A recent ruling by the Osaka High Court has determined that the city of Muko, Kyoto Prefecture, acted unlawfully by taxing a piece of land, on which a new building was constructed by the motor company Nidec, as agricultural land while it was legally being used for a different purpose. The court concluded that the city failed to reassess the land's usage, undermining the principle of fair taxation based on current land status and utilization. The initial lawsuit alleged that the fixed asset tax was improperly assessed, resulting in a substantial loss of tax revenue.

The case centered around Nidec, formerly known as Nippon Densan, which acquired the rights to farm land in May 2020, began construction on the building in December of that year, and completed it by July 2022. During the 2021 and 2022 tax years, the city continued to tax the property at a lower rate appropriate for farmland, rather than applying a tax reflective of its actual use as a commercial site. The High Court acknowledged that by January 1 of each tax year, the land had transformed into a site for commercial use, thereby constituting grounds for a revised assessment as per the law.

The plaintiffs' legal team estimated that the city's failure to reassess the land’s tax status resulted in over 17 million yen in lost tax revenue. One of the plaintiffs, Masahiro Mizushima, expressed satisfaction with the judgment, emphasizing the importance of fair taxation for citizens and urged the city to promptly rectify the tax discrepancy and redirect the funds towards beneficial projects. Meanwhile, the city officials have refrained from providing detailed comments on the ruling, indicating that they are still evaluating the implications of the court's decision.