Justia Government & Administrative Law Opinion Summaries

The Missouri Supreme Court ruled in a case involving the St. Louis County Assessor ("Assessor") and a group of St. Louis County commercial property owners, referred to as "Taxpayers." The Taxpayers alleged that their properties were assessed at a higher percentage of fair market value (FMV) than other commercial properties in the county. This claim is known as a "ratio discrimination" claim. The Taxpayers appealed their assessments to the local board of equalization ("BOE") and the Missouri State Tax Commission ("STC"). In some of the appeals, the BOE and STC did not change the Assessor's original FMV and assessed value, while in others, they ordered reductions in the estimated FMV of the property, resulting in a lower assessed value and decreased tax liability.The STC found that the Taxpayers did not provide substantial and persuasive evidence of discrimination. The Taxpayers then filed a petition for judicial review, and the circuit court reversed the STC's decision and order and remanded the case for retrial. The Assessor appealed to the Missouri Supreme Court, which found that the STC's decision was authorized by law and supported by substantial evidence. The Court agreed with the STC that the Taxpayers did not provide persuasive evidence of discriminatory assessment. The Court held that the actual assessment level used to analyze a claim of discriminatory assessment and taxation is based on the assessed value that actually determines the tax liability. The Court also found that the STC did not abuse its discretion by denying certain discovery requests and quashing subpoenas for the deposition of the Assessor and several staff appraisers. The circuit court's judgment was vacated, and the STC's decision and order was reinstated. View "Crown Diversified Industries Corp. v. Zimmerman" on Justia Law

In the case before the Court of Appeal of the State of California First Appellate District Division Two, the appellant, Debra Abney, challenged the decision of the State Department of Health Care Services and the City and County of San Francisco to consider money garnished from her Social Security payments as income for the purposes of determining her eligibility for benefits under Medi-Cal.Abney's Social Security payments were being reduced by nearly $600 each month to satisfy a debt she owed to the IRS. The authorities considered this garnished money as income, which led to Abney being ineligible to receive Medi-Cal benefits without contributing a share of cost. Abney argued that the money being garnished was not income “actually available to meet her needs” under the regulations implementing the Medi-Cal program.The trial court rejected Abney's argument, and she appealed. The Court of Appeal affirmed the trial court's decision. The Court of Appeal held that the tax garnishment was "actually available" to meet Abney's needs because it benefitted her financially by helping to extinguish her debt to the IRS. Therefore, the garnished money was correctly considered as income for the purpose of calculating her eligibility for the Medi-Cal program. View "Abney v. State Dept. of Health Care Services" on Justia Law

The Supreme Court of the State of Colorado reviewed a case involving a dispute over the methodology for implementing Tax Increment Financing (TIF) under Colorado's Urban Renewal Law (URL). The respondents, collectively known as AURA, argued that the methodology applied by the Colorado State Property Tax Administrator and the Arapahoe County Assessor was in violation of the URL because it differentiated between direct and indirect benefits when adjusting the base and increment values of blighted property in urban renewal areas. They contended that this methodology deprived urban renewal authorities of property tax revenues they should receive due to enhanced market perceptions of properties located in a TIF plan. The court of appeals agreed with AURA and reversed the district court's summary judgment favoring the Assessor. However, the Supreme Court held that the Administrator's methodology does not violate the URL. The URL does not prescribe a specific methodology but gives the Administrator broad authority to determine how to calculate and proportionately adjust the base and increment values. The court concluded that the Administrator's differentiation between direct and indirect benefits does not conflict with the URL, and therefore, reversed the portion of the division’s judgment concerning the Administrator’s methodology and affirmed that the district court correctly entered summary judgment. View "Kaiser v. Aurora Urban Renewal Authority" on Justia Law

In South Dakota, McLane Western, Inc. and McLane Minnesota, Inc., South Dakota-licensed wholesalers of tobacco products, purchased Other Tobacco Products (OTP) from U.S. Smokeless Tobacco Brands, Inc. (UST Sales), who in turn purchased the products from U.S. Smokeless Tobacco Manufacturing Company, LLC (UST Manufacturing), a federally licensed tobacco manufacturer. McLane brought the OTP into South Dakota and paid the state's 35% tobacco tax. They calculated the tobacco tax they owed using the amount they paid to UST Sales for the OTP, a price higher than what UST Sales paid UST Manufacturing for the same OTP. McLane later submitted numerous refund requests to the South Dakota Department of Revenue, arguing that they overpaid their tax obligations as their tax should have been based on the price UST Sales paid UST Manufacturing.The Supreme Court of the State of South Dakota agreed that McLane overpaid its tobacco tax as it was based on the higher price it paid to UST Sales instead of the price at which UST Manufacturing sold tobacco products to UST Sales. However, the court also concluded that McLane was not entitled to a refund for the overpaid amounts. The court reasoned that although McLane overpaid its advance tax obligation, it fully recovered the advance tax it paid from the dealers to whom it subsequently sold the OTP. The dealers then recovered that tax from the consumers who purchased the OTP. Thus, McLane was made whole by its resale of the OTP and is not entitled to any refund. The court affirmed the Department’s denial of McLane’s request for a refund. View "Mclane Western, Inc. v. South Dakota Department Of Revenue" on Justia Law

This case involves a dispute over the tax assessments of 115 vacant lots in the Sunup Ridge subdivision in Converse County, Wyoming, owned by Jan Gray. Gray appealed the Converse County Board of Equalization’s decisions upholding the Converse County Assessor’s tax assessments for the years 2016, 2017, 2018, and 2020. He contended that the County Assessor failed to physically inspect each lot as required by law, and that the tax assessments were not supported by substantial evidence. Additionally, he argued that the County Board did not provide an adequate record on appeal and that he was denied an opportunity for proper discovery.The Supreme Court of Wyoming upheld the County Board's decisions. The court found that the County Assessor had complied with the requirement to physically inspect the properties, and that the tax assessments were supported by substantial evidence. Furthermore, the court determined that the County Board had provided an adequate record for appeal and that Gray had not been denied an opportunity for discovery. Therefore, the court affirmed the County Board's tax assessments for the years in question. View "Jan Charles Gray v. Converse County Assessor" on Justia Law

In Mississippi, Jackson Sales & Storage Co. (JSSC), a subsidiary of National Presto Industries, was granted an annual exemption from ad valorem property taxes by Hinds County for almost forty years. This exemption was based on a free-port-warehouse license issued to JSSC by the State Tax Commission in 1981. In 2019, however, Hinds County denied the exemption and assessed JSSC back taxes for 2012-18, arguing JSSC lacked the requisite free-port-warehouse license. JSSC sought relief in Hinds County Circuit Court, which held that JSSC’s license remained valid and in effect since 1981 and was not subject to renewal. The Circuit Court also ruled that JSSC owed no taxes for 2012-19. On appeal, the Supreme Court of Mississippi partially affirmed and partially reversed the lower court's ruling. The Supreme Court agreed that JSSC's license was valid since 1981 and that JSSC owed no taxes for 2012-18. However, the Supreme Court disagreed with the lower court’s finding that the license wasn’t subject to renewal and that JSSC owed no taxes for 2019. The Supreme Court held that the county could require JSSC to renew its license and that JSSC owes Hinds County the remaining $290,724.52 in ad valorem taxes for 2019. The court clarified that moving forward, the board of supervisors has discretion over whether it grants JSSC an exemption and over the period of time that exemption is in effect. View "Stokes v. Jackson Sales & Storage Co" on Justia Law

The Supreme Court affirmed the decision of the Minnesota Tax Court affirming the assessment of the Commissioner of Revenue assessing tax on an apportioned share of Cities Management, Inc.'s (CMI) income from the sale of the S corporation, holding that the income from the corporation's sale was apportionable business income.CMI, which did business in Minnesota and Wisconsin, and its nonresidential partial owner filed Minnesota tax returns characterizing the sale of CMI's goodwill as income that was not subject to apportionment by the State under Minn. Stat. Ann. 290.17. The Commissioner disagreed and assessed tax on an apportioned share of the corporation's income from the sale. The tax court affirmed. The Supreme Court affirmed, holding that CMI's income did not constitute "nonbusiness" income under section 290.17, subd. 6 and may be constitutionally apportioned as business income. View "Cities Management, Inc. v. Commissioner of Revenue" on Justia Law

In April 2017 and June 2017, Appellant Diane Zilka filed petitions with the Philadelphia Department of Revenue (the “Department”), seeking refunds for the Philadelphia Tax she paid from 2013 to 2015, and in 2016, respectively. During the relevant tax years, Appellant resided in the City, but worked exclusively in Wilmington, Delaware. Thus, she was subject to four income taxes (and tax rates) during that time: the Philadelphia Tax; the Pennsylvania Income Tax (“PIT”); the Wilmington Earned Income Tax (“Wilmington Tax”); and the Delaware Income Tax (“DIT”). The Commonwealth granted Appellant credit for her DIT liability to completely offset the PIT she paid for the tax years 2013 through 2016; because of the respective tax rates in Pennsylvania versus Delaware, after this offsetting, Appellant paid the remaining 1.93% in DIT. Although the City similarly credited against Appellant’s Philadelphia Tax liability the amount she paid in the Wilmington Tax — specifically, the City credited Appellant 1.25% against her Philadelphia Tax liability of 3.922%, leaving her with a remainder of 2.672% owed to the City — Appellant claimed that the City was required to afford her an additional credit of 1.93% against the Philadelphia Tax, representing the remainder of the DIT she owed after the Commonwealth credited Appellant for her PIT. After the City refused to permit her this credit against her Philadelphia Tax liability, Appellant appealed to the City’s Tax Review Board (the “Board”). The issue this case presented for the Pennsylvania Supreme Court's review as whether, for purposes of the dormant Commerce Clause analysis implicated here, state and local taxes had to be considered in the aggregate. The Court concluded state and local taxes did not need be aggregated in conducting a dormant Commerce Clause analysis, and that, ultimately, the City’s tax scheme did not discriminate against interstate commerce. Accordingly, the Court affirmed the Commonwealth Court order. View "Zilka v. Tax Review Bd. City of Phila." on Justia Law

The IRS may penalize taxpayers who fail to report a “listed transaction” that the agency determines is similar to one already identified as a tax-avoidance scheme, 26 U.S.C. 6707A(a), (c)(2). IRS Notice 2007-83 listed employee-benefit plans with cash-value life insurance policies. In 2013, Mann created trusts for its co-owners that paid the premiums on their cash-value life insurance policies. Mann deducted the expenses on its tax forms, and the owners counted the death benefits as income. None of them reported the trusts as a listed transaction.In 2019, the IRS determined that the trusts failed to comply with Notice 2007-83 and imposed penalties, which were paid. After the IRS refused requests for refunds, the taxpayers filed suit. The district court granted the IRS summary judgment on a claim that the Notice violated the Administrative Procedures Act’s notice-and-comment requirements. The Sixth Circuit reversed, concluding that Notice 2007- 83 was a legislative rule that lacked exemption from the requirements; “we must set [Notice 2007-83] aside” and “need not address the taxpayers’ remaining claims.”Before the district court ruled on remand, the IRS refunded the past penalties with interest and agreed not to apply the Notice to anyone within the Sixth Circuit. The district court concluded that it retained jurisdiction to set aside and vacate the Notice nationwide. The Sixth Circuit vacated. The taxpayers sought a refund of past tax penalties and prospective relief against Notice 2007-83; the IRS’s actions mooted their claim and left nothing more for the court to do. View "Mann Construction, Inc. v. United States" on Justia Law

Plaintiffs-appellants Michael Cathey and Vonderosa Properties, LLC (collectively "Vonderosa") filed suit seeking declaratory relief against Defendant-Appellee Board of County Commissioners for McCurtain County (Board) and moved for a temporary injunction to restrain and enjoin the Board from enforcing and collecting a lodging tax increase passed at a special election held in McCurtain County on November 8, 2022, in conjunction with the general election. The district court denied Vonderosa's request for a temporary injunction and Vonderosa appealed, seeking emergency relief from the Oklahoma Supreme Court. On March 28, 2023, the Supreme Court entered an Order temporarily enjoining enforcement of the 2% increase to the lodging tax until the special election was fully and finally litigated. The Court expressed no opinion concerning the validity of the special election in its emergency Order. While Appellee's petition for rehearing was still pending before the Supreme Court and before the mandate issued, the district court granted Appellee-Intervenor's Motion for Summary Judgment and held the special election was valid. The Supreme Court held that under the facts of this specific case the district court was without jurisdiction to enter summary judgment for Appellee while the appeal was pending before the Supreme Court and before mandate had issued. The District Court's Order of June 20, 2023 was void for lack of jurisdiction and the Order was vacated. The case was remanded to the district court with instructions. View "Cathey v. McCurtain County Bd. of County Comm'rs" on Justia Law