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Summaries of Court Cases

2013 | 2012 | 2011 | 2009
2008 | 2007 | 2005 | 2002 | 2001 | 2000
Property Assessment Court Cases


2013 Cases

  • OEI, Inc. v. Nebraska Department of Revenue
    Citation: CI12-4225 District Court of Lancaster County (2013)

    Synopsis: On July 24, 2013, the Lancaster County District Court held that the statute of limitations for an overpayment of tax does not apply to refundable credits issued under the Nebraska Advantage Research and Development Act because the credit could not be considered an overpayment of tax.

    In OEI, Inc. v. Department of Revenue, OEI, Inc. filed an amended return claiming a refundable credit under the Nebraska Advantage Research and Development Act. The Tax Commissioner determined that the refundable credit was considered an overpayment of tax and subject to the statute of limitations in Neb. Rev. Stat. § 77-2793. The Tax Commissioner denied the refund claim because it was filed after the statute of limitations expired. The court overturned the Tax Commissioner’s decision and held that the refund claim was not barred by the statute of limitations because it did not involve an overpayment of tax.
  • Banks v. Heineman
    Citation: 286 Neb. 390, 837 N.W.2d 70 (2013)

    Synopsis: On August 2, 2013, the Nebraska Supreme Court held that Section 4, Article VIII of the Nebraska Constitution did not prohibit the commutation of an excise tax by granting a tax credit for previously paid property tax.

    In Banks v. Heineman, Knox County challenged the constitutionality of a tax credit allowed for property taxes previously paid by Elkhorn Ridge Wind, LLC, which is a wind energy generation facility. Under LB 1048 (Laws 2010), an owner of a wind energy generation facility must annually pay a nameplate capacity tax on the total megawatt capacity of the facility. LB 1048 also allowed an owner of a wind energy generation facility to claim a tax credit for property taxes previously paid on the facility if the amount of tax previously paid on the facility exceeded the amount due under the newly-created nameplate capacity tax. The Nebraska Supreme Court held that the nameplate capacity tax credit does not violate the Nebraska Constitution because it is an excise tax imposed on the privilege of owning wind energy generation facilities and the constitutional prohibition against commutation of taxes does not apply to an excise tax. Additionally, the court held that the Nebraska Legislature had legitimate public policy purposes in allowing an owner of a wind energy generation facility to claim a tax credit for property taxes previously paid on the facility.
  • Lyman‑Richey Corporation v. Department of Revenue
    Citation: CI12‑3031 District Court of Lancaster County (2013)
    This case has been appealed.
  • Synopsis: On February 25, 2013, the Lancaster County District Court held that the three‑day rule in Neb. Ct. R. Pldg. § 6‑1106(e) (Three‑Day Rule) does not extend the 60‑day period contained in Neb. Rev. Stat. § 77‑2709(7) for filing a petition for redetermination in response to a notice of deficiency determination.

    In Lyman‑Richey Corporation v. Department of Revenue, the Lyman‑Richey Corporation (Lyman‑Richey) filed a petition for redetermination which was denied by the Nebraska Department of Revenue as untimely. Lyman Richey appealed the denial based upon the Three‑Day Rule, which adds an additional three days to the time allowed for a party to respond or appeal in a civil case. The court held that the plain language of Neb. Rev. Stat. § 77‑7209(7) clearly provided the deadlines applicable to a petition for redetermination, and that it was not appropriate to extend the deadline by applying the Three‑Day Rule.

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2012 Cases

  • McGee v. Ewald
    Citation: CI12‑9410 District Court of Douglas County (2012)

    Synopsis: On December 3, 2012, the Douglas County District Court held that a party appealing a decision of a state agency must serve notice of the appeal on the Attorney General pursuant to the Administrative Procedures Act.

    In McGee v. Ewald, McGee filed an appeal with the district court and served notice of the appeal to the Tax Commissioner by certified mail. The court held the service was improper in accordance with the Administrative Procedures Act, which requires service upon the Attorney General, not the agency.

  • Enterprise Rent‑A‑Car v. Nebraska Department of Revenue
    Citation: CI11‑3101 District Court of Lancaster County (2012)

    Synopsis: On November 5, 2012, the Lancaster County District Court held that optional damage waiver fees and refueling charges associated with the lease of a motor vehicle were subject to sales tax.

    In Enterprise Rent‑A‑Car Company v. Nebraska Department of Revenue, Enterprise Rent‑A‑Car Company (Enterprise) was assessed uncollected sales tax for damage waiver fees and refueling charges related to the lease of a motor vehicle. Enterprise appealed the assessment. The court held that the fees were part of the total consideration received by Enterprise, and thus part of the “gross receipts” from leasing the motor vehicle and subject to sales tax, regardless of whether or not the customer could waive coverage or the refueling charge. The court concluded that a customer could not lease a vehicle without either accepting or rejecting the damage waiver or refueling charges and these items were, therefore, part of the “gross receipts” of the lease transaction, and subject to sales tax.
  • Bridgeport Ethanol v. Nebraska Department of Revenue
    Citation: 284 Neb. 291 818 N.W. 2d 600 (2012)
  • Synopsis: On August 10, 2012, the Nebraska Supreme Court ruled that a refund claim for sales and use taxes paid on qualifying manufacturing machinery and equipment can only be made by the party that paid the sales and use tax. In addition, the court held that Option 3 contractors, who are deemed the purchaser/consumer of all manufacturing machinery and equipment they purchase, cannot qualify for the manufacturing machinery and equipment sales tax exemption, unless they are engaged in the business of manufacturing.  

    In Bridgeport Ethanol v. Nebraska Department of Revenue, Bridgeport Ethanol (Bridgeport) filed a claim for refund of sales and use taxes paid on qualifying manufacturing machinery and equipment by its contractor on building materials and equipment used for the design and construction of an ethanol facility. The court held that Bridgeport was not entitled to a refund because the contractor, not Bridgeport, paid sales and use taxes on the building materials. In addition, the court held the appointment of the contractor as a purchasing agent pursuant to a contract was insufficient under state law for purposes of granting the sales tax exemption.

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2011 Cases 

  • Skylark Meats LLC v. Nebraska Department of Revenue 
    Citation: CI10‑ 703 District Court of Lancaster County (2011)
    Gibbon Packing LLC v. Nebraska Department of Revenue 
    Citation: CI10‑702 District Court of Lancaster County (2011)

    Synopsis: On May 6, 2011, the Lancaster County District Court ruled that a taxpayer bears the burden of requesting an administrative hearing on a sales and use tax refund claim and that such a request must be made upon filing a refund claim under the rules and regulations promulgated by the Department of Revenue (Department). 

    In both Skylark Meats LLC v. Nebraska Department of Revenue, and Gibbon Packing LLC v. Nebraska Department of Revenue, Skylark Meats (Skylark) and Gibbon Packing (Gibbon) filed refund claims for sales and use taxes paid on building cleaning services, which the Department denied. Skylark and Gibbon subsequently requested administrative hearings on the denials of the refund claims. The Department denied the requests for hearings because the requests were not timely. The court held that the Department properly denied the requests for administrative hearings under the rules and regulations promulgated by the Department and that Skylark and Gibbon should have requested hearings at the time of filing the refund claims with the Department.
  • Cargill v. Nebraska Department of Revenue
    Citation: CI10‑2623 District Court of Lancaster County (2011)

    Synopsis: On March 28, 2011, the Lancaster County District Court held that for purposes of the Nebraska Advantage Act, employees of a company who were employed at other Nebraska locations and subsequently transferred to a project should be considered base‑year employees. The court also ruled that a “regular full‑time workweek for hourly employees” means the standard number of hours an employee is required to work to be considered full‑time by an employer.

    In Cargill v. Nebraska Department of Revenue, Cargill, Inc. (Cargill) filed a claim for a personal property tax exemption for purposes of the Nebraska Advantage Act (Act). The claim was subsequently denied by the Department on the basis that Cargill did not meet the required level of employment under the Act. The Department’s decision was appealed by Cargill. The court held that employees at other Nebraska locations who are subsequently transferred to the project should be considered base‑year employees; that Cargill had established its regular work week to be 40 hours; and that the number of hours in a year (except for “short” tax years) was 2,080 hours.

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2009 Cases

  • Swift & Co. v. Nebraska Department of Revenue
    Citation: 278 Neb. 763, 773 N.W.2d. 381 (2009)

    Synopsis: On October 23, 2009, the Nebraska Supreme Court held that the cleaning and maintenance of tangible personal property is taxable if it is incidental and related to the cleaning and maintenance of the building and fixtures.

    In Swift & Co. v. Nebraska Department of Revenue, several meatpacking plants paid sales tax on building cleaning services, which also included cleaning of machinery and equipment located within the plants. The meatpacking plants then filed a refund claim for sales tax paid for cleaning of machinery and equipment located within the plants. The Department denied the refund claim. The Nebraska Supreme Court held that a contract for cleaning a building, taxable under Nebraska law, that also included the cleaning of some tangible personal property located within the building, was taxable. Under Nebraska law, a contract for cleaning tangible personal property is not taxable; however, the cleaning and maintenance of tangible personal property is taxable if it is incidental and related to the cleaning and maintenance of the building and fixtures. 
  • National Research Corporation v. Nebraska Department of Revenue 
    Citation: CI08‑2582 District Court of Lancaster County (2009)

    Synopsis: On July 16, 2009, the Lancaster County District Court held that a significant delay in the review of a tax incentive agreement was not unreasonable in‑and‑of‑itself, but dependent upon the facts underlying each proceeding. Additionally, the court held that the Tax Commissioner has discretion in denying amendments to a tax incentive agreement.

    In National Research Corporation v. Nebraska Department of Revenue, National Research Corporation (NRC) filed an application for tax benefits under the Employment and Investment Growth Act (Act) in 1997. In 2004, the Department issued a draft agreement; NRC subsequently requested amendments to the draft agreement, which the Department denied. The court held that the delay was reasonable based on the facts of the case and that the delay did not materially affect NRC’s ability to secure tax incentives under the Act. The court also held that the Department maintains discretion in approving or denying amendments to an agreement under the Act.
  • Concrete Industries Inc. v. Nebraska Department of Revenue
    Citation: 277 Neb. 897, 766 N.W.2d. 103 (2009)

    Synopsis: On June 5, 2009, the Nebraska Supreme Court held that the purchase of parts assembled into manufacturing machinery and equipment qualifies as the purchase of manufacturing machinery and equipment, and was therefore exempt from sales tax.

    In Concrete Industries Inc. v. Nebraska Department of Revenue, Concrete Industries, Inc. purchased parts to build its own manufacturing machinery and equipment. The Nebraska Supreme Court held that the purchase of parts assembled into manufacturing machinery and equipment qualified as the purchase of manufacturing machinery and equipment since the law exempted assembled machinery from sales and use taxes. The Court determined that it made little sense to impose a tax on the purchase of the same parts when they were purchased to subsequently assemble the machinery and equipment in the first place.
  • Berrington Corporation dba Eldorado Hills Golf Club v. Nebraska Department of Revenue
    Citation: 277 Neb. 765, 765 N.W.2d. 448 (2009)

    Synopsis: On May 15, 2009, the Nebraska Supreme Court held that fees charged to members of a golf course were subject to sales tax as taxable admissions because the fees did not grant the members the right to participate in the legal or business affairs of the organization, and therefore did not qualify as exempt membership fees under the state’s sales tax regulations.

    In Berrington Corporation dba Eldorado Hills Golf Club v. Nebraska Department of Revenue, the Department of Revenue issued an assessment on membership fees paid by Berrington’s members. While the membership dues allowed Berrington members to serve on an advisory board to the Berrington shareholders, the Berrington shareholders alone maintained direct control over the operations of the golf club. As a result, the Nebraska Supreme Court held that the fees were taxable admissions because members did not have the right to participate in the legal or business affairs of Berrington.

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2008 Cases

  • Intralot, Inc. v. Nebraska Department of Revenue
    Citation: 276 Neb. 708, 757 N.W.2d. 182 (2008)

    Synopsis: On October 31, 2008, the Nebraska Supreme Court held that purchases of thermal paper and pay slips were purchased for fulfilling a contractual obligation rather than for purposes of resale, and therefore were subject to use tax.

    In Intralot, Inc. v. Nebraska Department of Revenue, the Department issued an assessment for use tax on Intralot Inc.’s (Intralot) purchases of thermal paper and pay slips used to print lottery tickets. The court held that Intralot contracted with and was compensated for providing the Nebraska Lottery (Lottery) with a complete on-line lottery system including the purchases of thermal paper and pay slips. Since the cost of the paper and pay slips were incorporated into the cost of the contract, the purchase was not eligible for an exemption from use tax as a purchase for resale.

  • Becton, Dickinson & Co. v. Nebraska Department of Revenue 
    Citation: 276 Neb. 640, 756 N.W.2d 280 (2008)

    Synopsis: On October 10, 2008, the Nebraska Supreme Court held that the statute of limitations for the filing of a refund claim could not be extended because the taxpayer was not prevented from filing its refund claim in a timely manner.

    In Becton, Dickinson & Co. v. Nebraska Department of Revenue, Becton, Dickinson & Company (Becton) filed a claim for refund of sales and use taxes under Nebraska’s Employment and Investment Growth Act (Act), which was subsequently denied by the Department because it was filed beyond the statute of limitations. The Supreme Court held the statute of limitations could not be extended on equitable grounds where both parties had previously agreed to extend the statute. In addition, a party must request an administrative hearing at the time of filing a refund claim with the Department, as required under the Department's regulations.

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2007 Cases

  • Farmland Foods, Inc. v. State
    Citation: 273 Neb. 262, 729 N.W.2d. 73 (2007)

    Synopsis: On March 23, 2007, the Nebraska Supreme Court held that the tax incentive credits earned under the Employment and Investment Growth Act (Act) could not be used before the taxpayer met the minimum employment and investment thresholds required under the Act.

    In Farmland Foods, Inc. v. Nebraska Department of Revenue, Farmland Foods, Inc. (Farmland) entered into an agreement with the Department pursuant to the Act. While the Act was silent on the issue, Farmland’s agreement specified that tax credits can be claimed only after the minimum levels of employment and investment had been met. The court held that a provision in an incentive agreement is controlling when the language of the statute does not contradict or is silent on the issue.

  • PSI Group, Inc. v. Nebraska Department of Revenue
    Citation: CI07-691 District Court of Lancaster County (2007)

    Synopsis: On August 16, 2007, the Lancaster County District Court ruled that the business of a mail presort company did not constitute a qualified business activity under the Employment and Investment Growth Act (Act).

    In PSI Group, Inc. v. Nebraska Department of Revenue, PSI Group Inc. (PSI) filed a refund claim for sales and use tax which was subsequently denied by the Department because PSI was not a qualifying business pursuant to the Act. PSI’s business activities included presorting mail for its customers before it was taken to the U.S. Postal Service for delivery; PSI did not perform “distribution,” “transportation,” or “storage” of tangible personal property for purposes of the Act.

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2005 Cases

  • Tyson Fresh Meats, Inc. v. State
    Citation: 270 Neb. 535, 704 N.W.2d 788 (2005)

    Synopsis: On October 21, 2005 the Nebraska Supreme Court held that the taxpayer owed interest assessed on unpaid use tax, even though the tax was ultimately paid and refunded.  In addition, the court held that the Nebraska Department of Revenue (Department) did not have the statutory authority to waive interest assessed on delinquent taxes.

    In Tyson Fresh Meats, Inc. v. State, the Department assessed IBP, Inc. (IBP) for unpaid use tax, interest, and penalty. IBP appealed the Department’s determination imposing interest on the portion of delinquent tax that was later refunded under the Employment and Investment Growth Act. The court held that the taxpayer owed the accrued interest because it had not paid the use tax at the time it was due. Furthermore, the court held that the plain language of Neb. Rev. Stat. § 77-2711 did not provide the Department any discretion to waive interest for unpaid tax. Note –Neb. Rev. Stat. § 77-2711 was amended by LB 914 (2008), and now allows the Tax Commissioner to waive both penalty and interest in his or her discretion.

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2002 Cases

  • Am. Bus. Info. v. Egr and Nebraska Department of Revenue
    Citation: 264 Neb. 574, 650 N.W.2d 251 (2002)

    Synopsis: On August 16, 2002, the Nebraska Supreme Court held that sales of intellectual property via prospect lists, index cards, computer diskettes, magnetic tapes, CD-ROMs, and online data transfers were sales of tangible personal property for the purpose of apportioning Nebraska income tax.

    In Am. Bus. Info. v. Nebraska Department of Revenue, American Business Information, Inc. (ABI) maintained a database of business information which it used to market a number of customized and noncustomized products. The court held that ABI’s sales were sales of tangible personal property because ABI’s customers acquired no intangible intellectual property rights with the products. In addition, the court held that data sent electronically was considered a transfer of tangible personal property.

  • Northwall v. State
    Citation: 263 Neb. 1, 637 N.W.2d 890 (2002)

    Synopsis: On January 18, 2002, the Nebraska Supreme Court held that it lacked authority to hear an appeal by a taxpayer where the taxpayer did not first exhaust his administrative remedies.

    In Northwall v. State, the Nebraska Department of Revenue (Department) issued an assessment against corporate officers determined to be liable for unpaid sales tax of their business pursuant to Neb. Rev. Stat. § 77-1783. The Court held that it did not have authorization to order a declaratory judgment nor order a refund because the officers did not file a claim for refund, as required under the statute, in order to challenge the Department's corporate officer assessment.

  • Capitol City Telephone v. Nebraska Department of Revenue 
    Citation: 264 Neb. 515, 650 N.W.2d 467 (2002)

    Synopsis: On August 9, 2002, the Nebraska Supreme Court held that certain telecommunication services were taxable because the statutory language allowed for taxation of those services.

    In Capitol City Telephone v. Nebraska Department of Revenue, the Nebraska Department of Revenue (Department) assessed sales tax deficiencies against three telephone companies on the gross receipts from services related to a public utility function and installing and connecting telephone communication systems. The Court held that the broad statutory language provided for taxing the services and the Department’s interpretation did not alter or enlarge the statutory language, and therefore should be provided great weight. In addition, the Court held that the issuance of a regulation provides sufficient notice to a taxpayer that it may no longer rely on previously-issued guidance from the Department.

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2001 Cases

  • Gottsch Feeding Corp. v. State
    Citation: 261 Neb. 19, 621 N.W.2d 109 (2001)

    Synopsis: On January 12, 2001, the Nebraska Supreme Court held that the evidence supported the Nebraska Department of Revenue’s (Department) determination that the taxpayer was liable for unpaid taxes after becoming a “successor” or “transferee”.

    In Gottsch Feeding Corp. v. State, the Department determined Gottsch Feeding Corp. (GFC) was liable for taxes as a “successor” to RFD-TV, Inc. (RFD). GFC claimed to be a shareholder of RFD and thus not liable for unpaid tax. The Court held that GFC’s purchase of 80% ownership combined with other evidence that GFC assumed control of assets, management, and operation of RFD’s business made GFC a successor and transferee of RFD.

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2000 Cases

  • Lyman-Richey Corp. v. Nebraska Department of Revenue
    Citation: 258 Neb. 908, 606 N.W.2d 813 (2000)

    Synopsis: On March 3, 2000, the Nebraska Supreme Court held that concrete mixers attached to truck chassis are not qualified property eligible for tax incentives under the Employment and Investment Growth Act (Act).

    In Lyman-Richey Corp. v. Nebraska Department of Revenue, the Nebraska Department of Revenue denied a refund claim for sales tax on Lyman Richey's purchase of concrete mixers because the mixers did not constitute qualified property under the Act. The Court found that the concrete mixer and the truck chassis formed an integrated unit because the operation of the mixer was dependent on being attached to the chassis of the truck and, as a motor vehicle, was not eligible for a refund under the Act.
  • Lackawanna Leather Co. v. Nebraska Department of Revenue
    Citation: 259 Neb. 100, 608 N.W.2d 177 (2000)

    Synopsis: On March 31, 2000, the Nebraska Supreme Court held that solvents used in the leather finishing process do not enter into and remain part of the product, and therefore do not qualify as tax exempt.

    In Lackawanna Leather Co. v. Nebraska Department of Revenue, the Lackawanna Leather Company (Lackawanna) filed a claim for refund of sales and use taxes paid on what it claimed were qualifying materials which became an essential ingredient or component part. The solvents played an essential function in processing and coloring the leather, but only trace amounts of the solvents remained on the surface of the finished product. The Court held that the solvents do not qualify for a tax exemption because they are not ingredients nor do they become component parts of the finished product.
  • A&D Tech. Supply Co. v. Nebraska Department of Revenue
    Citation: 259 Neb. 24, 607 N.W.2d 857 (2000)

    Synopsis: On March 24, 2000, the Nebraska Supreme Court held that the taxpayer’s sales to a firm working for a tax-exempt organization were not tax exempt because the materials purchased were not intended to be annexed to the real estate. In addition, the Court held that a software support agreement was taxable because it did not qualify as nontaxable repair labor.

    In A&D Tech. Supply Co. v. Nebraska Department of Revenue, A&D Technical Supply Co. (A&D) appealed an assessment for failing to collect sales tax on transactions with firms working on behalf of tax-exempt organizations. The Nebraska Department of Revenue also assessed A&D for failing to remit use tax on payments made for software support and printing press maintenance. The Court held that the transactions involving the tax-exempt organizations were taxable because the transactions did not comply with the applicable statutes’ delimiting requirements, and A&D could not rely in good faith upon tax-exempt certificates when A&D knew they were improperly completed. In addition, the Court held that the software support agreements and printing press agreements were not repair labor, but rather taxable maintenance agreements.

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