Articles Posted in Tax Law

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Richland Aviation filed this proceeding to determine whether it was a “scheduled airline” and therefore subject to central tax assessment by the Montana Department of Revenue (DOR). The district court concluded that Richland Aviation was not a scheduled airline because it “does not hold out to the public that it operates between certain places at certain times[.]” Therefore, the district court concluded that Richland Aviation was not subject to central assessment. Applying the definitions found in Montana Department of Revenue v. Alpine Aviation, Inc., 384 P.3d 1035, the Supreme Court affirmed, holding that Richland Aviation does not engage in “regularly scheduled flights” required for central assessment. View "Richland Aviation, Inc. v. State, Department of Revenue" on Justia Law

Posted in: Aviation, Tax Law

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The Montana Supreme Court reversed the district court's order of a refund to Mountain Water and assessment of property taxes against the City of Missoula. The court held that section 70-30-315, MCA, selects a different date for purposes of designating the person who shall be assessed the property taxes in condemnation situations, requiring the condemnor to be assessed earlier in time than the general tax statutes would normally require, thus effectuating a unique proration of taxes as between condemnation parties. The statute simply established a tax proration date that is more favorable to condemnees than under general law, and provided no additional or alternate process to accompany this simple adjustment. In this case, Mountain Water retains responsibility for actual payment of the property taxes for the period it possesses the property, until the taking occurs. View "Mountain Water v. Department of Revenue" on Justia Law

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The Montana Department of Revenue (DOR) informed Alpine Aviation, Inc. that it would be centrally assessed pursuant to Mont. Code Ann. 15-23-101 and 15-6-145. The DOR denied Alpine’s request for reclassification. After Alpine appealed to the State Tax Appeal Board, DOR brought an interlocutory appeal to the district court seeking an adjudication of the meaning of “scheduled airline” and “scheduled air commerce” for property tax purposes. Those terms are further informed by the statutory phrase “regularly scheduled flights.” After the district court interpreted the phrases as requested, Alpine appealed, arguing that the court incorrectly interpreted the phrase “regularly scheduled flights.” The Supreme Court affirmed in part and reversed in part, holding that the district court’s definition of “regularly scheduled flight” was satisfactory with the exception of its use of the phrase “patterned but not necessarily uniform.” View "Department of Revenue v. Alpine Aviation, Inc" on Justia Law

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Property owners (Petitioners) appealed the Department of Revenue’s valuation of their residential lot for the tax year 2012. The Flathead County Tax Appeal Board (County Board) reduced the value of the land and the value of the improvements. Petitioners appealed, arguing that the appraised value was still too high. The State Tax Appeal Board (STAB) upheld the County Board’s determination of the value of the property. The district court reversed, concluding that the County Board property value upheld by STAB was clearly erroneous. The Supreme Court reversed the district court and reinstated the STAB decision, holding that the district court erred in reversing STAB’s order concerning the valuation of the property. View "Peretti v. State, Dep’t of Revenue" on Justia Law

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When Mary Stewart failed to pay real property taxes on her property, the Flathead County Treasurer held a tax lien sale for the delinquent taxes. The County was listed as the purchaser of the tax lien. In 2013, RN & DB, LLC paid the delinquent taxes, penalties, interests, and costs for the property and applied for a tax deed. The County issued a tax deed to RN & DB, after which RN & DB filed an action to quiet title in the property. The district court granted RN & DB’s motion for summary judgment and entered a decree quieting title in favor of RN & DB. The Supreme Court affirmed, holding (1) the district court did not err in not applying the statutory homestead exemption to the tax lien sale on Stewart’s property; (2) Stewart’s claim that the district court should have considered the tax assessor’s failure to investigate Stewart’s complaints regarding irregular tax assessments on Stewart’s property was barred; and (3) the district court did not abuse its discretion in granting summary judgment without holding a hearing. View "RN & DB, LLC v. Stewart" on Justia Law

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Appellees were Online Travel Companies (OTCs) that provide online travel information and secure reservations for travelers for car rental and lodging services in Montana. The Montana Department of Revenue filed suit against the OTCs arguing that the OTCs were required to collect and remit taxes on OTC fees under both the Lodging Facility Use Tax and Sales Tax. The district court granted summary judgment in favor of the OTCs. The Supreme Court affirmed in part and reversed in part, holding that the district court (1) correctly found that the Lodging Facility Use Tax does not apply to OTC fees; but (2) erred in ruling that the Sales Tax does not apply to OTC fees. View "Mont. Dep’t of Revenue v. Priceline.com, Inc." on Justia Law

Posted in: Tax Law

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In 2009, the Montana Department of Revenue (Department) began the process of reappraising Montana agricultural properties. In 2010, Petitioners filed a petition for declaratory judgment and writ of mandate seeking a declaration that the Department improperly assessed their agricultural property for tax uses. The district court granted the Department’s motion for summary judgment. The Supreme Court affirmed, holding (1) the district court correctly interpreted the plain language of section 15-7-111 and complied with the rules of statutory construction; and (2) the Department followed the rule-making mandate of section 15-7-111(2), the Department’s application of section 15-7-111 was not unlawful, and the Department is capable of implementing the district court’s interpretations of section 15-7-111. View "Lucas Ranch, Inc. v. Mont. Dep’t of Revenue" on Justia Law

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For tax year 2004, the State of Montana, Department of Revenue (DOR) centrally assessed property owned by Omimex Canada Ltd. and classified it under class nine. Omimex contested the assessment, claiming that it did not operate a “single and continuous property,” and therefore, its properties should be locally assessed and subject to the lower tax rate under class eight. The district judge entered an order in 2007 finding that Omimex’s properties operated as a single and continuous property. The Supreme Court reversed, concluding that Omimex’s property was not subject to classification under class nine, regardless of whether it was centrally assessed. For the tax year 2011, DOR again centrally assessed Omimex’s property and classified it under class nine. Ommimex filed a declaratory action arguing that it did not operate a single and continuous property. The district court granted partial summary judgment for DOR, concluding that the doctrine of issue preclusion barred Omimex from relitigating the issue. The Supreme Court reversed, holding that the court erred when it concluded that the district court’s 2007 finding precluded Omimex from litigating the issue of whether it operated a single and continuous property because Omimex demonstrated the existence of genuine questions of material fact regarding whether the issue in the current litigation was identical to the issue in the 2007 litigation. View "Omimex Canada, Ltd. v. State Dep’t of Revenue" on Justia Law

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In 2012, after auditing Cloud Peak Energy Resources, LLC’s Montana Coal Tax payments for years 2005-2007, the Department levied a deficiency assessment for additional taxes owing from sales involving non-arm’s length (NAL) agreements. Cloud Peak filed a complaint alleging that the Department’s methodology for determining market value was illegal and that it had also illegally assessed taxes on coal additives for the years 2005-2007. The district court (1) held in Cloud Peak’s favor on the first issue, concluding that the market value of coal sold under NAL agreements is determined by comparing its price with that of coal sold under arm’s length contracts negotiated in a similar timeframe; and (2) ruled in the Department’s favor on the issue regarding additives. The Supreme Court affirmed in part and reversed in part, holding that the district court (1) correctly found that market value is properly based upon similarly negotiated contracts, but the additional language included in the order was inappropriate; and (2) did not err in holding that coal additives used from 2005-2007 are subject to Montana Coal Taxes. View "Cloud Peak Energy Res., Inc. v. Dep’t of Revenue" on Justia Law

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Westmoreland Resources Inc. (WRI) mines coal owned by the Crow Tribe and pays coal severance and gross proceeds taxes to the Tribe. In 2005, WRI filed a tax return with the Department of Revenue for coal produced and sold at its Absaloka Mine, located on the Crow Reservation, during tax year 2004. The return deducted the coal severance and gross proceeds taxes it had paid to the Tribe. The Department disallowed WRI’s deduction. WRI filed a complaint with the State Tax Appeal Board. WRI and the Department later filed a joint petition for an interlocutory adjudication of a substantive question of law with the district court. At issue was whether WRI’s coal severance and gross proceeds deduction was proper. The district court held in favor of the Department, concluding that WRI may not deduct taxes paid to the Tribe as “taxes paid on production” from the “contract sales price” when calculating the Resource Indemnity Trust and Ground Water Assessment Tax. The Supreme Court affirmed, holding that the phrase “any tax paid to the federal, state, or local governments” within Mont. Code Ann. 15-35-102(11) does not include those taxes WRI pays to the Tribe. View "Westmoreland Res., Inc. v. Dep’t of Revenue" on Justia Law