Justia Oklahoma Supreme Court Opinion SummariesArticles Posted in Tax Law
CompSource Mutual Ins. Co. v. Oklahoma ex rel. Okla. Tax Comm.
CompSource Mutual Insurance Company and the Oklahoma Association of Electric Self Insurers requested rebates from the Oklahoma Tax Commission based upon previously paid Multiple Injury Trust Fund assessments. The requests were denied as an Executive Order by the Governor stated the authority for the rebates had been repealed by implication and directed no rebates be funded. The parties seeking rebates filed a protest with the Oklahoma Tax Commission. The protests were consolidated and an administrative law judge concluded the Protestants were entitled to the rebates. The Tax Commission, with two Commissioners voting, denied both protests and directed the administrative law judge to issue findings, conclusions and recommendations consistent with the denial. The protestants appealed to the Oklahoma Supreme Court in separate appeals. Protestants filed motions to retain which were granted and their appeals were made companion appeals by prior order of the Court. The Supreme Court consolidated the cases for a single opinion, holding no repeal by implication occurred, the statute at issue was not expressly repealed by the Legislature, no due process violation occurred when the requests for rebates were denied, protestants were not entitled to payment of interest on their rebates, and the cases were remanded to the Tax Commission for processing the protestants' requests for rebates. View "CompSource Mutual Ins. Co. v. Oklahoma ex rel. Okla. Tax Comm." on Justia Law
Independent Sch. Dist. No. 54 v. Independent Sch. Dist. No. 67
Within the 2006 through 2010 tax years, the Oklahoma Tax Commission and the Oklahoma State Board of Equalization issued certified assessments of certain public property physically located within the boundaries of the Stroud school district. Ad valorem taxes associated with these properties were distributed by the Lincoln County Treasurer to the Cushing and Wellston districts, instead of to Stroud. The error was discovered and subsequently corrected by the Lincoln County Board of Tax Roll Corrections during the 2010-2011 fiscal year. There was no disagreement among the three school districts that they were not responsible for the errors made in the distribution of the ad valorem taxes. To recover the funds that should have been Stroud's, Stroud sued Cushing and Wellston school districts. Stroud filed its petition on April 22, 2013. The defendant school districts filed a motion for summary judgment in December of 2014. In the same month, the plaintiff responded with its own motion for summary judgment. Stroud received the taxes from the property identified as within its district; Cushing received the taxes from the property identified as within its district; and Wellston received the taxes from the property identified as within its district. The Oklahoma Supreme Court found Stroud received the same amount for its general funds that it would have received had the ad valorem taxes been properly allocated. Nevertheless, it demanded additional funds from Cushing and Wellston that it would have received if the real property had been correctly identified. The Court determined if that amount was paid to Stroud, then Cushing and Wellston would have deficits in those districts that they would not have if the real property had been correctly identified. Stroud did not believe the other two school districts are entitled to a setoff if they paid Stroud the misallocated ad valorem taxes. The Court found all three school districts were victims of this error, but no district failed to receive the funds needed for their respective districts. The Court reversed judgments against the Cushing and Wellston districts and that in favor of Stroud: "county and state officials will make mistakes in the taxing of property and the distribution of taxes." View "Independent Sch. Dist. No. 54 v. Independent Sch. Dist. No. 67" on Justia Law
Truel v. Aguirre, LLC
The plaintiffs-respondents in this case sued hundreds of defendants, whom the plaintiffs asserted had served them mixed drinks over a period of several years prior to filing the lawsuit. The plaintiffs claimed that defendants had violated a tax statute, 37 O.S.2011, section 576(B)(2), that required a 13.5% tax on the gross receipts the holders of a license by the ABLE Commission for sale of a mixed beverage. They contended that the licensees who failed to combine the retail sale price with the tax in its advertised price had overcharged their customers by 13.5%. The defendants appealed the trial court's interpretation of the statute. The Oklahoma Supreme Court remanded these cases with orders to dismiss: "Although the briefs from the parties skillfully address other permutations of argument on both sides of this cause, we conclude that what we have chosen to address sufficiently resolves the main issue presented. The statute's ambiguities caused sufficient problems in collection of the tax that the Legislature amended the statute. We hold that the statute's purpose does not involve protecting consumers from having a tax separately listed from the price of a drink instead of including it in the price of a drink. Because the complaints of the plaintiffs against the defendants rest on the assumption that 37 O.S.2011, section 576(B)(2) protects consumers, and we have held that it is solely a tax statute." View "Truel v. Aguirre, LLC" on Justia Law
Sierra Club v. Oklahoma ex rel. Oklahoma Tax Comm’n
Petitioner, Sierra Club, requested the Oklahoma Supreme Court to assume original jurisdiction and petitioned for a writ of prohibition or mandamus. Petitioner alleged that House Bill 1449 was a revenue bill that violated Article V, Section 33 of the Oklahoma Constitution. H.B. 1449 created the Motor Fuels Tax Fee for electric-drive and hybrid-drive vehicles, of $100 and $30 per year respectively, and directed that the money from the fees be deposited to the State Highway Construction and Maintenance Fund. The House passed H.B. 1449 on May 22, 2017 and the Senate passed it on May 25, 2017. H.B. 1449 passed with more than 51%, but less than 75%, of the vote in both chambers. It was scheduled to take effect November 1, 2017. The Oklahoma Supreme Court assumed original jurisdiction and transformed the petition into a request for declaratory relief. The Court found H.B. 1449 was enacted to raise revenue and was in violation of Article V, Section 33 of the Oklahoma Constitution. View "Sierra Club v. Oklahoma ex rel. Oklahoma Tax Comm'n" on Justia Law
Naifeh v. Oklahoma, ex rel. Oklahoma Tax Comm’n
Petitioners are manufacturers, wholesalers, and consumers of cigarettes. Collectively they challenged Oklahoma Senate Bill 845, alleging that it was a revenue bill enacted outside of the procedure mandated in Article V, Section 33 of the Oklahoma Constitution. The parties agreed that the passage of SB 845 did not comply with Article V, Section 33; so the case turned on whether SB 845 was the kind of "revenue bill" that Article V, Section 33 governed. Applying a test used since 1908, the Oklahoma Supreme Court concluded that the primary purpose of Sections 2, 7, 8, and 9 of SB 845 was to raise new revenue for the support of state government through the assessment of a new $1.50 excise tax on cigarettes and that, in doing so, SB 845 levied a tax in the strict sense. As such, Sections 2, 7, 8, and 9 of SB 845 comprised a revenue bill enacted in violation of Article V, Section 33 and were unconstitutional View "Naifeh v. Oklahoma, ex rel. Oklahoma Tax Comm'n" on Justia Law
In the Matter of the Income Tax Protest of Hare
Taxpayer held stock in two Oklahoma S-corporations. He sold substantially all of the corporate assets of both companies to a third party. Following the sale, taxpayer received his proportionate share of the proceeds, and reported that sum as a net capital gain on his federal tax return. Taxpayer later sought a deduction equivalent to the net capital gain on an amended Oklahoma return. The Oklahoma Tax Commission disallowed the deduction to the extent the proceeds were derived from intangible personal property (namely goodwill). After review of the matter, the Oklahoma Supreme Court reversed, finding the taxpayer sold an indirect ownership interest in an Oklahoma company, and therefore, qualified for the deduction. View "In the Matter of the Income Tax Protest of Hare" on Justia Law
Edwards v. Bd. of Cty. Commr’s.
The issue this case presented for the Oklahoma Supreme Court's review centered on a dispute between Defendants-Appellants The Board of County Commissioners of Canadian County and certain citizens and officers of Canadian County, over the legal usage of funds generated from a sales tax enacted by the voters of Canadian County in 1996. In response to concerns raised over the legality of using funds generated by the Tax to pay for juvenile programs and services, in addition to the physical structures, an Attorney General Opinion was requested. The Attorney General issued an opinion concerning the matter in 2014. The Attorney General examined the resolution in question, Resolution No. 96-20, and determined that the language did not authorize use of the Tax for the funding of programs, salaries and expenses related to operation of the juvenile bureau, or even certain aspects of the physical facilities. In the wake of the Opinion, the Board ceased using the Tax for funding the programs, services, and salaries deemed outside the purpose of the Tax, and instead sought other funding sources for those items. Plaintiffs filed suit against the Board in the District Court in late 2014, seeking declaratory relief, a temporary restraining order and temporary injunction pending a declaratory ruling, and a writ of mandamus by way of ancillary relief. In an order filed on January 28, 2015, the trial court granted Citizens' request for a temporary injunction, determining: (1) Citizens were likely to prevail in their request for a declaratory judgment; (2) the Board would not suffer irreparable harm if the temporary injunction was issued; and (3) Citizens would suffer irreparable harm if the temporary injunction was not issued. The Board appealed, arguing that Plaintiffs failed to meet their burden of proof for a temporary injunction. After examining the available evidence, the Supreme Court determined that that the trial court's issuance of a temporary injunction was not an abuse of discretion or against the clear weight of the evidence. Accordingly, the order of the trial court granting a temporary injunction was affirmed. View "Edwards v. Bd. of Cty. Commr's." on Justia Law
Frankenberg v. Strickland
Taxpayers Don and Mary Frankenberg made improvements to their home in 2001. The Garvin County Assessor did not increase the fair cash value of the property for the improvements until 2012 when she visually inspected the property and discovered the improvements. The Assessor notified the Taxpayers of a new assessed fair cash value, which was a substantial increase from the previous valuation in 1999. The Taxpayers protested the assessment, arguing that under Art. X, section 8B of the Oklahoma Constitution, the fair cash value of the property could not be increased more than 5% in any year. The district court granted summary judgment in favor of the Taxpayers, and the Assessor appealed. Upon review, the Supreme Court found the exception to the 5% cap for improvements to a property existed only for the year the improvements were made to the property and did not apply in the year when the Assessor first discovers the improvements. Accordingly, the Court affirmed. View "Frankenberg v. Strickland" on Justia Law
American Airlines, Inc. v. Oklahoma Tax Commission
The main issue on appeal in this case was whether the purchase of electricity and natural gas utility services qualifies for a sales tax exemption. Appellant-taxpayer American Airlines, Inc., ("AA") was denied a refund for the sales tax it paid on its purchases of electricity and natural gas utility services during the 2006 calendar year. The Account Maintenance and Compliance Division of the Oklahoma Tax Commission denied the request. Appellant timely protested the denial. The Oklahoma Tax Commission, by order, adopted the Findings, Conclusions and Recommendations of the administrative law judge finding taxpayer failed to prove the denial was incorrect. Upon review, the Supreme Court held the Services Exemption (68 O.S. Supp. 2006, section 1357 (28)) provided an exemption for electricity and natural gas utility services used by AA during 2006 in aircraft repair and maintenance activities. The remaining issue concerned the appropriate methodology for determining the amount of the sales tax refund AA should have received on its 2006 purchases of utility services. The adopted Findings, Conclusions and Recommendations did not make a specific finding concerning an appropriate methodology. The Court remanded the case back to the Oklahoma Tax Commission for further proceedings. View "American Airlines, Inc. v. Oklahoma Tax Commission" on Justia Law
Marshall County v. Homesales, Inc.
Appellants Homesales, Inc., JPMorgan Chase Bank, N.A., and Jason L. Howell, appealed the district court's order certifying this case as a class action at the request of Appellee Marshall County. This case centered on the Documentary Stamp Tax Act, and its applicability to a sheriff's deed granted to Homesales in a mortgage foreclosure action prosecuted by JPMorgan. Homesales claimed that the transaction was exempt from documentary tax. The County disagreed and sued to collect the tax it claimed was due. The County also moved to certify the case as a class action in which all Oklahoma counties would join as plaintiffs. The district court granted the County's motion and certified the case pursuant to Title 12 O.S. Supp. 2013 sec. 2023 (B)(3) and the defendants appealed. Because the County was precluded by the Oklahoma Supreme Court's holding in "Murray Cnty. v. Homesales, Inc.," (330 P.3d 519) from suing to collect unpaid taxes allegedly due pursuant to the DSTA, the district court's class certification order was reversed and this case was remanded for further proceedings. View "Marshall County v. Homesales, Inc." on Justia Law