Justia Utah Supreme Court Opinion Summaries

Articles Posted in Tax Law
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This case involved a group of businesses (referred to collectively as Taxpayers) who filed applications for adjustments to the fair market value of their properties for tax year 2020 in the state of Utah. They claimed that their properties' values had decreased due to "access interruption" caused by the COVID-19 pandemic and associated government guidelines, which they argued constituted a circumstance beyond their control under Utah Code section 59-2-1004.6 (the Access Interruption Statute).The Utah State Tax Commission rejected this argument, maintaining that the pandemic did not qualify as an "access interruption event" under the Access Interruption Statute. It reasoned that the statute applies only if access was interrupted due to any of thirteen enumerated events or due to a similar event as determined by the Commission via administrative rule. Because the pandemic neither fit into any of the enumerated categories nor was included in the Commission's administrative rules, the Commission ruled that the statute did not apply.The Supreme Court of the State of Utah agreed with the Commission's reasoning, holding that the Access Interruption Statute allows only the Commission to add to the statute’s list of qualifying circumstances if the Commission determines by rule that the additional event is similar to the events enumerated in the statute. Because the pandemic was not an enumerated event and had not been added by administrative rule, the Supreme Court upheld the Commission's decision. View "Miller Theatres v. Tax Commission" on Justia Law

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The Supreme Court affirmed the determination of the Utah State Tax Commission that the Property Tax Division correctly followed the requirements of the Aircraft Valuation Law, Utah Code 59-2-201 subsection 4, in determining the 2017 value of Delta Air Lines' aircraft, holding that Salt Lake County failed to demonstrate that the Law, as applied to Delta's 2017 assessment, violated the fair market value provision of the Utah Constitution.For tax year 2017, the Division valued Delta's aircraft according to section 59-2-201's preferred methodology. The County appealed, arguing that the valuation did not reflect the fair market value of Delta's aircraft, in violation of the Utah Constitution. The Commission upheld the assessment, concluding that the County did not establish that the Legislature's preferred method of valuation did not reasonably reflect fair market value. The Supreme Court affirmed, holding that the Aircraft Valuation Law was not unconstitutional as applied by the Commission to assess the value of Delta's aircraft for tax year 2017. View "Salt Lake County v. Utah State Tax Commission" on Justia Law

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The Supreme Court affirmed in part and reversed in part the judgment of the district court concluding that Pleasant Grover (City) had the power to enact a three-tiered "transportation utility fee" (TUF) but reversed the court's ruling that the TUF was actually a tax, holding that remand was required.The subject TUF charged local property owners a monthly fee corresponding to the "intensity" with which they used City roads, as determined by a study of user demand on the City's roadways, and the generated funds were to be used to repair and maintain city roadways only. At issue was whether the City had the authority to enact the TUF and whether the City properly characterized the TUF as a fee or if it was in fact a tax requiring the City to follow specific enactment procedures. The district court held that the TUF was actually a tax based on its purpose. The Supreme Court reversed in part, holding (1) the City acted within its discretion in enacting the TUF; but (2) the purpose of the TUF was characteristic of a fee because it was a specific charge for a specific purpose. View "Larson v. Pleasant Grove City" on Justia Law

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The Supreme Court affirmed in part and reversed in part the judgment of the district court dismissing this case claiming that the Traverse Ridge Special Service District needed either to stop charging members The Cove at Little Valley Homeowners Association for services it had never provided or to start plowing snow from private roads in front of homes in the Cove, holding that the district court erred in part.The Service District filed a motion to dismiss for failure to state a claim because the Draper City Code did not require it to service private roads and because the Homeowners Association needed to bring its challenge in a manner dictated by the Utah Tax Code. The Supreme Court affirmed the district court's dismissal of the Cove's first cause of action but reversed its dismissal of the second reversed in part, holding that the district court erred when it concluded that the assessment its members paid to the Service District was a tax as a matter of law. View "Cove at Little Valley Homeowners Ass'n v. Traverse Ridge Special Service District" on Justia Law

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The Supreme Court reversed the decision of the Tax Commission determining that John and Brooke Buck were domiciled in Utah for the 2012 tax year and therefore owed nearly $400,000 in back taxes and interest, holding that the court erred interpreting Utah Code 59-10-136 to effectively preclude the Bucks from being able to overcome the rebuttal presumption of domicile.On appeal, the Bucks maintained that they were domiciled in Florida in 2012 and that the Commission's decision suffered several constitutional and interpretive deficiencies. The Supreme Court agreed, holding (1) the Tax Commission erred as a matter of law in interpreting section 136, and the plain language of the domicile provision supported the Bucks; and (2) the stipulated facts decisively demonstrated that the Bucks were not domiciled in Utah in 2012 for income tax purposes. View "Buck v. Utah State Tax Commission" on Justia Law

Posted in: Tax Law
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The Supreme Court affirmed the decision of the district court dismissing two of Plaintiffs' claims as unripe and the remainder of the claims for failure to exhaust administrative remedies, holding that none of Plaintiffs' claims presented a justiciable controversy.Plaintiffs, five Utah counties, filed suit against the State of Utah challenging several provisions of the Utah Tax Code as unconstitutional. The district court dismissed as unripe two of the Counties' claims because the allegations did not show that the Counties had been adversely affected by the pertinent tax code provision. The court dismissed the remaining claims for failure to exhaust administrative remedies because the Counties had not first filed with the Utah State Tax Commission an appeal of a tax assessment. The Supreme Court affirmed, holding (1) dismissal of the two claims on ripeness grounds was proper because the Counties' complaint was facially insufficient to show that the law at issue adversely affected them; and (2) the remaining claims were properly dismissed on the ground that the claims were merely requests for an advisory opinion because none of the claims was tied to the facts of a particular controversy. View "Salt Lake County v. State" on Justia Law

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The Supreme Court affirmed in part and reversed in part the judgment of the tax court allowing a second set of deductions sought by Robert and Wendy Steiner on their tax returns but disallowing the first set of deductions, holding that neither set of deductions was mandated by the United States Constitution or the Utah Tax Code.The Utah State Tax Commission disallowed the tax deductions claimed the Steiners on their tax returns. The Steiners challenged that determination in the tax court, asserting that the Dormant Commerce Clause and the Dormant Foreign Commerce Clause mandated the Utah allow their claimed deductions relating to income earned in the United States but outside of Utah and income earned in foreign countries. The Steiners cited Utah Code 59-10-115(2) in support of their latter claim. The tax court agreed in part with the Steiners. The Supreme Court disagreed, holding that the Steiners were not entitled to their claimed deductions. View "Steiner v. Utah State Tax Commission" on Justia Law

Posted in: Tax Law
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The Supreme Court affirmed the decision of the district court finding that the language of Utah Code 59-7-113 was ambiguous and that section 113 did not permit the income allocation that the Utah State Tax Commission had imposed upon See’s Candies, holding that the district court properly employed the arm’s length transaction standard to determine that the Commission improperly allocated See’s income.The Commission in this case allocated certain royalty payments See’s had deducted from its taxable income back to See’s as taxable income. The district court decided that the allocation was inappropriate and allowed See’s to take the deductions. The Supreme Court affirmed, holding (1) the language of section 113 is ambiguous; (2) the district court properly looked to the statute’s federal counterpart and its accompanying regulations for guidance; and (3) the district court correctly determined that the Commission improperly allocated See’s income. View "Utah State Tax Commission v. See’s Candies, Inc." on Justia Law

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The Supreme Court affirmed the judgment of the district court dismissing Plaintiffs’ complaint against Weber County claiming that the County had violated Utah Code 59-22-103 and 59-2-103.5, which establish the tax exemption for primary residential property.Plaintiffs paid taxes on their primary residence but later learned that the County had not given them the residential exemption. The district court entered a judgment on the pleadings dismissing Plaintiffs’ causes of action, concluding, inter alia, that the assessor acted within the scope of his authority in reclassifying Plaintiffs’ property as “non-primary residential.” In affirming, the Supreme Court held that Plaintiffs’ challenges to the taxes they paid must fall under Utah Code 59-2-1321, which requires taxpayers to point an “error or illegality that is readily apparent from county records.” Because Plaintiffs did not challenge this requirement or show that the alleged errors or illegalities were readily apparent, the district court did not err in its judgment. View "Hammons v. Weber County" on Justia Law

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The Supreme Court affirmed the judgment of the district court dismissing Plaintiffs’ complaint against Weber County claiming that the County had violated Utah Code 59-22-103 and 59-2-103.5, which establish the tax exemption for primary residential property.Plaintiffs paid taxes on their primary residence but later learned that the County had not given them the residential exemption. The district court entered a judgment on the pleadings dismissing Plaintiffs’ causes of action, concluding, inter alia, that the assessor acted within the scope of his authority in reclassifying Plaintiffs’ property as “non-primary residential.” In affirming, the Supreme Court held that Plaintiffs’ challenges to the taxes they paid must fall under Utah Code 59-2-1321, which requires taxpayers to point an “error or illegality that is readily apparent from county records.” Because Plaintiffs did not challenge this requirement or show that the alleged errors or illegalities were readily apparent, the district court did not err in its judgment. View "Hammons v. Weber County" on Justia Law