China Manufacturers Alliance LLC v. Dept. of Rev. ( 2015 )

50 April 1, 2015 No. 7
IN THE OREGON TAX COURT
REGULAR DIVISION
CHINA MANUFACTURERS ALLIANCE LLC,
and Cheng Shin Rubber USA, Inc.,
Plaintiffs,
v.
DEPARTMENT OF REVENUE,
Defendant.
(TC 5240)
Plaintiffs (taxpayers) filed a complaint requesting a declaratory judgment
that they were protected from taxation by the state of Oregon by reason of a
federal statute and provisions of the Constitution of the United States. The com-
plaint was filed after Defendant Department of Revenue (the department) had
begun to investigate whether taxpayers had a duty to file tax returns in Oregon.
Granting the department’s motion to dismiss, the court ruled that while the Tax
Court has the authority to issue declaratory judgments, it has concluded that
actions for declaratory relief should not be continued where there are other pro-
cedures available, especially when a procedure available to a plaintiff is to chal-
lenge action of the department or other government in the Magistrate Division
of the Tax Court.
Submitted on Defendant’s Motion to Dismiss.
James C. Strong, Assistant Attorney General, Department
of Justice, Salem, filed the motion for Defendant Department
of Revenue (the department).
Stephanie E.L. McCleery, K & L Gates LLP, Portland,
filed a response for Plaintiffs (taxpayers).
Decision for Defendant rendered April 1, 2015.
HENRY C. BREITHAUPT, Judge.
This matter is before the court on the motion of
Defendant (the department) to dismiss the complaint of
Plaintiffs (taxpayers). Neither party has requested a hear-
ing on the motion pursuant to Tax Court Rule (TCR) 14 F(1).
The complaint in this Corporation Excise Tax case
seeks a declaratory judgment that they are protected from
taxation by the state of Oregon by reason of a federal statute
and provisions of the Constitution of the United States.
Cite as 22 OTR 50 (2015) 51
The complaint was filed after the department
began to investigate whether taxpayers had a duty to file
tax returns in Oregon. Just prior to formal assessments of
tax by the department, taxpayers brought this action.
The Tax Court has the authority to issue declaratory
judgments. However, this court has concluded that actions
for declaratory relief should not be continued where there
are other procedures available. That is especially true when
a procedure available to a plaintiff is to challenge action
of the department or other government in the Magistrate
Division of this court.
In Wynne v. Dept. of Rev., 342 Or 515, 156 P3d 64
(2007), the Oregon Supreme Court acknowledged the legis-
lative purpose in having tax disputes proceed, in most cases,
through the Magistrate Division of this court.
The motion of the department is granted. The
motions of taxpayers to strike and for sanctions and the
department’s request for sanctions are denied.
Counsel for the department is directed to submit a
form of judgment. Now, therefore,
IT IS ORDERED that Defendant’s Motion to
Dismiss is granted.