The partnership said it’s governed by rules surrounding affordable housing tax credits, and that means it can offer its general partner’s parent the rights to purchase the housing when it goes up for sale, typically after 15 years, when the partnership has used up all the tax credits. The regulated minimum price for such a sale to a parent company must include all taxes triggered by the sale, AMTAX said.
A related case was filed in federal court in Massachusetts as well.
In arguing that the case should be tossed, CohnReznick pointed to the test established by the U.S. Supreme Court in Grable & Sons Metal Products Inc. v. Darue Engineering & Manufacturing for determining whether federal question jurisdiction exists. AMTAX had met none of the four factors in that test, and thus the court lacks jurisdiction, the firm argued.
On top of that, CohnReznick said the related action in Massachusetts federal court has already made its way to the First Circuit, which held that disputes related to the partnership’s right of refusal and purchase option agreement with the nonprofit don’t support federal question jurisdiction.
