Justia Minnesota Supreme Court Opinion Summaries

The Supreme Court held that the tax court lacked jurisdiction to consider a motion filed in a case arising from a tax petition that was automatically dismissed by operation of law.Ronald and Dee Johnson challenged the County’s assessment of their property taxes. The County automatically dismissed the petition by operation of law because the Johnsons had not paid a portion of their property taxes by the date required by law. The tax court declined to consider the Johnsons’ motion regarding their petition because the petition had been automatically dismissed by statute and had not been reinstated. The Supreme Court affirmed, holding that the tax court correctly concluded that it no longer had jurisdiction over the dismissed petition.Specifically, the Court held (1) the requirements of Minn. Stat. 783.03(1) were met; and (2) the Johnsons’ arguments challenging the constitutionality of section 278.03(1) were without merit. View "Johnson v. County of Hennepin" on Justia Law

The tax court correctly dismissed the appeals brought by several cooperatives (the Cooperatives) challenging the valuation orders of the Commissioner of Revenue for the 2014, 2015, and 2016 tax years because the appeals were not filed within the sixty-day deadline for appeals from orders of the Commissioner.On appeal, the Cooperatives argued that the two appeal paths provided by Minn. Stat. 273.372(2) effectively establish the single deadline of April 30 of the year in which the tax becomes payable. The Supreme Court disagreed, holding (1) the Cooperatives’ view that a single filing deadline governs all appeals under section 273.372 fails because the plain language of that statute establishes two different filing deadlines, depending on the appeal path chosen; and (2) the Cooperatives’ notices of appeal were governed only by a sixty-day deadline, and therefore, the tax court properly dismissed the appeals as untimely. View "Lake Country Power Cooperative v. Commissioner of Revenue" on Justia Law

The Supreme Court held that four irrevocable inter vivos trusts (the Trusts) lacked sufficient relevant contacts with Minnesota during the relevant tax year to be permissibly taxed, consistent with due process, on all sources of income as “resident trusts.”The Trusts filed their 2014 Minnesota income tax returns under protest, asserting that Minn. Stat. 290.01(7b)(a)(2), the statute classifying them as resident trusts, was unconstitutional as applied to them. The Trusts sought refunds for the difference between taxation as resident trusts and taxation as non-resident trusts. The Commissioner of Revenue denied the refund claims. The Minnesota Tax Court granted summary judgment for the Trusts, holding that the statutory definition of “resident trust” violates the Due Process Clauses of the Minnesota and United States Constitutions as applied to the Trusts. The Supreme Court affirmed, holding that, for due process purposes, the State lacked sufficient contacts with the Trusts to support taxation of the Trusts’ entire income as residents. View "Fielding v. Commissioner of Revenue" on Justia Law

The Supreme Court affirmed the decision of the Minnesota Tax Court affirming the order of the Commissioner of Revenue that assessed Terrance Sargent’s income tax liability for tax years 2010-2014, holding that Sargent’s arguments on appeal were without merit.On appeal, Sargent argued that Minnesota’s income tax violates the Minnesota Constitution and the United States Constitution on several grounds. The Supreme Court affirmed the Minnesota Tax Court's decision after considering all of Sargent’s arguments, holding that they each were without merit. View "Sargent v. Commissioner of Revenue" on Justia Law

The Commissioner of Revenue properly invoked her alternative-apportionment authority under Minn. Stat. 290.20(1) and applied an alternative apportionment method that fairly reflected the income of Associated Bank, N.A. and its affiliates (the Bank) allocable to Minnesota.The Bank, which included two LLC partnerships under Wisconsin law, objected to the Commissioner’s assessment of additional state corporate franchise tax liability for tax years 2007 and 2008. The Bank had calculated the tax owed based on the relevant statutes for apportioning income to Minnesota. The Commissioner found that applying the general apportionment formula to the LLCs did not “fairly reflect” the Bank’s “taxable net income allocable” to Minnesota. Accordingly, the Commissioner invoked her authority under section 290.20(1) and applied an alternative apportionment method to correct a distortion of reported income. After exhausting its administrative remedies, the Bank appealed to the tax court. Relying on the Supreme Court’s decision in HMN Financial, Inc. v. Commissioner of Revenue, 782 N.W.2d 558 (Minn. 2010), the tax court agreed and reversed the Commissioner’s order. The Supreme Court reversed, holding (1) HMN Financial is not dispositive; and (2) the Legislature plainly gave the Commissioner the authority to use an alternative apportionment method under the circumstances presented here. View "Associated Bank, N.A. v. Commissioner of Revenue" on Justia Law

In this case regarding the determination of the tax court valuing Minnesota Energy Resources Corporation’s (MERC) natural gas pipeline distribution system for the years 2008 through 2012, the Supreme Court affirmed the decision of the tax court on remand, holding that the tax court followed the Court’s instructions on remand and properly applied the Court’s clarified standard to MERC’s claim of external obsolescence. On remand, the tax court found that MERC failed to demonstrate that external obsolescence affected the value of its property. The Supreme Court affirmed, holding (1) the tax court correctly evaluated whether MERC’s evidence of external obsolescence was credible, reliable, and relevant; and (2) the tax court’s decision was justified by the evidence and in conformity with law. View "Minnesota Energy Resources Corp. v. Commissioner of Revenue" on Justia Law

At issue on certiorari was what evidence a tax court may rely upon in deciding whether the taxpayer has overcome the presumptive validity of the county’s assessment.Here, Taxpayer contested the County’s assessment of the fair market value of Taxpayer’s parking ramp. The tax court denied the County’s motion to dismiss, basing its decision on evidence presented in the County’s case. The Supreme Court affirmed, holding (1) the tax court erred in considering the County’s evidence to decide the motion to dismiss because the relevant law permits only the Taxpayer’s evidence to be considered; but (2) the tax court did not abuse its discretion by holding, in the alternative, that Taxpayer’s evidence overcame the presumptive validity of the assessment. View "Court Park Co. v. County of Hennepin" on Justia Law

The Supreme Court affirmed the tax court’s denial of relief to Ronald and Dee Johnson, who filed this action challenging the property taxes that Hennepin County assessed against their property. The tax court granted the County’s motion to dismiss the petition for tax years 2007 through 2012 because those claims were not filed in compliance with Minn. Stat. 278.01-.02 and dismissed the Johnson’s constitutional claims for lack of jurisdiction. The tax court then granted judgment in favor of the County on the Johnsons’ remaining claims challenging the assessment for the 2013 tax year. Thereafter, the tax court denied the Johnsons’ five post-trial motions. The Supreme Court affirmed, holding that the evidence in the record adequately supported each of the tax court’s decisions at issue. View "Johnson v. County of Hennepin" on Justia Law

Minnesota’s water’s edge rule, Minn. Stat. 290.17(4)(f), does not prohibit the inclusion in “net income” the income of a foreign entity that elects under federal tax law to be disregarded as a separate entity.At issue in this appeal from the tax court was whether the consequences of an election made under federal tax law by a foreign entity owned by Ashland Inc., a domestic unitary business, must be recognized in determining Ashland’s Minnesota tax liability. The Commissioner of Revenue concluded that the income and apportionment factors of the foreign entity were improperly included in Ashland’s combined return and so excluded them in calculating Ashland’s Minnesota tax liability. The tax court granted Ashland’s motion for summary judgment, concluding that the consequences of the federal election were properly included in the determination of Ashland’s net income on its Minnesota tax returns. The Supreme Court affirmed, holding that the tax court did not err in its conclusion. View "Ashland Inc. & Affiliates v. Commissioner of Revenue" on Justia Law

This tax dispute arose out of a failed real estate investment that resulted in significant tax consequences for Germaine Harmon, the widow of one of the original investors. Harmon challenged the Commissioner of Revenue’s assessment of her 2010 Minnesota income-tax liability, which the Commissioner based on a Schedule K-1 filed by the partnership in charge of the foreclosed real estate investment. The Supreme Court affirmed the tax court’s grant of summary judgment in favor of the Commissioner, holding that the tax court did not err by determining that Harmon failed to overcome the presumption of validity of the Commissioner’s assessment of taxes. View "Harmon v. Commissioner of Revenue" on Justia Law