Minnesota ~ Sales and Use Tax: Tax Court Lacked Jurisdiction to Hear Contractor’s Appeal

The Minnesota Tax Court lacked jurisdiction to hear an appeal of a sales tax assessment by a home repair and remodeling contractor because there was no appealable order. In addition, the contractor’s claim was barred by the doctrine of res judicata because the contractor had already appealed the assessment and the case was fully litigated. Furthermore, the contractor was not entitled to a refund because he had not paid sales tax to the state.

This was the contractor’s second appeal involving a sales tax assessment that was previously upheld by the Minnesota Supreme Court. In the first case, Schober v. Commissioner of Revenue (Schober 1), the state supreme court held that the contractor was properly assessed for Minnesota sales tax that he collected from customers but did not remit to the state. After the supreme court decided Schober 1, the Department of Revenue began collection efforts against the contractor and the contractor requested a refund even though he had paid no sales tax to the department.

No Appealable Order

After receiving the contractor’s formal request for a refund, the department sent the contractor a letter stating that the years at issue were covered in the Schober 1 case. In filing an appeal in the instant case, the contractor cited the department’s letter as the “order” he was appealing. The tax court held that this letter was not an order that could be appealed, and, therefore, the court lacked subject matter jurisdiction.

Res Judicata

The tax court found that all factors establishing res judicata were satisfied in the instant case. The appeal in the instant case was based on the same facts as the prior litigation; the appeal involved the same parties as the prior case; a final decision was made against the contractor/appellant in the prior case; and the appeal was heard by the tax court and the state supreme court so the contractor had a full and fair opportunity to litigate the matter.


Under statute, a refund claim is available to a taxpayer who has paid tax in excess of the taxes lawfully due. In this case, the contractor admittedly failed to pay sales tax and failed to file a return. Thus, there was nothing that could have been refunded to the contractor.

Schober v. Commissioner of Revenue, Minnesota Tax Court, No. 8352-R, March 2, 2012, ¶203-707


Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

All stories by: Wolters Kluwer Tax and Accounting