Justia Civil Procedure Opinion Summaries

SSI Food Services Inc. (SSI) appealed the district court’s decision rejecting the Board of Tax Appeal’s (BTA) 2016 assessed value of SSI’s food processing facility in favor of the Canyon County Assessor’s (Canyon County) significantly higher valuation. On appeal, SSI argued the district court erred when it modified the BTA’s valuation because: (1) Canyon County did not meet its burden of proving that the BTA’s valuation was erroneous; (2) the modified valuation was not supported by substantial and competent evidence; and (3) the conclusions of law contained in the district court’s findings of fact and conclusions of law are inadequate. SSI also appealed the district court’s decision to allow Canyon County’s expert to testify on rebuttal. Canyon County cross-appealed the district court’s decision that SSI was not obligated to pay penalties and interest on the unpaid amount of property taxes. Finding no reversible error or abuse of discretion, the Idaho Supreme Court affirmed the district court. View "Stender v. SSI Food Services, Inc." on Justia Law

Political subdivisions of the State of Colorado challenged Colorado’s Taxpayer Bill of Rights (“TABOR”) under the Colorado Enabling Act and the Supremacy Clause, contending that TABOR contradicted the Enabling Act’s requirement that Colorado maintain a “republican form of government.” TABOR allowed the people of Colorado to raise or prevent tax increases by popular vote, thereby limiting the power of Colorado’s legislative bodies to levy taxes. The issue currently before the Tenth Circuit Court of Appeals was whether certain school districts, a special district board, and/or a county commission had standing to challenge TABOR. On a motion to dismiss for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1), the district court held that plaintiffs had Article III standing but that they lacked political subdivision standing and prudential standing. Accordingly, the court dismissed the complaint. The Tenth Circuit concluded that it could not properly reach its conclusions at this stage of litigation. Because the Court held the political subdivision plaintiffs were not barred by standing requirements, the district court was reversed. View "Kerr v. Hickenlooper" on Justia Law

In this case’s previous appearance before the Georgia Supreme Court, the primary issue involved taxation of alcoholic beverages at the Hartsfield-Jackson Atlanta International Airport. Clayton County appealed the trial court’s partial grant of summary judgment to the City of College Park on claims the City was not receiving its statutorily mandated share of taxes collected on alcoholic beverages. When the parties could not resolve their dispute, the City filed a complaint naming as defendants the County and two businesses that operated within the Airport, Mack II, Inc. and General Wholesale Company (the “taxpayer defendants”). The complaint sought an interlocutory and permanent injunction against the County (as well as the taxpayer defendants), and a declaratory judgment as to the City’s and County’s division and collection of alcoholic beverage taxes, as well as the taxpayer defendants’ payment of those taxes. The complaint also asserted claims against the County for an accounting, unjust enrichment, attorney fees, and damages. Following a hearing, the trial court denied the County’s motion for judgment on the pleadings, finding that sovereign immunity does not apply to the City’s claims or the taxpayer defendants’ cross-claims for indemnity and contribution. The court granted the City’s motion for partial summary judgment on the declaratory judgment counts, finding that the Alcoholic Beverage Code, OCGA 3-3-1 et seq., permitted the City to impose alcoholic beverage tax only within its municipal limits and the County to impose such a tax only in the unincorporated areas of the County, that neither could impose and collect alcoholic beverage taxes within the other’s taxing jurisdiction, and that the taxpayer defendants had to submit tax monies only to the entity authorized to collect the funds. Ultimately, the Supreme Court vacated this judgment and remanded the case for consideration of the “threshold question of whether sovereign immunity applies at all in suits between political subdivisions of the same sovereign (like the City and the County).” The Supreme Court disagreed sovereign immunity did not apply to multiple issues raised by this case. The case was remanded for reconsideration. View "City of College Park v. Clayton County et al." on Justia Law

In these actions challenging the assessment of alleged illegal real estate taxes on several properties and property owners, the Supreme Court affirmed the judgment of the superior court in favor of Defendants in the declaratory judgment action and denied and dismissed the appeal in the tax appeal action, holding that the Plaintiff did not have standing in either action.Defendants were various officials of the Town of Barrington, Rhode Island; Sweetbriar, LP; and East Bay Community Development Corporation. Plaintiff was the owner of property located in Barrington. Plaintiff filed a complaint appealing the assessment of his property (tax appeal action) and filed a separate declaratory judgment action. In essence, Plaintiff argued that he was forced to pay a higher amount on his taxes because of Sweetbriar's favorable tax treatment under R.I. Gen. Laws 44-5-12 and 44-5-13.11. The hearing justice ruled that Plaintiff lacked standing to bring either action. The Supreme Court affirmed, holding (1) Plaintiff lacked standing to bring the declaratory judgment action; and (2) the hearing justice did not err in determining that Plaintiff lacked standing to challenge Barrington's application of section 44-5-12 and 44-5-13.11 to the Sweetbriar development, along with another project. View "Morse v. Minardi" on Justia Law

The American Jobs Creation Act of 2004 authorized the IRS to gather information about tax shelters, 26 U.S.C. 6707A. The IRS requires taxpayers and certain third parties to submit records pertaining to “reportable transaction[s]” as defined by IRS regulations, subject to significant penalties. A “material advisor” who provides material aid to a taxpayer in carrying out reportable transactions and who derives a threshold amount of gross income from that aid, faces similar penalties. A material advisor who fails to maintain a list of taxpayers that he aided in carrying out reportable transactions faces a $10,000 per day penalty. Notice 2016-66 identified “micro-captive transactions” as “transactions of interest,” a subset of reportable transactions that have “a potential for tax avoidance or evasion,” but stated that the IRS “lack[s] sufficient information” to distinguish between those that are lawful and those that are unlawful. Plaintiff, a material advisor to taxpayers engaging in micro-captive transactions, challenged the Notice under the Administrative Procedure Act, 5 U.S.C. 500, and the Congressional Review Act, 5 U.S.C. 801, arguing that it was a legislative rule that required notice-and-comment rulemaking, was arbitrary, and required submission for congressional review. The Sixth Circuit affirmed the dismissal of the complaint as barred by the Anti-Injunction Act, 26 U.S.C. 7421(a) and the tax exception to the Declaratory Judgment Act, 28 U.S.C. 2201, which divest federal district courts of jurisdiction over suits “for the purpose of restraining the assessment or collection of any tax.” The court noted that the IRS does “not have a great history of complying with APA procedures.” View "CIC Services., LLC v. Internal Revenue Service" on Justia Law

The Colorado School of Mines contracted with Sodexo America, LLC, to fulfill its obligations to provide meals and food options for its students. During the time at issue, Mines loaded each meal-plan student’s student identification card, with an individual meal plan choice. To use their meal plans, students swiped their “BlasterCards” at a dining facility. Sodexo had nothing to do with loading the students’ BlasterCards with their meal plans; Sodexo also had no way of knowing if a student had fully paid for his or her meal plan, and Sodexo had no way of enforcing collections against a student who hadn’t fully paid. Neither Mines nor Sodexo collected any sales tax on these meal-plan meals. When the City of Golden’s Finance Department audited Sodexo and discovered that sales tax for these meal plans had not been collected, it issued a sales and use tax assessment. Sodexo protested and lost, so Sodexo appealed to the district court. The court granted summary judgment for Golden, finding that Sodexo had engaged in taxable retail sales directly to Mines’ students, rather than tax-exempt wholesale sales to Mines. Sodexo appealed again. This time, a unanimous division of the court of appeals reversed the judgment of the district court, concluding that there were two sales transactions at issue: one between Mines and Sodexo, and the other between Mines and its students. The division further concluded that Mines and Sodexo were engaged in tax-exempt wholesale transactions. Accordingly, the division remanded for entry of judgment in Sodexo’s favor. The Colorado Supreme Court granted the City of Golden’s request to review the appellate court’s decision. After review, the Court agreed that two transactions took place. Like the division below, the Court concluded Sodexo sold the meal-plan meals to Mines at wholesale, and, accordingly, these transactions were exempt from taxation under the Code. The Court therefore affirmed the judgment of the court of appeals. View "City of Golden v. Sodexo America, LLC" on Justia Law

Between 2012 and 2014, Medhost of Tennessee, Inc. ("Medhost"), sold Russell County Community Hospital, LLC, d/b/a Jack Hughston Memorial Hospital ("the taxpayer"), computer software and accompanying equipment, which Medhost contracted to install in a hospital operated by the taxpayer. The software and equipment assists the taxpayer in operating various aspects of its hospital. Medhost collected a little less than $18,000 in sales tax in connection with the transactions, which it remitted to the Alabama Department of Revenue ("the Department"). Later, the taxpayer petitioned the Department for a refund of the sales tax it had paid on the transactions with Medhost. The Department denied that request, and the taxpayer appealed to the Alabama Tax Tribunal, which reversed the Department's decision and directed the Department to grant the taxpayer's request for a refund. The Department then filed an action in the trial court requesting de novo review of the tax tribunal's decision. After a hearing, during which testimony was presented ore tenus, the trial court overturned the tax tribunal's decision and affirmed the Department's denial of the taxpayer's refund petition. The taxpayer appealed to the Court of Civil Appeals, which affirmed the trial court's judgment. The Alabama Supreme Court granted the taxpayer's petition for a writ of certiorari. Under the ore tenus rule, which the taxpayer has conceded was applicable here, "a judgment based on [ore tenus] evidence is presumed to be correct and will not be disturbed on appeal unless a consideration of the evidence and all reasonable inferences therefrom reveals that the judgment is plainly and palpably erroneous or manifestly unjust." Under that standard, the Court found the evidence sufficient to support the trial court's judgment. Accordingly, the Court of Civil Appeals correctly affirmed that judgment, and the Supreme Court affirmed its judgment. View "Ex parte Russell County Community Hospital, LLC, d/b/a Jack Hughston Memorial Hospital." on Justia Law

The Supreme Court denied Appellee's motion to dismiss Appellant's appeal from the decision of the Board of Tax Appeals (BTA) that denied Appellant's claim for property-tax exemption for several parcels of land it owned, holding that Appellant timely perfected its appeal.As support for its motion to dismiss, Appellee argued that because Appellant did not initiate service by certified mail within the thirty-day period prescribed by Ohio Rev. Code 5717.04 for filing its notice of appeal, the Supreme Court must dismiss the appeal for lack of jurisdiction. The Supreme Court rejected Appellee's argument, holding that section 5717.04 does not state a timeline for the certified-mail service of the notice of appeal on the appellees, and it is not disputed that the notice of appeal was properly served on Appellee by certified mail. View "The City of Upper Arlington v. McClain" on Justia Law

John and Deanne Roth appealed a Tax Court decision that imposed a 40% penalty for the Roths’ “gross misstatement” of the value of a conservation easement they donated to a land trust in Colorado. On appeal, the Roths largely argued that, before imposing the penalty, the IRS failed to obtain written, supervisory approval for its “initial determination” of a penalty assessment as required by I.R.C. 6751(b). The Roths also sought a deduction in 2007 for repayments they made on the proceeds from their sale of tax credits generated by their donation of a separate conservation easement in 2006. The Tenth Circuit disagreed as to both counts and therefore affirmed the Tax Court. View "Roth v. CIR" on Justia Law

Gold Forever, a music publishing company solely owned by Holland, has agreements with various artists entitling it to half of the royalties collected for the sale and performance of those artists’ work. Holland was a Motown artist and co-wrote several famous songs. His music forms some, but not all, of Gold’s catalog. BMI and Universal license others to use Gold’s music; they collect and remit the royalties to Gold. Holland owes millions of dollars to the IRS in taxes, interest, and penalties. In 2012, the IRS served notices of levy to BMI and Universal, identifying Gold as the “alter ego/nominee transferee of" Holland and requiring the companies to remit to the IRS property and rights to property that they were obligated to pay Gold. Beginning on October 6, 2016, the companies remitted $967,140.76 to the IRS. Gold made requests for refunds to the IRS within nine months. On December 6, 2017, Gold filed a wrongful levy action for the funds remitted beginning on October 6, 2016, alleging that most, if not all, of the money belongs either to Gold or to artists other than Holland. The court dismissed the suit as untimely. The Sixth Circuit reversed. The statute of limitations for a wrongful levy action cannot begin until there has been a levy that attaches to the property at issue. Notices of levy in 2012 did not constitute levies on royalties generated after the notices were served, so the statute of limitations did not bar the wrongful levy action. View "Gold Forever Music, Inc. v. United States" on Justia Law