Justia Maryland Supreme Court Opinion Summaries

The assessment of real property in the State for property tax purposes is calculated by reference to the value on the “date of finality,” which is defined as “January 1, immediately before the 1st taxable year to which the assessment based on the new value is applicable.” Petitioner appealed her 2011 tax assessment of a condominium she owned and occupied. The Tax Court concluded that the Tax Property Article did not prohibit the court from taking into account sales of comparable properties that occur after the date of finality in determining the value of a property on the date of finality and, thus, relied on sales of comparable properties that occurred several months after the date of finality. The Circuit Court ruled that the Tax Court erred in considering evidence of post-date of finality sales of comparable properties. The Court of Special Appeals reversed. The Court of Appeals affirmed, holding (1) the Tax Court may consider the sale of comparable properties occurring within a reasonable time after the date of finality to assess the value of the property; and (2) substantial evidence in the record supported the Tax Court’s assessment of Petitioner’s property, relying on the post-date of finality sales. View "Lane v. Supervisor of Assessments of Montgomery County" on Justia Law

Appellees’ farm was condemned by the Board of Education for the purpose of building a school. On Appellees’ behalf, the Board paid the State agricultural land transfer tax and the County farmland transfer tax. Appellees requested from the County a refund of a portion of the County farmland transfer tax, arguing that the County, in calculating the County farmland transfer tax, was incorrect in concluding that the twenty-five percent State surcharge was not part of the combined transfer tax. The County denied the request for a refund. The Tax Court affirmed, concluding that the State surcharge was to be collected in addition to the State agricultural land transfer tax and the County farmland transfer tax. The circuit court reversed. The Court of Special Appeals certified the case to the Court of Appeals to answer a question of law. The Court of Appeals answered (1) the agricultural land transfer tax, as set forth in Md. Code Ann. Tax-Prop. 13-407(a)(2) and (3), includes the State surcharge imposed under Md. Code Ann. Tax-Prop. 13-303(d), and the State surcharge must be calculated into the tax ceiling on a county’s agricultural land transfer tax; and (2) therefore, Appellees were entitled to a refund in the amount of the overcharge of the County farmland transfer tax. View "Montgomery County v. Phillips" on Justia Law

Respondent lived in his home for nearly ten years before razing the existing house in order to build a new house on the lot. Respondent benefitted from the application of the homestead tax credit with respect to increases in the value of the prior structure while he lived in it. The new construction increased the value of the property by approximately $500,000. The tax assessor, while retaining Respondent’s existing credit, included the full value of the renovation in the value to be taxed. The Maryland Tax Court affirmed the assessor’s interpretation. The circuit court reversed, and the Court of Special Appeals affirmed. At issue on appeal was whether the “taxable assessment” used to compute the homestead tax credit under Md. Code Tax-Property (TP) 9-105 should include the value of renovations when a homeowner razes and rebuilds a home. The Court of Appeals reversed the judgments of the Court of Special Appeals and circuit court affirmed the decision of the tax court, holding that, when a homeowner razes and rebuilds a home, the homeowner may retain existing homestead tax credit if the homeowner satisfies certain criteria and the tax credit computation for the property with the rebuilt house is to be done in accordance with TP 9-105(c)(5) and TP 9-105(e)(1). View "Dep’t of Assessments & Taxation v. Andrecs" on Justia Law

Nordstrom, Inc. created several subsidiary corporations, including NIHC, Inc., which engaged in a series of transactions, with each other and with Nordstrom, involving the licensing rights to Nordstrom’s trademarks. The rights to use Nordstrom’s trademarks eventually ended up back with Nordstrom. In the process, Nordstrom’s Maryland taxable income was significantly reduced, and Nordstrom realized a significant gain. The Comptroller of the Treasury issued tax assessments against the subsidiaries’ income, determining that the transactions were an effort to shift income from Nordstrom, where a portion of the income would be taxable by Maryland, to the subsidiaries, where the income would escape Maryland taxation, as the subsidiaries had arguably no nexus to Maryland. The tax court affirmed the assessments against the two subsidiaries, concluding that the activities of the subsidiaries must be considered the activities of Nordstrom, which had a nexus with Maryland, and therefore, the subsidiaries’ income was taxable by Maryland. The circuit court and court of special appeals affirmed. The Court of Appeals affirmed, holding that NIHC did not carry its burden of showing that the Comptroller’s assessment was wrong. View "NIHC, Inc. v. Comptroller of the Treasury" on Justia Law

In 2006, the Comptroller of Maryland issued assessments of tax and interest against Petitioners, two out-of-state subsidiary corporations, based on Petitioners’ relationship with their Maryland parent, Petitioners’ substance as corporations, and all of the entities’ activity in Maryland. The tax court affirmed. Petitioners appealed, arguing, among other things, that Maryland did not have the authority to tax Petitioners because they did not have a sufficient nexus with Maryland for the Comptroller’s assessment of taxes to be constitutional. The court of special appeals upheld the Comptroller’s assessments. The Supreme Court affirmed, holding that the tax court did not err in (1) concluding that the Comptroller had authority to tax Petitioners under the Court’s holding in Comptroller of the Treasury v. SYL, Inc., which allows the Comptroller and tax court to find nexus when a subsidiary lacks economic substance, because Petitioners did not have economic substance as separate business entities; and (2) upholding the apportionment formula used by the Comptroller in its assessment of Petitioners. View "Gore Enter. Holdings, Inc. v. Comptroller of Treasury" on Justia Law

Prince George’s County enacted a resolution creating the Victoria Falls Special Taxing District (District) under authority granted by a State enabling act (Act). Taxpayers challenged the resolution and sought tax refunds. The tax court denied the Taxpayers’ claims. The circuit court and intermediate appellate court affirmed. The Supreme Court affirmed, holding (1) the tax court properly upheld the County’s resolution creating the District, where changes in land ownership within the District occurred after the time of application for creation of the District but before final action on the application, as the State Legislature did not intend to require that the County determine whether any change in land ownership may have affected the super-majority landowner requirement expressed in the Act for applying for the District; and (2) the tax court properly ruled that the County’s approval of the request to create the District that did not include twenty-five of the 609 lots contained within the planned Victoria Falls community was lawful under the Act’s requirement that the District be used to finance infrastructure improvements in “any defined geographic region within the county.” View "Victoria Falls Comm. for Truth in Taxation, LLC v. Prince George's County" on Justia Law

The Maryland Economic Development Corporation (MEDCO) is a public corporation established by the legislature to aid in promoting the economic development of the State. This litigation arose from MEDCO's involvement in the development of a technology development center. MEDCO sought a loan with Bank to finance the center. MEDCO executed a leasehold deed of trust with Bank requiring MEDCO to pay all recording costs and fees in connection with filing the loan documents. MEDCO subsequently presented the deed of trust for recording in Montgomery County, claiming an exemption from the recordation tax based on Md. Code Ann. Econ. Dev. 10-129(a), which granted MEDCO a tax exemption "from any requirement to pay taxes or assessments on its properties or activities." The county transfer office denied the exemption and required MEDCO to pay recordation tax. The county department of finance denied MEDCO's recordation tax refund claim. The tax court denied MEDCO's petition for appeal. The circuit court reversed, and the court of special appeals reversed the circuit court. The Court of Appeals reversed, holding that, based on the plain language of section 10-129(a), the legislature intended to exempt MEDCO from paying the recordation tax at issue in this case. View "Md. Econ. Dev. Corp. v. Montgomery County" on Justia Law

To facilitate the transition to a competitive market for the supply of electricity, the Legislature provided that consumers would receive certain credits over the period of a year to mitigate a large projected increase in Baltimore Gas & Electric Company's (BGE) rates for the supply of electricity. The overall scheme involving credits, charges, and bond financing was known as the rate stabilization plan. Following passage of the rate stabilization law, BGE took the position that the legislation had the effect of deferring part of its franchise tax liability during the period that credits were applied to customers' bills. The Department of Assessments rejected BGE's position. BGE filed a refund claim, which was rejected. The tax court upheld the Department's denial. The circuit court concluded that the deferral credit affected BGE's distribution revenues for purposes of computing its franchise tax liability, that the tax court decision would subject BGE to double taxation, and that BGE was entitled to the claimed refund. The court of special appeals affirmed. The Court of Appeals reversed, holding that, in establishing the rate stabilization plan, the legislature neither intentionally nor inadvertently provided for the credits and charges to affect BGE's franchise tax liability. Remanded. View "Dep't of Assessments v. Baltimore Gas & Elec. Co." on Justia Law

Taxpayer, a Maryland resident, appealed an assessment by the State Comptroller that did not allow a credit against the county income tax portion of the Maryland income tax. Taxpayer's income consisted of significant "pass-through" income generated by a Subchapter S corporation in other states, which was apportioned to Taxpayer and taxed by the states in which it was generated. The tax court affirmed the assessment. The circuit court reversed and remanded for further factual development and "an appropriate credit for out-of-state income taxes paid" on the corporation's income. The Court of Appeals affirmed, holding that the failure of the Maryland income tax law to allow a credit against the county tax for a Maryland resident taxpayer with respect to pass-through income of an S corporation that arises from activities in another state and that is taxed in that state violates the dormant Commerce Clause of the federal Constitution. View "Md. State Comptroller v. Wynne" on Justia Law

The Church of Jesus Christ of Latter-day Saints requested that it be exempt from paying property tax on an apartment complex it owned in Maryland to house missionaries. The county supervisor of assessments concluded that the apartment complex did not qualify for a property tax exemption under Md. Code Ann. Tax-Prop. 7-204 because the complex was not exclusively used as a "parsonage" or a "convent." The Maryland tax court upheld the decision. The circuit court reversed, determining that the complex qualified as both a parsonage and a convent. The Court of Appeals affirmed, holding that the tax court applied the wrong standard in assessing whether the apartment complex constituted a convent. Remanded for the tax court to issue an order granting the exemption. View "Green v. Church of Jesus Christ of Latter-day Saints" on Justia Law