WILEY BARKER Crowley Fleck PLLP P.O. Box 797
Helena, MT 59624 Phone: (406) 449-4165 Fax: (406) 449-5149
Website: www.crowleyfleck.com
I. INCOME/FRANCHISE TAXES
A. Legislative Developments.
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B. Judicial Developments.
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C. Administrative Developments.
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D. Trends/Outlooks for 2014/2015.
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II. TRANSACTIONAL TAXES A. Legislative Developments.
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B. Judicial Developments.
Department of Revenue v. Priceline.com et al., Cause No. CDV-2010-1056 (Mont. 1st Jud. Dist. Ct.
Mar. 6, 2013). The District Court held online travel companies (OTCs) are not subject to Montana’s Lodging Facilities Use Tax (“Lodging Tax”) or the corresponding sales tax, which applies to hotel accommodations and rental cars. Id. at 13. The Court held the plain language of the statutes resolved the issues in the case. Id. at 9, 11. The OTCs were not liable for payment of the Lodging Tax because they did not use the accommodations. Id. at 9. They were not required to remit the tax because they were not lodging facilities. Id. at 10. The Court further held the OTC were not liable for the sales tax because they were not owners or operators of the lodging facilities and their charges were not part of the statutorily defined base rental charge for rental vehicles. Id. at 11-12. Finally, the Court held the sales tax did not apply to sales or sellers of intermediaries services. Id. at 12.
C. Administrative Developments.
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D. Trends/Outlooks for 2014/2015.
N/A
III. PROPERTY TAXES A. Legislative Developments.
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B. Judicial Developments.
Bresnan Communications LLC v. Department of Revenue, 2013 MT 357, 373 Mont. 29, 315 P.3d 921.
The Montana Supreme Court reversed the district court decision and held a company was a
telecommunications services company with Class 13 property subject to central assessment. Id. ¶¶ 40, 47. The company was previously classified as a cable services company, which apportioned its property among tax classifications. Id. ¶ 3. The Court held the company’s upgrades to its network capabilities to provide internet and telephone services expanded its operation beyond a cable television system, and met the statutory definitions of cable television system. Id. ¶¶ 34-39. The Court also held the company operated a single transmission line to deliver services to customers, requiring central assessment. Id. ¶ 47. Finally, the Court held the Department had authority to retroactively assess the company’s property under § 15-8-601, MCA, because the Department’s audit revealed the company had not been tax
appropriately. Id. ¶¶ 58-59.
Department of Revenue v. Wood, Docket Nos. PT-2013-9 through PT-2013-11, 2014 WL 1464587 (Mont. Tax App. Bd. Apr. 2, 2014). The State Tax Appeal Board (STAB) reversed the Lewis and Clark County Tax Appeal Board’s decision and held taxpayers’ land should not be classified as grazing land and the Department used an appropriate percent-complete valuation on the taxpayers’ home. Id. at 1.
The taxpayers owned four contiguous parcels of land, two held in the name of one taxpayer and two held in the name of both taxpayers. Id. at 3-4. Citing ARM § 42.20.615(2)(b)(i), STAB held the parcels could not be aggregated for classification purposes because they were not held under one ownership. Id.
at 6. STAB also held the Department acted properly by estimating the percent-complete of the home because the taxpayers refused to allow the Department’s appraiser to enter the home. Id. The taxpayers also failed to meet their burden to show the Department’s estimate was incorrect because the
photographic evidence the taxpayers presented did not provide a comprehensive view of the improvements to the home. Id. at 6-7.
C. Administrative Developments.
MAR Notice No. 42-2-898. The Department amended ARM 42.21.113, 42.21.123, 42.21.131,
42.21.137, 42.21.138, 42.21.139, 42.21.140, 42.21.151, 42.21.153, 42.21.155, and 42.22.1311, relating to the trended depreciation schedules for valuing various types of personal property. The changes are part of the Department’s annual update of these tables.
MAR No. 42-2-901. The Department amended 42.20.102 relating to applications for property tax
exemptions. The amendment removes references to the deadline to apply for an exemption 30 days after receiving the assessment notice.
MAR Notice No. 42-2-905. The Department amended ARM 42.19.401, 42.19.405, 42.19.406, and 42.19.501, relating to property tax assistance and exemptions. The amendments to 42.19.401, governing the Property Tax Assistance Program (PTAP), and 42.19.406, governing the Extended Property Tax Assistance Program (ETAP), were made so the rules would more mirror one another and provide more consistent treatment between the programs. The amendment to 42.19.405 applies the definitions to all rules in Chapter 19 and adds several definitions to cover all sections. The amendment to 42.19.501 changes and clarifies the requirements to qualify for the property tax exemption for qualified disabled veterans.
MAR Notice No. 42-2-895. The Department amended ARM 42.21.116, 42.21.158, and 42.21.162, relating to personal property valuation. The amendment to 42.21.116 changes the implementing citation. The amendment to 42.21.158 implements legislative amendments that changed the business personal property exemption from $20,000 to $100,000, and redefines reporting requirements. The amendment also extends the application deadline from February 15 to March 1, and eliminates the requirement the Department provide a reminder to taxpayers to return a completed personal property statement. The amendment to 42.21.162 updates statutory references, eliminates the deadline for submitting an application for an exemption that falls 30 days after receipt of an assessment notice, and allows applications within 30 days of acquisition of only motor vehicles.
D. Trends/Outlook for 2014/2015.
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IV. OTHER TAXES/ISSUES N/A
VI. PROVIDER’S BRIEF BIOGRAPHY/RESUME
Michael (Mike) Green practices in the Helena office of Crowley Fleck in the areas of state and local tax, government relations/lobbying, administrative matters, and business litigation. Mr. Green is a regular consultant to the Montana Taxpayers Association and other statewide groups regarding state income and property tax matters. Mr. Green represents clients before administrative agencies, Montana and federal courts, and the Montana Legislature.
Wiley Barker practices in the Helena office of Crowley Fleck in the areas of state and local tax,
administrative matters, and business litigation. He is licensed to practice law in Montana, North Dakota, and Wyoming. Mr. Barker received his law degree magna cum laude from Brigham Young University, where he served as Editor in Chief of the BYU Journal of Public Law. He graduated summa cum laude with bachelor degrees in accounting and economics from Utah State University.
NEBRASKA STATE TAX DEVELOPMENTS