NO. 91-108 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1992 

HOLLY SUGAR CORPORATION, 

Plaintiff and Appellant, 

V. 

THE DEPARTMENT OF REVENUE OF THE STATE OF MONTANA: 9 -gggz’ 

THE STATE OF MONTANA: THE COUNTY OF RICHLAND: ‘,7 I 

THE TREASURER OF RICHLAND COUNTY: THE ASSESSOR OF > - L >,:,c.$ 

RICHLAND COUNTY; HIGH SCHOOL DISTRICT NO. 1, RICHWD I. CCJil 

COUNTY: DISTRICT NO. 5, RICHLAND COUNTY: BOARD OF -‘“’- ’ ‘ 

TRUSTEES, HIGH SCHOOL DISTRICT NO. 1, RICHLAND COUNTY: 

SUPERINTENDENT OF SCHOOLS, SIDNEY PUBLIC SCHOOLS: and 

BOARD OF TRUSTEES, DISTRICT NO. 5, RICHLAND COUNTY: 

SUPERINTENDENT OF SCHOOLS, RICHLAND COUNTY, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Seventh Judicial District, 

In and for the County of Richland, 

The Honorable Richard G. Phillips, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

James P. Sites, Argued, Crowley, Haughey, Hanson, 

Toole & Dietrich, Billings, Montana 

For Respondents: 

Phillip N. Carter, Argued, Koch & Carter, Sidney, 

Montana: David Woodgerd, Chief Legal Counsel, 

Department of Revenue, Helena, Montana 

Filed: 

Submitted: February 19, 1992 

Decided: April 9, 1992 
Justice William E. Hunt. Sr., delivered the opinion of the Court. 

Plaintiff/appellant (hereinafter lttaxpayerft) brought a 

declaratory judgment action in District Court pursuant to 

!j 15-1-406, MCA, alleging that certain property taxes levied 

against the taxpayer were '*illegally or unlawfully imposed or 

exceeded the taxing authority of the entity imposing the tax." 

Taxpayer alleged that the requirements of 5 15-10-412(9), MCA, were 

not satisfied by the taxing authority. The District Court did not 

consider the merits of taxpayer's contention, as the court granted 

summary judgment for all defendants on the grounds that the statute 

of limitations for bringing such actions had run on the taxpayer. 

We reverse. 

We phrase the issues before this Court as follows: 

1. Did the District Court err in holding that the 90-day 

statute of limitations for bringing an action pursuant to 

§ 15-1-406, MCA, began running on the date the amount of tax due 

was entered on the assessment book and the Department of Revenue 

affixed their affidavit thereto? 

2. Did the District Court err in not finding that 

jurisdiction was present under the Uniform Declaratory Judgments 

Act? 

The facts in this case can be briefly stated. The District 

Court Judge summarizedthe relevant facts in his Memorandum Opinion 

and Order as follows: 

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This action stems from a tax increase that was the 

result of a request by Richland County School Districts 

1 and 5 for voter approval to exceed the limitations of 

15-10-402 MCA. Resolutions calling for an election were 

adopted on March 13, 1989 and an election was held on 

April 4, 1989. At the election the question was approved 

by the voters. Plaintiff paid the portion of its taxes 

dealing with the increased school levy under protest on 

November 30, 1989 and filed this action January 26, 1990. 

The total amount of taxes in dispute is $169,915.64. The tax 

statement, which is the notice of the property tax due, was mailed 

on October 31, 1989. Taxpayer received the tax statement 

indicating the amount of property taxes owed on November 1, 1989. 

In response to taxpayer's declaratory judgment action, the 

defendants moved for summary judgment. This motion was based upon 

three separate grounds: (1) the statute of limitations set forth in 

5 15-1-406, MCA, had run; (2) laches, in that the taxpayer should 

have taken action earlier based upon the school levy election 

results; and (3) taxpayer was estopped from bringing the action in 

that the taxpayer's delay in filing suit allowed the defendants to 

change their position detrimentally relying on the election 

results. The court did not address issues 2 and 3, but granted 

summary judgment based on the statute of limitations. 

Section 15-1-406(2), MCA, states that a declaratory judgment 

action of this nature '#must be brought within 90 days of the 

imwosition of the tax." [Emphasis added.] The question before the 

District Court was when the actual "imposition" of the tax 

occurred. Defendants argued that the imposition of the tax 

occurred on April 4, 1989, when the emergency levy election was 

3 
held. The 90-day statute of limitations began running at that time 

according to the defendants. The taxpayer argued that the 

imposition of the tax was not until November 1, 1989, when they 

received notice of the amount of the tax due. Taxpayer then 

contended that since the 90-day statute of limitations began to run 

on November 1, 1989, taxpayer's suit filed on January 26, 1990, was 

within the 90-day period provided by statute in which to bring an 

action. The District Court, in its January 29, 1991, memorandum, 

opinion, and order, determined that I'[w]hen the final steps to 

impose the tax were taken the cause of action to challenge the tax 

accrued to the Plaintiff .'I According to the court this date was 

October 25, 1989. By October 25, 1989, the court found that all 

the necessary steps had been taken and the tax was imposed as of 

that date. The property had been assessed, the final budget and 

levy had been determined, and the actual tax liability was set and 

entered in the assessment book. Taxpayer's declaratory judgment 

action was filed January 26, 1990, which is just over the 90 days 

allowed to bring the action. The court found it was not 

significant that the notice was not sent until October 31, 1989, 

and that the taxpayer did not receive the notice of the actual tax 

liability until November 1, 1989. The court stated that the actual 

tax liability had been determined and it was the taxpayer's own 

fault that he was unaware of the actual tax liability. Taxpayer 

could have checked to determine if his tax liability had been 

entered on the books and his lack of knowledge as to when the tax 

4 
was entered on the books 

period of limitations. 

did not postpone the beginning of the 

Did the District Court err in holding that the 90-day statute 

of limitations for bringing an action pursuant to § 15-1-406, MCA, 

began running on the date the amount of tax due was entered on the 

assessment book and the Department of Revenue affixed their 

affidavit thereto? 

The outcome of this case turns on this Court's determination 

of when the imposition of the tax in question occurred. It is only 

upon the imposition that the 90-day period of statute of 

limitations begins to run. The question presented here has not 

been previously addressed by this Court. However, there are a 

number of District Court decisions on when the imposition of a tax 

occurs. The present case presents this Court with the opportunity 

to clarify the existing law in this area and settle a point of some 

contention in the lower courts. 

Taxpayer filed suit on January 26, 1990, and therefore, 

taxpayer's declaratory judgment action was filed within the 

required 90 days pursuant to § 15-1-406, MCA, if the "imposition1' 

of the tax is determined to have occurred after October 28, 1989. 

Section 1-1-306, MCA. On appeal, taxpayer argues that the District 

Court erred in determining that the imposition of the tax was on 

October 25, 1989, seven days prior to the time taxpayer received 

notice of the tax. 

5 
The defendants also argue on appeal that the District Court 

erred in its determination of when the tax was imposed. Defendants 

contend that the tax was imposed on April 4, 1989, when the 

election was held and request that we modify that part of the 

District Court's decision which found that the imposition of the 

tax occurred on October 25, 1989. 

Section 15-1-406, MCA, the primary statute in question in this 

case, reads as follows: 

(1) An aggrieved taxpayer may, in lieu of proceeding 

under 15-1-402 or 15-1-211, bring a declaratory judgment 

action in the district court seeking a declaration that 

a tax levied by the state or one of its subdivisions was 

illegally or unlawfully imposed or exceeded the taxing 

authority of the entity imposing the tax. 

The action must be brouaht within 90 days of the 

imvosition of the tax. The court shall consolidate all 

actions brought under subsection (1) which challenge the 

same tax levy. The decision of the court shall apply to 

all similarly situated taxpayers except those taxpayers 

who are excluded under 15-1-407. 

(3) The taxes that are being challenged under this 

section must be paid when due as a condition of 

continuing the action. [Emphasis added.] 

Section 15-16-101, MCA, mandates that within ten days after 

the tax liability is entered on the assessment books, the county 

treasurer must send a notice to taxpayers indicating the amount of 

taxes due. Taxpayer contends that it is only upon receipt of this 

notice that the tax is actually imposed. The District Court's 

decision imposes an affirmative duty upon taxpayers to check with 

the taxing authorities from time to time to determine if their tax 

liability has been determined yet. Taxpayer contends this decision 

(2) 

6 
not only disregards the purpose of the required statutory notice, 

but would be an administrative nightmare for local taxing 

authorities. 

Unlike personal income taxes, property taxes are 

'Inon-self -assessing, and are assessed and determined by the 

government. Taxpayer argues that the process of determining 

property taxes is complicated and that the necessary information is 

in the hands of the government, and therefore, individual taxpayers 

should not be expected to know what their property taxes will be 

prior to receiving notice. 

Defendants counter by arguing that the taxpayer should have 

been aware of the tax, and that they were in a position to easily 

figure out what the tax would be. Defendants also argued that 

public policy requires that Itan aggrieved taxpayer should be 

required to file its declaratory judgment action at the point in 

time when it first learns that its taxes are going to be 

increased," and that this should be "prior to the time when the 

school authorities are forced to commit to the expenditure of this 

expected revenue." Allowing taxpayers 90 days from the time they 

receive notice of their tax liability to file suit creates too much 

uncertainty for the schools. They will not be able to properly 

determine the amount of money they will actually have until this 

time period has passed. 

The public policy arguments raised by the defendants are 

indeed important, but this Court is bound to follow and apply the 

7 
intent of the legislature, as manifested in constitutionally sound 

statutes. As we have stated in the past: 

In construing a statute, it is our function as an 

appellate court to ascertain and declare what in terms or 

in substance is contained in a statute and not insert 

what has been omitted. 

State v. Crane (1989), 240 Mont. 235, 238, 784 P.2d 901, 903. 

Whenever possible, this court is to look to the plain meaning of 

the statute in determining the legislative intent. State Ex Rel. 

Roberts v. Public Service Commission (1990), 242 Mont. 242, 790 

P.2d 489. 

As previously mentioned, this Court has not interpreted the 

term imposition as it is used in 5 15-1-406, MCA. Additionally, 

the term has not been defined by the legislature. The statutes are 

silent as to when the actual imposition of the tax occurs. The 

District Court concluded that the imposition of the tax occurred 

when the taxing authority had completed all the steps necessary to 

impose the tax and there was nothing remaining for the government 

to do. The District Court determined that all the steps necessary 

to impose the tax had been completed when the taxes were entered on 

the assessment book and the Department of Revenue affixed its 

affidavit to the assessment book as provided in 5 15-10-305, MCA. 

This date was October 25, 1989. The basic framework utilized by 

the District Court was correct, but the analysis of the District 

Court stopped one step short of completion. The tax is imposed 

when the taxing authority completes all the steps necessary to 

8 
impose the tax, including the final step that the taxing authority 

is statutorily bound to comply with before the tax is imposed. 

Pursuant to 5 15-16-101, MCA, the county treasurer is required, 

within ten days after receipt of the assessment book, to send each 

taxpayer a written notice showing the amount of taxes and 

assessments due. It is not until this notice has been sent that: 

the government has taken all the steps necessary to impose the tax. 

We hold that the imposition of the tax, for purposes of bringing an 

action under 5 15-1-406, MCA, occurs on the date the actual notice 

of taxes due is sent. In this instance, that occurred on 

October 31, 1989. Taxpayer filed suit on January 26, 1990, which 

is within the 90-day period allowed for bringing an action under 

5 15-1-406, MCA. We must, therefore, reverse the decision of the 

District Court and remand for further proceedings consistent with 

this opinion. 

I1 

Did the District Court err in not finding that jurisdiction 

was present under the Uniform Declaratory Judgments Act? 

In light of our holding on the first issue, a determination 

of the question of jurisdiction under the Uniform Declaratory 

Judgments Act is not essential to the outcome of this case. 

Reversed and remanded to the District Court for further 

proceedings consistent with this opinion. 

Justice 

9 
We concur: 

Justices 

10 
Justice R. C. McDonough dissents. 

The District Court in its opinfion and order was correct. All 

the necessary steps to impose the tax were completed on October 25, 

1989. An action of this nature must be brought within 90 days of 

the imposition of the tax. Section 15-1-406(2), MCA. There are no 

cases in Montana which have interpreted the term "imposition" 

relative to the imposition of a property tax. 

In So0 Line Railroad Company v. Commissioner of Revenue (Minn. 

1985), 377 N.W.2d 453, 458, the court, in what I feel to be a 

correct analysis, discussed the use of the term in the process of 

taxation as follows: 

[Taxation] consists of two distinct processes- -the one relating to the levying or imposition 

of the taxes on persons or property: the other 

the collection of the taxes levied. The first 

is constituted of the provisions of law which 

determine or work out the determination of the 

persons or property to be taxed, the sum or 

sums to be thus raised, the rate thereof and 

the time and manner of levying and receiving 

and collecting the taxes.. It definitelv and 

conclusivelv establishes the sum to be uaid bv 

each person taxed, or to be borne by each 

property sueciallv assesw, and creates a 

fixed and certain demand fin favor of the state 

or a subordinate governmental agency, and a 

definite and positive obligation on the part 

of those taxed, and prescribes the manner of 

its voluntary or enforced fulfillment. 

Mayor and City Council of Baltimore v. Perrin, 178 Md. 

101, 12 A.2d 261, 264-65 (1940). 

When used in connection with the authority to tax, 

tllevy,tt strictly speaking, denotes the exercise of a 

legislative function, which imposes the tax and sets the 

amount, purpose, and subject of the exaction. Carkonen 

v. Williams, 76 Wash.2d 617, 458 P.2d 280, 286 (1969). 

See also Fichtner v. Schiller, 271 Minn. 163, 135 N.W.2d 

877, 879 (1965). In view of the interchangeable use of 

the terms "impose11 and "levygt by the United States 
Supreme Court, e.g., Minneapolis Star ti Tribune Co. v. 

Minnesota Commissioner of Revenue, 460 U.S. 575, 103 

S.Ct. 1365, 75 L.Ed.2d 295 (1983), we conclude the excise 

tax was imposed by legislative action, i.e., 5 290.02, 

not by the commissioner's attempt to collect it, . . . (Emphasis added.) 

The components that are necessary to impose a tax on pieces of 

property in Montana are the value of the property, the amount of 

the millage and the establishment of the sum to be borne by each 

piece of property. The value of the property is established by the 

application of the assessment and equalization statutes which is 

not contested here. The millage, or the rate of tax, was 

established in this case by the certification of the school board 

to the county commissioners after public notice of the amount of 

millage needed. The commissioners then, at their meeting on the 

second Monday in August of 1989, and after notice to the public, 

levied the millage and taxes against the taxable property of the 

district. See 5 7-6-2502, MCA. The third step is the computations 

by the county assessor of the exact tax to be paid by each piece of 

property and its entry on the assessment book. This, by statute, 

is to be done by the second Monday in October, and the assessment 

book is then delivered to the county clerk and recorder with the 

assessorls affidavit of completion. See 5 15-10-305, MCA. This 

completes the first step as set forth in the above quotation; it 

definitely and conclusively establishes the sum to be paid by each 

person taxed and the sum to be borne by each property specially 

assessed. 

The second step in the process starts by requiring that on or 

before the third Monday in October, the county clerk and recorder 

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charges the county treasurer with the full amount of the taxes 

levied and delivers the assessment book to the treasurer. This 

second process, the collection of the taxes, is not governed by 

Chapter 10 which provides for the levy or imposition of the taxes. 

Rather, the collection is governed by law in a different chapter, 

Chapter 16 of Title 15 of the MCA. Part 1 of said Chapter 16 

provides for the notice to be given to the taxpayers, what the 

notice shall contain, the time and place of payment, etc. 

In this specific case the county assessor was late in 

completing and delivering the assessment book together with the 

affidavit and it was not done until October 25, 1989. On this date 

then, all the steps necessary to levy and impose a tax on a 

specific piece of property owned by a specific person were 

completed. The 90 day statute of limitations began to run on this 

date. This action was not filed until January 26, 1990, which is 

more than 90 days after the tax was imposed. 

What the majority opinion has done is add the requirement of 

the mailing of the notice of taxes due, which is governed by said 

Chapter 16, as a requirement to the levy and imposition of the 

taxes. The notice requirement is actually a part of the second 

process, to wit: the collection of the taxes. I would affirm the 

order granting summary judgment. 

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