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Tag Archives: Taxation

Municipal – Administrative – Privilege License – Taxation – Electronic Gaming Operations (access required)

Smith v. City of Fayetteville Electronic gaming operations are legal, and the city has the authority to impose a privilege license tax on legal businesses. But the city may not impose a tax so prohibitively high that it prevents a business owner from conducting a profitable business unless the city can show that the tax was necessary to pay for increased police enforcement, or that the businesses suffered because of mismanagement rather than the increased tax.

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Taxation – Subdivision Association – Parking Lot & Beach Club – Net Income – Private Interests (access required)

Ocean Pines Ass’n Inc. v. Comm’r of Internal Revenue A tax-exempt subdivision association must pay taxes on net income from two parking lots and a beach club that benefit the private interests of association members rather than the general public; the 4th Circuit affirms the Tax Court judgment, as the income is not “substantially related” to the association purpose of promoting social welfare, but is taxable as “unrelated business taxable income.”

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Labor & Employment – Public Employees – Retirement – Taxation – Statutory Amendment (access required)

Pendergraph v. North Carolina Department of Revenue (Lawyers Weekly No. 12-16-0233, 6 pp.) (John C. Martin, Ch.J.) Appealed from Wake County Superior Court. (John R. Jolly Jr., J.) N.C. App. Unpub. Full-text opinion. Holding: Where plaintiffs’ state and local government ...

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Real Property – Taxation – Valuation – Lack of Infrastructure – ‘Condition Factor’ (access required)

In re Appeal of Ocean Isle Palms LLC A taxpayer’s failure to contest the valuation of its property in 2008 and 2009 did not prevent the taxpayer from challenging the same valuation in 2010. However, there were genuine issues of material fact as to whether the county’s 2007 Schedule of Values was misapplied.

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Taxation – Sales & Use – Leases & Maintenance Agreements – Credit (access required)

Technocom Business Systems Inc. v. North Carolina Department of Revenue A taxpayer in the business of selling and leasing office equipment collected sales taxes on its optional maintenance agreements. An audit by the Department of Revenue determined that the taxpayer should have been paying use taxes instead of sales taxes. G.S. § 105-164.41 entitles the taxpayer to a credit for the sales taxes it paid to the Department against the assessment of use taxes that the taxpayer should have paid.

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Taxation – Real Property – Ad Valorem — Reappraisal – Schedule of Values — Agricultural & Forestry Land (access required)

In re McLamb. Where a taxpayer fails to show a county’s schedule of values in reappraisal of agricultural and forestry land is either arbitrary or capricious, the schedule will stand. The county is not obliged to use all “practicable” resources to determine fair valuation. And the county is not statutorily required to consider soil quality in determining fair value.

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Taxation – Real Property – Ad Valorem – Forest Land (access required)

In re Appeal of Family Tree Farm, LLC Even if the federal Clean Water and Food Security Acts “severely restrict” the taxpayer’s property’s use, the restrictions do not appear to affect the land’s current use as forestland. The taxpayer cannot show that its property is differently situated with respect to these restrictions than other property located in the same geographic region. Additionally, the N.C. Sedimentation Pollution Act specifically does not apply to land used for forestry.

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Taxation – Fraudulent Transfer – Taxpayer’s Nominee – Bankruptcy – Civil Practice – Res Judicata & Collateral Estoppel (access required)

Johnson v. United States Since a final decision of the bankruptcy court has already determined that plaintiff received a fraudulent transfer from her husband of his million-dollar judgment against a former employer, the doctrines of res judicata and collateral estoppel make it appropriate for this court to reach the same conclusion.

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Taxation – Federal Income Tax – Bankruptcy Discharge – Willful Nonpayment – Discretionary Spending (access required)

United States v. Clayton Where defendant knew he was required to pay his federal income taxes, knew he had not done so, and continued to make extravagant discretionary expenditures, the government has made out a prima facie case that defendant willfully attempted to evade his tax liability. If defendant willfully evaded paying his taxes, his tax debt was not discharged in his bankruptcy.

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