Justia Government & Administrative Law Opinion Summaries

The Supreme Judicial Court affirmed the decision of the Appellate Tax Board, which concluded that, under a provision of the Massachusetts sales tax statute known as the “drop shipment rule,” Taxpayer was responsible for collective and remitting sales tax due on products it sold to out-of-state retailers and then delivered to consumers. Taxpayer sold goods to retailers at wholesale and delivered the goods to Massachusetts consumers and others on behalf of those retailers. The Supreme Judicial Court held (1) the Commissioner of Revenue and the Board did not err in determining that Taxpayer was responsible as the vendor for collecting and remitting the sales tax due on products it sold to the out-of-state retailers and then delivered to consumers where it failed to meet its burden of proving that the retailers were engaged in business in Massachusetts; and (2) the statutory drop shipment rule does not violate the dormant commerce clause of the federal Constitution. View "D & H Distributing Co. v. Commissioner of Revenue" on Justia Law

South California Edison (Edison) was not due a refund of use tax paid to Nevada because it did not demonstrate the existence of substantially similar entities that gained an unfair tax advantage because of the unconstitutional tax, and Edison was not owed a tax credit in an amount equal to the transaction privilege tax (TPT) levied by Arizona because the TPT did not qualify as a sales tax paid by Edison within the meaning of Nev. Admin. Code 372.055.Edison filed a claim with the State Department of Taxation for a refund of the use tax it paid between 1998 and 2000. The Department and Nevada Tax Commission denied the requested refund. Edison then filed an independent action in the district court seeking a refund of the taxes it paid. The district court concluded that, while the negative implications of the dormant Commerce Clause rendered Nev. Rev. Stat. 372.270 (the use tax exemption) unconstitutional, Edison was not entitled to a refund because it did not have favored competitors that benefitted from the discriminatory taxation scheme. The Supreme Court affirmed for the reasons set forth above. View "Southern California Edison v. State Department of Taxation" on Justia Law

Chandler’s-Boise, LLC (“Chandlers”), challenges a district court’s grant of summary judgment upholding the Idaho State Tax Commission’s (the “Commission”) deficiency determination. Chandlers owned and operated a restaurant in downtown Boise, Idaho. The Commission, through its Sales, Use, and Miscellaneous Tax Audit Bureau (the “Bureau”), conducted a comprehensive sales audit of Chandlers for the period of May 1, 2007, through May 31, 2010 (the “Audit Period”), to determine sales tax law compliance. After its audit, the Bureau found errors in sales, fixed asset additions, ordinary purchases, and meals given to employees and guests. The only error relevant to this appeal was Chandlers’ failure to pay sales tax on automatically added gratuities that were added to banquet meals, room service meals, and restaurant dining services for groups having six or more persons (the “Charges”). The bills that Chandlers gave its customers during the Audit Period did not contain a written statement indicating that the Charges could be declined as required by the Pre-2011 Rule. Chandlers did not retain the Charges in question; rather, the employees involved in preparing or providing the meals, including the server, busser, and bartender, kept the Charges. The Bureau issued a Notice of Deficiency Determination to Chandlers wherein it determined that Chandlers owed $91,243 for sales and use tax plus penalty and interest. After review, the Idaho Supreme Court determined the district court did not err in rejecting Chandlers’ arguments with respect to non-payment of the Charges, and affirmed that court’s judgment. View "Chandlers-Boise v. Idaho Tax Commission" on Justia Law

Applying Wis. Stat. 70.47(7)(aa) and Wis. Stat. 74.37(4)(a) in a manner that required submission to a tax assessor’s search as a precondition to challenging the revaluation of their property violated Plaintiffs’ due process rights.Plaintiffs brought this case claiming that the assessment of their real property was excessive and that sections 70.47(7)(aa) and 74.37(4)(a), as applied, were unconstitutional because they conditioned their right to challenge the assessor’s valuation of the property on submission to a search of the interior of their home. The circuit court granted summary judgment for the Town. The court of appeals affirmed. The Supreme Court reversed, holding that sections 70.47(7)(aa) and 73.37(4)(a) were unconstitutionally applied to Plaintiffs. View "Milewski v. Town of Dover" on Justia Law

This appeal raised a question of whether the Uniformity Clause of the Pennsylvania Constitution permitted a taxing authority to selectively appeal only the assessments of commercial properties, such as apartment complexes, while choosing not to appeal the assessments of other types of property – most notably, single-family residential homes – many of which were under-assessed by a greater percentage. The common pleas court sustained the preliminary objections and dismissed the complaint, finding Appellants’ claims failed as a matter of law because the School District (the taxing authority) was not the entity that set assessments, and the applicable statute gave it a clear statutory right to appeal tax assessments set by the County. In rejecting Appellants’ argument relating to discriminatory treatment, the Court indicated that “[t]he filing of selective appeals does not result in a uniformity violation, and it is not deliberate discrimination.” In this regard, the court ultimately concluded “the Uniformity Clause does not require equalization across all subclassifications of real property.” The Commonwealth Court affirmed in a published decision. The Pennsylvania Supreme Court disagreed with the lower courts, finding Appellants’ complaint set forth a valid claim that the School District’s appeal policy violated the Uniformity Clause. View "Valley Forge Towers v. Upper Merion SD" on Justia Law

Clayton County appealed the trial court’s order denying its motion for judgment on the pleadings and granting the motion for partial summary judgment filed by the City ofCollege Park. This dispute arose over the taxation of alcoholic beverages at Hartsfield-Jackson Atlanta International Airport. Of the many businesses located within the Airport, some are located in the unincorporated sections of the County while other businesses are located in the County within the incorporated limits of the City of College Park (the “City”). In its complaint, the City contended that since the 1983 enactment of OCGA section 3-8-1 (regulation and taxation of alcoholic beverages at public airports), it has not been receiving the proper amount of alcoholic beverage taxes to which it was entitled, and that the County improperly infringed on its authority to tax by instructing vendors to remit to the County 50% of the taxes due from the sale of alcohol in those portions of the Airport located within the City limits. The City and County disagree on the interpretation of OCGA 3-8-1(e). In seeking a judgment on the pleadings, Clayton County asserted, among other things, that the City of College Park’s claims were barred by sovereign immunity. The matter of sovereign immunity was not briefed by the parties, and the trial court did not consider it. To permit a more thorough consideration of this question, the Mississippi Supreme Court remanded for the trial court to address it, with the benefit of full briefing. View "Clayton County v. City of College Park" on Justia Law

Baruch SLS, Inc., a Michigan nonprofit corporation, sought exemptions from real and personal property taxes as a charitable institution under MCL 211.7o and MCL 211.9 for tax years 2010–2012. Petitioner based its request on the fact that it offered an income-based subsidy to qualifying residents of Stone Crest Assisted Living, one of its adult foster care facilities, provided those residents had made at least 24 monthly payments to petitioner. The Tax Tribunal ruled that Stone Crest was not eligible for the exemptions because petitioner did not qualify as a charitable institution under three of the six factors set forth in Wexford Med Group v City of Cadillac, 474 Mich 192 (2006). The Court of Appeals reversed with respect to two of the Wexford factors, but affirmed the denial of the exemptions on the ground that petitioner had failed to satisfy the third Wexford factor because, by limiting the availability of its income-based subsidy, petitioner offered its services on a discriminatory basis. The Michigan Supreme Court found the third factor in the Wexford test excluded only restrictions or conditions on charity that bore no reasonable relationship to a permissible charitable goal. Because the lower courts did not consider Baruch’s policies under the proper understanding of this factor, the Court vacated the Court of Appeals’ and Tax Tribunal’s opinions in part and remanded this case to the Tax Tribunal for further proceedings. View "Baruch SLS, Inc. v. Twp of Tittabawassee" on Justia Law

Consolidated appeals arose out of a complaint filed by four Georgia taxpayers in which they challenged the constitutionality of Georgia’s Qualified Education Tax Credit, Ga. L. 2008, p. 1108, as amended (“HB 1133” or the “Bill”). HB 1133 set up a tax credit program that allows individuals and businesses to receive a Georgia income tax credit for donations made to approved not-for-profit student scholarship organizations (“SSOs”). The Bill created a new tax credit statute for that purpose. Generally speaking, the SSO is required to distribute the donated funds as scholarships or tuition grants for the benefit of students who meet certain eligibility requirements, and the parent or guardian of each recipient must endorse the award to the accredited private school of the parents’ choice for deposit into the school’s account. Plaintiffs alleged: (1) the Program was educational assistance program, and the scheme of the Program violated the Constitution; (2) the Program provided unconstitutional gratuities to students who receive scholarship funds under the Program by allowing tax revenue to be directed to private school students without recompense, and also that the tax credits authorized by HB 1133 resulted in unauthorized state expenditures for gratuities; (3) the Program took money from the state treasury in the form of dollar-for-dollar tax credits that would otherwise be paid to the State in taxes, and since a significant portion of the scholarships awarded by the SSOs goes to religious-based schools, the Program takes funds from the State treasury to aid religious schools in violation of the Establishment Clause; and (4) the Department of Revenue violated the statute that authorized tax credits for contributions to SSOs by granting tax credits to taxpayers who have designated that their contribution is to be awarded to the benefit of a particular individual, and by failing to revoke the status of SSOs that have represented to taxpayers that their contribution will fund a scholarship that may be directed to a particular individual. Plaintiffs sought mandamus relief to compel the Commissioner of Revenue to revoke the status of SSOs, and injunctive relief against the defendants to require them to comply with the constitutional provisions and statutory laws set forth in the complaint. In addition to mandamus relief and injunctive relief, plaintiffs sought a declaratory judgment that the Program was unconstitutional. The Georgia Supreme Court found no error in the trial court’s finding plaintiffs lacked standing to pursue their constitutional claims, or their prayer for declaratory relief with respect to those claims, either by virtue of their status as taxpayers or by operation of OCGA 9-6-24. Consequently plaintiffs failed to allege any clear legal right to mandamus relief. View "Gaddy v. Georgia Dept. of Revenue" on Justia Law

West Carrollton City Schools Board of Education (BOE) appealed the decision of the Board of Tax Appeals (BTA) that retained the auditor’s update-year valuation of $4,716,690 for 2011 for the two contiguous parcels of property at issue in this case. Specifically, the BOE argued, inter alia, that the BTA acted unreasonably and unlawfully by refusing either to rely on the land-sale price and actual-cost evidence to value to the property. The Supreme Court affirmed, holding (1) Ohio Rev. Code barred the direct use of the land-sale price in Carmax Auto Superstores, Inc.’s 2008 acquisition of the property because Carmax spent more than $7 million on subsequently added improvements; and (2) neither the 2008 land-sale price nor the actual construction costs affirmatively negated the auditor’s valuation, and therefore, the BTA acquired no duty to perform an independent valuation. View "West Carrollton City Schools Board of Education v. Montgomery County Board of Revision" on Justia Law

The Colorado Supreme Court granted certiorari review to determine whether “Blunt Wraps,” a type of cigar wrapper made in part of tobacco and designed to be filled with smoking material and smoked, could be taxed as “tobacco products,” as that term was defined in section 39-28.5-101(5), C.R.S. (2016). The Court concluded Blunt Wraps fell within the plan language of the definition of “tobacco products” in the statue at issue, and are taxable accordingly. View "Colo. Dep't of Revenue v. Creager" on Justia Law