Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales And Use Tax Court Decisions

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Mantz v. State Board of Equalization . . . (2003)

The Bankruptcy Code Vests a Bankruptcy Court with Subject Matter Jurisdiction to Determine the Amount and Validity of a Tax Assessment Against a Debtor

The debtors filed a chapter 11 bankruptcy petition to, among other things, challenge the Board's redetermination of a sales tax deficiency. When Board staff filed a proof of claim in the debtors' chapter 11 case for the sales tax deficiency, the debtors objected to the Board's proof of claim. The bankruptcy court dismissed the debtors' objection on the basis that it could not be challenged because it had previously been redetermined by the Board. On appeal, the Ninth Circuit Court of Appeals held that 11 U.S.C. § 505(a)(2)(A) did not deprive the bankruptcy court of subject matter jurisdiction to determine the debtors' state tax liability because the debtors' state tax dispute was still pending before the Board when the debtors filed for bankruptcy. Because 11 U.S.C.S. § 505(a)(1) plainly authorized the bankruptcy court to determine the debtor's tax liability, the bankruptcy court was not required by 28 U.S.C.S. § 1738 to give preclusive effect to the Board's state tax liability determination. Mantz v. State Board of Equalization (2003) 343 F3d 1207.