Articles Posted in Tax Law

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Plaintiffs filed three petitions for relief from property tax assessments on their home for the tax years 2009 through 2011. The petitions and appeals were consolidated. The trial justice granted judgment in favor of Plaintiffs in all three appeals, concluding that Plaintiffs sustained their burden of proving that their property was overvalued by the tax assessor. The Supreme Court affirmed, holding (1) the trial justice did not err in determining that Plaintiffs met their burden of proving that the tax assessor’s valuation was above the fair market value; (2) there was sufficient evidence to support the trial justice’s valuation; and (3) the trial justice should have dismissed Plaintiffs’ third petition challenging their 2011 assessment based on Plaintiffs’ failure to timely file an account. Remanded. View "Whittemore v. Thompson" on Justia Law

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Plaintiffs allowed a wind turbine to be built on their property in North Kingstown. None of the electricity produced by this wind turbine was sold to the public but, rather, was sold directly to National Grid. The Town of North Kingstown assessed the wind turbine at a value of $1.9 and sought payment of annual tangible personal property taxes. Plaintiffs appealed the assessment, arguing that the wind turbine was tax exempt. Both the Northtown Tax Assessor and the North Kingstown Tax Board of Review denied Plaintiffs’ appeal. Plaintiffs subsequently brought this action against Defendant, in her capacity as the Town Tax Assessor. The superior court granted summary judgment in favor of Plaintiffs, concluding that the wind turbine was exempt from taxation. The Supreme Court affirmed, holding that Plaintiffs qualified for the exemption listed in R.I. Gen. Laws 44-3-3(22), which exempts manufacturing machinery and equipment acquired or used by a manufacturer from taxation. View "DePasquale v. Cwiek" on Justia Law

Posted in: Tax Law

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After Plaintiff agreed to lease a motor vehicle he learned that he had been charged separately for property tax on the leased vehicle and an additional seven percent sales tax paid on that amount. Plaintiff filed a claim for a refund in the amount of sales tax he had paid on the property tax. The Division of Taxation denied Plaintiff’s claim. Plaintiff filed an appeal to the district court. Contemporaneously, Plaintiff filed a complaint in the superior court, seeking various forms of relief and seeking to certify his complaint as a class action. The superior court granted Defendants’ motion to dismiss the complaint for lack of jurisdiction. The Supreme Court affirmed, holding that the superior court lacked subject matter jurisdiction because the district court has exclusive jurisdiction over “tax matters.” View "Barone v. State" on Justia Law

Posted in: Tax Law

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Plaintiffs, limited liability entities that owned property in the Town of Coventry, filed suit seeking declaratory and injunctive relief challenging the legality of sewer assessments assessed by Coventry. A hearing justice dismissed Plaintiffs’ complaint for their failure to follow the correct administrative appeal process. The Supreme Court vacated the judgment of the superior court dismissing Plaintiffs’ complaint, holding (1) the hearing justice erred in granting Defendants’ motion to dismiss on the grounds that Plaintiffs had not followed the R.I. Gen. Laws 44-5-26 tax appeal process, as section 44-5-26 did not apply in this case; and (2) the appeal process set forth in section 19 of Coventry’s sewer enabling act is the process by which residents of Coventry may appeal sewer assessments or charges levied by Coventry pursuant to its authority under the enabling act. View "Commerce Park Assocs. 1, LLC v. Houle" on Justia Law

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Mortgage Electronic Registration Systems, as nominee for two lenders (collectively, Plaintiffs), held mortgages on Lot 456. For the property owner's failure to pay his water bill, the Pawtucket Water Supply Board (PWSB) auctioned the lot. PWSB issued a deed conveying the title in the property to Amy Realty. Amy Realty subsequently discovered that the property PWSB had intended to auction had been mistakenly listed as Lot 486 on the tax sale notices and deed. Amy Realty then obtained a corrective deed from the PWSB conveying title to Lot 456. Amy Realty subsequently filed a petition to foreclose on Plaintiffs' rights of redemption in Lot 456. Plaintiffs filed this action seeking to vacate the final decree of disclosure, alleging that the corrective deed changing the lot number from 486 to 456 was invalid and this infirmity rendered the foreclosure decree void. The superior court granted summary judgment for Plaintiffs. The Supreme Court affirmed, holding (1) the corrective deed obtained in this case was null and void because it was not recorded within sixty days of the tax sale; and (2) the final foreclosure decree may be vacated because the tax sale was invalid. View "Mortgage Elec. Registration Sys., Inc. v. DePina" on Justia Law

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Plaintiff, the State of Rhode Island Tax Administrator, filed this collection action against Defendants William J. and Marielle Reilly, in pursuit of more than $1 million in assessed-but-unpaid personal income taxes. In their answer, Defendants denied that they owed any personal income taxes for the assessed years. Eventually Plaintiff filed a motion for summary judgment, which was granted by a justice of the Superior Court. Defendants timely appealed to the Supreme Court, arguing that the motion justice erred because: (1) they were nonresidents who were not subject to Rhode Island income tax; (2) that the period of limitation for filing a tax collection action had expired; and (3) that the equitable doctrine of laches should bar the tax administrator's suit under the circumstances of this case. Upon review, the Supreme Court affirmed; Defendants were not entitled to judicial review of the tax administrator's assessment of taxes for the contested tax years because they failed to exhaust their administrative remedies. The Court agreed with Plaintiff that "a taxpayer cannot 'simply wait to be sued for the income tax to then raise objection to the assessment or payment in [the] collection proceeding.'" View "Sullivan v. Reilly" on Justia Law

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The City of Cranston, by and through its tax assessor, valued Plaintiff Narragansett Electric Company's tangible personal property located within that municipality at $23,290,814. Plaintiff appealed the tax assessment. The tax assessor and Tax Board of Review denied Plaintiff's appeal. Plaintiff then filed a complaint in the superior court, naming as defendants Cranston's finance director and its tax assessor. Defendants filed a motion to dismiss the complaint, contending that the superior court lacked subject matter jurisdiction because Plaintiff had not timely filed his appeal to the tax assessor. The hearing justice agreed and granted summary judgment in favor of Defendants. The Supreme Court vacated the judgment of the superior court, holding (1) because Defendants failed to plead as an affirmative defense Plaintiff's noncompliance with a condition precedent in accordance with R.I. Sup. Ct. 9(c), Defendants waived their contention that Plaintiff did not file its appeal with the tax assessor in a timely manner; and (2) therefore, the hearing justice should have exercised the superior court's subject matter jurisdiction and heard Plaintiff's appeal. View "Narragansett Elec. Co. v. Saccoccio" on Justia Law

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Because Property Owner failed to pay real estate taxes on his property, the Town held a tax sale of Property Owner's property. Buyer purchased the property after Property Owner defaulted on the action. The superior court subsequently granted Buyer's petition to foreclose Property Owner's right of redemption to the property. Subsequently, a judgment was entered declaring the prior tax sale void and vesting the property back to Property Owner. Property Owner then executed a warranty deed conveying the property to his Sister. Concurrently, a stipulation was entered as an order of the superior court vesting title in the property to Buyer. Thereafter, Property Owner and Sister filed the instant action, seeking a declaratory judgment invalidating the stipulation order. The superior court determined that Buyer was the proper record title holder of the property. The Supreme Court affirmed, holding that a superior court judgment cannot "re-vest" title to property back to a prior owner once that owner has been defaulted in a petition to foreclose his right of redemption and a final decree has been entered. View "Medeiros v. Bankers Trust Co." on Justia Law

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Rather than undertaking appeals from the assessment of taxes on its gas assets in accordance with R.I. Gen. Laws 44-5-26(a), plaintiff electric company sought declaratory and injunctive relief directly from the superior court. Plaintiff sued the taxing authorities of most of Rhode Island's municipalities, requesting a declaration that because the municipalities failed to tax plaintiff's gas assets as tangible personal property, they assessed illegal taxes. The trial justice dismissed all but one count of plaintiff's complaint, holding that plaintiff did not file a timely appeal or invoke the court's equitable jurisdiction. The Supreme Court affirmed. Because plaintiff elected to bypass the applicable review procedures and proceed directly to the superior court, plaintiff failed to establish that it had been assessed an illegal tax. Thus, plaintiff could not avail itself of the direct appeal to the superior court. View "Narragansett Electric Co. v. Minardi, et al." on Justia Law