Justia Alaska Supreme Court Opinion Summaries

Pro se appellant Ray DeVilbiss owned property within a road service area, but did not make use of the roads built and maintained with the road service taxes levied on that property. He argued Alaska law required that his property therefore be excluded from the service area, and that the tax was invalid absent a special benefit to his property. The superior court rejected these claims, and granted the borough that oversaw the service area summary judgment. Appellant appealed to the Supreme Court, but the Supreme Court affirmed. Alaska law neither required boroughs and municipalities to exclude properties that do not make use of roads financed by road service taxes nor tied the validity of a tax to each taxpayer’s receipt of a special benefit. View "DeVilbiss v. Matanuska-Susitna Borough" on Justia Law

At the center of this an appeal was the superior court's de novo valuation of the Trans-Alaska Pipeline System (TAPS) for tax assessment years 2007, 2008, and 2009. In February 2014 the Alaska Supreme Court issued a decision affirming the superior court's de novo valuation of TAPS for the 2006 assessment year.1 The parties introduced considerably more evidence during trial for the 2007, 2008, and 2009 years, but the operative facts remained substantially the same and the superior court applied similar standards and methods for valuation. Many of the issues raised on appeal were similar or identical to issues raised in the 2006 appeal and thus are partially or wholly resolved by the Court's prior opinion. Because the superior court did not clearly err or abuse its discretion with regard to any of its findings or its methodology, and because it committed no legal error in its conclusions, the Supreme Court affirmed. View "Alaska Dept. of Revenue v. BP Pipelines (Alaska) Inc." on Justia Law

The State Department of Revenue sought to hold the sole shareholder, director, and employee of a closely held Washington corporation personally liable for the corporation’s unpaid tax debts. The superior court pierced the corporation’s corporate veil, ruled that the shareholder’s successor corporation was liable for the tax debt, voided two contract transfers as fraudulent conveyances, and ruled that the shareholder had breached fiduciary duties to the corporation and the State as the corporation’s creditor. The shareholder and corporation appealed the superior court’s decision to pierce the corporate veil, arguing that the superior court erred by not barring the State’s suit under the principle of res judicata, by applying Alaska rather than Washington veil-piercing law, and by making clear factual errors. The shareholder and corporation also appealed the superior court’s finding that two contracts were fraudulently conveyed. After review, the Alaska Supreme Court concluded that res judicata did not bar the State from seeking to pierce the corporation's corporate veil to collect tax debt established in an earlier case. Furthermore, the Court held that the corporation's veil was properly pierced under both Alaska and Washington state law. Though the superior court's fraudulent conveyance determination contained errors of fact, the Supreme Court concluded that those errors were harmless. Therefore, the Court affirmed the superior court in part, reversed in part, and remanded for further proceedings. View "Pister v. Dept. of Revenue" on Justia Law

The State Department of Revenue sought to hold the sole shareholder, director, and employee of a closely held Washington corporation personally liable for the corporation’s unpaid tax debts. The superior court pierced the corporation’s corporate veil, ruled that the shareholder’s successor corporation was liable for the tax debt, voided two contract transfers as fraudulent conveyances, and ruled that the shareholder had breached fiduciary duties to the corporation and the State as the corporation’s creditor. The shareholder and corporation appealed the superior court’s decision to pierce the corporate veil, arguing that the superior court erred by not barring the State’s suit under the principle of res judicata, by applying Alaska rather than Washington veil-piercing law, and by making clear factual errors. The shareholder and corporation also appealed the superior court’s finding that two contracts were fraudulently conveyed. After review, the Alaska Supreme Court concluded that res judicata did not bar the State from seeking to pierce the corporation's corporate veil to collect tax debt established in an earlier case. Furthermore, the Court held that the corporation's veil was properly pierced under both Alaska and Washington state law. Though the superior court's fraudulent conveyance determination contained errors of fact, the Supreme Court concluded that those errors were harmless. Therefore, the Court affirmed the superior court in part, reversed in part, and remanded for further proceedings. View "Pister v. Dept. of Revenue" on Justia Law

The issue before the Supreme Court in this case involved the assessed value of the Trans-Alaska Pipeline System for property tax purposes. The parties disputed the method used to assess the pipeline's value as well as the specific deductions made for functional and economic obsolescence. Finding no reversible error, the Supreme Court affirmed the superior court's valuation. View "BP Pipelines (Alaska) Inc. v. Alaska" on Justia Law

Schlumberger Limited conducts its business in Alaska through a wholly owned subsidiary, Schlumberger Technology Corporation. Schlumberger Technology's primary business is oilfield services, but it also owns all of Schlumberger Limited's associated companies incorporated in the United States and operates all of Schlumberger Limited’s domestic businesses. Schlumberger Technology files a consolidated federal tax return for all of Schlumberger Limited’s domestic subsidiaries. For tax years 1998-2000, Schlumberger Technology filed Alaska corporate income tax returns that included only the domestic subsidiaries working in the oilfield services business. In September 2003, a Department of Revenue auditor concluded that Schlumberger Limited was engaged in a unitary business with Schlumberger Technology. Based on these conclusions, the Department issued a notice of assessment for additional corporate income taxes of $429,739 plus interest. Schlumberger Technology argued on appeal of the assessment that under the Internal Revenue Code, domestic corporations were taxed on their worldwide income, but entitled to claim a tax credit against their United States income tax liability for taxes paid to foreign countries. Foreign corporations, on the other hand, are taxed differently. The issue this case presented to the Supreme Court centered on the application of Alaska's Net Income Tax Act (ANITA). ANITA incorporates certain provisions of the Internal Revenue Code, unless the federal provisions are "excepted to or modified by other provisions" of the act. ANITA required a corporation to report its income and the income of certain affiliates and to exclude "80 percent of dividend income received from foreign corporations." The Internal Revenue Code had a different formula; it required a foreign corporation to report only income "effectively connected with the conduct of a trade or business within the United States." Schlumberger Technology argued that since ANITA has no explicit exception for Internal Revenue Code (section 882), this sourcing rule was incorporated by reference. Thus, Schlumberger Technology argued that the foreign dividends paid to Schlumberger Limited should not have been included in its taxable income under ANITA. In response, the State argued that the provisions of ANITA applied to all business income of the taxpayer, not just income derived from sources in the United States. Upon review of the matter, the Alaska Supreme Court concluded that the Internal Revenue Code provision in question here was not adopted by reference because it was inconsistent with the formula provided by ANITA. The Court affirmed the decision of the Department of Revenue. View "Schlumberger Technology Corp. v. Alaska Dept. of Revenue" on Justia Law

Appellant Sheila Brandner appealed the Anchorage Municipal Board of Equalization's valuation of her home for the 2012 tax year. She argued the Municipal assessor's office used an improper appraisal method and that the Board overestimated the value of her property. Upon review, the Supreme Court concluded that the Board made a clerical error in the calculation of the value of Brandner's property. Therefore the case was remanded to the Board to adopt a final assessment consistent with the Board's intent. View "Brandner v. Municipality of Anchorage" on Justia Law

In consolidated appeals, the issue before the Supreme Court concerned the attorney’s fees and costs awarded in the 2006 Trans-Alaska Pipeline System tax assessment case. The superior court decided that the Fairbanks North Star Borough, the City of Valdez, and the North Slope Borough were prevailing parties for purposes of attorney’s fees and costs because they had prevailed on the main issues of the case. The superior court also applied the enhancement factors to raise the presumptive award from 30 percent to 45 percent of the prevailing parties’ reasonable attorney’s fees. The owners of the Trans-Alaska Pipeline System appealed, arguing the superior court should have applied Alaska Appellate Rule 508 instead of Civil Rules 79 and 82. In the alternative, they contended: (1) that the three municipalities did not prevail as against the owners; (2) that fees should have been allocated between separate appeals; (3) that none of the prevailing parties were entitled to enhanced attorney’s fees; and (4) that the Fairbanks North Star Borough’s award should have been reduced as recommended by a special master. The Fairbanks North Star Borough and the City of Valdez cross-appealed, arguing that the superior court should have viewed this case as one involving a money judgment for purposes of an attorney’s fees award under Rule 82(b)(1) and, in the alternative, that they were entitled to a greater enhancement of their fees. Finding no reversible error, the Supreme Court affirmed. View "BP Pipelines (Alaska) Inc. v. Alaska, Dept. of Revenue" on Justia Law

Tesoro Corporation challenged its income taxes assessed for 1994 through 1998. The state Department of Revenue (DOR) calculated Tesoro’s Alaska income by applying a three-factor apportionment formula to Tesoro’s worldwide income, including that of its non-Alaskan subsidiaries. An administrative law judge ruled Tesoro was a unitary business that could be subject to formula apportionment, and that DOR could permissibly assess penalties against Tesoro. Tesoro appealed to the superior court, which affirmed. On appeal to the Supreme Court, Tesoro argued that only the income of its Alaska-based subsidiaries should have been subject to taxation in Alaska because Alaska’s tax scheme violates the Due Process and Interstate Commerce Clauses of the United States Constitution. Because Tesoro’s business was unitary, the Supreme Court rejected Tesoro’s challenge to the constitutionality of taxing all of its income under formula apportionment. Because Tesoro lacked standing to challenge the formula’s constitutionality, the Court did not reach the internal consistency issue Tesoro raised. Furthermore, the Court concluded that DOR permissibly imposed penalties on Tesoro. Therefore the Court affirmed the superior court decision that affirmed the administrative law judge’s decision and order. View "Tesoro Corporation v. Alaska Dept. of Revenue" on Justia Law

A tour company claimed fraud and misconduct on the part of a borough in the course of a fraudulent conveyance trial concerning liability for property taxes. Specifically, the company argued that a police officer falsely testified at trial concerning a conversation he allegedly had with the company president regarding the company's obligation to pay borough taxes. The superior court denied relief under Rule 60(b)(3), finding that the company had failed to establish clear and convincing evidence of fraud. The company appealed, arguing that the superior court applied the incorrect legal standard and that the company presented clear and convincing evidence of fraud. The company also appealed various orders relating to discovery and the award of attorney's fees. Because the superior court applied the correct legal standard and did not abuse its discretion in finding that there was not clear and convincing evidence of fraud, the Supreme Court affirmed its denial of the Rule 60(b) motion. Furthermore, the Court affirmed the lower court's refusal to reopen discovery or awarding attorney's fees. View "Alaskan Adventure Tours, Inc. v. The City and Borough of Yakutat" on Justia Law