Justia Government & Administrative Law Opinion Summaries

In August 2016, the Commissioner of the Minnesota Department of Revenue issued an order assessing personal liability against David Knapp, a North Dakota resident, for $65,843.80 in unpaid Minnesota sales and use taxes relating to his interest in a business in Bemidji, Minnesota. In December 2016, the Commissioner issued a third-party levy on securities held by broker Edward Jones for Knapp by sending a notice to Edward Jones at its Missouri office. The third-party levy said Edward Jones had to sell Knapp's securities under Minn. Stat. Ann. 270C.7101(7) and send the Minnesota Department of Revenue payment up to the amount due. The levy instructed Edward Jones not to send money that was exempt or protected from the levy and cautioned that state law allowed the Commissioner to assess debt to businesses, officers, or other individuals responsible for honoring the levy, including assessing the total amount due plus a twenty-five percent penalty. Knapp petitioned the district court to dissolve the levy and for a writ of prohibition against the Commissioner and Edward Jones to prohibit them from taking any further action to levy on his account. Knapp alleged that the Commissioner had no jurisdiction in North Dakota to levy on his North Dakota property and that his property was exempt from the levy. The district court issued a preliminary writ of prohibition to stay the levy pending the filing of an answer showing cause under N.D.C.C. 32-34-05, but later concluded Knapp failed to establish he was entitled to relief. The North Dakota Supreme Court concluded the district court did not abuse its discretion in denying Knapp's petition for a writ of prohibition, and affirmed the judgment and the order. View "Knapp v. Commissioner of Minnesota Department of Revenue" on Justia Law

Petitioners-appellants John Machacek, Jr. and Marianne Machacek were the sole shareholders of John J. Machacek, Jr., Inc. (Machacek, Inc.), a corporation organized under Subchapter S of the Internal Revenue Code. John was also an employee of Machacek, Inc. The Machaceks appealed the Tax Court’s ruling requiring them to treat as income the economic benefits resulting from Machacek, Inc.’s payment of a premium on John's life insurance policy under a compensatory split-dollar arrangement. Relying on the compensatory nature of the arrangement, the Tax Court rejected the Machaceks’ argument that the economic benefits should be treated as a shareholder distribution. The Sixth Circuit reversed, finding that the Tax Court did not consider the impact of a provision of the tax regulations specifically requiring that such economic benefits be treated as shareholder distributions. View "Machacek v. Comm'r of Internal Revenue" on Justia Law

The Supreme Court affirmed the circuit court’s judgment affirming a hearing examiner’s decision that an exemption from taxation for real property be increased to 100 percent but reversed the award of attorney fees, holding that the circuit court correctly upheld the hearing examiner’s decision but erred in its award of attorney fees.The Pennington County Board of Equalization established an exemption of thirty-two percent for the 2017 tax year for real property owned by American Legion Home Association Post 22. On American Legion’s administrative appeal, the hearing examiner concluded that the real property qualified for a 100 percent exemption under S.D. Codified Laws 10-4-9.2. The Supreme Court held that the circuit court (1) did not err in affirming the hearing examiner’s decision that the property was entitled to a 100 percent exemption under the statute; but (2) awarded attorney fees without sufficient information to determine a reasonable fee. The Court remanded the attorney fee issue. View "American Legion Home Ass’n Post 22 v. Pennington County" on Justia Law

The Supreme Court affirmed the decision of the district court finding that the language of Utah Code 59-7-113 was ambiguous and that section 113 did not permit the income allocation that the Utah State Tax Commission had imposed upon See’s Candies, holding that the district court properly employed the arm’s length transaction standard to determine that the Commission improperly allocated See’s income.The Commission in this case allocated certain royalty payments See’s had deducted from its taxable income back to See’s as taxable income. The district court decided that the allocation was inappropriate and allowed See’s to take the deductions. The Supreme Court affirmed, holding (1) the language of section 113 is ambiguous; (2) the district court properly looked to the statute’s federal counterpart and its accompanying regulations for guidance; and (3) the district court correctly determined that the Commission improperly allocated See’s income. View "Utah State Tax Commission v. See’s Candies, Inc." on Justia Law

Plaintiff The Marist Brothers of New Hampshire (MBNH) appealed several superior court orders: (1) a decision upholding the denial by defendant Town of Effingham (Town), of MBNH’s request for a charitable tax exemption, for tax year 2015, for real property; and (2) an order granting the Town’s motion in limine to exclude evidence of the tax treatment of New Hampshire youth camps other than the camp run by MBNH. When Camp Marist was not in session, MBNH rented the Property subject to this appeal: no restrictions were placed on who is eligible to rent, or how renters use, the Property. Rental proceeds were allocated to either the “regular Camp fund, the running of the Camp, or . . . to some of [MBNH’s] scholarships.” MBNH argues that the trial court erred in determining that it met none of the "ElderTrust" factors. After careful consideration, the New Hampshire Supreme Court concluded MBNH did satisfy all ElderTrust factors, reversing the trial court. View "The Marist Brothers of New Hampshire v. Town of Effingham" on Justia Law

Comcast Corporation challenged the Oregon Tax Court's construction of the statutory formula by which Oregon calculated the portion of its income taxable by Oregon. Based in part on those statutes, the Oregon Department of Revenue calculated that taxpayer had underpaid Oregon taxes for the tax years 2007-2009 and sent notices of deficiency, which Comcast appealed to the Tax Court. The Tax Court agreed with the department’s construction of the income-apportionment statutes and granted the department partial summary judgment on that part of Comcast's appeal. The Tax Court also entered a limited judgment to permit this appeal. After review, the Oregon Supreme Court concluded the Tax Court correctly construed the statutes that governed income-apportionment for interstate broadcasters, and affirmed the limited judgment. View "Comcast Corp. v. Dept. of Rev." on Justia Law

AICPA challenged the IRS's Annual Filing Season Program as violating the Administrative Procedure Act (APA). On remand, the district court granted the IRS's motion for judgment on the pleadings based on AICPA's lack of standing.The DC Circuit reversed and held that AICPA has constitutional and statutory standing to challenge the validity of the Program because its members employ unenrolled preparers. On the merits, the court held that the Program did not violate the APA in any of the ways AICPA alleged. In this case, 31 U.S.C. 330(a) authorizes the IRS to establish and operate the Program, and 26 U.S.C. 7803(a)(2)(A) authorizes the agency to publish the results of the Program; the IRS did not violate the APA by failing to follow notice-and-comment rulemaking procedures in promulgating it; and the Program was not arbitrary and capricious. View "American Institute of Certified Accountants v. IRS" on Justia Law

Capital One Auto Finance, Inc. (taxpayer) filed consolidated Oregon corporate excise tax returns as part of a group that included two corporate affiliates. Taxpayer disputed the Department of Revenue’s contention that it owed additional taxes. Ultimately, the issue in this case was whether taxpayer’s corporate affiliates, which did not have a physical presence in this state, were subject to either Oregon’s corporate excise tax or its corporate income tax for the tax years 2006-2008. Preliminarily, taxpayer also asserted the department lacked the authority to assert for the first time in the Tax Court that the affiliates were subject to corporate income tax. Ruling on cross-motions for summary judgment, the Tax Court concluded that the affiliates were subject to the corporate income tax and entered judgment in favor of the department. The Oregon Supreme Court concluded: (1) the department timely raised the corporate income tax issue; and (2) the corporate affiliates were subject to the corporate income tax based on “income derived from sources within this state.” View "Capital One Auto Finance, Inc. v. Dept. of Rev." on Justia Law

Detroit residents voted to allow the school district to increase property taxes “for operating expenses.“ In 2013, the Downtown Development Authority (DDA) announced its intent to capture some of that tax revenue to fund the construction of Little Caesars Arena for the Red Wings hockey team. In 2016, the DDA revised its plan to allow the Pistons basketball team to relocate to Arena. The Detroit Brownfield Redevelopment Authority (DBRA) agreed to contribute to the $56.5 million expenditure, including reimbursing construction costs that private developers had already advanced. The project is largely complete. Plaintiffs requested that the school board place on the November 2017 ballot a question asking voters to approve or disapprove of the agencies' use of tax revenue for the Pistons relocation. The board held a special meeting but did not put the question on the ballot. Plaintiffs filed suit. Count VIII sought a declaratory judgment that the board had authority to place the question on the ballot. Count IX sought a writ of mandamus ordering the board to place it on the ballot. The court dismissed Counts VIII and IX, noting that Plaintiffs could have filed suit in 2013. The Sixth Circuit affirmed. Plaintiffs lack Article III standing. Failure to place Plaintiffs’ question on the ballot affects all Detroit voters equally; they raised only a generally available grievance about government. Michigan statutes do not give Detroit residents the right to void a Tax Increment Financing plan by public referendum, so a referendum would not redress Plaintiffs’ injury. View "Davis v. Detroit Public School Community District" on Justia Law

Mendocino County Ballot Measure AI, which imposed a tax on commercial cannabis businesses, was approved by a simple majority of county voters. The trial court dismissed a challenge and denied plaintiffs’ motion for a preliminary injunction. The court of appeal affirmed, rejecting an argument that under a correct interpretation of article XIII of the California Constitution the tax imposed by Measure AI was not a general tax but, together with a related advisory measure, amounted to a special tax requiring approval by a supermajority of county voters. The court also rejected an alternative argument that Measure AI did not involve a tax at all, and instead imposed an unlawful fee. Because Measure AJ did not in any way limit the County’s ability to spend the proceeds collected under Measure AI, the tax necessarily and by its terms remained a general tax. View "Johnson v. County of Mendocino" on Justia Law