Title: MT DEPT OF REVENUE v JARRETT
Citation: N/A
Docket Number: 84-551
State: Montana
Issuer: Montana Supreme Court
Date: May 23, 1985

No. 84-551 I N THE S U P R E M E COURT O F THE STATE O F MONTANA 1985 THE D E P A R T M E N T O F REVENUE O F THE STATE O F MONTANA, P e t i t i o n e r and Appellant, -vs- AMOS JARRETT , Respondent and Respondent. APPEAL F R O 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 Yellowstone, The Honorable William J. Speare, Judge presiding. C O U N S E L O F RECORD: For Appellant: Larry G. Schuster, Dept. of Revenue, Helena, Montana For Respondent: Amos Jarrett, pro s e , B i l l i n g s , Montana Submitted on Briefs: March 1 4 , 1985 Decided: M ~ Y 2 3 1 1985 -- 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 re fund. 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 commissioners denied a refund, which, i f g r a n t e d , would have amounted t o $512.35. I n 1983, respondent appealed t o t h e Yel-lowstone County Tax Appeal Board. The Board found f o r respondent. The Department of Revenue then appealed t o t h e S t a t e Tax Appeal Board. The S t a t e Board concluded t h a t an erroneous assessment had been made i n 1978 and was c a r r i e d o n t h e t a x r o l l s from 1979 through 1981 and, t h e r e f o r e , under § 15-8-601, MCA a c o r r e c t i o n could b e made. The Board affirmed t h e Yellowstone County Tax Appeal Board's d e c i s i o n 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 review 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 Yellowstone 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 October 15, 1984, t h e District Court e n t e r e d summary judgment i n f a v o r of t h e respondent. From t h a t adverse d e c i s i o n , t h e Department of Revenue a p p e a l s t o t h i s Court. Appellant p r e s e n t s t h e following i s s u e on appeal: Does t h e S t a t e Tax Appeal Board have 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 , pursuant t o 15-8-601, MCA, when a taxpayer h a s n o t f i l e d 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 Court i s whether t h e taxpayer i s e n t i t l e d t o a refund o f t a x e s paid due t o an erroneous assessment made on h i s land. S e c t i o n 15-1-402, MCA, sets o u t t h e procedure by which a taxpayer may p r o t e s t t h e payment o f a t a x he b e l i e v e s t o be i n c o r r e c t . I t s t a t e s i n p e r t i n e n t p a r t : "15-1-402. Payment o f t a x e s under p r o t e s t - a c t i o n t o recover. " (1) The person upon whom a t a x o r l i c e n s e fee is being imposed may proceed under 15-1-406 o r may, b e f o r e t h e t a x o r license fee becomes d e l i n q u e n t , pay under 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 l i c e n s e f e e p r o t e s t e d . The payment must: (a be made t o t h e o f f i c e r designated and authorized t o c o l l e c t it; 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 under T i t l e 15, c h a p t e r s 2 and 75, a person 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 competent 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 paid o r a g a i n s t t h e county o r m u n i c i p a l i t y i n whose behalf 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 be i n c o r r e c t a t t h e t i m e he pays them. A taxpayer who does n o t know he i s being overtaxed w i l l n o t pay h i s t a x e s under p r o t e s t and can n o t r e c e i v e a refund under § 15-1-402, MCA. For t h e v i c t i m o f an erroneous assessment, a s i n t h e c a s e a t hand, t h e r e must be a n o t h e r way t o o b t a i n a t a x refund. The S t a t e Tax Appeal Board allowed respondent t o 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 follows: "15-8-601. Assessment r e v i s i o n - conference f o r review. (1) Whenever t h e department o f revenue 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 any person has i n any y e a r escaped assessment, been erroneously a s s e s s e d , o r been omitted from t a x a t i o n , t h e department 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 person who owned o r c o n t r o l l e d it a t t h e t i m e it escaped assessment, was erroneously a s s e s s e d , o r was omitted from t a x a t i o n . A l l such r e v i s e d assessments must be 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 assessment was o r should have been made. " I n t h e r e c e n t c a s e o f Eagle Communications, Inc. v. Flathead County, (Mont. 1984), 685 P.2d 912, 4 1 St.Rep. 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 refund t a x e s unlawfully c o l l e c t e d . I n Eagle, t h e p l a i n t i f f , Eagle Communications I n c . , 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 w i t h i n 90 days f i l e d a l a w s u i t a l l e g i n g an erroneous assessment o f t h e i r property. While i t s l a w s u i t was pending Eagle paid t a x e s under p r o t e s t , however, it d i d n o t f i l e an a c t i o n fox each payment. The Department o f Revenue determined t h a t an erroneous assessment had been made, b u t t h e County T r e a s u r e r r e f u s e d t o refund t a x e s t h a t had a l r e a d y been disbursed because no a c t i o n had been commenced on them. I n an a c t i o n t o recover 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 under S 15-8-601, MCA, t o provide a refund o f t a x e s paid on an erroneous assessment. T h i s Court denied t h e refund and s t a t e d a s follows: " H e r e , t h e Department has agreed t o a reassessment. 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 refund erroneously c o l l e c t e d t a x e s . It appears t h e refund f u n c t i o n was granted t o t h e T r e a s u r e r , a s set f o r t h i n s e c t i o n 15-1-402, MCA because t h e T r e a s u r e r c o l l e c t s and c o n t r o l s disbursements o f t a x funds. S e c t i o n 15-8-601, MCA i n speaking only o f assessment by t h e Department, is 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 hold t h a t t h e Department o f Revenue has no d u t y under s e c t i o n 15-8-601, MCA t o provide a refund of t a x e s paid on an erroneous assessment." C l e a r l y , S 15-8-601, MCA makes no p r o v i s i o n f o r a t a x 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 erroneous assessment had been made on h i s land and could n o t have known t o f i l e h i s t a x e s under p r o t e s t . Section 15-16-601, MCA provides t h e necessary 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 than once o r erroneously o r i l l e g a l l y c o l l e c t e d or any amount o f t a x p a i d f o r which a taxpayer i s e n t i t l e d t o a refund under 15-16-612 o r any p a r t o r p o r t i o n o f t a x e s paid which were mistakenly computed on government bonus o r subsidy received by t h e taxpayer may, by o r d e r o f t h e board o f county commi.ssioners, be refunded by t h e county 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 provided i n 15-1-504 and it s h a l l a f t e r w a r d s appear t o t h e s a t i s f a c t i o n o f t h e board o f county commissioners t h a t a p o r t i o n o f t h e money s o paid should be refunded a s h e r e i n provided, s a i d board o f county commissioners may refund such 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 paid 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 county c l e r k and r e c o r d e r s h a l l c e r t i f y t o t h e s t a t e a u d i t o r , i n such 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 refunded, 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 w i t h 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 refunded." (emphasis added) The following s e c t i o n , § 15-16-602, MCA s t a t e s : "15-16-602. Concurrent remedies. S e c t i o n 1.5-16-601 s h a l l n o t be deemed o r construed t o be i n c o n f l i c t w i t h t h e p r o v i s i o n s o f p a r t 4 o f c h a p t e r 1, b u t 15-16-601 and t h e p r o v i s i o n s o f such p a r t 4 s h a l l provide and a f f o r d concurrent remedies." C l e a r l y , S 15-16-601, MCA was n o t meant t o be used i n l i e u o f t h e S 15-1-402, MCA requirements o f paying under p r o t e s t , b u t when t h e recourse o f S 15-1-402, MCA i s n o t a v a i l a b l e , a taxpayer can o b t a i n a refund under § 15-16-601, MCA . Section 15-16-601, MCA provides t h a t t a x e s paid erroneously may be refunded by t h e county t r e a s u r e r , "by o r d e r -- o f t h e board o f county commissioners." The Yellowstone - Board o f County Commissioners denied respondent's r e q u e s t f o r a t a x refund. However, respondent h a s followed t h e proper procedure f o r appealing t h a t d e c i s i o n . Respondent appealed t o t h e County Tax Appeal Board. Section 15-15-101, MCA provided f o r such a p p e a l s a s follows: " ( 2 ) The county t a x appeal board must m e e t on t h e t h i r d Monday o f A p r i l i n each y e a r t o h e a r p r o t e s t s concerning assessments made by t h e department o f revenue . . . . " ( 3 ) I n connection w i t h any such a p p e a l , t h e county t a x appeal board may change any assessment o r f i x t h e assessment a t some o t h e r level. . ." The Yellowstone County Tax Appea 1 Board p r o p e r l y reviewed t h e r e s p o n d e n t ' s c a s e and determined respondent was due a refund. Pursuant t o $ 15-15-104, MCA, t h e Department of Revenue appealed 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 i t s own d e t e r m i n a t i o n s under S 15-2-301, MCA, which s t a t e s , i n p a r t : " ( 2 ) A t t h e time o f g i v i n g such n o t i c e , t h e s t a t e board may r e q u i r e t h e county board 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 a c t i o n and a l l testimony taken i n connection therewith. The s t a t e board may, i n i t s d i s c r e t i o n , determine t h e appeal on such record 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 submit 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 board may h e a r f u r t h e r testimony . . . . " ( 4 ) I n connection w i t h any appeal under 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 be bound by common law and s t a t u t o r y r u l e s o f evidence o r r u l e s o f discovery and may a f f i r m , r e v e r s e , o r modify any d e c i s i o n . The d e c i s i o n o f t h e s t a t e t a x appeal board s h a l l be f i n a l and b i n d i n g upon a l l i n t e r e s t e d p a r t i e s u n l e s s reversed o r modified by j u d i c i a l review." The S t a t e Tax Appeal Board agreed w i t h t h e county board and ordered a refund. J u d i c i a l review o f t h a t d e c i s i o n has followed. I n reviewing 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 abuse o f d i s c r e t i o n . The s t a t e board found an erroneous a p p r a i s a l r e s u l t e d 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 county commissioners. The evidence was i n d i s p u t e and t h e f i n d i n g could go e i t h e r way. A s was pointed o u t by t h i s Court i n t h e recent c a s e o f Northwest Land & Devel. o f Montana, Inc. (Mont. 19831, 6 6 1 P.2d 44, 40 St.Rep. 470, when w e quoted t h e D i s t r i c t Court. " [ 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 evidence more weight than o t h e r evidence. The Board's choice o f t h e lower 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 evidence i n t h e record t o support such f i n d i n g it must stand." 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 f i n d i n g s of t h e S t a t e Tax Appeal Board. I t i s t h e opinion o f t h i s Court t h a t under S 15-16-601, MCA respondent should r e c e i v e a t a x refund f o r t h e erroneous assessment made on h i s land i n 1978 through 1981. W e remand t o t h e Yellowstone Board o f County Commissioners w i t h i n s t r u c t i o n s t o o r d e r t h e Yellowstone County T r e a s u r e r t o i s s u e a refund t o respondent. J u s t i c e s