Noteworthy Cases

Subscribe to Noteworthy Cases via RSS

The point at which the evidentiary record is established in a state or local tax case varies significantly among state and local jurisdictions, and the related statutes, regulations, and rules are unclear. In this A Pinch of SALT, Sutherland SALT attorneys Eric Tresh, Zack Atkins, Maria Todorova and Steve Kranz highlight the risks…

On July 28, 2011, the New Jersey Supreme Court denied a taxpayer’s claim that New Jersey’s Throwout Rule (which excludes certain sales from the denominator of the sales apportionment factor) is facially unconstitutional. Whirlpool Props., Inc. v. Div. of Tax’n, Case No. 066595 (N.J. July 28, 2011). However, the court held that the application…

Thomas Jefferson once described jury trials as “the only anchor yet imagined by man by which a government can be held to the principles of its constitution.” Jefferson would likely be disappointed by the California Supreme Court’s recent decision holding that taxpayers have no right to demand a jury trial in California income tax refund…

Recipients of qualified empire zone enterprise (QEZE) tax benefits beware: New York is reviewing your qualifications to receive a QEZE credit. On April 28, 2011, an administrative law judge upheld the Department of Taxation and Finance (Department) denial of the taxpayer’s QEZE credit claims because the taxpayer did not establish the credit for a valid business purpose. In the Matter of the Petition of Ward Lumber Co., Inc., Dkt. Nos. 823209, 823163 (N.Y. Div. Tax App. Apr. 28, 2011).

The taxpayer, Ward Lumber Co., was incurring substantial losses and appeared destined for bankruptcy. In an effort to prevent Ward Lumber, one of Essex County’s largest employers and businesses, from going under, several local officials recommended that Ward Lumber pursue QEZE credits to ease its financial difficulties. One state official told Ward Lumber that it would have to form a new entity to qualify for the QEZE program. Ward Lumber merged with a Delaware corporation in 2001, kept the original business’s name, and qualified for and received QEZE benefits for 2002 through 2004.Continue Reading New York Giveth, Taketh Away

California’s Fourth Appellate District ruled that taxpayers must include the value of intangible emissions reduction credits (ERCs) when they determine the fair market value of an independent power plant’s property. Elk Hills Power, LLC v. Bd. of Equalization, No. D056943 (May 10, 2011). Elk Hills sets a disturbing precedent regarding the taxation of intangibles…

The U.S. District Court for the Western District of Tennessee recently upheld a class action lawsuit against an out-of-state law firm that the city of Memphis, Tennessee, hired to collect past-due property taxes. Wright v. Linebarger Goggan Blair & Sampson, 2011 WL 1100462 (W.D. Tenn. Mar. 22, 2011). A class of Memphis taxpayers filed…