Justia Arkansas Supreme Court Opinion Summaries

The Supreme Court affirmed an order of the circuit court finding in favor of Welspun Tubular, LLC in this challenge to a disallowed compensating-use-tax exemption, holding that the circuit court did not err.A "sales and use" tax audit of Welspun's books and records for the reporting periods May 1, 2009 through April 30, 2012 resulted in an assessment of compensating-use tax totaling $162,266 on Welspun's purchases of steel grit during the audit period. Welspun brought this suit, arguing that its grit purchases were tax exempt as the purchase of manufacturing equipment. The circuit court found for Welspun, concluding that the Arkansas Department of Finance and Administration erred in assessing tax on Welspun's purchases of grit. The Supreme Court affirmed, holding that the circuit court did not clearly err in finding that the grit was used to manufacture an article of commerce. View "Walther v. Welspun Tubular, LLC" on Justia Law

The Supreme Court affirmed the judgment of the circuit court finding that certain rent-to-own leases were subject to the special excise tax on short-term rentals of tangible personal property levied by Ark. Code Ann. 26-63-301(b), holding that the circuit court did not err.At issue was the assessment of short-term rental tax on transactions between Appellant, Rent-A-Center East, Inc., and its customers. The Arkansas Department of Finance (DFA) and Administration issued a notice of proposed assessment to Appellant for short-term rental tax, compensating-use tax, and interest. The proposed assessment was upheld. Appellant then filed a complaint seeking judicial relief from the tax assessment, alleging that DFA wrongly classified the rental-purchase-agreement transactions as "leases" or "rentals." The circuit court granted summary judgment for DFA. The Supreme Court affirmed, holding that the transactions at issue were taxable short-term leases and not nontaxable long-term leases. View "Rent-A-Center East, Inc. v. Walther" on Justia Law

The Supreme Court reversed the judgment of the circuit court affirming the Pulaski County Assessor's denial of the Little Rock Municipal Airport Commission's tax exemption for three land parcels, holding that because the Airport used the unleased properties exclusively for public purposes, they were exempt from taxation.After the Assessor denied the Airport's application for tax exemptions the Airport filed four amended complaints. The circuit court granted the Assessor's motion for summary judgment, concluding that the properties were not exempt from taxation. The Supreme Court reversed, holding (1) the Airport directly used the subject properties exclusively for public purposes when the properties were unleased; and (2) therefore, the properties exempt from taxation during the periods were they were unleased. View "City of Little Rock v. Ward" on Justia Law

The Supreme Court reversed in part the judgment of the circuit court denying the motion for summary judgment filed by Appellant Bear Chaney, in his official capacity as the Director of the Arkansas Assessment Coordination Division (AACD) of the State of Arkansas, holding the the circuit court erred as a matter of law in finding that Appellant was not entitled to sovereign immunity.Appellees appealed the county court's rulings denying their claims challenging the assessed values of their working interests as determined by the county assessor and added claims for injunctive relief against Chaney in his official capacity as the director of the AACD. Chaney moved for summary judgment, arguing that the claims against him were barred. The circuit court denied the motion. The Supreme Court reversed in part and dismissed in part, holding (1) the circuit court erred as a matter of law in finding that Chaney was not immune from suit; and (2) Chaney's argument that the circuit court lacked subject matter jurisdiction to award injunctive relief against him was outside the scope of this interlocutory appeal. View "Chaney v. Union Producing, LLC" on Justia Law

In this tax refund case centering on Arkansas's excise tax on tobacco products other than cigarettes the Supreme Court affirmed the judgment of the circuit court granting summary judgment for the Director of the Arkansas Department of Finance and Administration (DF&A) and dismissing Plaintiffs' claims for refund, holding that the circuit court did not err in denying Plaintiffs' motion for summary judgment and granting DF&A's cross-motion for summary judgment.Plaintiff, seven companies that alleged that they overpaid Other Tobacco Products (OTP) taxes from 2011 through 2013, filed suit under the Arkansas Tax Procedure Act, Ark. Code Ann. 27-18-406, seeking declaratory relief in the form of a judgment that they overpaid OTP taxes. The circuit court dismissed Plaintiffs' claims for refund. The Supreme Court affirmed, holding that Plaintiffs were not entitled to a full or partial refund of the $3,223,200 they paid in excise taxes to the state during the time period in question. View "Douglas Companies, Inc. v. Walther" on Justia Law

The Supreme Court affirmed the order of the circuit court granting summary judgment in favor of the director of the Arkansas Department of Finance and Administration (DFA) and dismissing American Honda Motor Company's challenge to the DFA's denial of its request for a corporate tax refund, holding that the circuit court correctly granted summary judgment in favor of DFA.American Honda filed an action for judicial relief under the Arkansas Tax Procedure Act, Ark. Code Ann. 26-18-101 et seq., challenging DFA's decision to deny its request for a corporate tax refund. The circuit court granted summary judgment in favor of DFA. The Supreme Court affirmed, holding (1) judicial review of DFA's statutory interpretation of the Tax Procedure Act is de novo; and (2) while the circuit court improperly gave great deference to DFA's interpretation of the Tax Procedure Act, the circuit court correctly granted summary judgment in favor of DFA. View "American Honda Motor Co. v. Walther" on Justia Law

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

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

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

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