Maryland Utility Company Secures $2.4M Sales Tax Refund

Siding with the utility taxpayer, the Appellate Court of Maryland (Court) issued a decision granting Potomac Edison Company (Potomac), a Maryland electric utility company, a $2.4M sales tax refund. The Court held that Potomac’s process of transporting electricity from a power plant to the final customer constituted a “production activity” and was qualified for a sales tax exemption under Maryland law.

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TaxLisa CivitellaComment
CT Supreme Court Criticizes City for “Amelia Bedelia” Interpretation

The Connecticut Supreme Court (Court) recently expressed criticism for the City of Danbury (City) during oral arguments regarding untimely filed property tax appraisals in a pending appeal. Several property owners, whose property assessments range from $1.5M to $2.8M, are defending the lower court’s decision to hear their appeals based on a Connecticut statute, which states: “If [the] appraisal is not timely filed, the court may dismiss the application” (emphasis added). While the property owners argue that the language of the statute gives the lower court discretion to hear untimely filed appeals, the City asserts that the statute demands a mandatory dismissal.

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TaxOlivia MascharkaComment
Battle of the Ballot ~ Taxation with Representation

Albeit the most significant vote on this year’s election day ballot was the choice for President of the United States, numerous consequential statutory amendments and propositions having a direct impact on state tax constructs were also included on ballots. Taxpayers across the country voted on ballot initiatives that would amend state constitutions and alter tax impositions in their state, approving some while denying others.

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TaxLisa CivitellaComment
Cleveland Browns Tackle City Over Right to Move from Tax-Funded Stadium

The Cleveland Browns Football Company, LLC (the Browns) recently brought suit against the City of Cleveland (the City) over a state law that restricts the Browns from moving their NFL team out of the tax-supported Huntington Bank Field (HBF) in downtown Cleveland. The Browns currently play home games at HBF, but plan to move to a new stadium after the expiration of their lease agreement in 2029.

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TaxOlivia MascharkaComment
Class Action Alleges Chipotle is Hiding Fees in a "Tax" Burrito

Alleging the company is fraudulently advertising service fees as sales tax, a class action complaint was filed in U.S. District Court, Central District of California against Chipotle Mexican Grill, Inc. (Chipotle). Suit was brought against the fast casual Mexican restaurant for representing to its customers that they are paying higher than usual amounts of sales tax, when they are actually paying sales tax plus “Chipotle’s eye-popping service fees.”

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TaxLisa CivitellaComment
TX Letter Ruling Clarifies Digital Software Taxability ~ Changes on the Horizon

In a Private Letter Ruling released by the Texas Comptroller’s Office, the Comptroller ruled that a Taxpayer’s pre-authorization services for insurance eligibility are not taxable as insurance services, data processing services, or information services. The decision comes despite a recent proposal by the Comptroller’s Office to effectuate a paradigm shift related to taxable data processing services from an “essence of the transaction” approach to a test that examines the seller’s actions over the product the buyer is purchasing.

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TaxLisa CivitellaComment
SCOTUS Denies Cert on Use Tax Apportionment Decision

The Supreme Court of the United States (SCOTUS) denied certiorari regarding South Dakota’s imposition of use tax on equipment used in-state by an out-of-state construction company. Minnesota construction company, Ellingson Drainage, Inc. (Ellingson), challenged South Dakota’s imposition of the tax on the unapportioned fair market value of the equipment, regardless of how long the equipment is physically located in the state.

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TaxLisa CivitellaComment
StubHub Continues to Fight $16M Assessment for Online Ticket Sales

StubHub, Inc. (StubHub), the world’s largest online marketplace for purchasing and selling tickets, filed its response brief to the Wisconsin Court of Appeals (Court) continuing its protest of a $16M audit assessment from the Wisconsin Department of Revenue (Department). The assessment includes a staggering $6M in interest and $2M in non-filing penalties. StubHub maintains that it is not liable for sales tax related to sales of tickets for admission to recreational events, e.g. football games and concerts, made through its platform as it is not a “person selling” as defined by Wisconsin statute.

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TaxLisa CivitellaComment
Sneaker Resale Platform Challenges $3.4M Sales Tax Assessment

After receiving a $3.4 million sales tax assessment, StockX, LLC (StockX), a Michigan-based sneaker resale platform, filed a complaint with the Michigan Court of Claims alleging that the Michigan Treasury Department (Department) incorrectly assessed it $3.4 million in sales tax, penalties and interest for the years 2017-2019. The company asserts that it was wrongfully classified as a “retailer” required to remit tax on sales instead of being recognized as a “marketplace facilitator.” Prior to the landmark Wayfair decision in 2019 and the following law changes, marketplace facilitators were not responsible for collecting and remitting sales tax.

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Online Auto Parts Company Rocked with $8M Transaction Tax Assessment

Recently, the Arizona Court of Appeals (Court) determined the Wisconsin headquartered online auto parts retailer RockAuto, LLC (RockAuto) had established substantial nexus in Arizona through its network of distributors, vacating and remanding the tax court’s decision. With a twist of fate regarding the tax court’s decision favoring RockAuto, the online retailer now faces a liability in excess of $8 million of tax, penalties and interest assessed by the Arizona Department of Revenue (Department).

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Former Officer Liable for $56k of Unpaid Tax After 10-Year Appeal

In a recent decision, the Nebraska Supreme Court (Court) held a company officer personally liable for over $56,000 in unpaid use tax, penalties and interest. The officer was the former president of Direct Media, Inc. (Media) a direct mail processing company which ceased operations in 2011. The Court’s ruling affirmed the lower court’s determination that the officer was the company’s responsible officer in charge of managing the business’ finances and thereby responsible for the unpaid tax.

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IL Appeals Court Rejects $162.7M Sales Tax Refund Claim on Aviation Fuel

The Illinois Appellate Court denied a $162.7M refund claim from American Aviation Supply, LLC (American) after determining that a sales tax exemption for property bought and stored temporarily in Illinois did not apply to the company’s sales of aviation fuel. In doing so, the Court affirmed the Illinois Independent Tax Tribunal’s (Tribunal) decision, which found that the exemption did not apply because the fuel was not consumed solely outside of the state. Because approximately 2% of the fuel was consumed in Illinois, the entire sale is subject to tax.

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