On July 11, the Texas Court of Appeals, Third District, at Austin, TX, decided the case of Freestone Power Generation, LLC, v. Texas Commission on Environmental Quality, et al., reversing the trial court’s ruling that eight Texas power companies were not entitled to certain property tax exemptions administered by the Texas Commission on Environmental Quality (TCEQ). Continue reading
The California Supreme Court’s recent Ardmore decision expanding the applicability of California’s Documentary Transfer Tax Act will no doubt be the source of future litigation. In their recent client alert, colleagues Craig A. Becker, Richard E. Nielsen, Breann E. Robowski and Dianne L. Sweeney examine the issue.
In California Supreme Court Decision Changes the Transfer Tax World, Pillsbury attorneys Craig Becker, Richard Nielsen, Breann Robowski and Dianne Sweeney discuss the California Supreme Court’s decision in 926 North Armore Avenue, LLC v. County of Los Angeles:
- Court concludes counties and cities are permitted to impose a documentary transfer tax on entity transfers that result in a Proposition 13 “change in ownership” under California Revenue & Taxation Code § 64(c) or 64(d).
First is the ability to finance improvements with debt, which offers depreciation deductions. Second is the ability to make leveraged distributions through refinancing without paying immediate tax on the proceeds. The tax basis of assets steps up to fair market value at the time of the holder’s death, eliminating the deferred gain, so the income tax deferral upon a refinancing is even more attractive for heirs.
Will the U.S. Constitution’s Commerce Clause always insulate interstate commerce from the imposition of state and local taxes? Not always, as the Texas Supreme Court recently confirmed, when it agreed with the Court of Appeals for the First District of Texas, that Texas counties are permitted to levy property taxes on natural gas held in storage in Texas while awaiting future resale and shipment to out-of-state consumers. The case is ETC Marketing, Ltd. v. Harris County Appraisal District. Affirming the Court of Appeals, the Court rejected the argument that taxing the temporary storage of natural gas conflicts with the Commerce Clause in the U.S. Constitution. Continue reading