Articles Posted in Tax Law

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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

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This appeal concerned a dispute between taxpayers from the Incline Village and Crystal Bay areas of Washoe County and Nevada State Board of Equalization concerning the State Board’s failure to equalize property values as required by Nev. Rev. Stat. 361.395 for tax years 2003 through 2005. The district court dismissed the taxpayers’ petition for judicial review of the State Board’s interlocutory administrative order requiring reappraisals of properties around Incline Village and Crystal Bay for the tax years in question. The Supreme Court reversed and instructed the district court to grant, in part, the petition for judicial review and vacated the State Board’s interlocutory administrative order directing reappraisals of the properties, holding (1) this Court has jurisdiction to consider the district court’s dismissal of the petition for judicial review; and (2) the district court erred when it dismissed the petition for judicial review because the State Board exceeded its statutory authority to order reappraisals pursuant to section 361.395. View "Village League To Save Incline Assets, Inc. v. State, Board of Equalization" on Justia Law

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The City of Fernley filed a complaint seeking declaratory and injunctive relief arguing that the Local Government Tax Distribution Account under Nev. Rev. Stat. 360.660 violates the Separation of Powers Doctrine and the prohibition on special or local legislation under Nev. Const. art IV, 20. The district court entered summary judgment in favor of the State. The Supreme Court affirmed, holding that the district court properly found the Local Government Tax Distribution Account to be general legislation because the system is a “general law that applies neutrally to local government entities and is based on classifications that are rationally related to achieving the Legislature’s legitimate government objective of promoting general-purpose governments that have public services.” View "City of Fernley v. State, Dep't of Taxation" on Justia Law

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Appellants filed suit in federal court seeking a declaration that Nevada’s Live Entertainment Tax (NLET) was facially unconstitutional for violating the First Amendment. The federal court dismissed the suit. Appellants then filed a de novo action (Case 1) in a Nevada district court seeking similar remedies to those sought in federal court and asserting an as-applied challenge to NLET. While Case 1 was pending, Appellants filed individual tax refund requests with the Nevada Department of Taxation on the grounds that NLET is facially unconstitutional. The Department denied refunds, and the Nevada Tax Commission affirmed. Appellants then filed a second de novo action (Case 2) challenging the administrative denials of their refund requests and asserting an as-applied challenge to NLET. The district court (1) dismissed Appellants’ as-applied challenge in Case 1; and (2) dismissed the entirety of Case 2 for lack of subject matter jurisdiction because Appellants failed to file a petition for judicial review after the completion of their administrative proceedings. This appeal challenging the district court’s dismissal of Case 2 followed. The Supreme Court affirmed the district court’s dismissal of the case for lack of subject matter jurisdiction, as Nevada law required Appellants to file a petition for judicial review. View "Deja Vu Showgirls of Las Vegas, LLC v. Nev. Dep't of Taxation" on Justia Law

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In 2003, the Nevada Legislature enacted the Live Entertainment Tax (NLET), which imposes an excise tax on business transactions completed at facilities providing live entertainment. Appellants, exotic dancing establishments, filed suit arguing that NLET was unconstitutional on its face and as applied. The district court ultimately (1) dismissed the as-applied challenge for lack of subject matter jurisdiction based on Appellants’ failure to exhaust their administrative remedies; and (2) concluded that NLET did not facially violate the first Amendment. The Supreme Court (1) affirmed the district court’s dismissal of Appellants’ as-applied challenge because Appellants failed to raise their as-applied challenge to NLET before the Nevada Department of Taxation; and (2) concluded that NLET does not violate the First Amendment as related to speech (i.e., dance), and therefore affirmed the district court’s summary judgment as to this issue. View "Deja Vu Showgirls of Las Vegas, LLC v. Nev. Dep't of Taxation" on Justia Law

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In 2007, the Nevada Tax Commission (NTC) promulgated Nev. Admin. Code 361.61038, which set forth an apportionment formula for calculating remainder-parcel property values for purposes of Nev. Rev. Stat. 361.4722. Respondent owned a parcel that was divided from a larger piece of land before the regulation's enactment and was properly characterized as a "remainder parcel" under section 361.4722(6). Appellant, the county assessor, valued the land under the approach he used before section 361.61038 was enacted. Respondent appealed, seeking application of the new regulation's apportionment formula. The NTC upheld the assessor's valuation and declined to apply its new regulation retroactively. The district court reversed the judgment of the NTC and directed it to apply section 361.61038 to Respondent's remainder parcel. The Supreme Court reversed, holding that, in this case, (1) application of the regulation would be impermissibly retroactive; and (2) the methods the assessor used did not violate the Constitution.View "County of Clark v. LB Props., Inc." on Justia Law

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Appellant, a Delaware corporation registered to do business in Nevada, purchased four aircraft to transport its employees and guests to and from its worldwide establishments. Each of the aircraft consistently flew to and from Nevada while in service and were continuously used in interstate commerce. Appellant paid Nevada use tax on each of the aircraft but later requested refunds for the taxes paid, claiming that the aircraft were not purchased for use in Nevada within the meaning of Nev. Rev. Stat. 372. The Nevada Department of Taxation denied the requested refunds. The Nevada Tax Commission and the district court upheld the denial. At issue before the Supreme Court was whether, by purchasing the aircraft out of state and later bringing them to Nevada, Appellant became subject to the use tax imposed by section 372.185. The Supreme Court reversed, holding that the Department erred in its interpretation of chapter 372, and Appellant’s aircraft were not subject to Nevada’s use tax. View "Harrah's Operating Co. v. State Dep't of Taxation" on Justia Law

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After the Department of Taxation denied Respondent's claim for a refund of overpaid taxes, Respondent appealed. The matter reached the Supreme Court, which concluded that Respondent was entitled to a tax refund. Respondent then filed a motion for judgment on the refund, arguing that it was entitled to pre- and post-judgment interest. The district court granted Respondent's request for pre- and post-judgment interest. The Supreme Court affirmed, holding (1) Respondent did not waive its right to seek interest by failing to demand interest in its initial tax refund claim; and (2) the Department may not withhold interest on tax refunds when it has failed to timely make a determination under Nev. Rev. Stat. 372.665 whether Respondent's overpayment of taxes had been made intentionally or by reason of carelessness. View "State Dep't of Taxation v. Masco Builder Cabinet Group" on Justia Law

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Respondents, the county board of county commissioners and county treasurer, attempted to provide refunds to property owners who paid excessive property taxes due to improper appraisals. To cover the cost of the refunds, Respondents withheld amounts from property tax distributions made to various county taxing units that had previously benefited from the excessive property taxes. Appellant, one of the taxing units from which distribution amounts were withheld, petitioned for a writ of mandamus compelling Respondents to cease withholding portions of the distributions. The district court denied relief. The Supreme Court affirmed the district court's order denying extraordinary relief, holding that Respondents were within their authority to withhold distributions, and because the manner in which they withheld distributions was discretionary, the political question doctrine precluded judicial review. View "N. Lake Tahoe Fire Prot. Dist. v. Washoe County Bd. of County Comm'rs" on Justia Law

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Respondent owned four parcels of real property in Clark County. Respondent challenged the Clark County Assessor's assessment for the tax year 2011-2012 with the County Board of Equalization, which lowered the valuation. Clark County in turn appealed the revised assessment to the State Board of Equalization, which increased the valuation. Respondent ultimately petitioned the district court in Carson City for judicial review. Clark County and the Assessor filed a motion for change of venue, contending that the action should be maintained in the district court in Clark County because Respondent's property was located outside of Carson City. The district court denied the motion. The Supreme Court affirmed, holding (1) the statute provides that a property owner with property located in any county in the State may file a property tax valuation action in any district court in the state; and (2) the Carson City district court was an appropriate venue for filing the property tax valuation challenge because it was a court of competent jurisdiction as required by Nev. Rev. Stat. 361.420(2). View " County of Clark v. Howard Hughes Co., LLC" on Justia Law