Justia Arkansas Supreme Court Opinion Summaries

Articles Posted in Tax Law
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The Supreme Court affirmed the judgment of the circuit court dismissing Plaintiff's illegal exaction suit against the City of Blytheville and its Sewer Department (collectively, the City), holding that the circuit court properly granted summary judgment.In her complaint, Plaintiff claimed that a $5 fee for sewer system repairs and upgrades, imposed pursuant to a city ordinance, was a tax and constituted an illegal exaction in violation of article 16, section 13 of the Arkansas Constitution. The circuit court granted the City's motion for summary judgment and dismissed all of Plaintiff's claims with prejudice. The Supreme Court affirmed, holding that the circuit court correctly found that the fee was not a tax and, therefore, not an illegal exaction. View "Watson v. City of Blytheville" on Justia Law

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The Supreme Court dismissed this appeal challenging the circuit court's order denying Appellants' motion for summary judgment and granting summary judgment for Appellees, holding that the circuit court's order was not a final order.Appellees filed a class-action complaint against Appellants, online travel companies (OTCs), alleging that the OTCs had failed to collect or collected and failed to remit the full amount of gross-receipts taxes imposed by government entities on hotel accommodations. The circuit court granted partial summary judgment for Appellees on the issue of liability. Appellants appealed. The Supreme Court dismissed the appeal, holding that where the circuit court stated that its order was preliminary and that it was retaining jurisdiction to determine the appropriate relief, and where the court did not enter an Ark. R. Civ. P. 54(b) certification, the order was not final. View "Hotels.com, L.P. v. Pine Bluff Advertising" on Justia Law

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The Supreme Court affirmed the decision of the circuit court granting an improvement district's (District 84) request for foreclosure and entering judgment against TND Developers, LLC for the total of unpaid improvement district taxes and ordering all TND lands within the district sold with the proceeds applied against the improvement district's judgment, holding that Appellants' claims on appeal failed.On appeal, Appellants argued, inter alia, that District 84's lien for nonpayment of improvement taxes could only attach to individual tracts upon which taxes were actually delinquent and unpaid, and therefore, an in rem judgment could not be attached to certain tracts. The Supreme Court affirmed, holding (1) Ark. Code Ann. 14-94-118 makes clear that all unreleased property within the district is subject to District 84's tax lien; (2) because District 84's complaint plainly described the land it sought to foreclose, as well as the tracts excluded from the action, the circuit court did not err in allowing District 84 to proceed on the basis of a statutorily defective complaint; (3) District 84 did not improperly refuse prepayment of improvement taxes; (4) Appellants' claims for equitable estoppel or equitable subordination failed; and (5) the circuit court's order did not violate Appellants' due process rights. View "Bullock's Kentucky Fried Chicken, Inc. v. City of Bryant, Arkansas" on Justia Law

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The Supreme Court reversed the order of the circuit court granting Burger King’s motion for summary judgment in an action seeking relief from a tax assessment pursuant to Ark. Code Ann. 26-18-406, holding that the circuit court erred in interpreting the relevant statutes and promulgated rules to find that Burger King was only required to pay taxes on the wholesale value of the food ingredients removed from stock as opposed to the retail value of the meals.On appeal, the Supreme Court agreed with the interpretation of the statutes and rules set forth by the Director of the Arkansas Department of Finance and Administration, holding that items withdrawn from stock by Burger King should be taxed at the advertised retail price rather than the actual wholesale cost - the original purchase price. View "Walther v. FLIS Enterprises, Inc." on Justia Law

Posted in: Tax Law
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The Supreme Court reversed the circuit court’s order granting Defendants’ motion to dismiss Plaintiff’s refund action pursuant to Ark. R. Civ. P. 12(b)(8) based on the doctrine of res judicata, holding that res judicata did not bar Plaintiff’s suit.After receiving the Faulkner County Assessor’s valuation of its personal property, Plaintiff challenged the assessments. The Faulkner County Board of Equalization upheld the assessments, as did the Faulkner County Court. The circuit court dismissed Plaintiff’s valuation appeal for lack of subject matter jurisdiction. During the discovery process in the valuation appeal, Plaintiff learned of errors regarding the issues in the first complaint. Plaintiff then filed a claim in the Faulkner County Court for a refund of its 2012 ad valorem taxes under Ark. Code Ann. 26-35-901 based on an erroneous assessment of its personal property and on the taxation of its exempt intangible property. The county court dismissed the refund action under Ark. R. Civ. P. 12(b)(8) because the earlier case involved the same parties and arose out of the same occurrence. Plaintiff appealed. The circuit court dismissed the refund action, finding that the refund claims were precluded by res judicata. The Supreme Court reversed, holding that because the valuation appeal was dismissed for lack of subject-matter jurisdiction, there was no valid judgment in that case by a court with proper jurisdiction, and all of the required elements of claim preclusion were not satisfied. View "Desoto Gathering Co. v. Hill" on Justia Law

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The Supreme Court reversed the circuit court’s order granting Burger King’s motion for summary judgment in an action seeking relief from a tax assessment pursuant to Ark. Code Ann. 26-18-406, holding that the circuit court erred in construing the relevant statutes and promulgated rules to find that Burger King was required to pay taxes only on the wholesale value of the food ingredients removed from stock, as opposed to the retail value of the meals. The Supreme Court held (1) because the parties did not raise in the proceedings below the issue of sovereign immunity, it was not properly addressed further in this case; and (2) as to the merits of the case, the tax of the manager meals is assessed on the retail value of the meal, rather than the wholesale value of the individual ingredients withdrawn from stock. View "Walther v. Flis Enterprises, Inc." on Justia Law

Posted in: Tax Law
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A nonlawyer may not appeal a tax assessment to a county court on behalf of a corporation.Appellants appealed the county assessor’s tax assessment, and the letters were signed by Appellants’ representative, a nonattorney. The county court upheld the assessments. Appellants appealed, and the notice of appeal was filed by a licensed attorney. Appellees filed a motion to dismiss, arguing that the circuit court lacked jurisdiction because the notice of appeal constituted the unauthorized practice of law, rendering the petition to appeal a nullity and depriving the circuit court of jurisdiction. The circuit court granted the motion. The Supreme Court agreed, holding that, because a nonlawyer invoked the process of a court, the county court never acquired jurisdiction over Appellants’ appeal, thus depriving the circuit court of jurisdiction. View "USAC Leasing LLC v. Hill" on Justia Law

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In this case challenging a county assessor’s ad valorem tax assessments, the Supreme Court affirmed the circuit court’s order granting the motion to dismiss filed by Appellees on the grounds that Appellants’ representative, a nonattorney, committed the unauthorized practice of law by signing a petition to appeal the tax assessment to the county court.The Supreme Court agreed with the circuit court for the reasons expressed in its opinion issued today in DeSoto Gathering Co., LLC v. Hill, 2017 Ark. 326, holding that the petitions for appeal were null and void because a corporation or its nonattorney officers or employees on its behalf are not authorized to practice law in Arkansas. View "USAC Leasing LLC v. Hill" on Justia Law

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In this case challenging a county board of equalization tax assessment, the Supreme Court affirmed the order of the circuit court dismissing Appellants’ appeal, holding that the circuit court did not err in dismissing Appellants’ appeal when Appellants’ representative, a nonlawyer, initiated the appeal on behalf of Appellants. Specifically, the court held that the notices of appeal that Appellants’ tax manager filed on behalf of Appellants must be deemed a nullity because they were filed in violation of the prohibition of the unauthorized practice of law. Therefore, the petitions of appeal were a nullity, and the county and circuit courts lacked jurisdiction to hear the appeals. View "DeSoto Gathering Co. v. Hill" on Justia Law

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In this case concerning a county board of equalization tax assessment, the Supreme Court affirmed the order of the circuit court dismissing Appellants’ appeal, holding that the circuit court did not err in dismissing the appeal when Appellants’ tax manager, a nonlawyer, initiated the appeal on behalf of Appellants. Specifically, the notices of appeal that Appellants’ tax manager filed on behalf of Appellants must be deemed a nullity because they were filed in violation of the prohibition of the unauthorized practice of law. Therefore, the petitions of appeal were a nullity, the county court did not have jurisdiction, and the circuit court did not have jurisdiction. View "DeSoto Gathering Co. v. Hill" on Justia Law