Trustees of the Nineteenth Street Baptist Church v. District of Columbia , 1977 D.C. App. LEXIS 396 ( 1977 )

KELLY, Associate Judge:

Appellants’ complaint against the District of Columbia disputing liability for assessed real estate taxes for fiscal year 1976 against previously exempt property was dismissed for lack of jurisdiction by the trial court because the limitations period of D.C.Code 1973, § 47-2403 (conjoined with § 47-801e) expired before the complaint was filed.¹ For the same reasons set forth by the court in its memorandum opinion, we affirm the dismissal.

Appellants purchased real property at 4606, 4608, and 4610 16th Street, N.W., from the Trustees of the Congregation and Talmud Torah B’Nai Israel on December 16, 1974. The Nineteenth Street Baptist Church had previously owned real estate at 19th and I Streets, N.W. Both properties had enjoyed identical tax exemption pursuant to D.C.Code 1973, § 47-801a:

The real property exempt from taxation in the District of Columbia shall be the following and none other:

⅜ * * * * ⅜

(m) Churches, including buildings and structures reasonably necessary and usual in the performance of the activities of the church. A church building is one primarily and regularly used by its congregation for public religious worship.

Appellants failed to give formal notice of the purchase to the Department of Finance and Revenue and no request for continued exemption was filed before the first day of the fiscal year after purchase; namely, July 1, 1975.² It is not clear from the record if or when the Nineteenth Street Baptist Church or the vendor filed the Annual Use Report with the Department as required by D.C.Code 1973, § 47-801c.³ The property was assessed by the Department and it is agreed that tax bills were mailed August 27,1975. On October 7,1975, counsel wrote to the Department informing it of the real estate purchase and requesting a tax exemption. The Department inspected the property and granted the exempt status effective July 1, 1976, (i. e., for fiscal year 1977) by letter dated December 23, 1975. Counsel wrote again to dispute liability for fiscal year 1976, and the Department responded, inartfully, on January 29, 1976, as follows:

In further response to your request for tax exemption of the above property, the action taken to place this property in an exempt status effective July 1, 1976 is consistent with the authority of the D. C. Mayor, (Commissioner) to grant such exemption.

Your attention is invited to Congregation Home of District of Columbia v. District of Columbia (1953, 92 U.S.App.D.C. 73, 202 F.2d 808).

I would also refer you to a U.S. Court of Appeals [sic] opinion rendered October 31, 1975 in National Graduate University v. District of Columbia further identified as Docket 9417. This letter reference is relevant to the issue of filing an appeal concerning the tax status of the property for fiscal year 1976.

This is to confirm Mr. Woodwells telephone conversation with you on this subject on January 22, 1976.

Appellants filed a petition protesting the assessment in Superior Court on March 18, 1976. The six-month period from the date of the mailing of the assessment terminated on February 27, 1976. After hearing argument on the District’s subsequent motion to dismiss, the court filed a formal opinion granting the motion for lack of jurisdiction.

Appellants contend here that the six-month time limitation in which to file for judicial review of the exemption status, which is jurisdictional, should be waived in this case as it was in Howard University v. District of Columbia, Super.Ct.Tax Div., No. 2319, 104 Wash.D.L.Rep. 637 (April 16, 1976).

The procedure for contesting a tax assessment of property the owner believes should be exempt is to file a petition with the Tax Division of Superior Court within six months of the date the notice of assessment was mailed. National Graduate University v. District of Columbia, D.C.App., 346 A.2d 740, 741-42 (1975). Failure to file within six months has traditionally deprived the taxpayer of judicial review. Workshop Center of the Arts v. District of Columbia, D.C.Mun.App., 145 A.2d 571 (1958); Jewish War Veterans v. District of Columbia, 100 U.S.App.D.C. 223, 243 F.2d 646 (1957); Congregational Home v. District of Columbia, 92 U.S.App.D.C. 73, 202 F.2d 808 (1953). And judicial review is the sole remedy available to the taxpayer once the Department of Finance and Revenue has made an assessment, since the Department has no authority to retroactively alter that assessment and grant an exemption. See Congregational Home v. District of Columbia, supra.

Appellants’ argument is superficially appealing, for they contend that the facts in their case are analogous to those in Howard University, supra. There, Howard University, an educational institution enjoying tax-exempt status by a specific Act of Congress (D.C.Code 1973, § 47-811), had acquired property from another tax-exempt educational institution run by the Sisters of the Holy Cross. Here, appellants, who are categorically exempt under D.C.Code 1973, § 47-801a(m), had also purchased property from another tax-exempt [religious] institution. Both Howard University and our appellants assumed there would be automatic transfer of exempt status covering the new real estate, and requested retroactive exemption by corresponding with the Department of Finance and Revenue during which period the limitations time for appeal expired. Appellants contend that the distinction in Howard University on the basis of the type of operative exemption for purposes of appellate procedure from assessment is erroneous. After analyzing the reasoning in Howard University, however, we conclude that the distinction drawn between necessary appellate procedures for a specifically-exempted property owner and a categorically-exempted property owner is justified. Specifically-exempted parties such as Howard University are excused by regulation from the ordinary rule that a written application be made for exempt status. 21 DCRR No. 74-35 at 1658, § 134(a)(5). Any real estate acquired by such parties is considered to be exempt ab initio as well so long as it is used for educational purposes. This presumption justifies allowing such parties to administratively appeal disputed assessments before litigating in court. The usual six-month limitations period to petition the court is tolled for the duration of administrative consideration. On the other hand, categorically-exempt parties must file written application for each change in real estate ownership before the first day of the next fiscal year after purchase. After assessment, the Department of Finance and Revenue is presumed to have correctly levied the tax and cannot extinguish it after the fact by administrative fiat. See Congregational Home v. District of Columbia, supra.

We concur with the trial court’s conclusion that while the equitable considerations in this case are strong they do not warrant a waiver of the limitations period which divests the Superior Court of jurisdiction in this case.⁴ Accordingly, the order dismissing the case for lack of jurisdiction is Affirmed.

1 . D.C.Code 1973, § 47-2403 provides:

Any person aggrieved by any assessment by the District of any personal-property, inheritance, estate, business-privilege, gross-receipts, gross-earnings, insurance premiums, or motor-vehicle-fuel tax or taxes, or penalties thereon, may within six months after payment of the tax together with penalties and interest assessed thereon, appeal from the assessment to the Superior Court of the District of Columbia. The mailing to the taxpayer of a statement of taxes due shall be considered notice of assessment with respect to the taxes. The court shall hear and determine all questions arising on appeal and shall make separate findings of fact and conclusions of law, and shall render its decision in writing. The court may affirm, cancel, reduce, or increase the assessment.

The six-month period is calculated from the date the assessment notice is mailed, whether or not taxes are prepaid. National Graduate University v. District of Columbia, D.C.App., 346 A.2d 740, 741^2 (1975).

D.C.Code 1973, § 47-801e provides:

Any institution, organization, corporation, or association aggrieved by any assessment of real property deemed to be exempt from taxation under the provisions of sections 47-801a, 47-801b and 47-801c to 47-801Í may appeal therefrom to the Superior Court of the District of Columbia in the same manner and to the same extent as provided in sections 47-2403 and 47-2404: Provided, however, That payment of the tax shall not be prerequisite to any such appeal.

2 . The regulations regarding exemption status are found in 21 DCRR No. 74-35 at 1643-1660, § 133 et seq. (1975). Appellants requested exemption in writing only after receipt of the tax bill. They had assumed that the exemption status would be transferred to the new realty automatically.

3 . 21 DCRR No. 74-35 at 1659, § 136 sets forth the requirement that an annual report be filed by all holders of exemptions [with certain exceptions not here relevant] by March 1 describing uses of the property during the previous calendar year.

4 . We nevertheless underscore the court’s remarks concerning the inartful manner in which the District Department of Finance and Revenue communicated with counsel about (1) the Department’s lack of power to correct a wrongful assessment once the process of assessment was completed for the fiscal year, and (2) the need to pursue timely certain appellate procedures. We trust that the District will insure that future notices from the Department of Finance and Revenue will be intelligible and informative.