Justia Government & Administrative Law Opinion Summaries

In this case regarding the determination of the tax court valuing Minnesota Energy Resources Corporation’s (MERC) natural gas pipeline distribution system for the years 2008 through 2012, the Supreme Court affirmed the decision of the tax court on remand, holding that the tax court followed the Court’s instructions on remand and properly applied the Court’s clarified standard to MERC’s claim of external obsolescence. On remand, the tax court found that MERC failed to demonstrate that external obsolescence affected the value of its property. The Supreme Court affirmed, holding (1) the tax court correctly evaluated whether MERC’s evidence of external obsolescence was credible, reliable, and relevant; and (2) the tax court’s decision was justified by the evidence and in conformity with law. View "Minnesota Energy Resources Corp. v. Commissioner of Revenue" on Justia Law

At issue in consolidated cases was the correctness of administrative decisions issued by the Louisiana Tax Commission (“Commission”) on review of the valuations, for the 2014 and 2015 tax years, by the Orleans Parish Tax Assessor (“Assessor”) of a low-income housing development, owned by Opportunity Homes Limited Partnership (“Opportunity Homes”), for purposes of assessment of ad valorem taxes. The Commission ruled in favor of Opportunity Homes for both tax years. The administrative decisions were upheld by the district court but reversed by the appellate court. The Louisiana Supreme Court reversed the appellate court and reinstated the assessment values as determined by the Commission. The Court found no conflict between La. R.S. 47:2323, providing parish assessors a choice of three generally recognized appraisal methods to utilize to determine fair market value (the market approach, the cost approach, and/or the income approach), and La. Admin. Code, Title 61, Part V, sec. 303(C), which recommended the use of the income approach for assessing affordable rental housing, such as the Opportunity Homes LIHTC development. The Supreme Court found this case turned purely on the facts established before the Commission, proving that the income approach was the more appropriate method for determining fair market value in this case. Consequently, the appellate court erred in holding that the Commission’s decisions were in violation of statutory provisions, in excess of its authority, based upon unlawful procedures, and legally incorrect. View "Williams v. Opportunity Homes Limited Partnership" on Justia Law

GMRI, Inc. a restaurant operator, appealed a judgment entered in favor of the State Board of Equalization (the Board) after the trial court granted the Board’s summary judgment motion. Between 2002 and 2004 (period in dispute), GMRI operated Olive Garden and Red Lobster restaurants in California. Customers of these restaurants were notified on their menus that an “optional” gratuity of either 15 or 18 percent (depending on which restaurant and time period within the period in dispute) “will be added to parties of 8 or more.” When it was added, a manager was required to swipe his or her manager’s card through the restaurant’s point- of-sale (POS) system and then manually add the gratuity to the bill. The bill generated and presented to the customer would then contain the total cost of the meal, the applicable tax, the amount of the large party gratuity added by the manager, and the sum of these amounts as the total amount to be paid. In line with the word “optional,” the Company’s policy was that its restaurant managers would always remove a large party gratuity if asked by the customer to do so. However, unless such a request was made, the large party gratuity would remain on the bill as a portion of the total amount. And where that customer paid with a credit card, the credit card slip would contain the amount of the meal plus tax, the amount of the large party gratuity, the total amount, and then a blank line designated, “Add’l Tip,” followed by another blank line designated, “Final Total.” The trial court concluded a 15 or 18 percent gratuity restaurant managers automatically added to parties of eight or more without first conferring with the customer amounted to a “mandatory payment designated as a tip, gratuity, or service charge” under California Code of Regulations, title 18, section 1603 (g), and therefore part of the Company’s taxable gross receipts, in one circumstance: where the large party gratuity was added and neither removed nor modified by the customer. Finding no error in affirming the Board's decision, the Court of Appeal affirmed the trial court. View "GMRI, Inc. v. CA Dept. of Tax & Fee Admin." on Justia Law

This direct cross-appeal to the South Carolina Supreme Court involved the scope of the authority the Department of Revenue (DOR) to enforce various provisions of state law relating to the imposition of a transportation penny tax by Richland County (County) and the County's expenditure of the funds generated by the tax. After DOR conducted an audit and informed the County that DOR intended to cease future remittances to the County based on purported misuse of funds, the County filed a declaratory judgment action in circuit court, arguing DOR lacked the authority to stop payments and seeking a writ of mandamus compelling DOR to continue remitting revenues. DOR counterclaimed seeking a declaration that the County's expenditures were unlawful, an injunction to prohibit future unlawful expenditures, and alternatively, the appointment of a receiver to administer the County's tax revenues. Following a hearing, the circuit court issued a writ of mandamus compelling DOR to remit the tax revenues, denied injunctive relief, and refused to appoint a receiver. Both the County and DOR appealed. After review, the Supreme Court affirmed in all respects except it reversed the circuit court's denial of DOR's request for injunctive relief. DOR was entitled to an injunction requiring the County to expend the funds generated by the tax solely on transportation-related projects in accordance with the law. View "Richland County v. So. Carolina Dept. of Revenue" on Justia Law

The Supreme Court vacated the order of the district court denying Appellants’ petitions for judicial review challenging a 2007 decision by the Nevada Tax Commission regarding a tax refund request, holding that the district court lacked jurisdiction to consider Appellants’ petitions for judicial review because they were untimely.In 2008, Appellants filed a second de novo action (Case 2) challenging the administrative denials of their refund requests. The district court dismissed the action for lack of subject matter jurisdiction because Appellants failed to file a petition for judicial review. Appellants subsequently filed a petition for judicial review (Case 3). The ALJ affirmed the Commission’s 2007 decision. In 2014, the Commission affirmed the ALJ’s decision. Appellants then filed a second petition for judicial review (Case 4) challenging the Commission’s 2014 decision. The district court consolidated the Case 3 and Case 4 petitions for judicial review and affirmed the Commission’s 2007 and 2014 decisions. The Supreme Court held that the district court lacked jurisdiction to consider Appellants’ Case 3 petition for judicial review and thus lacked the authority to consider the merits of Appellants’ Case 4 petition. View "K-Kel, Inc. v. State, Department of Taxation" on Justia Law

The Supreme Court reversed the decision of the Board of Tax Appeals (BTA) concluding that Taxpayer’s challenge to the taxable value assigned to its property for tax year 2012 was barred because taxpayer waited too long to notify the Board of Revision (BOR) that it wished to pursue a continuing complaint for tax year 2012. Taxpayer did not file a new complaint for the 2012 tax year but, rather, relied upon the continuing-complaint jurisdiction provided for in Ohio Rev. Code 5715.19(D). The Supreme Court held that the time limitation imposed by the BTA was contrary to the plain language of Ohio Rev. Code 5715.19(D) and that, under the statute, the BOR had continuing-complaint jurisdiction to consider Taxpayer’s request for tax year 2012. View "MDM Holdings, Inc. v. Cuyahoga County Board of Revision" on Justia Law

The Vermont Department of Taxes appeals from trial court orders in favor of defendants in consolidated tax-collection cases. Defendants Thomas Tatro, Kenneth Montani, and Tyre Duvernay failed to file personal income tax returns for various years and the Department sent a First Notice of Audit Assessment to each that provided the amount of taxes due along with interest and penalties. These notices were issued more than three years after the date that the tax returns should have been filed. Defendants did not appeal the assessments to the Commissioner pursuant to 32 V.S.A. 5883. The issue before the superior court in each case arose in the context of a collection action brought by the Department. Defendants did not appear or participate in the collection cases or in these appeals. The Department moved for default judgment. The superior court sua sponte raised a statute-of-limitations challenge to the underlying tax assessments. The court concluded that the underlying tax debts were invalid because the Department issued its notices of deficiencies or assessments of penalty or interest to defendants more than three years after defendants’ tax returns were originally due. The Department argued on appeal to the Vermont Supreme Court that the trial court lacked subject matter jurisdiction to consider the validity of the underlying debts in these collection actions, and that, in any event, it erred in concluding that a three-year limitation period applied. The Supreme Court agreed with the Department on both points. The Court therefore reversed and remanded for entry of judgment in the Department’s favor for the years covered in these cases. View "Vermont Department of Taxes v. Montani et al." on Justia Law

The Vermont Department of Taxes appeals from trial court orders in favor of defendants in consolidated tax-collection cases. Defendants Thomas Tatro, Kenneth Montani, and Tyre Duvernay failed to file personal income tax returns for various years and the Department sent a First Notice of Audit Assessment to each that provided the amount of taxes due along with interest and penalties. These notices were issued more than three years after the date that the tax returns should have been filed. Defendants did not appeal the assessments to the Commissioner pursuant to 32 V.S.A. 5883. The issue before the superior court in each case arose in the context of a collection action brought by the Department. Defendants did not appear or participate in the collection cases or in these appeals. The Department moved for default judgment. The superior court sua sponte raised a statute-of-limitations challenge to the underlying tax assessments. The court concluded that the underlying tax debts were invalid because the Department issued its notices of deficiencies or assessments of penalty or interest to defendants more than three years after defendants’ tax returns were originally due. The Department argued on appeal to the Vermont Supreme Court that the trial court lacked subject matter jurisdiction to consider the validity of the underlying debts in these collection actions, and that, in any event, it erred in concluding that a three-year limitation period applied. The Supreme Court agreed with the Department on both points. The Court therefore reversed and remanded for entry of judgment in the Department’s favor for the years covered in these cases. View "Vermont Department of Taxes v. Montani et al." on Justia Law

The court of appeals erred in ruling that a taxpayer avoided in Iowa inheritance tax through a private postmortem family settlement agreement (FSA).Here, the decedent, before his death, signed a beneficiary form listing the taxpayer as a contingent beneficiary of his brokerage account. That account transferred to the taxpayer upon the decedent's death. The Iowa Department of Revenue (IDOR) determined that the estate owed the inheritance tax on the full account value. The decedent’s grandchildren sued the taxpayer claiming that they were entitled to the brokerage account under the decedent’s will because the decedent lacked the mental capacity to execute an enforceable beneficiary designation for the account. The taxpayer settled the suit by transferring half the account value to the plaintiffs under an FSA. The taxpayer then sought a refund of part of the inheritance tax already paid. The IDOR denied a refund, determining that the taxpayer failed to establish incapacity. The district court affirmed. The court of appeals reversed, concluding that the FSA controlled the tax issue. The Supreme Court vacated the decision of the court of appeals and affirmed the district court judgment, holding that, without an adjudication of incapacity, the FSA was not binding on the IDOR and could not avoid the inheritance tax. View "Nance v. Iowa Department of Revenue" on Justia Law

The court of appeals erred in ruling that a taxpayer avoided in Iowa inheritance tax through a private postmortem family settlement agreement (FSA).Here, the decedent, before his death, signed a beneficiary form listing the taxpayer as a contingent beneficiary of his brokerage account. That account transferred to the taxpayer upon the decedent's death. The Iowa Department of Revenue (IDOR) determined that the estate owed the inheritance tax on the full account value. The decedent’s grandchildren sued the taxpayer claiming that they were entitled to the brokerage account under the decedent’s will because the decedent lacked the mental capacity to execute an enforceable beneficiary designation for the account. The taxpayer settled the suit by transferring half the account value to the plaintiffs under an FSA. The taxpayer then sought a refund of part of the inheritance tax already paid. The IDOR denied a refund, determining that the taxpayer failed to establish incapacity. The district court affirmed. The court of appeals reversed, concluding that the FSA controlled the tax issue. The Supreme Court vacated the decision of the court of appeals and affirmed the district court judgment, holding that, without an adjudication of incapacity, the FSA was not binding on the IDOR and could not avoid the inheritance tax. View "Nance v. Iowa Department of Revenue" on Justia Law