Case Name: Clyde STALLINGS, Denver Atkinson and Cecil Reynolds, Appellants, v. OKLAHOMA TAX COMMISSION, Appellee
Court: Oklahoma Supreme Court
Jurisdiction: Oklahoma
Decision Date: 1994-07-19
Citations: 880 P.2d 912
Docket Number: No. 73769
Parties: Clyde STALLINGS, Denver Atkinson and Cecil Reynolds, Appellants, v. OKLAHOMA TAX COMMISSION, Appellee.
Judges: LAVENDER, V.C.J., and SIMMS, HARGRAVE and SUMMERS, JJ., concur.
Reporter: Pacific Reporter 2d
Volume: 880
Pages: 912–922

Head Matter:
Clyde STALLINGS, Denver Atkinson and Cecil Reynolds, Appellants, v. OKLAHOMA TAX COMMISSION, Appellee.
No. 73769.
Supreme Court of Oklahoma.
July 19, 1994.
Stipe, Gossett, Stipe, Harper, Estes, MeCune & Parks, Gene Stipe, John B. Estes and Charles Gaunce, Oklahoma City, for appellants.
Oklahoma Tax Com’n, Stanley P. Johnston and Robert B. Struble, Oklahoma City, for appellee.

Opinion:
WATT, Justice.
SUMMARY OF FACTS AND PROCEDURAL HISTORY
Appellants, Clyde Stallings, Denver Atkinson and Cecil Reynolds, are retired federal civil service employees who, for some period prior to 1989, voluntarily reported and paid state income taxes on their federal employee retirement benefits. On April 5, 1989, they filed suit in the District Court of Oklahoma County under 68 O.S.1981 § 226 seeking a refund of those taxes from appellee, Oklahoma Tax Commission. Relying upon Davis v. Michigan Dept. of Treasury, 489 U.S. 803, 109 S.Ct. 1500, 103 L.Ed.2d 891 (1989), appellants alleged that the taxes were collected in violation of 4 U.S.C. § 111 and the Equal Protection Clause of the United States Con-' stitution. Appellants asserted that their retirement benefits were being taxed at a dis-criminatorily higher rate than the retirement benefits of retired state and local government employees.
The Commission filed a motion to dismiss for lack of subject matter jurisdiction. It argued that § 226 provides the sole basis for conferring district court jurisdiction, and that appellants failed to satisfy the jurisdictional prerequisites of subsection (b) because they paid the taxes without protest and failed to give notice of intent to file a lawsuit. Appellants argued that the jurisdictional requirements of subsection (b) were inapplicable because the taxes were exacted in violation of federal law. The district court held that appellants failed to satisfy the statutory requirements for bringing the action and dismissed the suit for lack of subject matter jurisdiction.
The Court of Appeals reversed. The court initially declared that the disputed taxes were collected in violation of 4 U.S.C. § 111. The court then ruled that subsection (b) was not applicable to this case and that subsection (c) provided an independent basis for conferring district court jurisdiction. Finding that no exhaustion of administrative remedies was required under subsection (e), the court held that appellants could maintain their action under that provision.
ISSUE
The sole issue to be decided on certiorari is whether, under 68 O.S.1981 § 226, the district court properly dismissed appellants' action for lack of subject matter jurisdiction. We answer this question in the affirmative and vacate the decision of the Court of Appeals.
DISCUSSION
We initially agree with the Court of Appeals that § 226 contains no requirement that administrative remedies be exhausted before a taxpayer may resort to district court action. In Ladd Petroleum Corp. v. Oklahoma Tax Comm'n, 767 P.2d 879 (Okla.1989), Ladd contested the assessment of additional taxes imposed by the Commission on the grounds that the taxes violated the federal constitution. Rather than lodging an administrative protest before the Commission under 68 O.S.1981 § 221, Ladd remitted the taxes under protest, in accordance with § 226, and filed suit in district court. The district court sustained the Commission's demurrer, ruling that Ladd had failed to exhaust its administrative remedies and that the court lacked subject matter jurisdiction. On appeal, this Court held that § 226 contains no exhaustion requirement:
We examine first the trial court's ruling that Ladd failed to exhaust its administrative remedies, and find that no exhaustion requirement exists under § 226 of title 68. Aggrieved taxpayers who protest under § 221 of title 68 must follow the specific administrative procedures set forth therein. Appeals from adverse rulings of the Commission under § 221 lie directly to this court. 68 O.S.1981 § 226. In contrast, § 226 provides an avenue to district court where the taxes complained of allegedly violate the United States Constitution, and "the judicial remedy granted pursuant to § 226(c) is limited to eases which meet the statutorily delineated criteria." Cimarron Industries, Inc. v. Oklahoma Tax Commission 621 P.2d 589, 542 (Okla.1980).
In [Cimarron ], we ruled that one could not short-circuit the administrative process by resort[ing] to district court without first meeting the, jurisdictional prerequisites of § 226. Here, the converse is equally true. One may not be deprived of his full and fair day in district court by forcing him to surmount nonexistent administrative hurdles. The plain language of § 226(c) contains no exhaustion requirement....
Ladd, 767 P.2d at 882.
Although the appellate court correctly determined that § 226 contains no exhaustion requirement, the inquiry into the district court's subject matter jurisdiction does not end with such ruling. Certain jurisdictional requirements must still be satisfied before the provisions of § 226 may be employed. The jurisdictional requirements are those set forth in § 2260o), that the taxes be paid under protest and notice be given at the time of payment that a suit to recover taxes will be filed.
In Ladd, we indicated that compliance with § 226(b) is required before initiating a district court action when we stated:
In 1980, we decided Ladd Petroleum Corp. v. Oklahoma Tax Commission, 619 P.2d 602, in which Ladd objected to similar assessments. We could not reach the gravamen of Ladd's complaint because Ladd failed to satisfy the thirty day requirement for lodging its protest under 68 O.S.Supp. 1979 § 226(b).
Ladd, 767 P.2d at 880 n. 1. In the 1980 Ladd case, this Court held "that a taxpayer must always satisfy the 80-day limitation requirement in section 226 in order to avail itself of the remedy in that section." Ladd, 619 P.2d at 604.
In Private Truck Council v. Oklahoma Tax Comm'n, 806 P.2d 598 (Okla.1990), vacated and remanded on other grounds — U.S. -, 111 S.Ct. 2882, 115 L.Ed.2d 1048 (1991), we again stated that compliance with § 226(b) is required before a district court suit may be filed. We held:
The legal avenues for bringing an action under § 226(c) are not expressly limited, there is no requirement that a taxpayer seek and exhaust administrative remedies. However, there is a requirement that a taxpayer must pay the taxes under protest or at the time of payment give notice of an intent to file a lawsuit.
Id. at 607.
The above holdings comport with this Court's directive that statutes be construed as a consistent whole and every portion thereof be given effect if possible. Cowart v. Piper Aircraft Corp., 665 P.2d 315, 317 (Okla.1983). See also Ledbetter v. Oklahoma Alcoholic Bev. Laws Enforcement Comm'n, 764 P.2d 172, 179 (Okla.1988). Although subsection (e) provides an avenue of relief in district court where taxes are alleged to have been collected in violation of a congressional act or provision of the federal constitution, it is not severable from the remainder of § 226. Subsection (b) of § 226 requires that taxes be paid under protest and that notice of intent to file suit be given béfore a taxpayer may resort to judicial remedies. In the present case, appellants did not fulfill either requirement. Moreover, the Court of Appeals was without power to grant dispensation from these statutorily imposed jurisdictional requirements. Estate of O'Bannon v. Oklahoma Tax Comm'n, 633 P.2d 741, 742 (Okla.1981).
Although appellants may have asserted a meritorious claim , that issue is not properly before us. The sole issue to be determined is whether appellants' petition, brought under the auspices of § 226, was sufficient to invoke the district court's subject matter jurisdiction. Section 226 envisions that an aggrieved taxpayer initially seek relief from the Commission, and the Commission be given an opportunity to rule on the contested matter, before the taxpayer may resort to judicial remedies under the provision. As set forth in § 226(b), a taxpayer must give notice of intent to file a lawsuit "[w]ithin thirty (30) days from the date of mailing to the taxpayer of the order, ruling or finding of the Tax Commission...." In the present case, appellants voluntarily paid their taxes for a number of years and never sought relief from the Commission prior to bringing this action. Because they did not seek relief in the first instance from the Commission, the Commission was not given the opportunity to either refund the disputed taxes or issue an order, ruling or finding that would have triggered the thirty day time limit of subsection (b). It is only after the Commission had taken such action that appellants could have, if aggrieved, taken steps to satisfy the jurisdictional prerequisites and avail themselves of the remedies afforded by § 226. Having failed to do so, appellants' claim brought pursuant to § 226 was properly dismissed.
In reaching the above conclusion, we think it beneficial to distinguish this case from Oklahoma Tax Comm'n v. Smith, 610 P.2d 794 (Okla.1980). The taxpayer in Smith brought a declaratory judgment action in district court challenging an income tax statute on federal constitutional grounds. In response to the Attorney General's argument that § 226 provided the taxpayer with bis exclusive remedy, this Court held that no adequate remedy was available under § 226 because the taxpayer attacked the statute "prior to the issuance of an order, judgment or decree by the commission, and at the time of filing the action . no tax was due." Id. at 802. We reiterate today that "one adversely affected by a statute which he contends is invalid on its face need not violate that law in order to obtain a declaration of its validity or invalidity." Id. at 801, quoting State Bd. of Examiners in Optometry v. Lawton, 523 P.2d 1064, 1066 (Okla.1974). However, where a taxpayer opts to pay a tax before challenging it under § 226, the taxpayer must satisfy the jurisdictional requirements of § 226 — that the tax be paid under protest and notice given that a suit to recover the tax will be filed. Unlike the taxpayer in Smith, § 226 would have provided the taxpayers herein with an adequate remedy had they satisfied the provision's jurisdictional requirements.
Appellants argue that compelling them to satisfy the jurisdictional requirements of § 226 before allowing them redress thereunder "offends federal law and constitutes a taking without due process." Appellants contend that due process requires they be given a refund because the taxes were exacted before appellants were given the opportunity to challenge them. Essentially, they argue that no procedural impediment to a refund may be raised by the state to frustrate the recovery of taxes imposed in violation of the federal constitution. We disagree.
In McKesson Corp. v. Div. of Alcoholic Beverages & Tobacco, 496 U.S. 18, 110 S.Ct. 2238, 110 L.Ed.2d 17 (1990), a unanimous Supreme Court discussed pre-deprivation and post-deprivation remedies for challenging a tax. A pre-deprivation remedy is one that permits a taxpayer to contest a tax prior to its payment, while a post-deprivation remedy is one used after the taxpayer has paid a tax. The Court explained that a state may, but is not required to, provide a pre-deprivation remedy before exacting a tax. Id. 496 U.S. at 36-37, 110 S.Ct. at 2250. In the absence of a pre-deprivation remedy, a state must provide a post-deprivation remedy that affords taxpayers a fair opportunity to challenge and recover an unlawful tax. Id. 496 U.S. at 39, 110 S.Ct. at 2251. Accord Kay Electric Co-op. v. Oklahoma Tax Comm'n, 815 P.2d 175, 179 (Okla.1991) (Summers, J., concurring in part and dissenting in part). Nothing before us in this case suggests that a procedure requiring a taxpayer to file a claim for a refund with the Commission deprives the taxpayer of a fair opportunity to challenge an unlawful tax. Nothing has been presented to this Court to demonstrate that the state procedures requiring timely protest are arbitrary in a constitutional sense. See Ross v. Oklahoma, 487 U.S. 81, 88-91, 108 S.Ct. 2273, 2278-80, 101 L.Ed.2d 80 (1988), and the explanation of Logan v. Zimmerman Brush Co., 455 U.S. 422, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982).
Appellants assert that a state must provide a remedy that allows a taxpayer to recover unconstitutional taxes paid in the past no matter how far removed in time from the protest action those taxes were paid. Again, we disagree. In discussing a state's concern with its ability to engage in sound fiscal planning, the McKesson Court held:
A State's freedom to impose various procedural requirements on actions for postde-privation relief sufficiently meets this concern with respect to future cases. The State might, for example, provide by statute that refunds will be available only to those taxpayers paying under protest or providing some other timely notice of complaint; execute any refunds on a reasonable installment basis; enforce relatively short statutes of limitation applicable to such actions; refrain from collecting taxes pursuant to a scheme that has been declared invalid by a court or other competent tribunal pending further review of such declaration on appeal; and/or place challenged tax payments into an escrow account or employ other accounting devices such that the State can predict with greater accuracy the availability of undisputed treasury funds. The State's ability in the future to invoke such procedural protections suffices to secure the State's interest in stable fiscal planning when weighed against its constitutional obligation to provide relief for an unlawful tax.
McKesson, 496 U.S. at 46, 110 S.Ct. at 2254-56.
A state may, therefore, impose a requirement that refunds for an unconstitutional tax will be available only for those complying with a statutorily prescribed protest procedure. As the Court in McKesson stated, "[w]e assume for present purposes that petitioner satisfied whatever protest requirements might exist, though . upon remand the State may invoke, as an independent basis for refusing to provide a refund, petitioner's failure to comply with a notice requirement that was in effect at the time of petitioner's tax payments." Id. 496 U.S. at 24-25 n. 4, 110 S.Ct. at 2243-44 n. 4. A parallel sentiment was expressed in Harper v. Virginia Dept. of Taxation, 509 U.S. -, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993), where a similar challenge to an unconstitutional state tax was presented. The Supreme Court declined to enter judgment for the taxpayers "because federal law does not necessarily entitle them to a refund." Id. 509 U.S. at -, 113 S.Ct. at 2519. Even if the tax was unconstitutional, the taxpayers might not get a refund if the state provided for relief consistent with federal due process and the taxpayers failed to follow the procedure.
Each year that appellants paid the now contested tax, they possessed a statutory remedy to challenge the tax and claim a refund. This they failed to do. Our conclusion that appellants are not entitled to maintain this action under § 226 does not offend federal due process.
We are not asked to articulate, nor do we express an opinion, regarding any other avenues of relief which are or were available to appellants. Our opinion relates only to the applicability of § 226 under the facts of this case. We specifically note that appellants, unlike the taxpayers in Strelecki, supra at note 2, do not urge that they filed a refund claim for overpayment of taxes pursuant to 68 O.S.Supp. 1985 § 2373, or that they filed any amended tax returns.
CONCLUSION
Before a taxpayer may file a suit for refund of taxes in district court pursuant to § 226, he must first pay the taxes under protest and at the time of payment give notice of his intent to file suit. Appellants neither paid the taxes under protest nor gave notice of intent to file suit at the time the taxes were paid. Therefore, they failed to satisfy the statutory prerequisites for invoking district court jurisdiction under § 226.
Certiorari previously granted. The opinion of the Court of Appeals is vacated. The judgment of the district court is affirmed.
LAVENDER, V.C.J., and SIMMS, HARGRAVE and SUMMERS, JJ., concur.
KAUGER, J., concurs in part, dissents in part.
HODGES, C.J., and OPALA and ALMA WILSON, JJ., dissent.
. Prior to its amendment in 1989 (effective July 1, 1989), § 226 provided in relevant part:
(a) In addition to the right of appeal to the Supreme Court provided for in the preceding section, a right of action is hereby created to afford a remedy to any taxpayer aggrieved by the provisions of this article or of any other state tax law, or who resists the collection of or the enforcement of the rules or regulations of the Tax Commission relating to the collection of any state tax.
(b) Within thirty (30) days from the date of mailing to the taxpayer of the order, ruling or finding of the Tax Commission, any such taxpayer shall pay the tax to the Tax Commission, and at the time of making such payment shall give notice to the Tax Commission of his intention to file suit for recovery of such tax....
(c)This section shall afford a legal remedy and right of action in any state or federal court having jurisdiction of the parties and the subject matter. It shall be construed to provide a legal remedy in the state or federal courts by action at law in cases where the taxes complained of are claimed to be an unlawful burden on interstate commerce, or the collection thereof violative of any Congressional Act or provision of the Federal Constitution....
. Prior to their respective amendments in 1989, 74 O.S.1981 § 923 exempted from taxation all benefits of retired state and local government employees, while 68 O.S.Supp.1982 § 2358(D)(9) exempted only $4,000.00 per year of retirement benefits received by retired federal civil servants. In Davis, the Court held that a similar Michigan taxing scheme violated 4 U.S.C. § 111 and the constitutional doctrine of intergovernmental tax immunity embodied in the Supremacy Clause of the federal constitution. Davis, 489 U.S. at 817, 109 S.Ct. at 1508. Recently, in Strelecki v. Oklahoma Tax Commission, 872 P.2d 910, (Okla.1993), reh'g granted for limited purpose, this Court relied upon Davis in holding that Oklahoma's pre-1989 tax scheme was invalid.
. As previously stated, Strelecki v. Oklahoma Tax Comm'n declared that Oklahoma's pre-1989 tax scheme was invalid under the rule announced in Davis v. Michigan Dept, of Treasury, supra, at note 2. Strelecki also recognized that pursuant to Harper v. Virginia Dept. of Taxation, 509 U.S. -, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993), the Davis rule applies retroactively to require refunds on timely claims of voluntary overpay-ments of state income tax on federal retirement income. Although the Court in Strelecki granted relief to the taxpayers at issue therein, we specifically declined to express an opinion on the re-fundability or correctness of other claims. Strelecki, 872 P.2d at 922. While not ruling on the timeliness or mathematical correctness of other claims, on rehearing we clarified that our opinion was binding on the Commission in other refund proceedings brought by similarly situated taxpayers — those persons who reported and paid income taxes on federal civil service and military retirement income and timely gave notice of the overpayment and a claim for refund. Strelecki, 872 P.2d at 923-924 (Corrected Order of Clarification).
. As previously stated, appellants were not required to pay the disputed taxes prior to challenging them. Oklahoma Tax Comm'n v. Smith, supra.