Justia Energy, Oil & Gas Law Opinion Summaries

The Arizona Department of Revenue (ADOR) is not authorized to value solar panels owned by SolarCity Corporation and Sunrun, Inc. (collectively, Taxpayers) and leased to residential and commercial property owners.For tax year 2015, ADOR notified Taxpayers that their panels had been assigned full cash values and that taxes would be assessed. Taxpayers sought a declaratory judgment that the panels were considered to have no value under Ariz. Rev. Stat. 42-11054(C)(2) and were not subject to valuation. The tax court ruled that the panels were “general property” that must be valued by county assessors pursuant to section 42-13051(A) and that the county assessors cannot assign a zero value because applying section 42-11054(c)(2)’s zero value provision to the panels would violate the Exemptions Clause and the Uniformity Clause of the Arizona Constitution. The Supreme Court affirmed the tax court’s judgment to the extent it concluded that ADOR lacked statutory authority to value Taxpayers’ leased solar panels but reversed the remainder of the judgment and remanded for a determination as to whether section 42-13054 authorizes county assessors to value the solar panels and, if so, whether section 42-11054(C)(2) requires a zero valuation. If section 42-11054(C)(2) applies, the tax could should determine whether that provision violates the Exemptions Clause or Uniformity Clause. View "SolarCity Corp. v. Arizona Department of Revenue" on Justia Law

The Arizona Department of Revenue (ADOR) is not authorized to value solar panels owned by SolarCity Corporation and Sunrun, Inc. (collectively, Taxpayers) and leased to residential and commercial property owners.For tax year 2015, ADOR notified Taxpayers that their panels had been assigned full cash values and that taxes would be assessed. Taxpayers sought a declaratory judgment that the panels were considered to have no value under Ariz. Rev. Stat. 42-11054(C)(2) and were not subject to valuation. The tax court ruled that the panels were “general property” that must be valued by county assessors pursuant to section 42-13051(A) and that the county assessors cannot assign a zero value because applying section 42-11054(c)(2)’s zero value provision to the panels would violate the Exemptions Clause and the Uniformity Clause of the Arizona Constitution. The Supreme Court affirmed the tax court’s judgment to the extent it concluded that ADOR lacked statutory authority to value Taxpayers’ leased solar panels but reversed the remainder of the judgment and remanded for a determination as to whether section 42-13054 authorizes county assessors to value the solar panels and, if so, whether section 42-11054(C)(2) requires a zero valuation. If section 42-11054(C)(2) applies, the tax could should determine whether that provision violates the Exemptions Clause or Uniformity Clause. View "SolarCity Corp. v. Arizona Department of Revenue" on Justia Law

In 2011, OXY USA Inc. (“Oxy”), made a mistake that caused it to overpay its property taxes on oil and gas produced from leaseholds. Oxy failed to deduct certain costs it was entitled to deduct. By the time it realized the mistake, the protest period had expired. The company nonetheless contended it was entitled to abatement and refund of the overpayment pursuant to section 39-10-114(1)(a)(I)(A), C.R.S. (2017). The county board of commissioners maintained that the abatement-and-refund provision did not apply because Oxy was the sole source of the error. Relying on Colorado Supreme Court precedent, the court of appeals held that Oxy couldn't receive abatement and refund for overpayment due to its own mistake. The Supreme Court held section 39-10-114(1)(a)(I)(A) gave taxpayers the right to seek abatement and refund for erroneously or illegally levied taxes resulting from overvaluation caused solely by taxpayer mistake. Therefore, Oxy was entitled to abatement and refund for its overpayment of taxes in the tax year at issue in this appeal. View "OXY USA Inc. v. Mesa County Board of Commissioners" on Justia Law

The Supreme Court affirmed the Board of Equalization’s decision affirming the ruling of the Wyoming Department of Revenue against PacifiCorp, Inc., which sought a ruling that its purchases of certain chemicals used in the process of generating electricity in coal-fired electrical generation facilities in Wyoming qualified for either the manufacturers’ sales tax exemption or the wholesalers’ sales tax exemption. The court held (1) The Board erred when it concluded that PacifiCorp is not a manufacturer under Wyo. Stat. Ann. 39-15-105(a)(iii)A); (2) the Board did not err when it held that certain chemicals necessary to treat water and sulfur dioxide emissions during the coal combustion processes that generate electricity are not “used directly” to generate electricity and are therefore not exempt from sales tax under section 39-15-105(a)(iii)(A); and (3) the Board did not err when it held that PacifiCorp’s purchases of certain chemicals and catalysts do not constitute wholesale purchases exempt from taxation under section 39-15-105(a)(iii)(F). View "PacifiCorp, Inc. v. Department of Revenue" on Justia Law

The Colorado Supreme Court concluded that the statutory scheme property taxation of oil and gas leaseholds authorized the retroactive tax assessment in this case. Petitioner Kinder Morgan CO2 Company, L.P., operated oil and gas leaseholds in Montezuma County, Colorado. In 2009, the assessor for Montezuma County issued a corrective tax assessment on these leaseholds for the previous tax year, retroactively assessing over $2 million in property taxes, after an auditor concluded that Kinder Morgan underreported the value of gas produced at the leaseholds. Kinder Morgan appealed, arguing the assessor lacked authority to retroactively assess these taxes because Colorado law did not authorize a retroactive assessment when an operator has correctly reported the volume of oil and gas sold but has underreported the selling price at the wellhead. In affirming the court of appeals in this matter, the Supreme Court further concluded that the Board of Assessment Appeals did not err in determining that Kinder Morgan underreported the selling price by claiming excess transportation deductions, given Kinder Morgan’s relationship to the owner of the pipeline through which the gas was transported. View "Kinder Morgan CO2 Co., L.P. v. Montezuma Cty. Bd. of Comm'rs" on Justia Law

At issue in this case was the meaning of the term “motor fuel taxes” as used in the Georgia Constitution, Article III, Sec. IX, Par. IV(b). A trucking industry association and three individual motor carriers challenged local sales and use taxes on motor fuels, the revenues of which were not used solely for public roads and bridges. They argued that these taxes fell within the meaning of “motor fuel taxes” under the Motor Fuel Provision and, therefore, the revenues from these taxes (or an amount equal to that revenue) had to be allocated to the maintenance and construction of public roads and bridges. The Georgia Supreme Court affirmed the dismissal of the plaintiffs’ complaint because the history and context of the Motor Fuel Provision revealed that “motor fuel taxes” were limited to per-gallon taxes on distributors of motor fuel, and did not include sales and use taxes imposed on retail sales of motor fuels. View "Georgia Motor Trucking Assn. v. Georgia Dept. of Rev." on Justia Law

After the Mississippi Supreme Court held in "Jones County School District v. Mississippi Department of Revenue," (111 So. 3d 588 (Miss. 2013)), that a school district was not liable for oil and gas severance taxes on royalties derived from oil and gas production on sixteenth-section land, the Chancery Court of Wayne County held that Wayne County School District (WCSD) was owed interest by the Mississippi Department of Revenue (MDOR) on its overpayment of severance taxes at the rate of one percent (1%) per month. The chancellor determined, based on Section 27-65-53 of the Mississippi Code, that the payment should have started on June 5, 2013, ninety days after the Jones County decision. Finding that the chancellor correctly applied the statute, the Supreme Court affirmed the judgment of the chancery court. View "Wayne County School District v. Morgan" on Justia Law

The issue in this case centered on the interpretation of the "right to travel" provision Article III of the Yakama Nation Treaty of 1855, in the context of importing fuel into Washington State. The Washington State Department of Licensing (Department) challenged Cougar Den Inc.'s importation of fuel without holding an importer's license and without paying state fuel taxes under former chapter 82.36 RCW, repealed by LAWS OF 2013, ch. 225, section 501, and former chapter 82.38 RCW (2007). An administrative law judge ruled in favor of Cougar Den, holding that the right to travel on highways should be interpreted to preempt the tax. The Department's director, Pat Kohler, reversed. On appeal, the Yakima County Superior Court reversed the director's order and ruled in favor of Cougar Den. Finding no reversible error in that judgment, the Washington Supreme Court affirmed. View "Cougar Den, Inc. v. Dep't of Licensing" on Justia Law

Oil producers (the Producers) challenged an administrative decision (the Decision) in which the Alaska Department of Revenue (DOR) decided to treat separate oil and gas fields operated by common working interest owners as a single entity when calculating the Producers’ oil production tax obligations. Relying on a statute that gave DOR the discretion to “aggregate two or more leases or properties (or portions of them), for purposes of determining [their effective tax rate], when economically interdependent oil or gas production operations are not confined to a single lease or property,” DOR concluded that operations on a number of smaller oil fields were economically interdependent with larger operations on the adjacent Prudhoe Bay oil field. The Producers argued that in interpreting the phrase “economically interdependent” in the Decision, DOR effectively promulgated a regulation without following the procedures established in the Alaska Administrative Procedure Act (APA) and, as a result, DOR’s Decision was invalid. After its review, the Supreme Court concluded that DOR’s Decision was not a regulation because it was a commonsense interpretation of the statute and, therefore, DOR was not required to comply with APA rulemaking requirements. The Court therefore affirmed the superior court’s decision upholding DOR’s decision. View "Chevron U.S.A., Inc. v. Dept. of Revenue" on Justia Law

This proceeding consisted of four consolidated appeals. The issue in two of the appeals was whether the alternative-energy infrastructures installed by Petitioners for their businesses met the statutory definition of “qualified alternative fuel vehicle refueling infrastructure” for the purpose of receiving an alternative-fuel infrastructure tax credit. The issue in the other two appeals was whether the alternative-energy infrastructures installed by Petitioners for their residences met the statutory definition of “qualified alternative fuel vehicle home refueling infrastructure” for the purpose of receiving an alternative fuel-infrastructure tax credit. The circuit court affirmed the final orders of the West Virginia Office of Tax Appeals that denied Petitioners’ requests for alternative-fuel infrastructure tax credits under W. Va. Code 11-6d-4(c). The Supreme Court affirmed, holding that the circuit court did not err in its judgment. View "Martin Distributing Co. v. Matkovich" on Justia Law