Dentons advised Delta Air Lines, Inc in a recent case in front of the Utah Supreme Court in which the Utah Supreme Court issued its unanimous decision in Salt Lake County v. Utah State Tax Commission and Delta Air Lines, Inc. The Court’s decision ended almost six years of litigation that included the dismissal of the County’s declaratory judgment action, a trip to the Utah Supreme Court that affirmed the dismissal, a week-long COVID-mandated remote formal hearing before the Utah State Tax Commission, and an appeal of the Tax Commission decision to the Utah Supreme Court. Delta prevailed in all four matters. The County’s appeal challenged the Tax Commission’s 2017 assessment of Delta’s tangible property located in Utah. The County challenged the constitutionality of three different statutes involving the valuation of commercial airline property. Ultimately, the appeal to the Utah Supreme Court was narrowed to a challenge of only one statute. This statute directs the Tax Commission to value an airline’s aircraft using a nationally recognized aircraft valuation guide that is used by airlines, lenders and leasing companies in the purchase, sale and lease of aircraft. The aircraft valuation publication provides for a reduction in the published values when there is the sale of multiple aircraft – a “fleet” value. The statute also provides a process for a person challenging the publication’s values. If a person can show by “clear and convincing” evidence that the publication’s values do not reflect fair market value, the Tax Commission may use alternative valuation methods. The Court held in its decision that the County did not follow the procedure provided in the statute to challenge the Tax Commission’s value, therefore, the Court ruled the County failed to carry its burden of proof and declined to rule that the statute was unconstitutional.
The Dentons team was led by shareholder Gary R. Thorup (Salt Lake City) and comprised of shareholder James D. Gilson (Salt Lake City) and associate Cole P. Crowther (Salt Lake City).
