Arkansas Court of Appeals Upholds Charitable Exemption for Hospital Clinics

In a unanimous opinion, the Court of Appeals has upheld a charitable exemption from property tax for clinics and lots acquired by a charitable hospital. Hardesty v. North Arkansas Medical Services, Inc., 2019 Ark. App. 410 (Sept. 25, 2019). This straightforward opinion reaffirms existing case law about the requirements for charitable exemption for a hospital, which do not include a minimum percentage of charity care. With this decision, Arkansas seems set to avoid the kind of high-stakes property tax controversy that has surrounded hospitals in other states. [More]

Walmart "Dark Store" Case Should Be of Interest to All Arkansas Property Taxpayers

2017 property taxpayer fairness legislation was intended to level the playing field between taxpayers and county assessors, and courts are now grappling with how to apply these changes. The leading case appears to be Walmart's appeal of its 2018 Pulaski County assessments. The taxpayer received an adverse decision in county court, and that decision has now been appealed for de novo proceedings in circuit (trial) court. While the "dark store" issue is somewhat specific to retail, how the courts apply the equalized burdens of proof in practice is of importance to all taxpayers. [More]

"Virtual Presence" Nexus: Wayfair Overturns Historic Quill Physical Presence Nexus Rule

The much-anticipated United States Supreme Court Wayfair opinion has been issued. In a 5-4 decision, the Court overturned its historic physical presence nexus standard, to be replaced by an inquiry into whether the taxpayer has availed itself of the privilege of carrying on business in the state. The thresholds in the South Dakota tax system were found to meet this test, and the state's tax simplification as part of the Streamlined Sales and Use Tax Agreement (SSUTA) meant that there would not be an undue or discriminatory burden on out-of-state businesses. The case was reversed and remanded for further proceedings, which leave open the option of further challenges but likely will put the South Dakota economic nexus law into effect. [More]

Arkansas Supreme Court Says That Erroneous Assessment Property Tax Appeal Can Proceed

The Arkansas Supreme Court recently issued a pro-taxpayer decision recognizing an erroneous assessment property tax refund claim as a distinct action from a valuation dispute. DeSoto Gathering Company, LLC v. Hill ("DeSoto II"), 2018 Ark. 103 (Mar. 29, 2018). While not an earth-shaking decision, it is heartening to see the Arkansas Supreme Court recognize that an erroneous assessment claim is a viable independent action. [More]

Flash Inventory? Thoughts on the FLIS Enterprises Withdrawals from Stock Analysis

While the Arkansas Supreme Court's recent decision in Walther v. FLIS Enterprises, Inc., 2018 Ark. 64 was mostly watched for its ruling that sovereign immunity is not jurisdictional, it went on the grapple with the substantive tax question: whether the tax base for gross receipts tax on a fast food franchisee's free meals given to employees is the cost of the ingredients or the menu price of the meals. The Supreme Court reversed the trial court and ruled in favor of the Department that the tax base is the menu price. [More]