Clifford Parsons, Trustee v. Dept. of Rev. , 21 Or. Tax 331 ( 2013 )

No. 42 December 30, 2013 331
IN THE OREGON TAX COURT
REGULAR DIVISION
CLIFFORD PARSONS, TRUSTEE,
Plaintiff,
v.
DEPARTMENT OF REVENUE,
and Clackamas County Assessor,
Defendants.
(TC 5145)
Plaintiff (taxpayer) appealed from a notice of assessment and disqualification
as to farm use tax exemption in the Magistrate Division. The matter was then
specially designated to the Regular Division. Taxpayer argued that because the
notice provided by the assessor did not state the correct reason for the act of the
assessor, the notice did not begin any limitations period in respect of an appeal
to the tax court. Granting Defendants’ cross-motions for summary judgment, the
court ruled that the acts and determinations of the type of which taxpayer was
notified, whether taxpayer viewed them as correct or not and whether they were
ultimately found to be correct or not, must be challenged under ORS 305.275
within the time restrictions of ORS 305.280. As the appeal of taxpayer was taken
well beyond the expiration of both dates established under ORS 305.280, the tax-
payer’s appeal was denied.
Oral argument on cross-motions for summary judgment
was held June 26, 2013, in the courtroom of the Oregon Tax
Court, Salem.
Christopher K. Robinson, Attorney at Law, Lake Oswego,
filed the motion and argued the cause for Plaintiff (taxpayer).
Douglas M. Adair, Senior Assistant Attorney General,
Department of Justice, Salem, filed the cross-motion and
argued the cause for Defendant Department of Revenue (the
department).
Kathleen J. Rastetter, Assistant County Counsel, Oregon
City, filed the cross-motion for Defendant Clackamas County
Assessor (the county).
Decision for Defendants rendered December 30, 2013.
HENRY C. BREITHAUPT, Judge.
332 Clifford Parsons, Trustee v. Dept. of Rev.
I. INTRODUCTION
This property tax case is before the court on cross-
motions for summary judgment. The tax years at issue are
2008-09 and 2009-10.1 Plaintiff (taxpayer) complains of
actions of the Clackamas County Assessor (the assessor)
in an action in which the assessor and the Department of
Revenue (the department) are defendants.
II. FACTS
The parties have stipulated to the following facts in
this case:
(1) For the tax years 2008-09, 2009-10, 2010-11,
and 2011-12 taxpayer owned the property identified by the
assessor as Account Numbers 00798097 and 00798168 (the
subject property).
(2) The subject property contains 32.62 acres of
farmland which, up to 2008, was zoned as Exclusive Farm
Use (EFU) property.
(3) On or about 2007 taxpayer filed an application
to have the subject property annexed into the City of Canby.
The application states that the property would be zoned
light industrial upon annexation.
(4) On or about June 20, 2007, the City of Canby
passed a resolution annexing the subject property into the
City of Canby. Pursuant to the Canby Comprehensive Plan
the annexation changed the zoning of the subject property
to M-1, light industrial.
(5) Pursuant to ORS 308A.113, the assessor sent
notices (for both accounts) (the notices) to taxpayer on June 5,
2008, informing taxpayer that the subject property would be
removed from EFU special assessment.
(6) The notices inaccurately stated that the rea-
son for disqualification as “due to the discovery that the land
is no longer being used as farmland” but referenced ORS
308A.113.
1
Taxpayer initially sought relief for each of the tax years 2008-09 through
2011-12. The parties subsequently came to an accommodation regarding tax
years 2010-11 and 2011-12. Thus, this opinion addresses only the 2008-09 and
2009-10 tax years.
Cite as 21 OTR 331 (2013) 333
(7)1 Under ORS 308A.113(1)(b) the assessor was
required to change the EFU special assessment of the sub-
ject property because it was annexed into the City of Canby
and thus became zoned light industrial.
(8)1 The notices from the assessor cite ORS
308A.113 and inform taxpayer that he can appeal the deci-
sion within 90 days from the postmark date of the notices.
The notices state that a new assessed value will be calcu-
lated under Measure 50 guidelines for 2008-09.
(9)1 Taxpayer did not appeal from the notices
within 90 days.
(10) Once the subject property was removed from
special assessment pursuant to ORS 308A.113 the assessor
calculated a real market value based on the industrial zon-
ing, and calculated a new maximum assessed value under
ORS 308.156, and taxes began to collect on the subject
property.
(11) The increase in value for the subject property
reflected on the tax roll for tax years 2008-09 and 2009-10
was the result of the property being assessed as industrial
property.
(12) The assessor did not actually collect any
deferred taxes assessed against the subject property. The
notices from the assessor informed taxpayer that the taxes
would be a notation on the account as a potential tax liabil-
ity which is not collectable until the property changes to a
use inconsistent with farming.
(13) Taxpayer has not paid any taxes on the sub-
ject property after the property was removed from EFU spe-
cial assessment.
III. ISSUES
The issues in this case are:
(1) Whether taxpayer has timely appealed to this
court from action of the assessor; and
(2) If not, whether this court nonetheless has
jurisdiction to consider the matter under ORS 305.288.
334 Clifford Parsons, Trustee v. Dept. of Rev.
IV. ANALYSIS
The statutes relevant to the issues in this case are
ORS 305.275, ORS 305.280, ORS 305.288, ORS 305.560,
and ORS 308A.718.2
A. ORS 308A.718
Taxpayer invokes the provisions of ORS 308A.718,
which provide in relevant part:
“(1) The county assessor shall send notice as provided in
this section if land is disqualified under any of the follow-
ing special assessment programs:
“(a) Farm use special assessment under ORS 308A.050
to 308A.128.
“* * * * *
“(3) Within 30 days after the date that land is disquali-
fied from special assessment, the assessor shall notify the
taxpayer in writing of the disqualification and shall state
the reason for the disqualification.
“(4) Following receipt of the notification, the taxpayer
may appeal the assessor’s determination to the Oregon Tax
Court within the time and in the manner provided in ORS
305.404 to 305.560.
“(5)(a) When any land has been granted special assess-
ment under any of the special assessment laws listed in sub-
section (1) of this section and the land is disqualified from
such special assessment, the county assessor shall furnish
the owner with a written explanation summarizing:
“(A) ORS 308A.706(1)(d) (relating to change in special
assessment);
“* * * * *
“(C) The administrative act necessary under ORS
308A.724 to change the property to another classification
described in this paragraph; and
“(D) The imposition of any penalties that would result from
the disqualification if no requalification or reclassification
2
Unless otherwise noted, all references to the Oregon Revised Statutes
(ORS) are to 2009.
Cite as 21 OTR 331 (2013) 335
is made under one of the other special assessment laws
listed in this paragraph.
“(b) The written explanation required by this subsection
shall be given in conjunction either with the notice of dis-
qualification required under this section or with an order
or notice of disqualification otherwise provided by law.
“(c)(A) If no notice of disqualification is required to be
made by this section or other provision of law, the written
explanation required by this subsection shall be made by
the county assessor.
“(B) A written explanation made under this paragraph
shall be made by the assessor within 30 days of the effec-
tive date of the disqualification.”
Taxpayer argues that because the notice provided by the
assessor did not state the correct reason for the act of the
assessor, the notice does not begin any limitations period in
respect of an appeal to this court.
As to taxpayer’s first argument, the matter is one
of statutory construction and specifically whether the leg-
islature intended a purported disqualification that was
the product of procedural defects or contained substantive
errors to be void ab initio, or simply voidable. The court is of
the opinion that the statute should not be read as taxpayer
asserts, that is, as rendering the notice of disqualification
provided by the assessor void ab initio so as to not start the
running of the statute of limitations.3
The legislature was undoubtedly aware that notices
required by statutes might, in some cases, contain errors
in substance or form or be issued after procedural errors
had occurred. The legislature could have provided, in ORS
308A.718, that any notice that was not fully in compliance
with a statute would not start a statute of limitations other-
wise measured from action of the government. It did not do
so.
Instead, in subsection (4) of that statute, it provided
for the ability of a recipient of a disqualification notice to
3
Neither party has presented the court with any legislative history regard-
ing the legislative intent relating to the statutory provisions.
336 Clifford Parsons, Trustee v. Dept. of Rev.
appeal to this court after receipt of the notification.4 That
appeal can, of course, raise claims both as to the substantive
conclusions contained in the notice, the propriety of the form
and other content of the notice and any deficiency in the pro-
cess that preceded issuance of the notice.
B. ORS 305.560
In this case, the appeal of taxpayer is, in the words
of ORS 308A.718, to be “within the time and in the manner
provided by ORS 305.404 to 305.560.” In that collection of
statutes the relevant one is ORS 305.560 which provides in
relevant part:
“(1)(a) Except for an order, or portion thereof, deny-
ing the discretionary waiver of penalty or interest by the
Department of Revenue, an appeal under ORS 305.275
may be taken by filing a complaint with the clerk of the
Oregon Tax Court at its principal office at Salem, Oregon,
within the time required under ORS 305.280.”
Accordingly, the direction in ORS 308A.718 through ref-
erence to ORS 305.560 and through that statute to ORS
305.275 and ORS 305.280, makes the provisions of those
statutes the appropriate focus.
C. ORS 305.275
This statute provides, in relevant part:
“(1) Any person may appeal under this subsection to the
magistrate division of the Oregon Tax court as provided in
ORS 305.280 and 305.560, if all of the following criteria
are met:
“(a) The person must be aggrieved by and affected by an
act, omission, order or determination of:
“* * * * *
“(C) A county assessor or other county official, includ-
ing but not limited to the denial of a claim for exemption,
the denial of special assessment under a special assess-
ment statute, or the denial of a claim for cancellation of
assessment.
4
Taxpayer makes no claim that the notice was not received, or that the
notice and appeal procedures do not satisfy due process requirements.
Cite as 21 OTR 331 (2013) 337
“* * * * *
“(2) Except as otherwise provided by law, any person hav-
ing a statutory right of appeal under the revenue and tax
laws of the state may appeal to the tax court as provided in
ORS 305.404 to 305.560.”
Taxpayer here had appeal rights either under ORS
305.275(1) or (2). If the appeal is subject to subsection (1), it
must be done in compliance with the time limitations of ORS
305.280 and the provisions of ORS 305.560. If the appeal
is subject to ORS 305.275(2), that statute requires compli-
ance with ORS 305.560 and the provisions of ORS 305.560
incorporate, in subsection (1)(a), the time limitations of ORS
305.280.
In all events, whether the appeal is under ORS
305.275(1) or (2) the statutes provide for appeals from an “act,
omission, order or determination.” See ORS 305.275(1)(a)
(person must be aggrieved by an “act, omission, order or
determination”) and ORS 305.560(2) (complaint shall state
how the plaintiff is aggrieved by the “order, act, omission or
determination”).
It should be noted that if what taxpayer here is com-
plaining about is the “determination” as to special assess-
ment status of the property, an appeal within the time lim-
its of ORS 305.280 is required. If, on the other hand, the
complaint is about the failure of the county assessor to pro-
vide the correct explanation for that act, the matter is one of
“omission.” But that is also one of the predicates to an appeal
that must be made within the time limits of ORS 305.280. It
is not a reason for taxpayer to take no action and be relieved
from the consequences of that choice.
The statutory provisions for appeal from govern-
ment acts, omissions, determinations or orders serve to
clarify that if government takes any action, or fails to take
action, or takes action but omits to satisfy statutory require-
ments in the process of taking action, the taxpayer must
bring any deficiency or alleged deficiency to the govern-
ment’s attention within a specified time—that specified in
ORS 305.280.
338 Clifford Parsons, Trustee v. Dept. of Rev.
D. ORS 305.280
This statute provides, in relevant part:
“(1) Except as otherwise provided in this section, an
appeal under ORS 305.275 (1) or (2) shall be filed within
90 days after the act, omission, order or determination
becomes actually known to the person, but in no event later
than one year after the act or omission has occurred, or the
order or determination has been made.”
The requirements of ORS 305.280 are that any-
one questioning an act, omission, order or determination do
so within 90 days after the act, omission, order or deter-
mination becomes actually known to the person, but in no
event later than one year from the date the act or omission
occurred, or the order or determination was made. Here the
appeal of taxpayer was taken well beyond the expiration of
both dates established under ORS 305.280.
The position of taxpayer appears to be that some-
how the time periods in ORS 305.280 do not begin to run
until a notice in complete compliance with the statutes has
been given. Nothing in the language of ORS 305.280 sup-
ports that notion. Acts and determinations of the type of
which taxpayer was notified, whether taxpayer views them
as correct or not and whether they are ultimately found to
be correct or not, must be challenged under ORS 305.275
within the time restrictions of ORS 305.280.
The reasons for the conclusions in this opinion are
set out in Nicolynn Properties LLC v. Dept. of Rev., 21 OTR
320 (2013), issued this day. That opinion also addresses why
many of the cases relied upon by taxpayer here do not sup-
port the position taken by taxpayer. The other cases upon
which taxpayer relies here are Smith v. Dept. of Rev., 17 OTR
357 (2004) and Safley v. Jackson County Assessor, TC-MD
030555E (Jan 28, 2004)(slip op).
In Smith the assessor failed to comply with the pro-
cess required in connection with disqualification of farm
land from special assessment. However, the affected tax-
payer appealed to this court within the time allowed by
statute. Having done so, the taxpayer reaped the benefit of
a decision of this court that the purported disqualification
Cite as 21 OTR 331 (2013) 339
was of no effect. Unlike the taxpayer in Smith, taxpayer here
did not appeal within the time allowed and nothing in Smith
suggests that this failure is without preclusive consequence.
Safley was a decision of a magistrate in a case involv-
ing certain defects in the process followed by an assessor
in connection with disqualification of property from special
use assessment. The decision concluded that the defects
were such that the statutory appeal period did not apply.
The decision was highly conclusory on this question and did
not discuss whether it was based on constitutional defects,
estoppel, or some other basis. In addition, the defects of the
notice in Safley were of sufficiently greater magnitude than
those here. Safley is not a decision that this court considers
helpful or persuasive.
E. ORS 305.288
Where there is no statutory right of appeal for a tax-
payer in respect of an allegedly incorrect separate assess-
ment of property, relief may be available under the provi-
sions of ORS 305.288. In this case relief, if any, would have
to come under ORS 305.288(3), which provides in relevant
part:
“(3) The tax court may order a change or correction appli-
cable to a separate assessment of property to the assess-
ment or tax roll for the current tax year and for either of the
two tax years immediately preceding the current tax year
if, for the year to which the change or correction is appli-
cable, 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.
“* * * * *
“(5) For the purposes of this section:
“(a) ‘Current tax year’ has the meaning given the term
under ORS 306.115.”
In turn, ORS 306.115 provides, in relevant part:
“(5) For purposes of this section, ‘current tax year’ means
the tax year in which the need for the change or correction
is brought to the attention of the department.”
340 Clifford Parsons, Trustee v. Dept. of Rev.
Under these provisions, the years open for potential review
by this court are determined by taking the year in which the
appeal was taken as being the “current year.” That year was
the 2012-13 year because the appeal was filed after July 1,
2012, and before June 30, 2013. Counting back from that
“current year,” the years potentially open for review are the
2010-11 and 2011-12 tax years. The years which taxpayer
seeks to have this court review lie beyond that time limit
and the court has no jurisdiction over the complaint.
V. CONCLUSION
For the reasons set forth above, the cross-motion of
the county is granted and the motion of taxpayer is denied.
Now, therefore,
IT IS ORDERED that Defendants’ Cross-Motions
for Summary Judgment are granted; and
IT IS FURTHER ORDERED that Plaintiff’s Motion
for Summary Judgment is denied.