Attorney Randal T Evans's Legal Cases

Tax

R. R. Donnelley & Sons Co. v. Ariz. Dep't of Revenue, 224 Ariz. 254

Apr 29, 2010

OUTCOME: Appellate court affirmed the ruling of Arizona Tax Court (in favor of taxpayer on 2 of 3 issues)

This Arizona corporate income tax case involved a taxpayer, a worldwide commercial printing enterprise, which maintained a principal place of business in Chicago and a sales office in Arizona. The Depa ... rtment found that the taxpayer and three of its subsidiaries should be taxed as a unitary business. The tax court held that the Department could not properly attribute income from two subsidiaries to the taxpayer, but could attribute income from the third subsidiary. The Court of Appeals of Arizona upheld the decision. The first subsidiary served as the taxpayer's accounts receivables. Because the services it performed were accessory, the subsidiary did not pass the unitary business test. The second subsidiary's services included buying and selling investment assets; receiving dividends, interest, and other passive income; and lending money. It did not share any of the taxpayer's employees, advertising, legal services, or centralized purchasing. It was not part of the unitary business. However, the taxpayer was the third subsidiary's only customer. The taxpayer fully depended on the third subsidiary for trademarks for the sale of its products and services. Because there was a substantial flow of operational intangibles, the third subsidiary was part of the taxpayer's unitary business.

Tax

Ariz. Dep't of Revenue v. Cent. Newspapers, Inc., 222 Ariz. 626

Nov 03, 2009

OUTCOME: Appellate court affirmed Tax Court's judgment

Newspaper company protested the Arizona Department of Revenue's denial of a formal request for the refund of corporate income taxes paid on revenues from an out-of-state partnership. The newspaper comp ... any was the parent of several newspapers, including a daily newspaper in Arizona. A group of publishers formed a Washington general partnership to build and run a newsprint mill. The partnership conducted no business activities in Arizona other than the solicitation of orders for newsprint sales. The newspaper company's income included a percentage of the partnership's net income. At issue on appeal was whether 15 U.S.C.S. § 381 precluded the state from including the out-of-state partnership's revenues in the numerator of the sales factor of the newspaper company's consolidated return. The appellate court concluded that the newspaper company failed the prong of the test requiring that its activities within Arizona be limited to solicitation of orders. The newspaper company's activities made 15 U.S.C.S. § 381 inapplicable. The appellate court did not interpret 15 U.S.C.S. § 381 as creating a class of tax-exempt income for sales in interstate commerce. The court also ruled that the newspaper corporation failed to show the Department's interpretation of the Uniform Division of Income for Tax Purposes Act, Ariz. Rev. Stat. §§ 43-1131 to -1150 (UDITPA), was erroneous.

Tax

Phoenix Newspapers, Inc. v. Ariz. Dep't of Revenue, 2005 Ariz. App. LEXIS 175 (Unpublished Decision)

Dec 06, 2005

OUTCOME: Appellate court upheld ruling of the Arizona Tax Court

Three affiliated entities involved in the newspaper business appealed a decision of the Arizona Tax Court in favor of the Arizona Department of Revenue ("ADOR"). The trial court had upheld ADOR's rejec ... tion of the Taxpayers' request for income tax refunds. The Taxpayers' refund claim was based on the position that two out-of-state holding companies were part of a unitary business with the third entity for purposes of calculating Arizona's corporate income tax. The ADOR concluded that although the Taxpayers had common ownership, common management, and a reconciled accounting system, they were not vertically or horizontally integrated, did not comprise a unitary business, and could not file a combined tax return. The Arizona Tax Court agreed with the ADOR's finding, and upheld the denial of Taxpayers' refund claim. The appellate court upheld the trial court's finding that Taxpayer's did not constitute a unitary business and could not file a combined Arizona corporate income tax return;, holding that Taxpayers had not shown that a combined return was necessary to accurately determine income for Arizona tax purposes.

Tax

DaimlerChrysler Servs. N. Am. v. Ariz. Dep't of Revenue, 210 Ariz. 297

May 03, 2005

OUTCOME: Appellate court affirmed the trial court's ruling in favor of the Department of Revenue

Auto manufacturer filed complaint and notice of appeal with the Arizona Tax Court on the issue of its entitlement to a bad debt deduction or refund. The auto manufacturer purchased retail installment c ... ontracts from car dealers arising from consumer automobile purchases. The consumers, when they bought a car, agreed to financing for their vehicles through the auto manufacturer. The dealers also simultaneously assigned rights to the auto manufacturer. Portions of the purchase price for each vehicle, as well as the transaction privilege tax and any other items that the consumer did not directly pay, were funded through the money provided by the auto manufacturer. The issue presented on appeal was whether a bad debt deduction under Ariz. Admin. Code 15-5-2011 was limited to the vendor of goods to which the debt applied. Looking at the express language of rule 15-5-2011, the defined terms used within the rule demonstrated that the regulation could not be satisfied by a person other than a vendor, although the term "vendor" was not expressly used. The court concluded that the rule did not allow the auto manufacturer, as a purchaser of retail contracts, to take a bad debt deduction when it had purchased the contracts without recourse against the dealers. The Arizona Tax Court denied plaintiff's motion for summary judgment and entered judgment in favor of the Arizona Department of Revenue. The appellate court affirmed the trial court's ruling, concluding that the issue presented was a matter for legislative, not judicial, action, and that the Department's action did not result in a forfeiture.

State, local, and municipal law

Taxpayer Prot. Alliance v. Arizonans Against Unfair Tax Schemes, 199 Ariz. 180

Jan 10, 2001

OUTCOME: Trial court's decision striking ballot initiative affirmed because the citizen-proposed initiative violated the state's constitutional single-subject requirement

Arizona Court of Appeals upheld the trial court's removal of a citizen-proposed initiative, Prop. 107, from the ballot because the initiative failed to conform to the single-subject requirement of the ... Arizona Constitution. Proposition 107 contained three proposals: It would have (1) eliminated the state income tax, (2) required voter approval of any legislation resulting in a net increase in state revenue, and (3) required that candidates for federal office disclose whether they had signed a pledge to eliminate federal income taxes. Both the trial court and the appellate court ruled that the third element--the disclosure requirement for candidates for federal office--was so distinct from the other sections, and from the overall purpose of the ballot initiative, that the proposition did not constitute a consistent and workable whole on the general topic embraced, and thereby violated the "single subject" requirement of Ariz. Const. art. XXI.

Randal T Evans's Legal Cases (5)

R. R. Donnelley & Sons Co. v. Ariz. Dep't of Revenue, 224 Ariz. 254

Ariz. Dep't of Revenue v. Cent. Newspapers, Inc., 222 Ariz. 626

Phoenix Newspapers, Inc. v. Ariz. Dep't of Revenue, 2005 Ariz. App. LEXIS 175 (Unpublished Decision)

DaimlerChrysler Servs. N. Am. v. Ariz. Dep't of Revenue, 210 Ariz. 297

Taxpayer Prot. Alliance v. Arizonans Against Unfair Tax Schemes, 199 Ariz. 180