Justia New York Court of Appeals Opinion Summaries

Articles Posted in Tax Law

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The owner commenced tax certiorari proceedings against the City of Rye, challenging assessments for tax years 2002-2010. for Lot 9 and Lot 10. Lot 10 is within the Rye City School District. Lot 9, which the owner believed to be within that district, actually lies within Rye Neck Union School District. Under RPTL 708, within 10 days of service of the notice and petition on a municipality in a tax certiorari proceeding, a petitioner must mail a copy of those documents to the superintendent of schools of any district within which the assessed property is located. The owner did not comply with that requirements before reaching an agreement with the City. Before that tentative settlement was finalized, the owner recognized its error, notified the Rye District, mailed the petition and notice, and sought the Rye District's consent to settle. The District instead intervened. The court dismissed the petitions with prejudice for failure to comply with RPTL 708. The Appellate Division clarified that dismissal pertained to Lot 9, noting that the action may not be recommenced under CPLR 205(a). The Court of Appeals affirmed. A petitioner who ignores the RPTL 708 mailing requirements and denies a school district the opportunity to economically address a tax certiorari proceeding is not permitted to recommence a proceeding dismissed based upon such noncompliance; to do so would undermine the goals that prompted amendments to RPTL 708. View "Westchester Joint Water Works v Assessor of City of Rye" on Justia Law

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Petitioner applied for the partial ten-year exemption for certain improvements made to real property - known as the business investment exemption - in 2008. After the city assessor valued Petitioner’s property, Petitioner challenged the assessed value of the property and the amount of the exemption. Supreme Court granted summary judgment to Petitioner on the amount of the exemption and recalculated the exemption for years 2008 through 2014. Supreme Court ordered the Schenectady City School District to issue refunds of any excess taxes it collected during the 2009 through 2014 calendar years due to the prior incorrect calculation of Petitioner’s exemption. The Appellate Division modified by reversing the portion of the order directing the School District to issue refunds for the 2009 through 2011 assessment rolls, concluding that unless Petitioner filed annual challenges to the assessment while the initial 2008 petition was pending, Petitioner failed to preserve its challenge. The Court of Appeals reversed, holding that there is no requirement that a taxpayer who challenges the amount of the business investment exemption file annual petitions while the initial petition is pending in order to compel compliance with a resulting court order. View "Highbridge Broadway, LLC v. Assessor of the City of Schenectady" on Justia Law
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In 2012, the Attorney General (AG) filed a complaint resulting in a civil enforcement action by the AG, alleging that Sprint knowingly violated the New York Tax Law, engaged in fraudulent or illegal acts, and submitted false documents to the State pursuant to the New York False Claims Act (FCA). Sprint moved to dismiss the complaint for failure to state a cause of action. Supreme Court denied the motion, and the Appellate Division affirmed. The Court of Appeals affirmed, holding (1) the New York Tax Law imposes sales tax on interstate voice service sold by a mobile provider along with other services for a fixed monthly charge; (2) the statute is unambiguous; (3) the statute is not preempted by federal law; (4) the AG’s complaint sufficiently pleads a cause of action under the FCA; and (5) the damages recoverable under the FCA are not barred by the ex post facto clause of the United States Constitution. View "People v. Sprint Nextel Corp." on Justia Law

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At issue in this case was whether the three-and-a-half year retroactive application of the 2010 amendments to N.Y. Tax Law 632(a)(2) were unconstitutional as applied to Plaintiffs under the due process clauses of the federal and state constitutions. Plaintiffs, Florida residents, brought this action claiming that the 2010 amendments retroactively imposed a tax on the 2007 sale of the stock of their subchapter S corporation in a deemed asset sale, for which they utilized the installment method of accounting for federal tax purposes, and seeking a declaration that the application of the amendments was unconstitutional as applied to them. Supreme Court granted summary judgment for Defendants, determining that the amendments were curative and, because Plaintiffs failed to show reasonable reliance on any relevant pre-amendment law, retroactive application of the statute was justified. The Appellate Division reversed. The Court of Appeals reversed, holding that retroactive application of the 2010 amendments did not violate Plaintiffs’ due process rights. View "Caprio v. New York State Dept. of Taxation & Fin." on Justia Law

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Plaintiffs, several nonresident former owners and shareholders in an S corporation, filed the instant declaratory judgment action against the New York State Department of Taxation and Finance, challenging a tax imposed on their pro rata share of gains from the sale of the corporation’s stock. Specifically, Plaintiffs alleged that N.Y. Const. art. XVI, 3 absolutely precluded taxation of gains from the sale of a nonresident’s intangible personal property - in this case, the corporation’s stock. Supreme Court granted Defendant’s motion for summary judgment and declared that the statute is constitutional. The Court of Appeals affirmed, holding that there is no constitutional bar to taxation of a nonresident’s New York-source income earned from a stock sale. View "Burton v. New York State Dep’t of Taxation & Fin." on Justia Law

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Petitioner owned and operated five commercial parking facilities for the purpose of furthering the goal of its sole member, a not-for-profit corporation, to revitalize downtown Jamaica, Queens. New York City Tax Commission revoked Petitioner’s real property tax exemption pursuant to N.Y. Real Prop. Tax Law 420-a(1)(a), determining that the use of the parking facilities, even for economic development of an underdeveloped area, did not constitute a “charitable” use and that the parking facilities were “not incidental to another recognized charitable purpose but [were] the very purpose for which the property [was] being used.” Supreme Court upheld the City’s revocation of the tax exemption. The Appellate Division reversed. The Court of Appeals reversed, holding that because Petitioner’s ownership and operation of the parking facilities was not incidental to a tax-exempt purpose, it was not entitled to a real property tax exemption under that statute. View "Greater Jamaica Dev. Corp. v. New York City Tax Comm’n" on Justia Law

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Petitioners, the owners of a single-family residence located in Nassau County, filed a small claims assessment review (SCAR) petition under Real Property Tax Law (RPTL) 730. The County requested disqualification of the petition for lack of jurisdiction on the grounds that the property was not owner-occupied by Petitioners during the tax year in question. The SCAR hearing officer agreed and disqualified the petition. At issue on appeal was whether the property should come within the statute’s coverage where, during the relevant tax year, the property was occupied rent-free by Petitioners’ close relative. The Appellate Division affirmed. The Court of Appeals affirmed, holding that when a property is occupied during the relevant tax period by an owner’s relative but not by the owner, the property is not “owner-occupied” within the meaning of RPTL 730(1)(b)(i). View "Manouel v. Bd. of Assessors" on Justia Law

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Plaintiff, which owns a residential co-op complex with 1,674 residential apartments, was incorporated in 1961 as a Mitchell-Lama cooperative housing corporation pursuant to the Limited-Profit Housing Companies Law. In 2007, Plaintiff terminated its participation in the Mitchell-Lama program and reconstituted itself as a corporation under the Business Corporation Law by amending its certification of incorporation. In 2010, the New York City Department of Finance issued a notice of determination to Plaintiff of a tax deficiency in the amount of $21,149,592, concluding that Plaintiff had engaged in a transaction that qualified as a conveyance of the underlying real property, and therefore, Plaintiff was required to pay a real property transfer tax (RPTT). Plaintiff commenced this action seeking a declaratory judgment that the RPTT was inapplicable. The Appellate Court ruled in favor of Plaintiff, concluding that the conversion from a Mitchell-Lama cooperative housing corporation to a cooperative housing corporation under the Business Corporation Law does not constitute a conveyance that is subject to the RPTT. The Court of Appeals affirmed, holding that no taxable event occurred in this case. View "Trump Vill. Section 3, Inc. v. City of New York" on Justia Law

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Petitioner Merry-Go-Round Playhouse, a not-for profit theater corporation, owned real property that it used to house its staff and summer stock actors. Petitioner filed applications for real property tax exemptions under N.Y. Real Prop. Tax Law 420-a. The Assessor of the City of Auburn denied the applications. Supreme Court upheld the denial, determining that Petitioner failed to establish that its summer theater was an exempt purpose and that the use of apartment buildings to house its employees was reasonably incidental to its primary purpose. The Appellate Division reversed. The Court of Appeals affirmed, holding that Petitioner established its entitlement to the tax exemption because the use of the property to provide staff housing was reasonably incidental to Petitioner’s primary purpose of encouraging appreciation of the arts through theater. View "Matter of Merry-Go-Round Playhouse, Inc. v. Assessor of City of Auburn" on Justia Law

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Petitioner purchased an apartment building on Staten Island. Petitioner’s parents lived in the building, and Petitioner stayed in their apartment on occasion to attend to their medical needs. Petitioner leased the other two apartments in the building to tenants. For the tax years in question, Petitioner filed nonresident income tax returns in New York. The Department of Taxation and Finance later issued a notice of deficiency, determining that Petitioner owed additional New York income taxes because he maintained a “permanent place of abode” at the Staten Island property during the relevant years. The Tax Appeals Tribunal sustained the deficiency, concluding that in order to qualify as a statutory resident under the Tax Law, a taxpayer need not actually dwell in the permanent place of abode but need only maintain it. Petitioner challenged the Tribunal’s determination, contending that the standard to be applied when determining whether a person “maintains a permanent place of abode” in New York should turn on whether he maintained living arrangements for himself to reside at the dwelling. The Court of Appeals agreed with Petitioner, holding that in order for an individual to qualify as a statutory resident, there must be some basis to conclude that the dwelling was utilized as the taxpayer’s residence.View "Gaied v. N.Y. State Tax Appeals Tribunal" on Justia Law