We are proud of the many successes we have helped our clients achieve through negotiation, mediation, and administrative proceedings across the country. The links below highlight representative matters that have become public through state court litigation.
The California Court of Appeal held that taxpayers who sought judicial relief after the denial of their individually filed tax refund requests could proceed on a classwide basis without first filing a class claim for a refund because they strictly complied with administrative procedures as required by Cal. Const., art. XIII, § 32, and sufficiently exhausted administrative remedies under Rev. & Tax. Code, § 19322, by individually filing their refund claims. The Court of Appeal also specifically ordered certification of the class, which was the first time a class had been certified in an action against the Franchise Tax Board in 30 years.
The California Court of Appeal held that an out-of-state corporation whose only connection to California was a passive membership in a limited liability company in California was not doing business in California and therefore was not subject to the minimum tax. Download PDF
The California Court of Appeal agreed that the trial court improperly sustained FTB’s demurrer with respect to whether allowing intrastate unitary groups to choose to file either separate or combined returns, while requiring interstate unitary groups to file combined returns, discriminated against interstate commerce. Download PDF
The San Francisco Superior Court rejected the State Board of Equalization’s attempt to disregard related-entity transactions and held that the taxpayer had properly calculated the tax base for purposes of California’s tobacco tax. Download PDF
The California Court of Appeal held that the taxpayer was entitled to pursue a refund of city telephone utility user taxes where the taxpayer was unable to collect the tax from end users.
The California Court of Appeal held that the unapportioned tax imposed on limited liability companies violated the Commerce Clause of the United States Constitution, and that the taxpayer (an LLC engaged in business wholly outside California) was entitled to a full refund. Download PDF
The California Court of Appeal held that the unapportioned tax imposed on limited liability companies violated the Commerce Clause of the United States Constitution, and that the taxpayer (an LLC engaged in business within and without California) was entitled to a partial refund. Download PDF
The San Francisco Superior Court agreed that Plaintiffs were entitled to use the mark-to-market method of accounting for their securities in 1997 (the first year that California conformed to the relevant federal treatment) even though they had not made a California election and had made their federal election prior to California conforming to the relevant law. Download PDF
The San Diego Superior Court agreed that the taxpayer was entitled to include gross proceeds from the sale of short term investment instruments in its sales factor denominator because the FTB did not meet the distortion burden necessary to modify the statutory apportionment formula.
We achieved a favorable settlement of the taxpayer’s claim for refund of sales and use tax based on bad debt deductions.
In companion cases, the Colorado Supreme Court held that the unambiguous language of both State statute and the Department’s own regulation prohibited the Department from including in a combined corporate income tax return holding companies that lacked property and payroll of their own. The Court also rejected the Department’s attempt to invoke an anti-abuse statute to reallocate the subject income to combinable affiliates, finding as a matter of law that the statute cannot be used to circumvent the State’s specific combination tests, and as factual matter that the Department had failed to show any abusive conduct by the taxpayers.
Download PDF: Dep’t of Revenue v. Oracle Corp. and Subsidiaries, 2019 Colo. LEXIS 419 (Colo. 2019)
Download PDF: Dep’t of Revenue v. Agilent Technologies, Inc., 2019 Colo. LEXIS 417 (Colo. 2019)
The Colorado Supreme Court held that Sodexo made non-taxable, wholesale sales of meals to its state university client, which the university separately resold to students under meal plan contracts. The Court rejected the City of Golden’s contention that Sodexo engaged in direct, retail sales of meals to students, with the university acting as its collection agent. Download PDF
The Court of Appeals held that the City of Lakewood had unlawfully imposed its use tax on furniture displayed in retail store showrooms. The Court concluded that because taxpayers’ “primary purpose” remained to resell the furniture, they had purchased the displayed items in non-taxable wholesale transactions. Download PDF
The district court held that the Department of Revenue’s apportionment of an intangible holding company’s net income using a single sales factor was “not reasonable,” and required the Department to include the holding company’s property and payroll factors in a revised apportionment. The court also held that the statute of limitations barred three years of the assessment because the Department had audited the holding company’s activities within a prior audit of its parent. Finally, the court struck a substantial portion of the interest assessed due to “inappropriate delays” by the Department in handling the taxpayer’s protest. Download PDF
The Court of Appeals affirmed a trial court ruling that barred the City of Golden from collecting sales tax on Comcast’s Internet access service, rejecting the City’s claim that it qualified for the grandfather exception to the moratorium stated in the federal Internet Tax Freedom Act. The court also affirmed the payment of interest to the taxpayer on its payment under protest, voiding a City ordinance that purported to deny interest. Download PDF
The district court held that Commerce City violated the TABOR amendment to the Colorado Constitution by modifying its tax code, without voter approval, to impose sales tax on transactions in which a service provider used tangible personal property to provide its service. The court separately awarded ConAgra more than $220,000 in attorney fees and costs. Download PDF
The district court entered summary judgment in favor of the taxpayer, holding that the production of natural gas liquids and marketable natural gas from raw gas qualified as “manufacturing” under the state’s sales and use tax exemption for manufacturing machinery. Download PDF
The Court of Appeals held that aluminum remnants of a can manufacturing process qualified as wholesale purchases exempt from the City of Golden’s use tax. Download PDF
The district court entered summary judgment in favor of the taxpayer public utility, holding that modifications made to the sales and use tax code of the City of Commerce City which imposed sales and use tax on all capitalized expenses violated the TABOR amendment to the Colorado Constitution. The court awarded attorney fees to our client.
The Supreme Court upheld the taxpayer’s appeal rights, concluding that administrative procedures stated in two local governments’ tax codes conflicted with governing state law and were therefore unenforceable. Download PDF
The district court held that the taxpayer’s Internet access service was not a taxable “telecommunication service.” Download PDF
The Court of Appeals held that extensive gathering and processing equipment used in the taxpayer’s natural gas operations did not constitute “construction and building materials” and therefore was not subject to county use tax. The Colorado Supreme Court later affirmed the decision without a written opinion. Download PDF
The Court of Appeals held that modifications made by the City of Lone Tree to its sales and use tax code violated the TABOR amendment to the Colorado Constitution. The court awarded a substantial tax refund to the taxpayer. Download PDF
The Michigan Supreme Court held that IBM was entitled to the election that it made under the Multistate Tax Compact to use an equally-weighted three factor apportionment formula to apportion its Modified Gross Receipts Tax base. Download PDF
The South Dakota Supreme Court entered judgment in favor of the taxpayer, holding that state law authorized the taxpayer’s administrative appeal of a refund claim denial involving telecommunications gross receipts taxes. Download PDF
The Tennessee Chancery Court held that late payment charges collected from certain of the taxpayer’s subscribers were not subject to Tennessee sales tax because they were separable from charges for taxable cable television services. The court awarded attorney fees to our client. Download PDF
The Wyoming Supreme Court held that the taxpayer’s end user common line access charges to inter-exchange carriers were not subject to Wyoming sales and use tax as charges for intrastate telephone service. Download PDF
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