Administrative Decision Reminds Taxpayers that You Can Call and Talk to DFA, but Don’t Rely on Oral Advice

By T.J. Lawhon

In a case before the Arkansas Department of Finance and Administration (“DFA”) Office of Hearings and Appeals, DFA issued an Administrative Decision in Docket No. 18-211 (Mar. 12, 2018) regarding a matter of reliance upon DFA’s communication with a taxpayer. The taxpayer protested an assessment of sales tax regarding the taxability of its business transactions. The taxpayer is a retail repair and installation business, including inspection and monitoring services. DFA contented that some of the taxpayer’s transactions were taxable, but many were exempt. Specifically, DFA determined that the taxpayer had failed to collect sales tax on the cleaning/calibration and labor performed on certain personal property. [More]

In a Relief to Taxpayers, Arkansas Supreme Court Says Sovereign Immunity Is Not Jurisdictional

Today's Arkansas Supreme Court opinion in Walther v. FLIS Enterprises, Inc., 2018 Ark. 64, coupled with the Department of Finance and Administration's own restraint, provides substantial comfort that the doors to Arkansas courts remain open for taxpayers seeking judicial relief. The court held that sovereign immunity is an affirmative defense to be raised, rather than a jurisdictional requirement that the court should raise on its own. Given that the Governor and DFA have indicated that they will not raise sovereign immunity, there is a high likelihood that tax cases can continue to proceed in state court. [More]

At Oral Argument, Justices Seem Reluctant to Find Sovereign Immunity a Jurisdictional Bar

Yesterday's oral argument in Walther v. Flis Enterprises, Inc., no. CV-17-240, should provide some comfort to taxpayers concerned about losing their right to litigate disputed tax claims where the tax in question has been paid to the state. At oral argument, counsel for the Arkansas Department of Finance and Administration explained that they had wanted to bring the issue to the court's attention but were not themselves advocating for it. Without DFA advocating for sovereign immunity, the justices seemed reluctant to apply it themselves sua sponte. [More]