Winston & Strawn has one of the most diverse state and local tax practices in the nation. Our lawyers provide services on a broad range of state and local tax issues, covering the complete gamut of state and local taxes from coast to coast, including tax planning, representation during audits, negotiated settlements, and litigation. This breadth of experience allows us to efficiently serve our clients with state and local tax issues across the nation.
Our attorneys have decades of experience representing clients with respect to issues involving corporate franchise and income taxes, sales and use taxes, real and personal property taxes, local business license taxes, gross receipts taxes, transfer taxes, local utility user taxes, local hotel taxes, parking taxes, various excise taxes, and personal income taxes including residency and other issues. Our wealth of experience and capabilities in state and local tax allows us to be highly efficient in our pursuit of superior results for our clients.
Winston’s lawyers have assisted clients in developing and implementing strategies to minimize their current and future state and local tax liabilities. In addition, our lawyers have participated with state and local tax agencies and officials in drafting legislation, regulations and other advisory materials. Our lawyers are accustomed to working closely with in-house tax directors, general counsel, and other in-house personnel to ensure that our clients are kept fully informed and involved.
When a dispute arises, our tax controversy services encompass the defense of our clients’ tax positions at all levels of the process, including during audit, before the respective administrative agency, and in litigation before the courts. In many cases, we are able to obtain a successful resolution of the dispute at the audit or administrative agency level through interaction and negotiations with the auditor or other tax officials. Where a fair resolution is not reached at the administrative level, our lawyers have litigated state and local tax matters at all levels of the judiciary, including the United States Supreme Court.
The following is a sample list of court cases that illustrates the variety of state and local tax issues that the Firm’s lawyers have recently handled.
United States Supreme Court
Hunt-Wesson, Inc. v. Franchise Tax Bd., (U.S. Supreme Ct.) (2000). Lawyers in our group represented Hunt-Wesson and secured a unanimous decision from the high Court striking down California’s franchise tax interest offset provision as unconstitutional.
Macy’s v. City and County of San Francisco, (U.S. Supreme Ct.) (2007). We filed an amicus brief in the business license tax case supporting the taxpayers petition for certiorari.
California Supreme Court
Auerbach v. Assessment Appeals Bd. No. 1 for County of Los Angeles, (Cal. Supreme Ct.) (2006). Lawyers in our group represented the taxpayer in its successful challenge to the assessor's implementation of a grandparent-to-grandchild transfer of two lessors’ interest in commercial property.
Beatrice Co. v. State Bd. of Equalization (Cal. Supreme Ct.) (1993). Lawyers in our group represented Beatrice in this case involving the sales tax liability associated with a parent corporation’s transfer of all of the assets of one of its divisions to a new subsidiary corporation in exchange for stock in the subsidiary and an assumption by the subsidiary of the division’s liabilities.
Crocker Nat’l Bank v. City and County of San Francisco, (Cal. Supreme Ct.) (1989). We represented Crocker National Bank in this, the leading case on property classification for property tax purposes. The Supreme Court ruled in our client’s favor on the primary issues involved, i.e., the standard of review of property classification findings, and the classification of computer equipment as personal property rather than fixtures.
Title Ins. & Trust Co. v. County of Riverside, (Cal. Supreme Ct.) (1989). Lawyers in our group represented the Institute for Property Taxation as amicus in this leading case defining Proposition 13’s change in ownership rules in the context of a corporate takeover.
Court of Appeal
Searles Valley Minerals, v. State Board of Equalization, (Court of Appeal) (Pending). We represent the taxpayers in this sales/use tax case involving the issue of whether coal was purchased for resale.
Soka University v. County of Los Angeles (Court of Appeal) (Pending). We are litigating the taxpayer’s exemption status and other issues in this multi-year property tax dispute.
High Desert Power Trust v. State Board of Equalization (Court of Appeal) (2007). This case involved the fair market value of a state assessed power plant, and the ability of local agencies to intervene in property tax proceedings.
Bennion v. Santa Clara County (Court of Appeal) (2007). This property tax case involved the proper interpretation of the base year value transfer allowance for qualified senior citizens.
National Holdings, Inc. v. Zehnder, Sangamon County Circuit Court, (Court of Appeal) (2007). We represented the former owner of U.S. retail grocery store chain in tax litigation stemming from the complete sale and liquidation of the U.S. grocery store business. We successfully argued that the gain from the liquidating sale should be treated as “non-business” income under Illinois law. The lower court’s decision in our client’s favor was affirmed on appeal by the Appellate Court of Illinois.
AES Alamitos, LLC v. County of Los Angeles, (Court of Appeal) (2006). Lawyers in our group represented the taxpayer in its successful defense of the trial court's valuation determination as binding on County for property tax purposes.
City of Modesto v. National Med, Inc. (Court of Appeal) (2005). Lawyers in our group represented National Med, Inc. in its successful challenge to the constitutionality of the City of Modesto’s business license tax and the City’s attempt to amend the offending ordinance retroactively.
Mason Shoe v. State Board of Equalization (Court of Appeal) (2005). We filed an amicus brief on behalf of the taxpayer in this sales tax case involving drop shipments.
Jim Beam Brands Co. v. Franchise Tax Bd. (Court of Appeal) (2005). Lawyers in our group represented Better Communications, Inc as amicus in this case involving the issue of whether gain from the liquidation of a wholly owned unitary subsidiary was business or non-business income for franchise tax purposes.
Bunker v. County of Orange (Court of Appeal) (2002). We represented Mr. Bunker in this seminal case interpreting county notice and refund responsibilities when an assessment appeals board fails to timely hear and decide a taxpayer’s application for changed assessment.
Maples v. Kern County Assessment Appeals Board (Occidental of Elk Hills, Inc.), (Court of Appeal) (2002). Lawyers in our group represented an oil and gas exploration company in its dispute involving whether unproved oil and gas reserves acquired in a closed auction are subject to property taxation under California law.
JI Aviation v. Illinois Department of Revenue (Court of Appeal) (2002). Illinois Appellate Court decision, affirming circuit court, applying substance over form doctrine to strike down proposed Illinois use tax assessment on taxpayer’s acquisition of a corporate aircraft via like-kind exchange.
Deluxe Corp. v. Franchise Tax Board (Court of Appeal) (2001). This case involved the proper apportionment of the income of a multistate group for franchise tax purposes.
Current, Inc. v. State Bd. of Equalization (Court of Appeal) (1994). Lawyers in our group represented Current, Inc. in its successful challenge to the SBE’s determination that the out-of-state mail order company had sufficient nexus with the state to require it to collect use tax on its California sales even though its parent had considerable commercial contacts within the state.
EM Sector Holdings Inc. v. State Board of Equalization (Court of Appeal) (1992). This case involved the proper application of sales tax to the reconditioning of platinum catalysts.
MCI Airsignal, Inc. v. State Bd. of Equalization (Court of Appeal) (1991). Lawyers in our group represented MCI Airsignal, Inc. in its successful challenge to the SBE’s determination that the true object of the taxpayer’s telephone paging services required the collection and remittance of sales or use tax on its transfers of paging devices to its customers.
Santa Fe Energy Co. v. County of Kern (Court of Appeal) (1991). This case involved the legal issue of whether a reassessable change in ownership had occurred in a complex corporate transaction.
Hibernia Bank v. State Bd. of Equalization (Court of Appeal) (1985). Lawyers in our group represented Hibernia Bank in this case involving the imposition of sales tax on a nonbank entity even though the economic burden fell on a state-chartered bank.
Elan Pharmaceuticals, Inc. v. Dept. of Revenue (Pending). This case in the Tennessee Chancery Court involves the issue of whether certain gains are properly characterized as business or non-business income, and whether such gain is taxable by Tennessee.
Canandaigua Wine Company, Inc. v. County of Madera, et al. (Madera County Superior Court) (Pending). We are litigating legal and valuation issues concerning the client’s property tax assessment of the winery.
Genentech, Inc. v. County of San Mateo, et al. (San Mateo Superior Court) (Pending). This property tax case involves legal and valuation issues related to the client’s biotech property.
China Basin Ballpark Comp. v. City and County of San Francisco (San Francisco Superior Court) (2006). This property tax case involved an appeal of the San Francisco Giants’ possessory interest in AT&T Park, and resulted in a significant reduction in the ballpark’s assessed value for the three years at issue.
In re Cable & Wireless USA, Inc., et al. (U.S. Bankruptcy Court, Delaware) (2005). We represented the liquidating trustee of affiliated telecommunications companies in post-confirmation Chapter 11 bankruptcy proceedings. Among the claims resolved in the case were sales, use, and property tax claims by several hundred state and local jurisdictions around the country. In scores of instances, we were successful (through negotiated settlements or contested evidentiary hearings) in persuading the taxing authorities or the bankruptcy court that tax assessments should be substantially reduced.
BW Hotel LLC v. County of Los Angeles (Los Angeles County Superior Court) (2004). Lawyers in our group successfully settled the base year value assessment for the Beverly Wilshire Hotel, obtaining a base year value reduction of $25 million.
Mammoth Pacific LP v. County of Mono, et al. (Mono County Superior Court) (2004). Lawyers in our group successfully settled valuation assessments for three geothermal power plants.
1260 BB Property LLC v. County of Santa Barbara (Santa Barbara County Superior Court) (2003). Lawyers in our group successfully settled the base year value assessment for the Four Seasons Biltmore Hotel, as well as several subsequent years.
The Newark Group, Inc., dba Newark Sierra Paperboard Corp. v. County of San Joaquin (San Joaquin Superior Court) (2002). We successfully litigated property tax refunds for a paper mill in San Joaquin.
Cincinnati Casualty Company & Affiliates v. Bower et al. (Cook County Circuit Court) (2001). Circuit Court order striking proposed income tax assessment by determining parent was operating company excluded as a matter of law from unitary insurance subsidiaries’ combined income tax return.
Westinghouse Electric Corporation v. County of Kern, (Kern County Superior Court) (1996). In this case we represented Westinghouse in litigation challenging the Kern County Assessor’s inclusion of a cogeneration power plant’s machinery and equipment in a supplemental assessment. We successfully reduced the supplemental assessment from over $77 million to $675,000. In addition, during the course of the litigation, we successfully negotiated with the assessor to obtain substantial reductions for regular assessments that followed the supplemental assessment.
Gelsar v. San Mateo County (San Mateo Superior Court) (1996-1997). This property tax case raised various legal and valuation issues involving the assessment of a shopping mall.