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On the first day of its new session, the U.S. Supreme Court denied several requests for review of state and local tax matters that had been pending before it. The rejected petitions are summarized below.
-- California: A taxpayer had asked the Court whether the procedures followed in a California property tax sale met the due process standards of the U.S. Constitution. The California Court of Appeal held that the county's efforts to provide notice of the pending sale were constitutionally adequate. Indyway Investment v. Opri, Dkt. 07-1479, petition for certiorari denied October 6, 2008. A separate petition arising from the same transaction, raising similar issues, and filed by the same taxpayer is still pending with the Court.
-- Michigan: A purchaser at a Michigan property tax foreclosure sale had asked the Court whether its due process rights were violated by the retroactive application of a rule that resulted in the nullification of the sale. After a judgment of foreclosure was entered and the tax sale to the purchaser occurred, the county treasurer discovered that the property belonged to a local government entity. Michigan law prohibits the foreclosure sale of publicly owned property and, consequently, the treasurer sought to nullify the sale. The Michigan Supreme Court agreed that the sale must be set aside based on the relevant statute. The purchaser argued unsuccessfully for reconsideration on the basis that the rule implementing the statute had not been promulgated until after the judgment of foreclosure was entered. Michigan Financial Investments, LLC v. Detroit Building Authority, Dkt. 07-1605, petition for certiorari denied October 6, 2008.
-- Michigan: A developer of residential subdivisions had asked the Court to review a decision concluding that the developer should have paid the Michigan real estate transfer tax based on the value of certain lots, as improved by homes built on the lots. The Michigan Supreme Court held that the tax applies to recorded instruments and the only recorded instrument in this case was the deed. Therefore, because the value exchanged for the deed included both the cost of the lot and the home, that value was the proper measure for taxation. Lake Forest Partners 2, Inc. v. Michigan Department of Treasury, Dkt. 08-109, petition for certiorari denied October 6, 2008.
-- Oklahoma: Members of the Oklahoma Tax Commission had asked the Court whether an action against them seeking to enjoin the state's assessment of personal income tax on tribal members may proceed in federal court. The Osage Nation filed an action in federal district court seeking to enjoin the assessment of tax on tribal members who are employed by the tribe and reside in Osage County, an area co-extensive with the tribe's historical reservation. The tribe also sought a declaratory judgment that its reservation, comprising all of Osage County, is Indian country. The state maintains that the reservation was incorporated into Oklahoma at the time of its statehood and that only a small fraction of the land within Osage County is Indian country. The state parties named in the suit, including the individual Commission members, moved to have the action dismissed on the grounds of state sovereign immunity. The district court refused to dismiss the action. On appeal, the U.S. Court of Appeals for the Tenth Circuit dismissed the action against the state and the Commission itself, but allowed the action to proceed against the individual Commission members. The Court of Appeals held that the action is permitted by the doctrine in Ex parte Young, 209 U.S. 123 (1908), because the relief sought is prospective in nature. Kemp v. Osage Nation, Dkt. 07-1484, petition for certiorari denied October 6, 2008.
-- Washington: A member of a Native American tribe had asked the Court whether Washington cigarette tax laws apply to his shipments of cigarettes between reservations. The tribal member (and cigarette retailer) asserted that federal law preempts an agreement governing the taxation of cigarettes sold in Indian country entered into between the state and the tribe to which he belongs. The Washington Court of Appeals affirmed the dismissal of the individual's lawsuit challenging this agreement on the basis that the tribe, which asserted its sovereign immunity from suit, was an indispensable party. Matheson v. Gregoire, Dkt. 08-23, petition for certiorari denied October 6, 2008.
Requests for Review Still Pending
At the present time, the Court has not granted any request for review of a pending state or local tax matter. The only such matter left over from its last term that the Court has not disposed of is the petition in Columbia Gas Transmission Corp. v. Levin, Tax Commissioner of Ohio, Dkt. 07-1554, petition for certiorari filed June 12, 2008. In this case, a federally regulated interstate natural gas pipeline company has asked the Court whether it was a Commerce Clause violation for Ohio to tax the company's pipeline equipment at the higher personal property tax rate for interstate pipeline companies, rather than at the lower rate for functionally identical equipment used by local natural gas companies, even though the company also delivered natural gas to Ohio consumers. Ohio had waived its right to file a response, but the Court requested a response and gave the state until December 1, 2008, to do so. At some point after that date, the Court will announce whether it will agree to review the issue or not.
Other requests for review still awaiting disposition, which were filed over the summer after the Court's last term ended, include the following:
-- Alaska: An operator of oil tankers has asked the Court whether an Alaska city's personal property tax on large vessels docking at private facilities violates the U.S. Constitution. Polar Tankers, Inc. v. Valdez, Dkt. 08-310, petition for certiorari filed September 8, 2008.
-- District of Columbia: Taxpayers have asked the Court whether the federal courts lack jurisdiction over the taxpayers' action challenging the District of Columbia unincorporated business tax. Fernebok v. District of Columbia, Dkt. 08-391, petition for certiorari filed September 22, 2008.
-- New York: A corporation has asked the Court whether its due process rights to notice were violated in New York property tax lien foreclosure proceedings. 114 Tenth Avenue Assoc., Inc. v. NYCTL 1999-1 Trust, Dkt. 08-184, petition for certiorari filed August 12, 2008.
Order List, U.S. Supreme Court, October 6, 2008.
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