Articles Posted in Tax Law

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Plaintiff segTEL, Inc. was a telecommunications company that owned and/or operated a fiber optic cable network throughout New Hampshire, including within the City of Nashua. It did not own any poles or conduits within the City, and did not have its own license from the City authorizing its occupation of the City’s rights of way. Instead, pursuant to pole attachment agreements with the utility providers, the plaintiff remitted a fee to the utility providers in exchange for the right to place its fiber optic cables on their poles and conduits. These pole attachment agreements did not require the plaintiff to pay property taxes assessed by the City. Having become aware of plaintiff’s use of the utility providers’ poles and conduits, the City in 2014 assessed plaintiff property taxes of $1,507.94 for its use of the City’s rights of way. Plaintiff applied for an abatement, which the City denied. Thereafter, plaintiff brought this action in superior court, seeking: (1) a declaratory judgment that the City was not entitled to impose the tax; and (2) to strike the City’s 2014 tax assessment. The trial court granted summary judgment to plaintiff, ruling that “[b]ecause [the plaintiff] has not entered into an agreement in which it consented to be taxed,” the City could not lawfully tax the plaintiff for its use and occupation of the City’s rights of way. The City appealed, and finding no reversible error in the trial court’s judgment, the New Hampshire Supreme Court affirmed. View "Segtel, Inc. v. City of Nashua" on Justia Law

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New Hampshire Electric Cooperative, Inc. (NHEC) filed tax abatement appeals to the Board of Tax and Land Appeals (BTLA) for 23 municipal assessments of its property that occurred in 2011 and 2012. The BTLA held a consolidated hearing over nine days between January and February 2015 regarding NHEC’s tax abatement appeals. During the hearing, NHEC presented expert witness testimony and an appraisal of NHEC’s property from George Lagassa, a certified general real estate appraiser and the owner of Mainstream Appraisal Associates, LLC. In his appraisals, Lagassa estimated the market value of NHEC’s property by reconciling the results of four valuation approaches: a sales comparison approach; an income approach, which estimated the value of NHEC’s property by capitalizing the company’s net operating income; a cost approach, which estimated the net book value (NBV) of NHEC’s property by calculating the original cost less book depreciation (OCLBD) of NHEC’s property; and a second cost approach, which estimated the value of NHEC’s property by calculating the reproduction cost new less depreciation (RCNLD) of NHEC’s property. NHEC appeals the BTLA order denying 16 of NHEC’s 23 individual tax abatement appeals regarding its property. The New Hampshire Supreme Court found no reversible error in the BTLA’s order and affirmed it. View "Appeal of New Hampshire Electric Cooperative, Inc." on Justia Law

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Plaintiff DirecTV, Inc. appealed a superior court decision denying a petition for property tax abatement for the tax years 2007, 2008, and 2009. The property at issue was located in New Hampton and used by DirecTV as a satellite uplink facility. On appeal, DirecTV argued that the trial court erred when it: (1) ruled that satellite antennas and batteries used to provide backup power constituted fixtures; and (2) determined the value of the property. The New Hampshire Supreme Court concluded after review that the antennas and batteries were not fixtures, and therefore, taxable as real estate. The Court reversed the superior court on that issue, vacated its decision on the valuation of the property, and remanded for further proceedings. View "DirecTV, Inc. v. Town of New Hampton" on Justia Law

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Respondent Town of New London (Town) appealed a superior court order granting summary judgment to petitioners Robert Carr and Raoul & Karen, LLC (Raoul & Karen), in their appeal of the Town’s denial of their request for a property tax abatement pursuant to RSA 76:16 (Supp. 2016). During the 2014 tax year, Carr owned property in the Town which he sold to Raoul & Karen. The house on the property was struck by lightning and burned to the ground on July 1, 2014, leaving only a few outbuildings on the property. As a result of the house’s destruction, the petitioners could not use it for 272 of the 365 days of the 2014 tax year. The Town assessed the house at $688,000 for that tax year. In the previous year, RSA 76:16 came into effect that provided for prorated tax assessments for buildings damaged under certain conditions. Petitioners did not apply for a proration of their property tax assessment, rather, they petitioned the Town for property tax abatement under RSA 76:16 in January 2015, six months after the home’s destruction. The Town did not dispute that petitioners filed their application for abatement under RSA 76:16 in a timely manner, but the Town denied petitioners’ application because they had not timely filed for proration under RSA 76:21. The trial court construed RSA 76:21 in petitioners’ favor, and ruled that the statute did “not limit taxpayers’ ability to apply for abatement under RSA 76:16.” The court then evaluated whether petitioners had shown “good cause” for abatement, and concluded that they had. Accordingly, the court granted summary judgment in petitioners’ favor. The Town appealed, but finding no reversible error, the New Hampshire Supreme Court affirmed. View "Carr & Town of New London" on Justia Law

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Petitioner Kadle Properties Revocable Realty Trust (Trust), challenged the dismissal of the Trust’s appeal to the New Hampshire Board of Tax and Land Appeals (BTLA), filed after respondent, the City of Keene (City), denied the Trust’s application for an educational use tax exemption. The Trust owned property in Keene that included an office building. A separate, for-profit corporation, Config Systems, Incorporated (Config Systems), rented a portion of the Trust’s office building, where it offered computer classes. The Trust did not own or operate Config Systems, but Daniel Kadle, in addition to serving as trustee for the Trust, was a beneficiary of the Trust and the sole shareholder of Config Systems. The Trust sought the exemption based upon Config Systems’s use of part of the property as a school. The Trust appealed the City’s denial of its request to the BTLA. During the BTLA hearing on the Trust’s appeal, the City moved to dismiss the appeal. The BTLA granted the City’s motion, reasoning that the property owner, the Trust, was not a school, and that Config Systems, the entity operating the school which the Trust claims qualified the property for an exemption, did not own the property. Finding no reversible error in that decision, the Supreme Court affirmed. View "Appeal of Kadle Properties Revocable Realty Trust" on Justia Law

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Plaintiff, The Bishop of the Protestant Episcopal Diocese in New Hampshire, A Corporation Sole, d/b/a St. George’s Episcopal Church (Church), appealed a superior court order denying its summary judgment motion and granting that of the defendant, Town of Durham (Town), based upon a finding that 24 spaces in the Church’s parking lot that are leased to University of New Hampshire (UNH) students were taxable. Until 2013, the Church received a religious tax exemption under RSA 72:23, III for its entire parking lot. In early 2013, the Town learned that the Church leased spaces to UNH students. At that time, the Town believed students leased 30 of the 37 parking spaces. Accordingly, after determining that the leased parking spaces were no longer exempt from taxation, the Town issued the Church a tax bill. After review of the Church’s arguments on appeal, the New Hampshire Supreme Court concluded that the Church did not meet its burden of demonstrating that the leased spaces were exempt. The Court affirmed the superior court order. View "Bishop of the Protestant Episcopal Diocese in New Hampshire v. Town of Durham" on Justia Law

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Plaintiff Signal Aviation Services, Inc. (Signal) appealed a superior court grant of summary judgment in favor of defendant City of Lebanon (City) in this action by Signal for, among other things, breach of contract. The City cross-appealed a portion of the trial court’s order interpreting the contract. Signal leased 8.91 acres at the Lebanon Municipal Airport (airport) as assignee of a Lease and Operating Agreement (LOA). The City owned the airport and was the lessor under the LOA. The LOA granted Signal the nonexclusive right and obligation to provide fixed based operator (FBO) services at the airport. In granting this nonexclusive right, the City agreed in paragraph 3M(2) of the LOA that “[a]ny other operator of aeronautical endeavors or activities will not be permitted to operate on the Airport under rates, terms [or] conditions which are more favorable than those set forth in this Agreement.” In 2006, the City increased the assessed value of the land leased by Signal, not including the improvements, resulting in a corresponding increase in Signal’s property tax liability. Signal applied for an abatement of taxes for the years 2006 and 2007. The City’s assessors denied abatement, and Signal appealed to the New Hampshire Board of Tax and Land Appeals (BTLA). The BTLA dismissed the appeals because Signal failed to present evidence of the property’s market value. Signal did not appeal that decision, bringing instead this suit, claiming, among other things, breach of contract. Its writ alleged that the City “materially breached its obligations under the [LOA] by providing more favorable and disproportionate tax assessments and taxation schemes under agreements with other entities at the Airport providing commercial aeronautical services there.” After review, the Supreme Court affirmed, having concluded that paragraph 3M(2), so far as it concerned taxation, merely obligated the City to require all other operators to pay all lawfully levied or assessed taxes. View "Signal Aviation Services, Inc. v. City of Lebanon" on Justia Law

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Respondent City of Nashua appealed a Superior Court order ruling that it could properly consider a tax abatement for the 2012 tax year for petitioner-taxpayer Nashua Coliseum, LLC. On appeal, the parties proposed contrary interpretations of RSA 76:17-c, II (2012), the statutory provision that addressed the effect of a successful abatement appeal on subsequently assessed taxes. The City argued that, under the plain language of the statute, Coliseum had not satisfied all of the prerequisites for the statute to apply. The City further argued that the statute was inapplicable because of the parties’ settlement agreement, which stated that the abated value would not be deemed to be the correct assessment value for purposes of the statute. Based upon a plain reading of the statutory language, the Supreme Court agreed with the City that the statute required the superior court to find that the assessment value was incorrect in order for the taxpayer to be excused from complying with the filing deadlines otherwise applicable to tax abatement requests. Accordingly, the trial court's order was reversed and the case remanded for further proceedings. View "Nashua Coliseum, LLC v. City of Nashua " on Justia Law

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Respondent, the City of Concord (City) appealed a superior court decision granting summary judgment in favor of petitioner Northern New England Telephone Operations, LLC d/b/a FairPoint Communications - NNE (FairPoint), in its equal protection challenge to the City’s taxation of FairPoint’s use and occupation of public property, and striking the tax levied against FairPoint. In order to provide telecommunications services throughout the City, FairPoint maintained poles, wires, cables, and other equipment within the City’s public rights-of-way. For the 2000 to 2010 tax years, the City imposed a real estate tax upon FairPoint for its use and occupation of this public property. Prior to 2010, the City did not impose a right-of-way tax upon Comcast, which used the City’s rights-of-way to provide cable services pursuant to a franchise agreement. The City began imposing the tax upon Comcast in 2010 in response to a ruling by the New Hampshire Board of Tax and Land Appeals (BTLA) that, notwithstanding the franchise agreement, Comcast was subject to the tax. Prior to 2008, the City did not impose the same tax upon Public Service of New Hampshire (PSNH) because it was unaware that PSNH had used and occupied the rights-of-way. Similarly, the City did not tax certain other users of its rights-of-way for their use and occupation of public property during the relevant tax years because it was not aware of their usage. FairPoint brought an action challenging, in relevant part, the constitutionality of the City’s right-of-way tax assessments against it for the 2000 through 2010 tax years. The parties filed cross-motions for summary judgment. In granting FairPoint’s motion, and denying the City’s motion, the trial court ruled, as an initial matter, that "intentionality" was not a required element of FairPoint’s equal protection claim. Upon review, the Supreme Court concluded that FairPoint’s equal protection claim was one of "selective enforcement," and not an equal protection challenge to the tax scheme itself. Thus, because the trial court applied an erroneous legal standard in ruling that the City selectively imposed the tax upon FairPoint, the Court vacated the trial court’s rulings and remanded for further proceedings. View "Northern New England Telephone Operations, LLC v. City of Concord" on Justia Law

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Before the Supreme Court in this case was appeal and cross-appeal of a Superior Court's order ruling in favor of the petitioners, eight individual New Hampshire residents and taxpayers and LRS Technology Services, LLC (LRS), on their petition for a declaratory judgment that the Education Tax Credit program. The State and several intervenors defended the program. The intervenors were three New Hampshire citizens, who wanted their children to receive scholarship funds under the program, and the Network for Educational Opportunity, a non-profit organization involved with the program. The trial court ruled that the petitioners had standing. The Supreme Court did not reach the merits of the petitioners’ declaratory judgment petition because it concluded that: (1) the 2012 amendment to RSA 491:22, I, which allowed taxpayers to establish standing without showing that their personal rights have been impaired or prejudiced, was unconstitutional; and (2) absent that amendment, the petitioners had no standing to bring their constitutional claim. Accordingly, the Court vacated and remanded with instructions to dismiss the petition. View "Duncan v. New Hampshire" on Justia Law