Court Reviews Whether the Tennessee-Based Income of a Delaware Limited Partnership are subject to Taxation in Tennessee

H.J. HEINZ COMPANY, L.P. v. LOREN L. CHUMLEY, COMMISSIONER OF REVENUE, STATE OF TENNESSEE (Tenn. Ct. App. June 29, 1011)

Plaintiff/Appellant H.J. Heinz Company, LP, is a Delaware limited partnership that manufactures, sells and distributes food products. Plaintiff operates a facility in Nashville, Tennessee. The issue in this case is whether Plaintiff's income from its investment in HJH One, LLC, is subject to taxation, on an apportionment basis, in Tennessee.

The trial court determined that the earnings constituted business earnings as defined by the relevant statutes, and that the Department of Revenue's assessment of franchise and excise taxes on the earnings was constitutional. The trial court further determined that the apportionment formula used by the Department was correct. The trial court awarded summary judgment to the Commissioner, and Plaintiff appeals. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2011/hjheinz_062911.pdf

TN Supreme Court Reviews A Corporation’s Liability for the Payment of Use Tax

CAO HOLDINGS, INC. v. CHARLES A. TROST, COMMISSIONER OF REVENUE (Tenn. December 15, 2010).

This appeal involves a corporation's liability for the payment of use tax following its purchase of a business jet. After it received an assessment from the Tennessee Department of Revenue for over $700,000, the corporation paid the tax and filed suit in the Chancery Court for Davidson County seeking a refund on the ground that it qualified for the sale for resale exemption under Tenn. Code Ann. section 67-6-102(a) (28)(A) (Supp. 2004) because it had leased the aircraft to another corporation. Both the corporation and the Department filed motions for summary judgment.

The trial court granted the corporation's motion for summary judgment, and the Department appealed. A divided Court of Appeals panel affirmed the trial court. CAO Holdings, Inc. v. Chumley, No. M2008-01679-COA-R3-CV, 2009 WL 1492230 (Tenn. Ct. App. May 27, 2009). We granted the Department's application for permission to appeal.

We have now determined that neither party is entitled to a summary judgment because material disputes exist regarding the factual inferences or conclusions that can be drawn from the facts.

Opinion available at:
http://www.tba2.org/tba_files/TSC/2010/caoholdings_121510.pdf
 
CORRECTION: on page 5, line 25 adds the word "no" between the words "conferred" and "real"
http://www.tba2.org/tba_files/TSC/2011/caoholdings_COR_011311.pdf

One-Fourth of Nonprofits Are to Lose Tax Breaks

Some nonprofits' tax breaks to end May 15

At midnight on May 15, an estimated one-fifth to one-quarter of some 1.6 million charities, trade associations and membership groups will lose their tax exemptions, thanks to a provision buried in the Pension Protection Act of 2006. An I.R.S spokeswoman said that while groups would lose their exemptions effective May 16, the I.R.S. would probably not send out notices until January to give nonprofits a chance to bring themselves into compliance with the law.

Learn more from The New York Times:
http://www.nytimes.com/2010/04/23/us/23exempt.html

Court reviews whether greenhouses are real property or personal property for taxation purposes

HERMANN HOLTKAMP GREENHOUSES, INC. v. METROPOLITAN NASHVILLE AND DAVIDSON COUNTY, TENNESSEE, JO ANN NORTH, Assessor of Property for Davidson County, and TENNESSEE STATE BOARD OF EQUALIZATION (Tenn. Ct. App. February 3, 2010)

This appeal concerns the classification of property for taxation purposes. The petitioner commercial business grows plants in large greenhouses erected on its land. The county assessor of property classified the greenhouses as real property, to be taxed as such. The petitioner taxpayer appealed the assessor's classification, contending that the greenhouses are personal property. An administrative law judge concluded that the greenhouses are personal property, taxed at a lower rate than real property. The assessor appealed to the state board of equalization. The state board of equalization reversed the ALJ's decision and concluded that the greenhouses are real property.

The petitioner taxpayer then filed a petition for judicial review of the state board's decision. On cross motions for summary judgment, the trial court concluded that the greenhouses are real property and dismissed the taxpayer's petition. The petitioner taxpayer now appeals. Utilizing the common law of fixtures, we find that the greenhouses are properly classified as real property. Thus, we affirm the decision of the trial court.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2010/holtkamph_020310.pdf