Justia Utilities Law Opinion Summaries

801 Skinker Boulevard Corporation (801), a corporation operating as a residential cooperative, sought a refund for sales taxes under Mo. Rev. Stat. 144.030.2, which indicates that utilities purchased for residential units for common areas and facilities shall be deemed to be for domestic use. The refund request concerned state sales tax charged and paid on electric and natural gas utilities purchased from 2006 through 2009. 801 filed for a refund of sales tax on its Union Electric (Ameren) and Laclede Gas Company (Laclede) bills. Ameren and Laclede also filed for refunds on behalf of 801. Ameren and Laclede's applications were denied. 801, Ameren, and Laclede (Taxpayers) subsequently filed a request for a refund of sales tax with the Administrative Hearing Commission, alleging that the utilities were purchased for domestic use by the individual owners and residents of 801 in accordance with section 144.030.2. The Commission denied the request. The Supreme Court reversed and ordered a full refund of the sales tax paid, holding that Taxpayers were entitled to the exemption and refund of their sales taxes pursuant to section 144.190.2, as 801's utility purchases were deemed by statute to be for "domestic use" and, thus, were exempt from sales tax. View "801 Skinker Boulevard Corp. v. Dir. of Revenue" on Justia Law

Casey's Marketing Company was a convenience store engaged in the retail sale of gas, grocery items, nonfood items, and prepared foods. Aquila Foreign Qualifications Corporation was a utility that sold electricity to Casey's. Casey's filed a refund claim with the director of revenue for one month's tax paid for a portion of electricity Aquila sold to two Casey's locations. The director denied the claim. At Casey's request, Aquila challenged the director's final decision. The administrative hearing commission reversed, holding that Mo. Rev. Stat. 144.054.2, which provides a tax exemption for the "processing" of products," exempted Casey's food preparation operations. The Supreme Court reversed the commission, holding (1) the preparation of food for retail consumption is not "processing" within the meaning of section 144.054.2; and (2) therefore, Casey was not entitled to a sales and use tax exemption on electricity it purchased to power its food preparation operations. View "Aquila Foreign Qualifications Corp. v. Dir. of Revenue" on Justia Law

Appellant contended that it was a "public utility" under OCGA 48-1-2 and, as such, was required under OCGA 48-5-511 to make an annual tax return of its Georgia property to the Georgia Revenue Commissioner rather than to the Chatham County tax authorities. Appellant filed a complaint for a declaratory judgment and for writ of mandamus in superior court, seeking to have the trial court recognize appellant as a "public utility" and to order appellee to accept appellant's annual ad valorem property tax return. The trial court granted appellee's motion to dismiss the complaint based on appellant's failure to state a claim upon which relief could be granted because the doctrine of sovereign immunity was applicable to the claims. The court reversed and held that it need not address whether sovereign immunity would act as a bar to appellant's declaratory action, as it was clear that, if the declaratory action were barred by sovereign immunity, appellant's mandamus action would still remain viable.View "Souther LNG, Inc. v. MacGinnitie" on Justia Law

The Commissioner sought review of a U.S. Tax Court decision favoring Entergy for the taxable years of 1997 and 1998. By reference to a companion case, the Tax Court concluded that Entergy was entitled to a foreign income tax credit for its subsidiary's payment of the United Kingdom's Windfall Tax. At issue on appeal was whether the Windfall Tax constituted a creditable foreign income tax under I.R.C. 901, 26 U.S.C. 901. The court concluded that when judged on its predominant character, the Windfall Tax was based on excess profits - realized income derived from gross receipts less deductions for substantial business expenses incurred in earning those receipts. This satisfied the three-part net gain requirement, as the Tax Court accurately noted. Therefore, the court affirmed the judgment. View "Entergy Corp. v. CIR" on Justia Law

In 1996, Dominion, a power company, replaced coal burners in two of its plants, temporarily removing the units from service for two to three months. During that time, Dominion incurred interest on debt unrelated to the improvements. On its tax returns, Dominion deducted some of that interest. The IRS disagreed, citing Treasury Regulation 1.263A-11(e)(1)(ii)(B), as requiring Dominion to capitalize half ($3.3 million) of that interest over several years, instead of deducting it in a single tax year. The Claims Court granted summary judgment to the IRS. The Federal Circuit reversed. The associated property rule in Treasury Regulation 1.263A-11(e)(1)(ii)(B), as applied to property temporarily withdrawn from service, is not a reasonable interpretation of the Tax Reform Act of 1986, I.R.C. 263A (Capitalization and Inclusion in Inventory Costs of Certain Expenses). Treasury acted contrary to 5 U.S.C. 706(2) in failing to provide a reasoned explanation when it promulgated that regulation. View "Dominon Res., Inc. v. United States" on Justia Law

Plaintiff, operator of an electricity plant, sued defendant ("the county"), seeking to enjoin Expedited Bill 29-10, which imposed a levy on large stationary emitters of carbon dioxide within the county, on the ground that it violated the United States and Maryland Constitutions. At issue was whether a Montgomery County exaction on carbon dioxide emissions, levied only upon plaintiff's electricity-generating facility, was a tax or a fee. The court held that the carbon charge, which targeted a single emitter and was located squarely within the county's own "programmatic efforts to reduce" greenhouse gas emissions, was a punitive and regulatory fee over which the federal courts retained jurisdiction. Accordingly, the court reversed and remanded for further proceedings. View "Genon Mid-Atlantic, LLC v. Montgomery County, Maryland" on Justia Law

The Montana Department of Revenue ("Department") appealed a judgment reversing the State Tax Appeal Board's ("STAB") conclusion that the Department had applied a "commonly accepted" method to assess the value of PacificCorp's Montana properties. At issue was whether substantial evidence demonstrated common acceptance of the Department's direct capitalization method that derived earnings-to-price ratios from an industry-wide analysis. Also at issue was whether substantial evidence supported STAB's conclusion that additional obsolescence did not exist to warrant consideration of further adjustments to PacifiCorp's taxable value. The court held that substantial evidence supported the Department's use of earnings-to-price ratios in its direct capitalization approach; that additional depreciation deductions were not warranted; and that the Department did not overvalue PacifiCorp's property. The court also held that MCA 15-8-111(2)(b) did not require the Department to conduct a separate, additional obsolescence study when no evidence suggested that obsolescence existed that has not been accounted for in the taxpayer's Federal Energy Regulatory Commission ("FERC") Form 1 filing. The court further held that STAB correctly determined that the actual $9.4 billion sales price of PacifiCorp verified that the Department's $7.1 billion assessment had not overvalued PacifiCorp's properties.