North River Boats v. Douglas County Assessor and Department of Revenue ( 2012 )

IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Property Tax
NORTH RIVER BOATS, INC. )
and GULF NATIONAL 8 LLC, )
)
Plaintiffs, ) TC-MD 120413N
)
v. )
)
DOUGLAS COUNTY ASSESSOR, )
and DEPARTMENT OF REVENUE, )
State of Oregon, )
)
Defendants. ) DECISION OF DISMISSAL
This matter is before the court on Defendant Department of Revenue‟s (department‟s)
Motion to Dismiss (Motion) on the ground that Plaintiffs‟ appeal was not timely filed.
Plaintiffs appeal the real market value of properties identified as Accounts R34468 and
R34484 for the 2010-11 and 2011-12 tax years. (Ptfs‟ Compl at 1.) Plaintiffs‟ Complaint was
postmarked to this court on April 24, 2012. With their Complaint, Plaintiffs attached an Order of
Dismissal from the Douglas County Board of Property Tax Appeals (board) for Account R34468
dismissing Plaintiffs‟ petition for the 2011-12 tax year because “the board lacks jurisdiction per
HB 2478.” (Id. at 2 (emphasis omitted).) Plaintiffs did not attach a board order for Account
R34484 for the 2011-12 tax year and there is no evidence that a petition was filed with the board
for Account R34484 for the 2011-12 tax year. Plaintiffs concede that no petition was filed with
the board for either account for the 2010-11 tax year. (See Ptfs‟ Resp at 2.) Plaintiffs‟
Complaint states that the properties appealed are “Industrial.” (Ptfs‟ Compl at 1.)
Plaintiffs provided property tax statements for each account for the 2010-11 and 2011-12
tax years. Account R34484 includes land only. (Ptfs‟ Ltr at 3-4, May 15, 2012.) The total real
market value of Account R34484 was $58,800 for the 2010-11 tax year and $60,000 for the
DECISION OF DISMISSAL TC-MD 120413N 1
2011-12 tax year. (Id.) Account R34468 includes both land and improvements. (Id. at 5-6.)
The improvements value of Account R34468 was $1,171,610 for the 2009-10 tax year,
$1,019,540 for the 2010-11 tax year and $1,006,990 for the 2011-12 tax year. (Id.) The total
real market value of Account R34468 was $1,292,810 for the 2009-10 tax year, $1,137,140 for
the 2010-11 tax year and $1,126,990 for the 2011-12 tax years. (Id.) “The department mailed a
Value Transmittal Sheet [] to North River Boats for the 2010-11 tax year indicating an
improvements [real market value] of $1,019,940 for account R34468.” (Def‟s Reply at 6.)
The department moves for dismissal because Plaintiffs did not timely petition the board
for the 2010-11 tax year and, although Plaintiffs filed a petition with the board for Account
R34468 for the 2011-12 tax year, Plaintiffs were required to file an appeal directly with this
court under ORS 305.403(2) and “the time for appeal ran on or around December 31, 2011.”
(Def‟s Mot at 2.) Plaintiff North River Boats responds that its appeal should be allowed because
“good and sufficient cause” exists under ORS 305.288(3) for its failure to pursue its statutory
right of appeal for both the 2010-11 and 2011-12 tax years. (See Ptf‟s Resp at 3.)
A. Statutory right of appeal
Oregon has a structured appeals system for taxpayers to follow when challenging the real
market value of their property. For most appeals, the first step is to file a petition with the
county board. ORS 309.026(2)1 (authorizing the board to hear petitions for reductions in
assessed value, real market value, and maximum assessed value); ORS 309.100(1) (authorizing
property owners and others with an interest in the property to petition the board for the types of
relief allowed under ORS 309.026); ORS 305.275(3) (precluding appeals to the magistrate
///
1
Unless otherwise noted, all references to the Oregon Revised Statutes (ORS) are to 2009.
DECISION OF DISMISSAL TC-MD 120413N 2
division if a taxpayer may appeal to the board). Taxpayers are required to file appeals with the
appropriate county board by December 31 of the tax year appealed. ORS 309.100(2).
Under ORS 305.403(1), “a taxpayer dissatisfied with the assessed or specially assessed
value of land or improvements of a principal or secondary industrial property * * * may elect to
proceed directly to the tax court.” (Emphasis added). In 2011, ORS 305.403(1) was amended to
state: “An appeal by a taxpayer dissatisfied with the assessed or specially assessed value of land
or improvements of a principal or secondary industrial property must be brought in the tax
court.” (Emphasis added). The 2011 amendments to ORS 305.403 “apply to appeals filed for
property tax years beginning on or after July 1, 2011.” Or Laws 2011, ch 111, § 4.
“ „[P]rincipal industrial property‟ and „secondary industrial property‟ have the meanings
given the terms under ORS 306.126 and include those properties appraised by the department for
ad valorem property tax purposes.” ORS 305.403(6) (2009); ORS 305.403(5) (2011). “Principal
industrial property” is defined as “any unit of industrial property having a real market value of
the improvements on the assessment roll for the preceding year of more than $5 million.”
ORS 306.126(1)(a)(A). “Secondary industrial property” is defined as “any unit of industrial
property having a real market value of the improvements on the assessment roll for the preceding
year of more than $1 million but of $5 million or less.” ORS 306.126(1)(a)(B).
Based on Plaintiffs‟ Complaint, both accounts appealed are industrial. Account R34468
was “secondary industrial property” for both the 2010-11 and 2011-12 tax years because the
“real market value of the improvements on the assessment roll for” the 2009-10 and 2010-11 tax
years was “more than $1 million but” less than $5 million. ORS 306.126(1)(a)(B). Thus, for the
2010-11 tax year, Plaintiffs were required to appeal Account R34484 to the board and were
required to appeal Account R34468 to either the board or this court; the deadline for both appeals
DECISION OF DISMISSAL TC-MD 120413N 3
was January 3, 2011.2 For the 2011-12 tax year, Plaintiffs were required to appeal Account
R34484 to the board and were required to appeal Account R34468 to this court; the deadline for
both appeals was January 3, 2012.3 Plaintiffs‟ Complaint was postmarked on April 24, 2012.
There is no evidence of any prior appeal to the board except for Plaintiffs‟ appeal of Account
R34468 to the board for the 2011-12 tax year. Plaintiffs did not timely appeal either account for
the 2010-11 tax year. Plaintiffs did not appeal Account R34484 to the board for the 2011-12 tax
year. Plaintiffs did not timely appeal Account R34468 to this court for the 2011-12 tax year.
B. “Good and sufficient cause” under ORS 305.288(3)
North River Boats appeals under ORS 305.288(3) (2011), which states:
“The tax court may order a change or correction applicable to a separate
assessment of property to the assessment or tax roll for the current tax year and
either of the two tax years immediately preceding the current tax year if, for the
year to which the change or correction is applicable, the assessor or taxpayer has
no statutory right of appeal remaining and the tax court determines that good and
sufficient cause exists for the failure by the assessor or taxpayer to pursue the
statutory right of appeal.”
ORS 305.288(5)(b) (2011) provides the applicable definition of “good and sufficient cause”:
“(A) Means an extraordinary circumstance that is beyond the control of the
taxpayer, or the taxpayer‟s agent or representative, and that causes the taxpayer,
agent or representative to fail to pursue the statutory right of appeal; and
“(B) Does not include inadvertence, oversight, lack of knowledge, hardship or
reliance on misleading information provided by any person except an authorized
tax official providing the relevant misleading information.”
1. 2010-11 tax year
John Mitchell (Mitchell) “was appointed the receiver of [North River Boats] by order of
the court on April 29, 2009.” (Ptfs‟ Resp at 3.) “Prior to the end of 2009, [North River Boats]
2
The court was closed on December 31, 2010; therefore, the statutory deadline was January 3, 2011.
ORS 174.120; Tax Court Rule (TCR) 10(A)(1).
3
December 31, 2011, fell on a Saturday and the following Monday, January 2, 2012, was a holiday.
Therefore, the statutory deadline was January 3, 2012. ORS 174.120; TCR 10(A)(1).
DECISION OF DISMISSAL TC-MD 120413N 4
operated out of four real property locations in Douglas County[.]” (Id.) “Sometime in
December 2009, [North River Boats] relocated most of its equipment and inventory” from one
location in Douglas County to another. (Id.) Following the sale of one of the four properties,
North River Boats “was once again forced to relocate to a different real property location” on or
around June 30, 2011. (Id. at 4.) For the 2010-11 tax year, North River Boats argues:
“[North River Boats] was no longer occupying the [accounts at issue] as of
January 1, 2010, and had no equipment or machinery on the [accounts at issue],
had no legal interest in the [accounts at issue] and had no relationship with the
owner of the property, Umpqua Bank and its successor, GN8, LLC. As a result,
[North River Boats] was not afforded any notice of the tax bill and had no ability
to appeal the tax assessments imposed at that time; yet that assessment established
the tax roll for the following year and contributed to the subject matter at issue in
this motion and opposition.”
(Id. at 6.)
The department responds that “changes in ownership and shifting of property are not
extraordinary circumstances beyond the control of taxpayer.” (Def‟s Reply at 5, citing
Alpenglow Construction Co. v. Multnomah County Assessor, TC-MD No 070462B (Oct 4, 2007)
(“prioritizing other business affairs does not constitute good and sufficient cause for failing to
earlier perfect appeals”).) The court agrees. Moving is not an extraordinary event and, even it if
was, it is unclear how a move in 2009 and another in 2011 prevented North River Boats from
pursuing its statutory right of appeal for the 2010-11 tax year.
North River Boats also suggests that good and sufficient cause exists because it did not
receive the 2010-11 property tax statements for the accounts at issue. The Oregon Supreme
Court has held that every taxpayer is responsible for knowing their property is taxable:
“[E]very citizen „is presumed to have known that his land was taxable, that in due
course it would be assessed, a tax levy extended against it, and it would be placed
on the tax rolls, that it was his duty to timely pay his taxes, that if he failed to do
so, his land would be offered for sale and resale at a time and place specified in
the statutes * * *.‟ ”
DECISION OF DISMISSAL TC-MD 120413N 5
Hood River County v. Dabney, 246 Or 14, 28, 423 P2d 954 (1967) (citation omitted). Property
owners are expected to know when they should receive their property tax statements. Failing to
receive a property tax statement does not excuse a taxpayer from failing to timely appeal to the
county board. See, e.g., GTB Associates Inc. v. Multnomah County Assessor, TC-MD No
000096C (Apr 24, 2000); Ford v. Marion County Assessor, TC-MD 010059E (Apr 18, 2001);
Nelson v. Lincoln County Assessor, TC-MD No 040095E (May 5, 2004). Plaintiffs have not
demonstrated good and sufficient cause for their failure to time appeal Accounts R34468 and
R34484 for the 2010-11 tax year.
2. 2011-12 tax year
Plaintiffs did not file a petition with the board for Account R34484 for the 2011-12 tax
year and Plaintiffs have not offered an explanation for their failure to timely appeal that account.
As a result, Plaintiffs‟ 2011-12 tax year appeal of Account R34484 must be dismissed.
North River Boats concedes that it “received the tax bill for 2011-2012 that is at issue in
this appeal.” (Ptf‟s Resp at 4.) North River Boat notes that the 2011-12 property tax statement
included a telephone number for the Douglas County Assessor‟s (county) office and a statement:
“THRU DEC. 15TH YOU MAY REQUEST A VALUE REVIEW BY PRODUCING
EVIDENCE THAT YOUR MARKET VALUE IS LESS THAN ABOVE[.]” (Id. at 4 (emphasis
in original).) In November 2011, Mitchell met with representatives of both the county and the
department concerning the real market value of the properties at issue. (Id. at 5.) “There was a
follow-up meeting between the parties in early December 2011, at the Salem office * * *.” (Id.)
After those meetings, Mitchell “had several conversations” with the county and the department
“regarding the assessment, taxing and appeals.” (Id.) “As a result of these discussions and the
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DECISION OF DISMISSAL TC-MD 120413N 6
notice [North River Boats] received from the [county], an appeal was filed with the [board].”
(Id.)
“At no time prior to this appeal did the [department] representative or the county
[] inform [] Mitchell * * * that an appeal would need to be filed with the
Magistrate Division given that the [property at issue] was now classified as
„secondary industrial property‟ under ORS 305.403. [] Absent this notice, there
was an implicit understanding between all parties that [North River Boats] would
appeal with the [] board.”
(Id.)
North River Boats asserts that good and sufficient cause exists for its failure to timely
pursue it statutory right of appeal with this court because its:
“[I]nteractions were solely with the county [] and [the department] representative.
At no time was [North River Boats] instructed by these state and county tax
official during their numerous encounters that the appeal of the [properties at
issue] should go directly to the tax court, not the [] board. This omission created
misleading conduct by the state that created an implicit understanding by [North
River Boats] to maintain an appeal with the [] board.”
(Id. at 7.) The department responds that “[t]axing official are not obliged to volunteer detailed
legal advice regarding appeals[.]” (Def‟s Reply at 10.)
North River Boats argues that representatives of the county and the department failed to
advise it that an appeal should be filed with this court rather than the board and that “omission
created misleading conduct by the state * * *.” (Ptf‟s Resp at 7.) The court disagrees. There is
no evidence that taxing officials of the county or the department gave “misleading information,”
either oral or written, concerning Plaintiffs‟ appeal rights. Plaintiffs‟ failure to timely pursue
their appeal of Account R34468 for the 2011-12 tax year was due to a lack of knowledge, not
reliance on misleading information from taxing officials. Plaintiffs have not demonstrated good
and sufficient cause for their failure to timely appeal Account R34468 for the 2011-12 tax year.
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DECISION OF DISMISSAL TC-MD 120413N 7
C. Conclusion
After careful consideration, the court concludes that Plaintiffs failed to timely pursue
their appeal rights for properties identified as Accounts R34468 and R34484 for the 2010-11 and
2011-12 tax years. The court finds that Plaintiffs have not identified good and sufficient cause
for their failure to timely pursue their appeal rights for the 2010-11 and 2011-12 tax years.
Defendant‟s Motion to Dismiss must therefore be granted. Now, therefore,
IT IS THE DECISION OF THIS COURT that Defendant‟s Motion to Dismiss is granted.
The Complaint is dismissed.
Dated this day of September 2012.
ALLISON R. BOOMER
MAGISTRATE
If you want to appeal this Decision, file a Complaint in the Regular Division of
the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563;
or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.
Your Complaint must be submitted within 60 days after the date of the Decision
or this Decision becomes final and cannot be changed.
This document was signed by Magistrate Allison R. Boomer on September 18,
2012. The Court filed and entered this document on September 18, 2012.
DECISION OF DISMISSAL TC-MD 120413N 8