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Tax

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Overview

Stoll Keenon Ogden's Tax practice advises businesses and individuals on all aspects of local, state and federal taxation, including tax planning, audits, administrative hearings and trials.

Our seasoned attorneys are dedicated to the individual needs of each client, and we work as a team to resolve the often complicated and intimidating tax issues that individuals and businesses face. Several of our tax attorneys have been recognized by The Best Lawyers in America for Tax Law.

We regularly assist clients with:

  • Corporate and individual income taxes
  • Sales and use taxes
  • Property taxes
  • Tobacco excise taxes
  • Insurance premium taxes
  • Natural resource severance taxes
  • License taxes
  • Motor vehicle and real estate transfer taxes
  • Utility gross receipts license taxes
  • Occupational license taxes
  • Lodging taxes
  • Motor & special fuel taxes
  • Section 1031 exchanges
  • Section 1033 tax-deferred condemnations/involuntary conversions
  • ESOP stock purchase transactions
  • Legislative & regulatory changes
  • Tax credits, exemptions and incentives
  • New Markets Tax Credit (NMTC) program
  • Community Development Entity (CDE) certification
  • Incentive planning

Work Highlights

Coal Severance Tax

Successful resolution in 2017 of coal severance tax assessments issued by Kentucky Department of Revenue against coal company.

Related Practices: Tax

Public Service Company Tax

Successful resolution in 2016 of litigation before Kentucky Board of Tax Appeals reducing public service company tax assessments issued to landfill companies.

 

Related Practices: Tax

Limited Liability Entity Tax

Successfully defended client against limited liability entity tax assessment resulting in assessment being set aside.

Related Practices: Tax

Income Tax

Successfully defended audit assessments of corporation income tax resulting in $500,000 refund for client.

Related Practices: Tax

Sales and Use Tax

Successfully defended clients against sales and use tax audit assessments saving clients in excess of $3 million.

Related Practices: Tax

Property Tax

Assisted taxpayer in obtaining multi-million dollar reduction in local property taxes.

Related Practices: Tax

Sales and Use Tax

Negotiated settlement in sales tax protest for chemical company reducing assessment by several millions of dollars.

Successful resolution  in 2015 of litigation before Kentucky Board of Tax Appeals reducing assessments imposed upon purchases of computer software used in the electric utility industry.

Successful resolution in 2016 of litigation  before Kentucky Board of Tax Appeals reducing assessments against telecommunications companies by over $3 million.

Successful resolution in 2016 of assessments issued by Kentucky Department of Revenue against telecommunications companies by $17.5 million.

Related Practices: Tax

Reorganization, Refinancing and Acquisition of Major Healthcare Entity

Stoll Keenon Ogden represented a major healthcare services entity, its affiliated upstream and sister companies, its owners and its founding management team in comprehensive reorganization, refinancing and acquisition transactions totaling more than $300 million. The matters resulted in the closing of a senior secured term loan and  revolving credit facilities secured by owned senior care facilities in four states with a 9-member syndicate of commercial banks; the requisition of waivers, consents and estoppels from various property lessors on leased senior care facilities in four states; restructuring of upstream holding companies and combination of two upstream ownership groups and boards of managers; the creation of a management company; the introduction of healthcare facility management agreements; the migration of payroll and benefits for more than 7,000 employees; the related restructuring of multiple lease and debt financing and supplier relationships;  the creation and reorganization of multiple SPE organizations accompanied by extensive non-consolidation analysis and issuance of a substantive non-consolidation opinion to the lending syndicate; the exercise of purchase option and acquisition of multiple senior care facilities; the contribution of additional equity capital from the client’s majority owners; and the amendment and restructuring of multiple Master Lease and inter-creditor agreements.

IRS Audit of Estate Tax Return- Family Limited Partnership-Graegin Loan

Represented a multi-million dollar estate in an Internal Revenue Service audit of the Federal estate tax return and a family limited partnership structure. Successfully defended the validity of the family limited partnership, obtained a significant valuation discount and successfully used a Graegin loan to finance the payment of the Federal estate tax.

Related Practices: Business Services, Tax

Reorganization of Equine Business, Insurance Trust and Gift Planning

Represented a husband and wife in planning and implementing the reorganization of a multi-million dollar equine business; in the preparation of multi-generation irrevocable trusts for each of the children and the gifting of interests in the equine business on a discounted basis to the trusts; in planning and implementing a multi-million dollar life insurance trust; and in preparing and implementing a beneficiary defective irrevocable dynasty trust.

Related Practices: Business Services, Tax

Trust Reformations- Delaware Directed Trusts

Represented a corporate trustee in amending multiple 1950s trusts to be directed trusts, transferring administration of the trusts to Delaware and obtaining a private letter ruling from the Internal Revenue Service to confirm the continuing applicability of the generation-skipping tax grandfathered exempt status of the trusts.

Related Practices: Tax

Property Tax

Successfully represented several coal companies in an appeal of personal property tax assessment thereby reducing their taxes due by $4 million.

Successful resolution in 2016 of litigation before Kentucky Claims Commission  reducing real property tax assessments issued to thoroughbred race track.

Successful resolution in 2016 of tangible personal property tax assessments issued by Kentucky Department of Revenue on computer software and equipment.

Worked with the Kentucky Department of Revenue in 2016 and the landfill industry regarding repeal of the public service company tax on landfills and enactment of a new landfill property tax statutory and regulatory scheme.

 

Related Practices: Tax

Local Hotel Taxes

Successfully defended online travel companies in litigation by three local governments seeking to collect local hotel taxes. Louisville/Jefferson County Metro Govt., Lexington-Fayette Urban County Govt., et al. v. Hotels.com, L.P., et al., 590 F.3d 381 (6th Cir., 2009).

Related Practices: Tax, Class Action

Utility Gross Receipts License Tax

Successfully represented a provider of utility services in an appeal of a utility gross receipts license tax assessment that reduced their liability by $2.5 million.

Related Practices: Tax

Income Tax

Successfully represented taxpayer in refund suit based on unitary income tax filing.

Related Practices: Tax

Sales and Use Tax

Successfully defended an auto parts manufacturer in a sales and use tax audit that saved the company in excess of $5 million.

Related Practices: Tax

Planning

Advised client with respect to like-kind exchanges of multiple properties under Section 1031 of the Internal Revenue Code involving exchange proceeds in excess of $17 million.

Related Practices: Tax

Incentives

Successfully negotiated and implemented an incentive package for a new $52 million distribution center involving state income and local occupational tax credits under the Kentucky Business Investment Act program; sales and use tax refunds under the Kentucky Enterprise Initiative Act program; a 30-year state and local ad valorem (property) tax abatement; a state grant under the Economic Development Bond program; and credits and grants from the Tennessee Valley Authority.

Related Practices: Tax

Class Action, Telecommunications and Consumer Protection

SKO acted as counsel for a 175,000-member plaintiff class in U.S. District Court to challenge sales tax collection on broadband Internet access services provided by incumbent local exchange carrier. The Court approved settlement agreement in August 2007 that provided class members full refunds of overpayments plus interest, totaling $8.2 million. Clark v. BellSouth Telecommunications, Inc., 461 F.Supp.2d 541 (W.D. Ky. 2006).

Purchase of Gas/Food Marts

Represented an oil company in the purchase of the assets and business of six gas and food mart locations. 

Mergers & Acquisitions

We have represented a number of clients in the acquisition of thoroughbred farms and related membership interests, including verification of environmental data and private development rights.

Estate Planning & Administration

SKO administers the estates of notable horsewomen and horsemen and is actively involved in planning estates in the shifting economic climate.

Representative Engagements

Asworth Corp. v. Commonwealth of Kentucky, Finance and Administration Cabinet, Dep’t of Revenue, Nos. 2007-CA-002549 and 2008-CA-000023 (Ky. App. Nov. 20, 2009), rev. den., No. 2009-SC-000816 (Ky. Aug. 18, 2010), cert. den., No. 10-662 (U.S. Jan. 24, 2011), pet. for reh. den. (U.S. March 21, 2011)(Case of first impression in Kentucky regarding whether non-resident corporate partner without physical presence in Kentucky had nexus for purposes of Kentucky corporate income tax)

Freeman v. St. Andrew Orthodox Church, 294 S.W.3d 425 (Ky. 2009) (First impression case holding that real property owned and occupied by a church is exempt from Property Tax, but leased homes located on the property are subject to Property Tax)

DirecTV, Inc. and EchoStar Satellite, LLC. v. Mark Treesh, Comm’r, 290 S.W.3d 638 (Ky. 2009) (Challenge to extension of utility gross receipts license tax for schools to satellite providers)

Miller v. Johnson Controls, Inc., 296 S.W.3d 392 (Ky. 2009), cert. denied, __ U.S. __, 130 S. Ct. 3324, 176 L. Ed. 2d 1240 (2010) (Despite legislative enactment having retroactive effect of 10-14 years, Kentucky Supreme Court held statute did not violate the Due Process Clause)

BellSouth Telecomms., Inc. v. Farris, 542 F.3d 499, (6th Cir. 2008) (State telecommunications tax statute restricted speech in violation of the First Amendment)

King Drugs, Inc. v. Commonwealth of Kentucky, 250 S.W.3d 643 (Ky. 2008) (Medical equipment supplier entitled to sales tax exemption for purchases of certain equipment and supplies.) Counsel for Amicus Curiae, The Kentucky Medical Equipment Suppliers Association

Revenue Cabinet v. The Babcock and Wilcox Company, 203 S.W.3d 149 (Ky. App. 2005) (Manufacturer’s contingent liability for asbestos claims had to be reduced by amount of claims to be paid by insurance companies in calculating “surplus” for purposes of Kentucky’s corporation license tax)

Caterpillar Financial Services Corporation v. Indiana Dep’t of State Revenue, 849 N.E.2d 1235 (Ind. Tax. 2005) (Expanding scope of taxpayers subject to the Indiana financial institutions tax and exempt from Indiana gross income tax, Indiana adjusted gross income tax and Indiana supplemental net income tax)

Currently litigating a case before the Indiana Tax Court which will address whether Indiana’s adjusted gross income tax statutes denying deduction of foreign-source dividends when calculating net operating loss carryovers, but allowing deduction of U.S.-source dividends, violates the Commerce Clause. Caterpillar, Inc. v. Indiana Dep’t of State Revenue, Indiana Tax Court No. 49T10-0812-TA-70

Currently litigating a case before the Franklin Circuit Court which will address the constitutionality of the prohibition on local franchise fees enacted by the 2005 Kentucky Tax Modernization Act. City of Florence, Kentucky, et al. v. Lori Hudson Flanery, Secretary of the Kentucky Finance and Administration Cabinet, et al., Franklin Circuit Court Action No. 11-CI-1418 (Div. I)

Currently litigating cases before the Kentucky Court of Appeals and the U.S. Court of Appeals for the Sixth Circuit which will address the constitutionality of retroactively shortening the presumed abandonment period for traveler’s checks under Kentucky’s unclaimed property law. Mary Lassiter, Kentucky State Budget Director v. American Express Travel Related Services Company, Inc., Kentucky Court of Appeals Nos. 2007-CA-908 and 2007-CA-973 (pending); American Express Travel Related Services Company, Inc. v. Commonwealth of Kentucky, Dep’t of Treasury, et al., U.S. Court of Appeals for the Sixth Circuit, Appeal No. 12-6249

Currently litigating an adversarial proceeding before the U.S. District Court (M.D. N.C.) which will address the application of the federal excise tax on large cigars to tobacco buy-out assessments collected from customers by manufacturers and importers.  United States of America, Alcohol and Tobacco Tax and Trade Bureau v. Peter L. Tourtellot, Trustee, U.S. District Court (M.D.N.C.), Civil Action No. 1:12-cv-00413 (Bk. No. 09-50141)

Currently litigating cases before the Kentucky Board of Tax Appeals and the Franklin Circuit Court which will address the calculation of base-year Kentucky provider tax payments and the application of the hospital provider tax to federally-exempted hospital receipts. Jewish Hospital & St. Mary’s Healthcare, Inc. v. Commonwealth of Kentucky, Finance and Administration Cabinet, Dep’t of Revenue, KBTA File No. K10-R-13 and Franklin Circuit Court Action No. 201-CI-723 (Div. I) (pending); St. Joseph Health System, Inc. v. Commonwealth of Kentucky, Finance and Administration Cabinet, Dep’t of Revenue, KBTA File No. K12-R-18

Recently filed an amicus curiae brief in a case before the Kentucky Supreme Court which will address the scope of taxpayers’ right to a refund of overpaid state and local ad valorem (property) taxes. Commonwealth of Kentucky, Finance and Administration Cabinet, Dep’t of Revenue v. Cox Interior, Inc., Kentucky Supreme Court Case No. 2010-SC-000794

Industry Involvement

American Bar Association, Section of Taxation

Council on State Taxation, Practitioners Member

Fayette County Bar Association

Institute for Professionals in Taxation

Kentucky Bar Association, Tax Committee

Kentucky Coal Association, Tax Committee

Kentucky Society of CPAs, Tax Committee

Louisville Bar Association, Taxation Section

Ohio/Kentucky Chapter of the ESOP Association

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