2023 Nebraska Revised Statutes › Chapter 77 - Revenue and Taxation › 77-1735 - Illegal or unconstitutional tax paid; claim for refund; procedure.

77-1735.
Illegal or unconstitutional tax paid; claim for refund; procedure.
(1) Except as provided in subsection (2) of this section, if a person makes a payment to any county or other political subdivision of any property tax or any payment in lieu of tax with respect to property and claims the tax or any part thereof is illegal or unconstitutional for any reason other than the valuation or equalization of the property, he or she may, at any time within thirty days after such payment, make a written claim for refund of the payment from the county treasurer to whom paid. The county treasurer shall immediately forward the claim to the county board. If the payment is not refunded within ninety days thereafter, the claimant may sue the county board for the amount so claimed. Upon the trial, if it is determined that such tax or any part thereof was illegal or unconstitutional, judgment shall be rendered therefor and such judgment shall be collected in the manner prescribed in section 77-1736.06. If the tax so claimed to be illegal or unconstitutional was not collected for all political subdivisions in a consolidated tax district and if a suit is brought to recover the tax paid or a part thereof, the plaintiff in such action shall join as defendants in a single suit as many of the political subdivisions as he or she seeks recovery from by stating in the petition a claim against each such political subdivision as a separate cause of action. For purposes of this section, illegal shall mean a tax levied for an unauthorized purpose or as a result of fraudulent conduct on the part of the taxing officials. A person shall not be entitled to a refund pursuant to this section of any property tax paid or any payment in lieu of tax unless the person has filed a claim with the county treasurer or prevailed in an action against the county. If a county refuses to make a refund, a person shall not be entitled to a refund unless he or she prevails in an action against the county on such claim even if another person has successfully challenged a similar tax or payment.
(2) For property valued by the state, for purposes of a claim for refund pursuant to this section, the Tax Commissioner shall perform the functions of the county treasurer and county board. Upon approval of the claim by the Tax Commissioner or a court of competent jurisdiction, the Tax Commissioner shall certify the amount of the refund to the county treasurer to whom this tax was paid or distributed. The refund shall be made in the manner prescribed in section 77-1736.06.
Source
Laws 1903, c. 73, § 162, p. 447;
R.S.1913, § 6491;
C.S.1922, § 6018;
C.S.1929, § 77-1923;
R.S.1943, § 77-1735;
Laws 1955, c. 297, § 2, p. 931;
Laws 1967, c. 505, § 1, p. 1702;
Laws 1977, LB 245, § 2;
Laws 1984, LB 835, § 15;
Laws 1989, LB 762, § 3;
Laws 1991, LB 829, § 13;
Laws 1992, Fourth Spec. Sess., LB 1, § 16;
Laws 1995, LB 490, § 166;
Laws 2007, LB334, § 81;
Laws 2014, LB558, § 2.
Annotations
1. Illegal or unauthorized purpose
2. Void tax
3. Demand for refund
4. Miscellaneous
1. Illegal or unauthorized purpose
An unconstitutional tax is not an "illegal" tax that can be recovered under subsection (1) of this section; therefore, a district court does not have jurisdiction under subsection (1) of this section to hear a constitutional challenge to a tax statute. Trumble v. Sarpy County Board, 283 Neb. 486, 810 N.W.2d 732 (2012).
An exclusive remedy is provided for recovery of taxes paid where the tax was levied or assessed for an illegal or unauthorized purpose. Scudder v. County of Buffalo, 170 Neb. 293, 102 N.W.2d 447 (1960).
Railroad company could enjoin illegal special assessment against right-of-way. Chicago & N. W. Ry. Co. v. City of Omaha, 156 Neb. 705, 57 N.W.2d 753 (1953).
This section authorizes the bringing of an original action to recover taxes paid, where the taxpayer claims that the tax was levied or assessed for an illegal or unauthorized purpose. Loup River Public Power District v. County of Platte, 144 Neb. 600, 14 N.W.2d 210 (1944).
In absence of statute, taxes voluntarily paid cannot be recovered back, but, when tax imposed is illegal and unauthorized, an original action may be brought to recover the tax by virtue of statutory authority. Riggs-Orr Inv. Co. v. City of Omaha, 130 Neb. 697, 266 N.W. 430 (1936).
Action to recover taxes paid on ground they were levied for an unauthorized purpose must be brought under this section. Lennemann v. Harlan County, 110 Neb. 742, 194 N.W. 814 (1923).
When taxes levied by a county exceed the maximum permitted by the Constitution, the excess is levied for an illegal and unauthorized purpose. Chase County v. Chicago, B. & Q. R. R. Co., 58 Neb. 274, 78 N.W. 502 (1899).
2. Void tax
Where petition alleges facts showing tax assessed by officer without authority, and proper refund is demanded, petition for refund states a cause of action under this section. Western Public Service Co. v. Wheeler County, 126 Neb. 120, 252 N.W. 609 (1934).
When taxpayer fails to demand repayment within thirty days after payment of void tax, he cannot maintain action. Monteith v. Alpha High School District of Chase County, 125 Neb. 665, 251 N.W. 661 (1933).
Where amount of money on hand returned by taxpayer for taxation was changed without notice to him, his remedy was under this section. Darr v. Dawson County, 93 Neb. 93, 139 N.W. 852 (1913).
Taxes in excess of constitutional limit are void, and may be recovered in action at law. Dakota County v. Chicago, St. P., M. & O. Ry. Co., 63 Neb. 405, 88 N.W. 663 (1902).
3. Demand for refund
When a taxpayer fails to substantially comply with the 30-day claim requirement and has voluntarily paid a tax, that taxpayer will not be allowed to complain about the tax at a later point in time. Rauert v. School Dist. 1-R of Hall Cty., 251 Neb. 135, 555 N.W.2d 763 (1996).
A request for refund of invalid tax or one paid as a result of clerical error must be by a written claim upon which the county board acts quasi-judicially, and upon request for declaratory relief on ground resolution for refund was invalid, refusal thereof was within discretion of district court where there was no showing such claim had not been filed. Svoboda v. Hahn, 196 Neb. 21, 241 N.W.2d 499 (1976).
Request for refund of special assessments was properly refused. Chicago & N. W. Ry. Co. v. City of Seward, 166 Neb. 662, 90 N.W.2d 282 (1958).
To recover taxes illegally imposed, demand in writing for repayment must be made within 30 days after payment of tax. Satterfield v. Britton, 163 Neb. 161, 78 N.W.2d 817 (1956).
Claim for refund, based upon contention that intangible property of foreign corporation was not subject to taxation, could not be maintained under this section. International Harvester Co. v. County of Douglas, 146 Neb. 555, 20 N.W.2d 620 (1945).
Notice to county treasurer is not a demand on treasurer of school district required by this section as condition precedent to bringing suit for refund of school taxes. City Nat. Bank of Lincoln v. School Dist. of City of Lincoln, 121 Neb. 213, 236 N.W. 616 (1931).
No formal protest is required under this section, and demand for return is sufficient if it specifies the taxes sought to be recovered and the ground upon which their return is demanded. Custer County v. Chicago, B. & Q. R. R. Co., 62 Neb. 657, 87 N.W. 341 (1901).
Protest must state grounds specifically, and burden of proof is on pleader. Davis v. Otoe County, 55 Neb. 677, 76 N.W. 465 (1898).
Demand is necessary to base action for recovery of illegal taxes paid under protest. City of Omaha v. Kountze, 25 Neb. 60, 40 N.W. 597 (1888); B. & M. Ry. Co. v. Buffalo County, 14 Neb. 51, 14 N.W. 539 (1883).
4. Miscellaneous
This section provides an exclusive statutory remedy under which a taxpayer may seek relief. Rawson v. Harlan County, 247 Neb. 944, 530 N.W.2d 923 (1995).
Plaintiff's petition to recover taxes stated cause of action under this section. First Data Resources v. Howell, 242 Neb. 248, 494 N.W.2d 542 (1993).
A person, as the term is used in this section, is one with an ownership interest in the property in question. First Nat. Bank, Stromsburg v. Heiden, 241 Neb. 893, 491 N.W.2d 699 (1992).
This section is not exclusive and proper claim may be allowed under section 77-1734.01. School Dist. of Minatare v. County of Scotts Bluff, 189 Neb. 395, 202 N.W.2d 825 (1972).
This section creates a direct cause of action by which a taxpayer may test the validity for any reason of a tax on any part thereof. Frye v. Haas, 182 Neb. 73, 152 N.W.2d 121 (1967).
A remedy is provided for the recovery of penalties as well as taxes which have been illegally imposed. Misle v. Miller, 176 Neb. 113, 125 N.W.2d 512 (1963).
Claim by railroad for refund of special assessments was properly disallowed. Chicago & N. W. Ry. Co. v. City of Seward, 166 Neb. 123, 88 N.W.2d 175 (1958).
Limitation under this section does not apply to action for recovery of money paid for void tax sale certificate against county. McDonald v. County of Lincoln, 141 Neb. 741, 4 N.W.2d 903 (1942).
Where propriety of removal to federal court of proceedings to recover taxes paid under protest is not challenged, subsequent suit in state court will be dismissed. Chicago, St. P., M. & O. Ry. Co. v. Bauman, 132 Neb. 67, 271 N.W. 256 (1937).
In action by taxpayer to recover special assessments voluntarily paid, statute of limitations begins to run from time of payment of the assessments. Dorland v. City of Humboldt, 129 Neb. 477, 262 N.W. 22 (1935).
A metropolitan city is not required to refund money received from purchaser at tax sale, taxes being levied on illegal special assessments. McCague v. City of Omaha, 58 Neb. 37, 78 N.W. 463 (1899).
Taxes paid to officer, whose authority to collect has ceased, may be recovered back. Fremont, E. & M. V. Ry. Co. v. Holt County, 28 Neb. 742, 45 N.W. 163 (1890).
Right to recover taxes paid under protest applies to business tax assessed under void ordinance. Caldwell v. City of Lincoln, 19 Neb. 569, 27 N.W. 647 (1886).
County is not liable for school tax collected and paid to district, even though illegally levied. Price v. Lancaster County, 18 Neb. 199, 24 N.W. 705 (1885).
Above statute does not provide adequate remedy at law to railroad so as to preclude equitable relief, where railroad, to recover taxes paid, would be required to sue county treasurers in thirty-two different counties through which its line of railroad runs, thus involving multiplicity of suits. Chicago & N. W. Ry. Co. v. Bauman, 69 F.2d 171 (8th Cir. 1934).
Suit is not authorized against state to recover taxes paid on air-flight equipment. Mid-Continent Airlines v. Nebraska State Board of Equalization, 105 F.Supp. 188 (D. Neb. 1952).