Mt. Dept. of Revenue v. Jarrett

No. 84-551
I N THE SUPREME COURT O THE STATE O MONTANA
F F
1985
THE DEPARTMENT O REVENUE O THE
F F
STATE O MONTANA,
F
P e t i t i o n e r and A p p e l l a n t ,
-vs-
AMOS JARRETT ,
Respondent and Respondent.
APPEAL F O :
R M D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t ,
I n and f o r t h e County of Y e l l o w s t o n e ,
The Honorable W i l l i a m J. S p e a r e , Judge p r e s i d i n g .
COUNSEL O RECORD:
F
For A p p e l l a n t :
L a r r y G. S c h u s t e r , Dept. of Revenue, H e l e n a , Montana
For Respondent:
Amos J a r r e t t , p r o s e , B i l l i n g s , Montana
S u b m i t t e d on B r i e f s : March 1 4 , 1985
Decided: M ~ Y 3 1 1985
2
--
Clerk
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of
the Court.
Amos Jarrett, respondent, was denied a request for a tax
refund by the Yellowstone County Commissioners. He appealed
to the Yellowstone County Tax Appeal Board which found in his
favor. The Department of Revenue appealed to the State Tax
Appeal Board which determined that respondent was due a tax
refund. The Department filed for judicial review and both
parties moved for summary judgment. The District Court
entered summary judgment in favor of the respondent. The
Department appeals.
The respondent owns a lot in Yellowstone County. For
the years 1978 through 1981 respondent received tax
assessment notices stating that the annual assessment on the
lot was $14,510. He paid the taxes each year without
protest. In 1982, the Department of Revenue discovered the
lot was not in a special improvement district as had been
originally believed and it did not have access to sewer
facilities. The Department of Revenue reappraised the lot
and reduced the assessment from $1.4,510 to $7,418.
In June of 1982, respondent contacted the Yellowstone
County Commissioners, the Yellowstone County Assessor and the
Yellowstone County Treasurer requesting a tax refund for the
years 1978 through 1981. At the request of the Yellowstone
County Commissioners, the Yellowstone County Assessor and the
appraisers of the Department of Revenue investigated the
matter and submitted a memorandum to the Commissioners. They
expressed an opinion that the property had not been
erroneously appraised in 1978, but that the value of the
property had decreased between 1978 a.nd 1982 because of a
change in development pattern. The Yellowstone County
Treasurer believed respondent was due a refund but the
c o m m i s s i o n e r s d e n i e d a r e f u n d , w h i c h , i f g r a n t e d , would have
amounted t o $512.35.
I n 1983, r e s p o n d e n t a p p e a l e d t o t h e Yel-lowstone County
Tax Appeal Board. The Board found for respondent. The
Department o f Revenue t h e n a p p e a l e d t o t h e S t a t e Tax Appeal
Board. The State Board concluded that an erroneous
a s s e s s m e n t had b e e n made i n 1978 and was c a r r i e d o n t h e t a x
rolls from 1979 through 1981 and, therefore, under §
15-8-601, MCA a c o r r e c t i o n c o u l d b e made. The Board a f f i r m e d
the Yellowstone County Tax Appeal Board's decision and
ordered a t a x refund f o r respondent.
The Department o f Revenue f i l e d f o r j u d i c i a l r e v i e w o f
t h e S t a t e Tax Appeal Board d e c i s i o n i n t h e Y e l l o w s t o n e County
D i s t r i c t Court. Both p a r t i e s moved f o r summary judgment. On
O c t o b e r 1 5 , 1984, t h e D i s t r i c t C o u r t e n t e r e d summary judgment
i n favor of t h e respondent. From t h a t a d v e r s e d e c i s i o n , t h e
Department o f Revenue a p p e a l s t o t h i s C o u r t .
A p p e l l a n t p r e s e n t s t h e f o l l o w i n g i s s u e on a p p e a l :
Does t h e S t a t e Tax Appeal Board h a v e any a u t h o r i t y t o
change t h e v a l u e o f p r o p e r t y f o r p a s t t a x y e a r s , p u r s u a n t t o
15-8-601, MCA, when a taxpayer has not filed any
a d m i n i s t r a t i v e a p p e a l s a s t o t h o s e tax y e a r s ?
The d i s p o s i t i v e i s s u e b e f o r e t h i s C o u r t i s w h e t h e r t h e
taxpayer is entitled to a refund of taxes paid due t o a n
erroneous a s s e s s m e n t made on his land. Section 15-1-402,
MCA, s e t s o u t t h e p r o c e d u r e by w h i c h a t a x p a y e r may p r o t e s t
t h e payment o f a t a x h e b e l i e v e s t o b e i n c o r r e c t . It states
i n pertinent part:
"15-1-402. Payment o f t a x e s u n d e r p r o t e s t - action
t o recover.
" (1) The p e r s o n upon whom a t a x o r l i c e n s e fee i s
b e i n g imposed may p r o c e e d u n d e r 15-1-406 o r may,
b e f o r e t h e t a x o r l i c e n s e f e e becomes d e l i n q u e n t ,
pay u n d e r w r i t t e n p r o t e s t t h a t p o r t i o n o f t h e t a x
o r license fee protested. The payment must:
(a b e made t o t h e o f f i c e r d e s i g n a t e d and
a u t h o r i z e d t o c o l l e c t i t ; and
(b) s p e c i f y t h e grounds o f p r o t e s t .
" (2) A f t e r having exhausted t h e a d m i n i s t r a t i v e
a p p e a l s a v a i l a b l e u n d e r T i t l e 1 5 , c h a p t e r s 2 and
75, a p e r s o n o r h i s l e g a l r e p r e s e n t a t i v e may b r i n g
an a c t i o n i n any c o u r t o f c o m p e t e n t j u r i s d i c t i o n
a g a i n s t t h e o f f i c e r s t o whom s a i d t a x o r l i c e n s e
f e e was p a i d o r a g a i n s t t h e c o u n t y o r m u n i c i p a l i t y
i n whose b e h a l f t h e same was c o l l e c t e d and t h e
department o f revenue." (emphasis added)
This s t a t u t e i s permissive n o t mandatory. A taxpayer
can o n l y use t h i s p r o t e s t procedure i f he i s aware t h a t h i s
t a x e s may b e i n c o r r e c t a t t h e t i m e h e p a y s them. A taxpayer
who d o e s not know h e i s being overtaxed w i l l n o t pay h i s
taxes under protest and can not receive a refund under §
15-1-402, MCA.
For the victim of an e r r o n e o u s a s s e s s m e n t , as i n the
case at hand, there must be a n o t h e r way to obtain a tax
refund. The S t a t e Tax Appeal Board allowed respondent to
o b t a i n a t a x refund under § 15-8-601, MCA. S e c t i o n 15-8-601,
MCA s t a t e s a s f o l l o w s :
"15-8-601. Assessment r e v i s i o n - c o n f e r e n c e f o r
review. (1) Whenever t h e d e p a r t m e n t o f r e v e n u e
d i s c o v e r s t h a t any t a x a b l e p r o p e r t y o f a n y p e r s o n
has in any year escaped assessment, been
erroneously assessed, or been omitted from
taxation, t h e d e p a r t m e n t may a s s e s s t h e same
provided t h e p r o p e r t y i s under t h e ownership o r
c o n t r o l o f t h e same p e r s o n who owned o r c o n t r o l l e d
it at the time it escaped assessment, was
e r r o n e o u s l y a s s e s s e d , o r was o m i t t e d from t a x a t i o n .
A l l s u c h r e v i s e d a s s e s s m e n t s must b e made w i t h i n 10
y e a r s a f t e r t h e end o f t h e c a l e n d a r y e a r i n which
t h e o r i g i n a l a s s e s s m e n t was o r s h o u l d h a v e b e e n
made. "
In the recent case of Eagle Communications, Inc. v.
F l a t h e a d County, (Mont. 1 9 8 4 ) , 685 P.2d 912, 4 1 S t . R e p . 1303,
t h i s Court held t h a t § 15-8-601, MCA c r e a t e s no power i n t h e
Department of Revenue t o r e f u n d t a x e s u n l a w f u l l y c o l l e c t e d .
In Eagle, the plaintiff, Eagle Communications Inc. , paid
t h e i r t a x e s under p r o t e s t pursuant t o 15-1-402, MCA, and
within 90 days filed a lawsuit alleging an erroneous
assessment of t h e i r property. While i t s l a w s u i t was p e n d i n g
E a g l e p a i d t a x e s u n d e r p r o t e s t , however, it d i d n o t f i l e an
action fox each payment. The Department of Revenue
d e t e r m i n e d t h a t an e r r o n e o u s a s s e s s m e n t had b e e n made, but
t h e County T r e a s u r e r r e f u s e d t o r e f u n d t a x e s t h a t had a l r e a d y
been d i s b u r s e d b e c a u s e no a c t i o n had been commenced on them.
In an a c t i o n t o r e c o v e r t h e s e t a x e s , Eagle maintained
t h a t t h e Department o f Revenue had a d u t y u n d e r S 15-8-601,
MCA, to provide a refund of taxes paid on an erroneous
assessment. This Court denied the refund and stated as
follows:
" H e r e , t h e Department h a s a g r e e d t o a r e a s s e s s m e n t .
It i s t h e refund i t s e l f t h a t i s a t i s s u e . However,
s e c t i o n 15-8-601, MCA c r e a t e s no a u t h o r i t y f o r t h e
Department t o r e f u n d e r r o n e o u s l y c o l l e c t e d t a x e s .
I t a p p e a r s t h e r e f u n d f u n c t i o n was g r a n t e d t o t h e
T r e a s u r e r , a s s e t f o r t h i n s e c t i o n 15-1-402, MCA
because the Treasurer collects and controls
disbursements o f t a x funds. S e c t i o n 15-8-601, MCA
i n s p e a k i n g o n l y o f a s s e s s m e n t by t h e D e p a r t m e n t ,
i s c o n s i s t e n t w i t h t h i s d i v i s i o n o f d u t i e s between
t h e T r e a s u r e r and Department.
"We h o l d t h a t t h e Department o f Revenue h a s no d u t y
u n d e r s e c t i o n 15-8-601, MCA t o p r o v i d e a r e f u n d o f
t a x e s p a i d on an e r r o n e o u s a s s e s s m e n t . "
Clearly, S 15-8-601, MCA makes no p r o v i s i o n for a tax
refund. Unlike Eagle, t h e recourse o f § 15-1-402, MCA i s n o t
a v a i l a b l e t o t h i s respondent. Respondent was n o t aware an
e r r o n e o u s a s s e s s m e n t had been made on h i s l a n d and c o u l d n o t
have known t o f i l e h i s t a x e s u n d e r p r o t e s t .
S e c t i o n 15-16-601, MCA p r o v i d e s t h e n e c e s s a r y r e l i e f f o r
respondent. It s t a t e s i n p e r t i n e n t p a r t :
"15-16-601. Taxes o r p e n a l t i e s i l l e g a l l y c o l l e c t e d
t o be refunded. ( 1 ) ( a ) Any t a x e s , p e r centum, and
c o s t s p a i d more t h a n o n c e o r e r r o n e o u s l y o r
i l l e g a l l y c o l l e c t e d o r any amount o f t a x p a i d f o r
which a t a x p a y e r i s e n t i t l e d t o a r e f u n d u n d e r
15-16-612 o r a n y p a r t o r p o r t i o n o f t a x e s p a i d
which were m i s t a k e n l y computed o n government bonus
o r s u b s i d y r e c e i v e d by t h e t a x p a y e r may, by o r d e r
o f t h e b o a r d o f c o u n t y commi.ssioners, be r e f u n d e d
by t h e c o u n t y t r e a s u r e r . Whenever any payment
s h a l l have been made t o t h e s t a t e t r e a s u r e r a s
p r o v i d e d i n 15-1-504 and it s h a l l a f t e r w a r d s a p p e a r
to the satisfaction of t h e board of county
c o m m i s s i o n e r s t h a t a p o r t i o n o f t h e money s o p a i d
s h o u l d be r e f u n d e d a s h e r e i n p r o v i d e d , s a i d b o a r d
o f c o u n t y c o m m i s s i o n e r s may r e f u n d s u c h p o r t i o n o f
s a i d t a x e s , p e n a l t i e s , and c o s t s s o p a i d t o t h e
s t a t e t r e a s u r e r , and upon t h e r e n d e r i n g o f t h e
r e p o r t r e q u i r e d by 15-1-505 t h e c o u n t y c l e r k and
recorder s h a l l c e r t i f y t o t h e s t a t e auditor, i n
s u c h form a s t h e s t a t e a u d i t o r may p r e s c r i b e , a l l
amounts s o r e f u n d e d , and i n t h e n e x t s e t t l e m e n t o f
t h e county t r e a s u r e r with t h e s t a t e , t h e s t a t e
a u d i t o r s h a l l g i v e t h e county t r e a s u r e r c r e d i t f o r
t h e s t a t e ' s p o r t i o n o f t h e amounts s o r e f u n d e d . "
(emphasis added)
The f o l l o w i n g s e c t i o n , § 15-16-602, MCA s t a t e s :
"15-16-602. Concurrent remedies. Section
1.5-16-601 s h a l l n o t b e deemed o r c o n s t r u e d t o b e i n
c o n f l i c t with t h e provisions of p a r t 4 of chapter
1, b u t 15-16-601 and t h e p r o v i s i o n s o f s u c h p a r t 4
s h a l l p r o v i d e and a f f o r d c o n c u r r e n t r e m e d i e s . "
Clearly, S 15-16-601, MCA was n o t meant t o b e u s e d in
lieu of the S 15-1-402, MCA requirements of paying under
protest, b u t when the recourse of S 15-1-402, MCA i s not
available, a taxpayer can o b t a i n a refund under § 15-16-601,
MCA .
Section 15-16-601, MCA provides that taxes paid
erroneously may be refunded by the county treasurer, "by
o r d e r - -e b o a r d - c o u n t y c o m m i s s i o n e r s . "
of th of The Y e l l o w s t o n e
Board o f County Commissioners d e n i e d r e s p o n d e n t ' s r e q u e s t f o r
a t a x refund. However, respondent has followed t h e proper
procedure f o r appealing t h a t decision.
Respondent appealed to the County Tax Appeal Board.
S e c t i o n 15-15-101, MCA p r o v i d e d f o r such appeals a s follows:
"(2) The c o u n t y t a x a p p e a l b o a r d must m e e t on t h e
t h i r d Monday o f A p r i l i n e a c h y e a r t o h e a r p r o t e s t s
c o n c e r n i n g a s s e s s m e n t s made by t h e d e p a r t m e n t o f
revenue . . . .
" (3) I n connection w i t h any such a p p e a l , t h e
c o u n t y t a x a p p e a l b o a r d may c h a n g e a n y a s s e s s m e n t
o r f i x t h e a s s e s s m e n t a t some o t h e r l e v e l . . ."
The Yellowstone County Tax Appea 1 Board properly
r e v i e w e d t h e r e s p o n d e n t ' s c a s e and d e t e r m i n e d r e s p o n d e n t was
due a r e f u n d . P u r s u a n t t o $ 15-15-104, MCA, t h e Department
of Revenue a p p e a l e d t h a t d e c i s i o n t o t h e S t a t e Tax Appeal
Board.
The S t a t e Tax Appeal Board i s a b l e t o h e a r a p p e a l s and
make its own determinations under S 15-2-301, MCA, which
states, i n part:
" ( 2 ) A t t h e time o f giving such n o t i c e , t h e s t a t e
b o a r d may r e q u i r e t h e c o u n t y b o a r d t o c e r t i f y t o it
t h e minutes o f t h e proceedings r e s u l t i n g i n such
action and a l l t e s t i m o n y t a k e n i n connection
therewith. The s t a t e b o a r d may, i n i t s d i s c r e t i o n ,
determine t h e appeal on such r e c o r d i f a l l p a r t i e s
r e c e i v e a copy o f t h e t r a n s c r i p t and a r e p e r m i t t e d
t o s u b m i t a d d i t i o n a l sworn s t a t e m e n t s , o r t h e s t a t e
b o a r d may h e a r f u r t h e r t e s t i m o n y ....
"(4) I n c o n n e c t i o n w i t h any a p p e a l u n d e r t h i s
s e c t i o n , t h e s t a t e board s h a l l n o t b e bound by
common law and s t a t u t o r y r u l e s o f e v i d e n c e o r r u l e s
o f d i s c o v e r y and may a f f i r m , r e v e r s e , o r modify any
decision. The d e c i s i o n o f t h e s t a t e t a x a p p e a l
board shall be final and binding upon all
i n t e r e s t e d p a r t i e s u n l e s s r e v e r s e d o r m o d i f i e d by
j u d i c i a l review."
The S t a t e Tax Appeal Board a g r e e d w i t h t h e c o u n t y b o a r d
and ordered a refund. J u d i c i a l review of t h a t d e c i s i o n has
followed. I n r e v i e w i n g w e a r e bound by t h e f i n d i n g s o f f a c t
made by t h e a d m i n i s t r a t i v e t r i b u n a l s a b s e n t a c l e a r a b u s e o f
discretion. The s t a t e board found an erroneous appraisal
resulted i n a mistaken levy. T h i s f i n d i n g was c o n t r a r y t o
t h e f i n d i n g of t h e c o u n t y c o m m i s s i o n e r s . The e v i d e n c e was i n
d i s p u t e and t h e f i n d i n g c o u l d go e i t h e r way. A s was p o i n t e d
o u t by this Court in t h e recent c a s e o f Northwest Land &
Devel. o f Montana, I n c . (Mont. 19831, 6 6 1 P.2d 44, 40 S t . R e p .
470, when w e q u o t e d t h e D i s t r i c t C o u r t .
" [ i l t i s w i t h i n t h e Board's province a s f a c t - f i n d e r
t o g i v e c e r t a i n e v i d e n c e more w e i g h t t h a n o t h e r
evidence. The B o a r d ' s c h o i c e o f t h e l o w e r amount
was w i t h i n i t s power and s i n c e t h e r e i s e v i d e n c e i n
t h e r e c o r d t o s u p p o r t s u c h f i n d i n g it must s t a n d . "
W e f i n d s u b s t a n t i a l c r e d i b l e evidence t o support t h e findings
o f t h e S t a t e Tax A p p e a l Board.
I t i s t h e o p i n i o n o f t h i s C o u r t t h a t u n d e r S 15-16-601,
MCA r e s p o n d e n t should r e c e i v e a t a x refund f o r t h e erroneous
a s s e s s m e n t made on h i s l a n d i n 1978 t h r o u g h 1981. W e remand
to the Yellowstone Board of County Commissioners with
instructions to order the Yellowstone County Treasurer to
i s s u e a refund t o respondent.
Justices