Justia Nebraska Supreme Court Opinion Summaries

Articles Posted in Tax Law

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At issue in this case was the adjustment of the valuation of three subclasses of residential real property in Douglas County. The Tax Equalization and Review Commission (TERC) issued an order to show cause why it should not increase the valuation of two properties by seven percent and decrease the valuation of a third property by eight percent. TERC voted to adjust the valuations. Douglas County filed a motion to reconsider, which the TERC commissioners overruled. The Supreme Court affirmed in part and reversed in part, holding (1) TERC’s order to decrease the valuation of one property by eight percent was not supported by competent evidence and was arbitrary, capricious, and unreasonable; (2) TERC’s order to increase the valuation of the other two properties was supported by competent evidence and was not arbitrary, capricious, and unreasonable; and (3) TERC did not abuse its discretion by denying Douglas County’s motion to reconsider its order. View "County of Douglas v. Nebraska Tax Equalization & Review Commission" on Justia Law

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The Nebraska Department of Revenue and the acting Tax Commissioner denied, in part, the requested refunds of Farmers Cooperative and Frontier Cooperative Co. (collectively, the Cooperatives). The district court affirmed. The Cooperatives sought refunds of sales and use taxes paid on the purchase of repairs and parts for agricultural machinery and equipment under Neb. Rev. Stat. 77-2708.01. At issue in these consolidated appeals was how the phrase “depreciable repairs or parts” within section 77-2708.01 should be interpreted. The Supreme Court affirmed, holding that the district court did not err in affirming the partial denial of the Cooperatives’ requested refunds based upon its interpretation of section 77-2708.01. View "Farmers Cooperative v. State" on Justia Law

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Two taxpayers sold their capital stock of a corporation and structured the transaction to comply with the terms of a definitional statute in order to qualify for a special capital gains election. The Nebraska Department of Revenue disallowed the taxpayers’ special capital gains election. The taxpayers filed a petition for redetermination, and the Tax Commissioner denied the petition. The district court affirmed. The taxpayers appealed, asserting that the district court erred in applying the “economic substance” and “sham transaction” doctrines in determining whether they were entitled to the special capital gains election. The Supreme Court reversed, holding that the economic substance doctrine and the sham transaction doctrines did not provide a basis to disallow the taxpayers’ election. Remanded. View "Stewart v. Nebraska Dep’t of Revenue" on Justia Law

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Several indoor tanning salons filed claims for tax refunds with the Department of Revenue for admissions taxes. Apparently, in 2012, the Attorney General’s office had issued an opinion that Neb. Rev. Stat. 77-2703(1) did not authorize subjecting tanning salons to admissions taxes. The Department has since repealed the regulation listing tanning salons among the businesses subject to the tax and has ceased collecting the tax. The Tax Commissioner disallowed the claims, stating that “[a] refund of a tax improperly or erroneously collected can only be issued by the State directly to the purchaser who paid the tax.” The district court consolidated the cases and affirmed. The Nebraska Supreme Court affirmed, agreeing that the salon customers were the taxpayers of the admissions tax. View "Aline Bae Tanning, Inc. v. Neb. Dep't. of Revenue" on Justia Law
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In 2011, Cheyenne County conducted its annual tax sale. Rather than using a traditional “round robin” format at the sale, the county treasurer used the “bid down” format provided by Neb. Rev. Stat. 77-1807. Adair Asset Management, LLC purchased a tax sale certificate on certain real estate, now owned by Terry’s Legacy, LLC, after offering to pay the taxes due for a one percent undivided interest in the property. After paying delinquent taxes on the property, Adair filed a complaint and obtained a decree judicially foreclosing the lien provided by the tax sale certificate. The complaint alleged that there was a potential claim against the property by First State Bank. The subsequent decree, in effect, ordered a sale of a 100-percent interest in the property. Terry’s Legacy appealed, arguing that the district court erred by failing to determine that it retained a ninety-nine-percent interest in the property. The Supreme Court modified the decree of foreclosure to apply only to Adair’s undivided one percent interest in the property and, as so modified, affirmed, holding that Adair’s lien to be foreclosed is limited to one percent of the property. Remanded. View "Adair Asset Mgmt., LLC v. Terry’s Legacy, LLC" on Justia Law

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Neb. Rev. Stat. 77-1502(2) imposes a requirement and specifies a consequence for its violation. In this case, a taxpayer filed a property valuation protest. The taxpayer’s protest form specified the assessed and requested valuation amounts but stated no reason for the requested change. The Lincoln County Board of Equalization dismissed the protest, citing section 77-1502(2). The taxpayer appealed to the Nebraska Tax Equalization and Review Commission (TERC). TERC dismissed the appeal with prejudice, concluding that it lacked jurisdiction because the Board did not have jurisdiction to hear the protest due to the taxpayer’s failure to state the reason for the protest. The Supreme Court affirmed, holding (1) the Board correctly dismissed the taxpayer’s protest because the protest failed to include a reason for the requested change in valuation; and (2) because the Board lacked authority to hear the taxpayer’s property valuation protest on the merits, TERC likewise lacked authority to do so. View "Village at North Platte v. Lincoln County Bd. of Equalization" on Justia Law

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In 2012, as the result of a change in the way the Custer County assessor classified irrigated grassland for purposes of valuation, the assessor increased the assessed value of the property owned by Appellant from $734,968 to $1,834,924. Appellant filed petitions with the Tax Equalization and Review Commission (TERC) pursuant to Neb. Rev. Stat. 77-1507.01 challenging the valuation increase. After two separate hearings on Appellant’s petitions, TERC affirmed the assessor’s valuations for 2012. The Supreme Court reversed, holding that TERC’s consideration of Appellant’s petitions using the appellate standard of review described in Nev. Rev. Stat. 77-5016(9) constituted plain error. Remanded. View "Cain v. Custer County Bd. of Equalization" on Justia Law

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Pursuant to the Nebraska Advantage Act, Archer Daniels Midland (ADM) entered an agreement with the Tax Commissioner with the aim of using incentives set forth in the Act for a project in Platte County. ADM sought a personal property tax exemption for the year 2010 under the Act for property involving agricultural processing equipment. The Department denied the exemption on the grounds that the personal property tax exemption claim had not been timely filed. The Tax Equalization Review Commission (TERC) affirmed. The Supreme Court affirmed, holding (1) ADM did not timely file its claim for a personal property tax exemption for the subject property, and therefore ADM was not entitled to the exemption; and (2) TERC did not err when it affirmed the order of the Tax Commission denying ADM’s protest. View "Archer Daniels Midland Co. v. State" on Justia Law

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After voters in School District rejected a bond proposal to construct an addition to existing high school building, School District entered into a lease-purchase agreement with Bank, which agreed to finance the project. Appellants, residents and taxpayers in the school district, sought declaratory and injunctive relief contending that the agreement violated Neb. Rev. Stat. 79-10,105. The trial court denied relief, concluding (1) under section 79-10,105, lease-purchase agreements may be used to make school improvements without the voters’ approval if the project is not funded by bonded debt; and (2) School District in this case did not fund the project through bonded indebtedness. The Supreme Court affirmed, holding (1) Appellants’ claims were moot because, as of the time of this appeal, the addition had been completed, but the public interest exception to the mootness doctrine applied; and (2) section 79-10,105 does not prohibit a school district from entering into a lease-purchase agreement to finance a capital construction project if it has not created a nonprofit corporation to issue bonds for the school district, and because there was no evidence that this occurred in this case, School District did not violate section 79-10,105 by entering into the lease-purchase agreement with Bank. View "Nebuda v. Dodge County Sch. Dist. 0062" on Justia Law

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Taxpayer timely filed a 2010 personal property tax return properly listing certain taxable property. The property, however, was not placed on the tax rolls. In 2013, the Colfax County Board of Equalization placed the personal property back on the tax rolls. Taxpayer appealed. The Tax Equalization and Review Commission ultimately decided that the Board’s action was void on the grounds that the Board did not have authority to place the items of personal property on the tax rolls, thereby reversing and vacating the Board’s decision. The Supreme Court affirmed, holding that the Board’s action in placing Taxpayer’s personal property on the tax rolls for 2010 was void because it lacked statutory authority to do so under Neb. Rev. Stat. 77-1507(1). View "Cargill Meat Solutions Corp. v. Colfax County Bd. of Equalization" on Justia Law