, section 2871. The Court concluded title 68, section 2884 did not apply to appeals pursuant to title 68, section 2871: "Timely payment of taxes is not a jurisdictional prerequisite for appeals from orders of the Board of Tax Roll Corrections. The district court erred in finding it did not have jurisdiction." Therefore, the Court reversed the order of dismissal and remanded for further proceedings. View "Video Gaming Technologies v. Tulsa County Bd. of Tax Roll Corrections" on Justia Law