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State Supreme Court ruling upholds taxation of the whole, not parts

When you buy a car in Minnesota or Wisconsin, you pay a sales tax on the price of the whole vehicle. You don't, nor should you expect to, pay taxes on the purchase of every individual part that goes into that vehicle. Many experts would likely argue that such a practice is inherently impractical and perhaps represents a misapplication of state tax authority.

Still, tax disputes of this kind do develop and resolving matters can get very complicated. As most readers can appreciate, appeals are built into the legal system to provide avenues of justice for all sides in a dispute. The appellate process is not simple. Issues need to be properly documented and submitted to the proper body. Moreover, it all must be done within a time-frame set down by law. Achieving the best possible outcome requires experience and diligence.

Minnesota Supreme Court rules in favor of our client

A recent Minnesota Supreme Court decision involving our firm’s expertise offers an example of how the system can serve to benefit a taxpayer. The case involves a Minnesota manufacturer, seller and installer of industrial-grade drying systems. Court documents in the case show that the business properly collected sales taxes when it sold its freestanding wares. However, Minnesota's Tax Commissioner sought to classify the products as a type warranting additional taxes and assessed a levy and interest amounting to hundreds of thousands of dollars.

The case went before a Tax Court judge, who found the state's position unreasonable. Besides rejecting the added tax, the judge also ordered the state to pay the company's legal fees incurred because of the dispute. The state appealed, arguing that the court abused its discretion and that the company's bid for legal fees came too late. The high court disagreed noting that the request was timely and the Tax Court’s ruling was justified.

No one can guarantee the outcome of a given case. But chances of a positive outcome improve when the attorney you work with has demonstrated skill and experience. To learn if we can help in your case, contact us.

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