In re Appeal of the Church of the Creator

WELLS, Judge.

Our review is governed by N.C. Gen. Stat. § 105-345.2, which states that a final decision of the Property Tax Commission may be reversed or modified if appellant’s substantial rights have been prejudiced because the Commission’s findings, conclusions, inferences, or decisions are:

(1) In violation of constitutional provisions; or

(2) In excess of statutory authority or jurisdiction of the Commission; or

(3) Made upon unlawful proceedings; or

(4) Affected by other errors of law; or

(5) Unsupported by competent, material and substantial evidence in view of the entire record as submitted; or

(6) Arbitrary or capricious.

We have reviewed the record and respondent’s assignments of error and view the dispositive question presented by this appeal to be whether the Commission correctly held that the procedures used by respondent in revoking petitioner’s tax exempt status violated the North Carolina Machinery Act (N.C. Gen. Stat. § 105-271 et seq.). We affirm.

Every owner of property seeking exemption from property taxes under provisions of the Act has the burden of establishing entitlement to such an exemption. N.C. Gen. Stat. § 105-282.1. The owner must file an application for exemption each year during the listing period. Id. This period begins on the first business day in January and extends through the end of the month, unless extended by the Board of County Commissioners. N.C. Gen. Stat. § 105-307. The Act excuses certain classes of taxpayers from this annual filing requirement, creating, in effect, a continuing exemption. The provision relevant here is N.C. Gen. Stat. § 105-282.1(a)(3):

After an owner of property entitled to exemption under . . . 105-278.3 . . . has applied for exemption and the exemption has been approved, such owner shall not be required to file applications in subsequent years except in the following circumstances:

a. New or additional property is acquired or improvements are added or removed, necessitating a change in the valuation of the property, or

b. There is a change in the use of the property or the qualifications or eligibility of the taxpayer necessitating a review of the exemption.

Respondent’s assessor purported to remove petitioner from tax exempt status on 14 February 1989, and gave it 30 days to correct its alleged deficiencies or appeal. The Commission held that there is no authority in the Act for such an action. We agree. A county assessor has the power to challenge an exemption once granted by requiring the taxpayer to file a new application if he or she perceives that one of the changes in the property listed in the statute has occurred. Under the plain language of the statute, the application for exemption must be made during the listing period. The Commission reasoned that the county therefore is required to notify the taxpayer before the listing period that such an application will be required for the coming tax year. This did not take place in this case.

While the interpretation given a statute by the agency charged with its administration is not controlling, it is entitled to great consideration. State Utilities Commission v. The Public Staff-North Carolina Utilities Commission, 309 N.C. 195, 306 S.E.2d 435 (1984). In this case, the Commission has interpreted the statute in a reasonable way so as to protect the rights of counties to challenge continuing exemptions without doing damage to any of the Act’s provisions. Respondent has failed to show that its substantial rights have been prejudiced in any of the ways set out in N.C. Gen. Stat. § 105-345.2. The decision of the Commission is therefore

Affirmed.

Judge Greene concurs. Judge Wynn dissents.