Justia Montana Supreme Court Opinion Summaries

The Supreme Court of the State of Montana affirmed a lower court's ruling in a tax dispute between Bluebird Energy LLC and the State of Montana Department of Revenue. Bluebird Energy acquired three oil wells that had previously qualified for a tax incentive known as the New Well Tax Incentive, which provides a reduced tax rate for the first 18 months of production from a well. After acquiring the wells, Bluebird Energy invested in permanent production facilities and resumed oil production, believing that it would qualify for the New Well Tax Incentive. However, the Department of Revenue determined that the wells were not eligible for the incentive because the initial 18-month incentive period had already expired under the previous ownership. Bluebird Energy appealed this decision.The Supreme Court held that, according to the statutes governing the New Well Tax Incentive, the 18-month period for the reduced tax rate begins when production begins and runs contiguously, regardless of whether production is continuous. The court found that the Department of Revenue's interpretation of the statutes was correct and consistent with the legislative intent. The court also held that the relevant administrative rules were consistent with and reasonably necessary to carry out the purpose of the Oil and Gas Production Tax statutes. Therefore, Bluebird Energy was not entitled to the reduced tax rate. View "Bluebird Energy v. DOR" on Justia Law

The Supreme Court reversed the order of the district court in this tax appeal, holding that the district court erred by concluding that Mont. Code Ann. 15-30-2119, the NOL statute, operates as a dollar-for-dollar offset provision that indirectly taxes out-of-state income.At issue was the decision of the Department of Revenue to deny nonresident taxpayers Franklin and Janet Tiegs a carryover net operating loss (NOL) deduction on their 2014 and 2015 Montana income tax returns. The Montana Tax Appeal Board upheld the Department's decision, but the district court reversed, concluding that Mont. Code Ann. 15-30-2119 was unconstitutional because it authorized taxation of non-Montana income. The Supreme Court reversed, holding that the district court (1) erred by holding that the general use of out-of-state income within the Montana income tax framework violated Mont. Code Ann. 15-30-2102 and federal constitutional principles; and (2) erred by concluding that section 15-30-2119 constitutes impermissible taxation of income outside of Montana's jurisdictional reach. View "Tiegs v. State, Dep't of Revenue" on Justia Law

The Supreme Court affirmed the judgment of the district court affirming the decision of the Montana Department of Revenue (MDOR) denying Appellant's petition to adopt a proposed administrative rule construing Mont. Code Ann. 15-30-2605(3), holding that the MDOR correctly construed sections 15-30-2605(1) and (3) and did not capriciously, arbitrarily, or unlawfully preliminarily deny Appellant's petition for adoption of a proposed rule interpreting the section 15-30-2605(3).At issue were internal MDOR reviews initiated by clients of Appellant, a certified public accountant, regarding 2021 MDOR adjustment notices regarding their 2017 income tax returns. Appellant argued that the noticed MDOR adjustments were untimely beyond the three-year deadline set forth in section 15-30-2605(3) and petitioned MDOR to adopt a rule to clarify section 15-30-2605 based on his contrary interpretation of section 15-30-2605(3). MDOR denied the petition, and the district court affirmed. The Supreme Court affirmed, holding that the district court did not err in determining that MDOR's construction of section 15-30-2605(3) was correct and that Appellant failed to demonstrate that the denial of his rulemaking petition was arbitrary, capricious, or based on an erroneous conclusion of law. View "Wangerin v. Dep't of Revenue" on Justia Law

The Supreme Court reversed the orders of the district court granting Zinvest, LLC's motion for summary judgment and dismissing Wells Fargo Bank, N.A.'s complaint alleging that Zinvest failed to give proper notice of pending tax deeds under Mont. Code Ann. 15-18-212 and requesting the tax deeds issued to Invest be declared void, holding that the district court erred.Wells Fargo held a deed of trust against two parcels of land. Because the taxes assessed against each parcel for the tax year 2014 were unpaid the Missoula County treasurer conducted a tax lien sale for both parcels. Missoula County purchased the tax liens, executed a county treasurer's certificate of tax sale for both parcels and assigned the certificates to Zinvest. When Zinvest mailed notices that tax deeds may issue to Wells Fargo, they were returned. The Missoula County treasurer then executed tax deeds conveying the parcels to Zinvest. Wells Fargo subsequently brought its complaint. The district court granted summary judgment for Zinvest. The Supreme Court reversed, holding that Zinvest's failure to mail notices that the tax deeds may issue to Wells Fargo violated Mont. Code Ann. 15-18-212. View "Wells Fargo Bank, N.A. v. Zinvest, LLC" on Justia Law

The Supreme Court affirmed the judgment of the district court holding that the "resort service fee" that Boyne USA, Inc. charges guests is not subject to Montana's lodging facilities use tax and forfeited guests deposits collected by Boyne are not subject to either the state use tax or sales tax, holding that the district court did not err.Specifically, the Supreme Court held that the district court (1) did not err in holding that Boyne's resort services fee was not subject to the lodging facilities use tax; (2) did not err in holding that the resort services fee was subject to the sales tax; and (3) did not err by holding that forfeited guest deposits are not subject to the lodging facilities use tax or the sales tax. View "Boyne USA, Inc. v. Department of Revenue" on Justia Law

The Supreme Court affirmed the judgment of the district court dismissing K&J Investments, LLC's petition and complaint for judicial review, rescission, and unjust enrichment against the Flathead County Board of Commissioners and Flathead County Treasurer, holding that the district court properly dismissed all claims for want of jurisdiction.K&J, an investment company, purchased a tax sale certificate from Flathead County for the property at issue for $1,512. K&J later filed an application for refund and abatement due to alleged erroneous property assessments. The Flathead County Board of Commissioners denied the application. K&J filed a petition for judicial review seeking to reverse the Commissioners' denial of tax refund and abatement and including a complaint for rescission of the tax sale certificate and seeking relief for all taxes paid under a theory of unjust enrichment. The district court dismissed the petition and complaint, ruling that it lacked subject matter jurisdiction because K&J did not follow the required process for seeking reassessment and exhausting administrative remedies. The Supreme Court affirmed, holding that Mont. Code Ann. 15-16-604 did not grant the district court authority to consider K&J's claims. View "K & J Investments, LLC v. Flathead County" on Justia Law

In this fifth case arising from an ongoing dispute between Plaintiffs and Glacier County and certain county officials (collectively, the County), the Supreme Court reversed the district court's grant of Plaintiffs' motion for appointment of a financial receiver for the County, holding that the court abused its discretion.Plaintiffs alleged claims against the County regarding alleged financial mismanagement and non-compliance with government budgeting, auditing, and tax laws. By motion filed prior to filing their complaint, Plaintiffs sought appointment of a financial receiver pendente lite to assure that the budgeting, tax levying, expenditure and disbursement, and accounting laws were strictly complied with. The district court refused to appoint a receiver for the purpose requested by Plaintiffs but appointed a more limited receivership to determine the extent of personal liability for the County officials for deficit spending. The Supreme Court reversed, holding that the district court (1) erred in appointing a receiver for a stated purpose in excess of and unrelated to the limited purpose of a receivership pendente lite; and (2) erred in basing the receivership on a preliminary adjudication of the ultimate merits of its underclass claims for relief and on a reason that did not establish or contribute to the requisite necessity for appointment of a receiver under section 27-20-102(3). View "Gottlob v. DesRosier" on Justia Law

The Supreme Court affirmed the judgment of the district court denying Defendants' motion to dismiss claims asserted against Glacier County officials (collectively, the County) in Plaintiffs' complaint due to lack of subject matter jurisdiction, holding that the district court did not err.This was the fourth case arising from a dispute between Plaintiffs and the County regarding alleged financial mismanagement and non-compliance with government budgeting, auditing, and tax laws. The County sought dismissal of certain claims under Mont. R. Civ. P. 12(b)(1), arguing that subject matter jurisdiction was lacking because no express or implied right to remedy existed. The district court denied the motion on the ground that Mont. Code Ann. 15-1-406 through -408 provided and express private right and related remedies, and thus related subject matter jurisdiction. The Supreme Court affirmed without prejudice to issues properly preserved and raised pursuant to Mont. R. Civ. P. 12(b)(6), holding that the district court did not err in denying the County's Rule 12(b)(1) motion to dismiss. View "Gottlob v. DesRosier" on Justia Law

The Supreme Court affirmed but on different grounds the summary judgment granted by the district court ruling that the equitable doctrine of unjust enrichment precluded the claim brought by Mountain Water Company for a general property tax refund on taxes that accrued during the pendency of a condemnation action initiated by the City of Missoula, holding that Mountain Water contractually waived its right to property tax proration and reimbursement from or against the City under Mont. Code Ann. 70-30-315.Specifically, the Supreme Court held (1) the district court erred in concluding that the doctrine of unjust enrichment precluded relief on Mountain Water's claim for property tax proration and relief under Mont. Code Ann. 70-30-315; (2) the district court erred in concluding that, but for application of equitable unjust enrichment, section 70-30-315 would entitle Mountain Water to a general property tax refund under Mont. Code Ann. 15-1-402(1)-(2), (6)(b)(i) and -406(1)-(3); (3) Mountain Water contractually waived its right to property tax proportion and reimbursement from the City under section 70-30-315; and (4) the district court correctly concluded that Mountain Water's subsequent assertion of a general property tax refund claim did not breach the parties' 2017 condemnation action settlement agreement. View "Mountain Water v. Department of Revenue" on Justia Law

The Supreme Court affirmed the order of the district court affirming the administrative decision of the Montana Tax Appeal Board (MTAB) regarding Petitioner's residency status and dismissing his petition for judicial review, holding that Petitioner did not sever his Montana residency during the years 2008 to 2012 for income tax purposes.The Montana Department of Revenue determined that Petitioner was a Montana resident from 2008 to 2012 and assessed Petitioner $515,321 of Montana resident income tax, interest, and penalties. The MTAB affirmed. On review, the district court denied Petitioner's petition regarding the issue of his residency. The Supreme Court affirmed, holding that the district court did not err when it affirmed MTAB's administrative decision that Petitioner did not sever his Montana residency for income tax purposes from 2008 to 2012. View "Greenwood v. Department of Revenue" on Justia Law