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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Northwest Medical Imaging, Inc. v. State, Dept. of Revenue (12/29/2006) sp-6087
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| NORTHWEST MEDICAL | ) |
| IMAGING, INC., | ) |
| ) Supreme Court No. S- 11984 | |
| Appellant, | ) |
| ) Superior Court No. | |
| v. | ) 1JU-04-307 CI |
| ) | |
| STATE OF ALASKA, | ) |
| DEPARTMENT OF REVENUE, | ) O P I N I O N |
| ) | |
| Appellee. | ) No. 6087 - December 29, 2006 |
| ) | |
Appeal from the Superior Court of the State
of Alaska, First Judicial District, Juneau,
Patricia A. Collins, Judge.
Appearances: Robert K. Reges, Jr., Reges &
Boone, LLC, Douglas, for Appellant. Michael
A. Barnhill, Assistant Attorney General, and
David W. M rquez, Attorney General, Juneau,
for Appellee.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
CARPENETI, Justice.
I. INTRODUCTION
I. May Alaska tax a corporation that was administratively
dissolved by its state of domicile but that continued to conduct
business in Alaska? The corporation says no. First, it asserts
that no court has subject matter jurisdiction to determine
whether taxes may be assessed on a dissolved corporation.
Because Alaska courts have subject matter jurisdiction to
determine the taxability of corporate entities, we reject this
jurisdictional challenge.
Second, the corporation argues that the State of Alaska
may not tax a corporation that has been administratively
dissolved by another state. The Office of Tax Appeals agreed,
concluding that, because the corporation had been dissolved in
Washington, it no longer existed for tax purposes in Alaska.
Because Alaska courts have subject matter jurisdiction to
determine taxability of corporations operating in this state, and
because the corporation did not cease to exist for Alaska
corporate income tax purposes, we affirm the superior courts
decision to reverse the Office of Tax Appeals.
II. FACTS AND PROCEEDINGS
A. Factual History
Northwest Medical Imaging, Inc. (Northwest Medical) was
incorporated under the laws of the State of Washington in 1988.
Dr. James Pister was the sole director and shareholder of the
corporation. Effective February 21, 1990, the corporation was
administratively dissolved by the State of Washington for failure
to file its initial list of officers and directors and for
failure to pay the annual license fee required by the state. The
parties have stipulated that Dr. Pister did not become aware of
this dissolution until December 1998.
Despite its administrative dissolution Northwest
Medical continued to act as a corporation between 1990 and 1998.
Corporate actions included entering written contracts in the name
of the corporation to provide radiology services to health care
organizations and hospitals; contracting with service providers
such as accountants, financial consultants, and lawyers;
contracting with medical organizations; maintaining a corporate
checking account in Alaska; filing Alaska and federal corporate
income tax returns; leasing a vehicle in the corporate name; and
filing the underlying appeal of the tax deficiency assessed by
Alaska for corporate income taxes. Dr. Pister admitted during
argument before the Office of Tax Appeals that business
transactions were conducted under the name Northwest Medical
Imaging, Inc. for the period 1990 through 1998.
In 1999 Northwest Medicals accountants learned of the
corporations administrative dissolution. Upon learning of the
dissolution, Dr. Pister instructed the accountants to wind up the
corporate accounts and tax filings as existing contracts
expired. By 2000 all of the corporate contracts had expired
except one. Dr. Pister sold that contract and stopped doing
business under the name Northwest Medical Imaging, Inc.
The Alaska Department of Revenue now seeks to collect
state corporate income taxes for business conducted by between
1991 and 1995. The department claims the corporation owes the
state $88,665 in taxes, plus interest and penalties. Northwest
Medical argues that it was not subject to Alaska corporate taxes
for the years following its dissolution.
B. Procedural History
The Office of Tax Appeals (the Office of Tax Appeals or
OTA) concluded as a matter of law that once Northwest Medical was
dissolved, it could no longer be considered a corporation for
purposes of assessing corporate income taxes. OTA determined
that, post-dissolution, Northwest Medical lacked the
characteristics necessary for classification as a corporation for
income tax purposes. Accordingly, OTA abated the tax assessment
against the corporation.
Upon the departments appeal, the superior court
reversed and remanded. The superior court first noted that the
purported dissolution was supported by fairly weak evidence,
including an undated document from the Washington Secretary of
States office, representations of counsel that the corporation
was dissolved, references to the State of Washingtons web page,
and a computer print-out, apparently from that web page. The
court held that the finding of administrative dissolution on the
basis of this evidence was premature. The court also determined
that, even if the dissolution was effective, OTAs legal
conclusions were flawed. In contrast to OTA, the superior court
concluded that a dissolved corporation may continue to exist as a
corporation, depending on the factual situation presented. The
superior court remanded for OTA to consider whether Northwest
Medical could be subject to taxation despite its dissolution.
On remand, OTA again concluded that the corporation did
not exist for tax purposes from 1991 to 1995. Applying
Washington law, it determined that Northwest Medical had been
effectively dissolved on February 21, 1990 the date on which the
certificate of administrative dissolution was issued. It then
concluded that, under Washington law, the corporation legally
ceased to exist as of the date of administrative dissolution.
It further stated that under federal law, the corporation ceased
to exist when it was administratively dissolved under Washington
law. According to OTA, because the corporation ceased to exist
immediately upon dissolution, it did not exist for tax purposes
after 1990. Thus, OTA abated the taxes and penalties assessed
against Northwest Medical for tax years 1991 through 1995.
The Department of Revenue again appealed. Northwest
Medical filed a motion to dismiss the departments appeal on the
ground that it was untimely. The superior court denied the motion
to dismiss, holding that although the state failed to appeal
within thirty days of service of OTAs decision, a conflicting
statute justified relaxation of the thirty-day limit of Appellate
Rule 602. Alaska Statute 43.05.480(a) provides that appeals of
tax agency decisions must be filed within thirty days of the date
the decision becomes final, and AS 43.05.465(f) states that such
decisions do not become final until sixty days after service,
allowing a total of ninety days to appeal.
On the merits, the superior court again reversed OTA,
stating:
A business that holds itself out to the
Alaskan public as a corporation, files Alaska
and federal taxes as a corporation, takes no
steps to amend federal corporate tax returns
at the same time it is claiming not to be a
corporation for Alaska corporate tax
purposes, and initiates a tax protest in the
corporate name in Alaska may not effectively
use its non-payment of corporate taxes in
Washington (which at least in part caused
dissolution) to avoid corporate taxes in
Alaska.
The court explained that, despite Northwest Medicals
administrative dissolution, it actively operated as a de facto
corporation for many years after the effective date of its
dissolution. The court held that, despite administrative
dissolution by a foreign state, Northwest Medical remained liable
for Alaska corporate income taxes. The superior court again
questioned the validity of the dissolution, but did not make any
specific findings in that regard. It also disagreed with OTAs
conclusion that Washington corporations immediately cease to
exist after dissolution. Finally, the superior court concluded
that, even if Northwest Medical had been administratively
dissolved and ceased to exist under Washington law, it still
acted as a business entity in Alaska, subjecting it to Alaska
corporate taxes.
Northwest Medical appeals. Its principal point on
appeal is that the courts of this state do not have subject
matter jurisdiction to consider claims brought against a defunct
corporation. We conclude that the courts of Alaska have subject
matter jurisdiction to consider the taxability of corporations
operating in this state. We hold that OTA erred in concluding
that Northwest Medical ceased to exist as a corporate entity for
Alaska corporate income tax purposes. Finally, we conclude that
the superior court did not abuse its discretion in hearing the
case over the corporations objection that the appeal was
untimely.
III. STANDARD OF REVIEW
When the superior court acts as an intermediate court
of appeal in an administrative matter, we independently review
and directly scrutinize the merits of the [agency]s decision.1
In reviewing the Office of Tax Appealss decision, we apply the
substantial evidence test for questions of fact and the
substitution of judgment test for questions of law.2
Whether an agency acting in a judicial capacity or the
superior court has subject matter jurisdiction is a question of
law, subject to de novo review by this court.3
We review for abuse of discretion the superior courts
decision to waive procedural rules and accept a partys untimely
appeal.4
IV. DISCUSSION
We begin our analysis by examining the subject matter
jurisdiction of the Office of Tax Appeals, the superior court,
and the Department of Revenue. We next consider whether
Northwest Medical is liable for corporate income taxes under
Alaska law. Finally, we discuss whether the superior court
abused its discretion in entertaining the second appeal.
A. Subject Matter Jurisdiction Was Appropriately Asserted
in this Case.
1. The Office of Tax Appeals and the superior court
have subject matter jurisdiction.
Northwest Medicals primary stated purpose in this
appeal is to challenge the subject matter jurisdiction of state
adjudicatory bodies over a defunct corporation. This challenge
is based on its claim that subject matter jurisdiction is absent
because the corporation did not exist for the time period during
which the department seeks to tax it.5
Subject matter jurisdiction is the legal authority of a
court to hear and decide a particular type of case.6 The
doctrine of subject matter jurisdiction applies to judicial and
quasi-judicial bodies to ensure that they do not overreach their
adjudicative powers.7 Subject matter jurisdiction is a
prerequisite to a courts ability to decide a case: [A] court
which does not have subject matter jurisdiction is without power
to decide a case.8 Under article IV, section 1, of the Alaska
Constitution, The jurisdiction of courts shall be prescribed by
law. Thus, where the legislature has authorized a court to enter
judgment in a particular class of cases, the court properly has
subject matter jurisdiction.9
The jurisdiction of the Office of Tax Appeals to hear
tax disputes has been clearly and explicitly prescribed by the
legislature. Before OTAs creation, controversies between
taxpayers and the Department of Revenue were adjudicated
administratively within the department.10 In 1996 the legislature
created OTA, removing the adjudicative role from elsewhere in
the department and giving this new quasi-judicial agency the duty
of resolving tax disputes.11 Because the issue of whether a
corporation exists for tax purposes is just such a tax dispute,
OTA has subject matter jurisdiction over the question raised in
this case.
The superior court acts as an intermediate court of
appeal in administrative matters. Alaska Statute 22.10.020(d)
declares that the superior court has jurisdiction in all matters
appealed to it from . . . [an] administrative agency when appeal
is provided by law. Alaska Statute 43.05.480 provides for
judicial review of final administrative decisions made by OTA.
This statute confers subject matter jurisdiction on the superior
court under the present circumstances.
Because OTA and the superior court have subject matter
jurisdiction under the relevant statutes, we deny Northwest
Medicals jurisdictional challenge.
2. The Department of Revenue has jurisdiction to
adjudicate tax assessments.
Although Northwest Medical describes its jurisdictional
challenge as against OTA and the superior court, it also directs
its protest against the Department of Revenues ability to assess
and enforce taxes. Northwest Medical contends that the
department lacks judicial authority to levy and enforce tax
assessments and penalties.
Alaska Statute 43.05.010(7) specifically confers upon
the Department of Revenue the authority to hold hearings and
investigations necessary for the administration of state tax and
revenue laws. Alaska Statute 43.05.010(8) further grants the
department the responsibility to hear and determine appeals of a
matter within the jurisdiction of the Department of Revenue and
enter orders on the appeals that are final unless reversed or
modified by the courts.12 The department is also required by AS
43.05.010(14) to issue warrants for the collection of unpaid tax
penalties and interest and take all steps necessary and proper to
enforce full and complete compliance with the tax, license,
excise, and other revenue laws of the state.
Because the legislature has conferred assessment and
adjudicatory duties upon the Department of Revenue, Northwest
Medicals jurisdictional challenge against the department must
fail.
B. Northwest Medical Did Not Cease To Exist as a Taxable
Corporate Entity.
Although our decision regarding subject matter
jurisdiction resolves the only substantive issue that Northwest
Medical directly appealed, we may consider issues not preserved
for appeal if the issues were raised and briefed below.13 Both
parties have briefed the underlying question in this case, which
is whether the state can tax a dissolved corporation that
continues to act as a business. The Office of Tax Appeals and
the superior court have both provided careful opinions, but they
reach opposite results. In order to resolve this conflict, we
address the question whether Northwest Medical ceased to exist as
a corporate entity for purposes of taxation by the State of
Alaska.
1. OTA erred in applying Washington state law to
determine that Northwest Medical did not exist for
taxation purposes.
OTA asserted that federal courts consider the statutory
and common law of the corporate domicile in determining whether a
corporate taxpayer has dissolved and still holds valuable assets.
Because Northwest Medical was domiciled in Washington, OTA
applied Washington law and concluded that, under that states law,
once the corporation was administratively dissolved it ceased to
exist for taxation purposes.
However, OTA mistakenly assessed the extent to which
federal courts defer to the law of the domiciliary state.
Indeed, the case upon which OTA relied for its assertion that
Washington law controlled, United States v. McDonald & Eide,14
actually makes clear that state law is not determinative:
[B]ecause there is no body of federal common
law on corporations, analysis of state law is
sometimes necessary to fill in the
interstices. Nevertheless, state law is not
controlling. Reference to the statutory and
common law of the corporate domicile may be
useful in determining whether a corporate
taxpayer has dissolved or still holds assets.
The extent of its utility depends, however,
on its consistency with the purposes of the
federal tax law.[15]
Is the decision of OTA consisten[t] with the purposes
of federal tax law? Federal Treasury Regulation 1.6012-2(a)(2)
(as amended in 2006) governs the cessation of corporate existence
for federal tax purposes. The regulation states in part:
A corporation is not in existence after it
ceases business and dissolves, retaining no
assets, whether or not under State law it may
thereafter be treated as continuing as a
corporation for certain limited purposes
connected with winding up its affairs, such
as for the purpose of suing and being sued.
In other words, dissolution alone is not enough to cause a
corporation to cease to exist for tax purposes the cessation of
business and a lack of assets are also required. Because this
federal regulation provides clear guidance for determining the
existence of dissolved corporations, and hence their taxability,
there are no interstices that need be filled by state law. We
therefore conclude that OTA erred in relying on Washington law to
determine whether Northwest Medical existed for federal, and
derivatively Alaska, taxation purposes.
2. Because Alaska law adopts federal law regarding
corporate taxation, and because under federal law
Northwest Medical remained a corporation despite
its dissolution, Northwest Medical is subject to
Alaska corporate taxes.
Alaska law generally incorporates federal tax law
regarding corporations.16 Accordingly, we must rely on federal
law to determine whether Northwest Medical continued to exist for
tax purposes after it was administratively dissolved. As noted
above, death of a corporation for federal, and hence Alaska, tax
purposes requires (1) cessation of business; (2) dissolution; and
(3) lack of any retained assets.17 The Department of Revenue
concedes that Northwest Medical was administratively dissolved in
1990. Thus, to decide whether the corporation remained a
corporate entity for tax purposes, we must determine whether it
ceased doing business and what assets, if any, it retained.
OTA relied on Washington state law to conclude that
Northwest Medical had ceased doing business because, once the
corporation was dissolved, it could not enter into any contracts
unrelated to winding up and dissolution. Consequently, any new
contracts or leases entered into under the corporate name were
rendered Dr. Pisters personal responsibility regardless of the
fact that he purported to act for the corporation when he
executed them.
OTA also found that Northwest Medical retained only
the most minimal of assets after dissolution. According to that
office, at the time of dissolution Northwest Medical had no long-
term contracts (because Dr. Pister was providing medical
radiology services on a per-job basis) and owned only one Xerox
copier, one computer, two or three hand-held tape recorders, and
a few medical books, with a total value of $3,600.
OTA looked to United States v. McDonald & Eide,18 Cold
Metal Process Co. v. Commissioner,19 and Commissioner v. Henry
Hess Co.20 in concluding that, like the corporations in those
cases, Northwest Medical had neither sufficient assets nor the
ability to conduct business to be liable for federal taxes. Yet,
as the superior court noted, each of those decisions involved
corporations that had already been fully liquidated, with all
debts and assets distributed to the shareholders at the time
taxes were assessed.21 The corporations had ceased all activities
in the corporate name by the time tax liability became an issue.
In contrast, the present case addresses the situation in which a
corporation continues in every respect to act as it previously
acted, despite its dissolved status.
Unlike the corporations in McDonald, Cold Metal, and
Henry Hess, Northwest Medical continued to earn income and to
make contracts after it was dissolved. The parties stipulated
that business transactions were conducted under the name
Northwest Medical Imaging, Inc., including the maintenance and
use of bank accounts; contracting with physicians; contracting
with service providers such as accountants, financial consultants
and lawyers; contracting with medical organizations; and leasing
vehicles. These actions indicate that the corporation did not
cease its business operations. Under federal law, a corporation
does not cease to exist just because it has been dissolved; it
must also cease all business activity and divest itself of all
assets. Northwest Medical, although dissolved, continued to
contract and provide services under its corporate name.
Moreover, contrary to OTAs conclusion, several cases
suggest that corporate dissolution does not automatically
insulate a corporation from corporate tax liability. OTA failed
to address these cases, which were highlighted by the superior
court. For example, in Hill v. Commissioner,22 the United States
Tax Court stated:
For federal income tax purposes, the
annulment of a corporations charter does not
necessarily have the effect of discontinuing
the corporate entity. If a corporation
retains assets, even though under State law
its legal existence has been terminated and
the corporation is in the process of
liquidation, it will be treated as a
continuing taxable entity.[23]
Similarly, in Hersloff v. United States,24 the Court of Claims
explained that after dissolution the corporation-in-liquidation
continues for federal income tax purposes as a taxable entity in
those instances in which its affairs are substantially unsettled,
it possesses, sells or seeks assets, or its liquidating agents
carry on any substantial activities on its behalf.25 These cases
are more factually relevant than those relied upon by OTA, and
they lead to a very different conclusion.
By maintaining active bank accounts; contracting with
physicians, service providers, and medical organizations; and
leasing vehicles, Northwest Medical continued to conduct
business. The outstanding contracts and the leased vehicles
constitute significant business assets. Consequently, we hold
that, although the corporation was administratively dissolved,
it continued to exist for purposes of taxation. OTA erred in
holding that under federal and Alaska law Northwest Medical was
not taxable post-dissolution.
3. OTAs decision would lead to inequitable results.
OTA acknowledged in its first opinion that the result
of its decision was undesirable. It stated, Concluding that NWMI
is not liable for Alaska corporate income taxes under these
circumstances is troubling because it seems to reward Dr. Pister
for conduct that, at best, was negligent with respect to business
and tax matters. Nonetheless, OTA held firm to its conclusion,
apparently relying in part on the notion that Dr. Pister could be
held personally liable for the actions of the dissolved
corporation. Citing White v. Dvorak,26 OTA stated that those new
post-dissolution contracts and leases were rendered Dr. Pisters
personal responsibility regardless of the fact that he purported
to act for the corporation when he executed them.
It is true that the court in Dvorak held that the
shareholder of an administratively dissolved corporation could
sue personally and individually to enforce a contract.27
However, the court emphasized the fact that the shareholder acted
on behalf of the corporation while knowing that it had been
dissolved.28 Quoting the relevant statute, it stated, All persons
purporting to act as or on behalf of a corporation, knowing there
was no incorporation under this title, are jointly and severally
liable for liabilities created while so acting . . . .29 The
court thus implied that an individual must act knowingly in order
to be individually liable. It did not analyze the result if the
party was unaware of the corporations dissolved status.
The Washington Supreme Court addressed that question in
Equipto Division Aurora Equipment Co. v. Yarmouth,30 holding that
the imposition of personal liability requires actual knowledge
that there was no incorporation.31 In that case the court
reversed judgments finding an individual personally liable for
debts incurred in the name of a corporation that had been
dissolved at the time the contracts were made.32 In the present
case, as in Equipto, the sole shareholder, director, and officer
of the corporation alleged that he acted in a good faith belief
that the corporation was intact.33 Under the Equipto framework,
Dr. Pister would not be personally liable for the debts of
Northwest Medical because he did not know that the corporation
had been dissolved. Consequently, OTAs decision to alleviate the
tax burden of the corporation would mean that neither the
corporation nor Dr. Pister individually could be held liable for
any taxes, despite the fact that the corporation continued to
operate and earn income.
We addressed the inequity of such a result in
University of Alaska v. Thomas Architectural Products, Inc.34 In
that case, Thomas, a subcontractor whose corporation had been
administratively dissolved, was sued for providing defective
materials.35 Thomas argued that, because the corporation had
been dissolved, it could no longer be sued.36 We held that
Thomass failure to comply with statutory wind-up requirements
made it susceptible to suit by known creditors who did not
receive notice of dissolution.37 As we explained, it would be
absurd to conclude that after being dissolved for nonpayment of
fees, a corporation would be rewarded.38 Allowing a corporate
board to walk away from an administratively dissolved
corporation, we further stated, would deliver all of the benefits
of the dissolution statute to a corporation without any of the
protections which the statute provides to creditors.39 A system
that allowed a dissolved corporation to escape its wind-up
obligations would create an incentive for corporations to avoid
the orderly procedures set forth in the voluntary dissolution
provisions in favor of a quick exit by administrative
dissolution.40
OTAs decision in the present case would have just such
an inequitable result and would create precisely the perverse
incentives we sought to avoid in Thomas. Northwest Medical would
be rewarded for failing to comply with its corporate obligations
and responsibilities, including paying the appropriate licensing
fees, as well as taxes on income it earned in Alaska while
operating under the corporate name.
OTA distinguishes Thomas by arguing that the Department
of Revenue was not a creditor at the time Northwest Medical was
dissolved. OTA focuses on the fact that no tax claims arose
before the certificate of dissolution was issued. However,
Northwest Medical continued to operate as a business entity for
several years after the certificate of dissolution was issued.
All businesses operating in Alaska are responsible for knowing
and complying with corporate income tax laws. Thus, the
Department of Revenue was a known creditor at the time Northwest
Medical conducted business in the state.
C. The Superior Court Did Not Abuse Its Discretion in
Entertaining the Second Appeal.
OTA distributed its final decision on August 6, 2003.
The state appealed the decision to the superior court on October
31, 2003, eighty-six days later. Northwest Medical argued
before the superior court that the states appeal was untimely and
should be dismissed. The superior court concluded that, although
the state failed to appeal within thirty days of the date of
service of OTAs final decision, Appellate Rule 521 allowed the
superior court to relax the filing deadline.
Under the statutory provisions governing revenue and
taxation, an appeal must be filed within thirty days after the
decision becomes final.41 While most administrative decisions by
OTA become final sixty days after they are served,42 an OTA
decision upon reconsideration becomes final at the time it is
served.43 In its opinion in this case, OTA advised the parties
that the decision was a final administrative decision under the
statutory provision that authorizes OTA to issue orders on
reconsideration44 thus avoiding the sixty-day delay before the
order would become final but it did not explain why it believed
that provision to be applicable. It may have reached that
conclusion because the case was on remand from the superior court
and the remand order required OTA to reconsider part of its
earlier decision. But it is debatable whether reconsideration in
this context encompasses a remand from the superior court to the
OTA.
The state argues that OTAs decision was not an order
upon reconsideration because
[n]o party requested reconsideration under AS
43.05.465(b). Thus, the OTA did not have the
opportunity to order reconsideration under AS
43.05.465(c). Accordingly, the OTA decision
became final under AS 43.05.465(f)(1), 60
days after the date the decision was served.
That meant the OTA decision became final on
October 5, 2003. Under AS 43.05.480(a) the
appeal deadline was therefore November 4,
2003. The Department filed its appeal on
October 31, 2003.
Thus, the states contention is that OTA erred in its
characterization of its own decision and that the decision would
not become final until sixty days after the date it was served.
Under the states view, its appeal was timely.
We need not resolve whether OTAs decision was a
decision upon reconsideration under subsection .065(e) because
Appellate Rule 521 authorizes a court to relax the rules where a
strict adherence to them will work surprise or injustice.45 Here,
the fact that OTA viewed its decision as a decision on
reconsideration which would properly be governed by the thirty-
day filing requirement was understandably lost on the state.
The decision merely asserted the point with no analysis as to how
it actually qualified as a decision on reconsideration. Since
this issue is genuinely debatable, it is hardly surprising that
the state failed to recognize OTAs view that this was a decision
on reconsideration. But even if the decision was a decision on
reconsideration and the shorter time period applied, the superior
court found that Northwest Medical had not sufficiently supported
its allegation that it would be prejudiced if the appeal were
accepted. Further, the state demonstrated that it would suffer
prejudice if the appeal were dismissed because it would be denied
the substantive opportunity for review. Under these
circumstances, it was not an abuse of discretion for the superior
court to entertain the appeal.46
V. CONCLUSION
Because the Office of Tax Appeals and Alaska courts
have subject matter jurisdiction to determine whether an active
but dissolved corporation may be taxed, we reject Northwest
Medicals jurisdictional challenge. Because the superior court
did not abuse its discretion in accepting the departments appeal
and because the corporation, although administratively dissolved
by the State of Washington, did not cease to exist as a corporate
entity for purposes of taxation by Alaska, we AFFIRM the superior
courts decision requiring Northwest Medical to pay the assessed
taxes plus interest and penalties.
_______________________________
1 Alyeska Pipeline Serv. Co. v. DeShong, 77 P.3d 1227,
1231 (Alaska 2003).
2 State, Dept of Revenue v. DynCorp, 14 P.3d 981, 985
(Alaska 2000).
3 Hydaburg Coop. Assn v. Hydaburg Fisheries, 925 P.2d
246, 248 (Alaska 1996).
4 Commercial Fisheries Entry Commn v. Apokedak, 606 P.2d
1255, 1258 (Alaska 1980).
5 Although Northwest Medical did not raise a
jurisdictional challenge until its second appeal to the superior
court, subject matter jurisdiction may be raised as an issue at
any point during the proceedings. Hydaburg Coop., 925 P.2d at
248.
6 Erwin Chemerinsky, Federal Jurisdiction 257 (3d ed.
1999).
7 See, e.g., Marley v. State, Dept of Labor &
Industries, 886 P.2d 189, 192 (Wash. 1994) (A tribunal lacks
subject matter jurisdiction when it attempts to decide a type of
controversy over which it has no authority to adjudicate.);
Gilbert v. Gladden, 432 A.2d 1351, 1353-54 (N.J. 1981) (subject
matter jurisdiction involves a threshold determination as to
whether the court is legally authorized to decide the question
presented).
8 Wanamaker v. Scott, 788 P.2d 712, 714 n.2 (Alaska
1990).
9 Rodriguez v. Rodriguez, 908 P.2d 1007, 1011 (Alaska
1995).
10 State, Dept of Revenue v. DynCorp, 14 P.3d 981, 984
(Alaska 2000). See former AS 43.05.240.
11 DynCorp, 14 P.3d at 984. See ch. 108, preamble, SLA
1996; AS 43.05.405, AS 43.05.435. AS 43.05.405 provides that
[t]he office of tax appeals has original jurisdiction to hear
formal appeals from informal conference decisions of the
Department of Revenue under AS 43.05.240.
12 AS 43.05.010(8) is limited to informal conference
decisions of the Department of Revenue made pursuant to AS
43.05.240 (delineating the procedure by which an aggrieved
taxpayer provides the department notice of its grievance).
Formal appeals are heard by the Office of Tax Appeals (AS
43.05.405-.499) or the Office of Administrative Hearings (AS
44.64.030). See ch. 163, 62, 97, SLA 2004, amending AS
43.05.010(8) effective July 1, 2005.
13 See, e.g., Alderman v. Iditarod Props., Inc., 104 P.3d
136, 141 n.17 (Alaska 2004) (explaining that failure to include
issue in statement of points on appeal does not bar consideration
of issue when it has been raised before trial court and fully
briefed to this court); Native Village of Eklutna v. Bd. of
Adjustment, 995 P.2d 641, 646 (Alaska 2000) ([T]he relevant
question is not whether an issue is stated verbatim in a
statement of points on appeal, but rather whether the court and
the opposing party are fully informed as to the matter at
issue.). See also Alaska R. App. P. 204(e): The appellate court
will consider only points included in the statement [of points],
and points that the court can address effectively without
reviewing untranscribed portions of the electronic record.
14 865 F.2d 73 (3d Cir. 1989).
15 Id. at 76.
16 AS 43.20.210(a); AS 43.20.160(c); AS 43.20.300(b).
17 Treas. Reg. 1.6012-2(a)(2) (as amended in 2006).
18 865 F.2d 73 (3d Cir. 1989).
19 247 F.2d 864 (6th Cir. 1957).
20 210 F.2d 553 (9th Cir. 1954).
21 McDonald, 865 F.2d at 74, 76; Cold Metal, 247 F.2d at
868; Henry Hess, 210 F.2d at 557.
22 66 T.C. 701 (1976).
23 Id. at 705.
24 310 F.2d 947 (Ct. Cl. 1962).
25 Id. at 950.
26 896 P.2d 85 (Wash. App. 1995).
27 Id. at 87.
28 Id. at 89.
29 Id. (quoting Wash. Rev. Code 23B.02.040).
30 950 P.2d 451 (Wash. 1998).
31 Id. at 456.
32 Id. at 452.
33 Id.
34 907 P.2d 448 (Alaska 1995).
35 Id. at 449.
36 Id.
37 Id. at 450.
38 Id. at 452 (quoting Inducon Corp. v. Crowley Maritime
Corp., 771 P.2d 356, 358 (Wash. App. 1989)).
39 Id. at 452.
40 Id.
41 AS 43.05.480(a).
42 AS 43.05.465(f)(1).
43 AS 43.05.465(f)(2).
44 See AS 43.05.465(e).
45 See Owsichek v. State, Guide Licensing & Control Bd.,
627 P.2d 616, 621 (Alaska 1981).
46 See, e.g., Worthy v. State, 999 P.2d 771, 777 (Alaska
2000); Mackie v. Chizmar, 965 P.2d 1202, 1207 n.4 (Alaska1998).
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