Opinion ID: 1467920
Heading Depth: 3
Heading Rank: 1

Heading: Missouri's Exclusive Tax Remedy Doctrine

Text: The Missouri exclusive tax remedy doctrine requires a taxing authority to follow its tax assessment and collection procedures before a tax collection claim can be brought in court. City of St. Louis v. United Rys. Co. of St. Louis, 263 Mo. 387, 174 S.W. 78, 93 (1914) (en banc) (if a remedy is specified for the collection of a tax, it will be held to be exclusive, where no other is provided); Missouri ex rel. Hayes v. Snyder, 139 Mo. 549, 41 S.W. 216, 217 (1897). The Missouri exclusive tax remedy doctrine does not apply, however, to the question in this case because the district court was presented with the legal question of whether the tax applies to the defendants, not the factual question of how much Springfield can collect from the defendants, assuming that they are subject to the tax. See M.L. Cross, Annotation, Tax Questions as Proper Subject of Action for Declaratory Judgment, 11 A.L.R.2d 359 (Supp.2005) (outlining cases from other jurisdictions, including New York, which have similar exclusive tax remedy doctrines but allow declaratory judgments for the pure legal issue of the validity or application of a tax). Although Springfield has an administrative remedy for tax assessment and collection, the ordinance does not provide a specific or exclusive remedy for a challenge to the validity or application of the ordinance. [8] The cases cited by Alltel address only tax collection claims in which the state or local governmental entity is seeking a money judgment. See Missouri ex rel. Hayes, 41 S.W. at 217 (if the statutes of this state make special provisions for the collection of taxes against real estate, and do not apparently contemplate that any others will be necessary, the mode of collection prescribed by statute is exclusive); Missouri ex rel. George v. Dix, 159 Mo.App. 573, 141 S.W. 445, 446 (1911) (The point at issue is whether the remedy provided in the ordinance is exclusive or merely cumulative. If exclusive, an action for a money judgment for the delinquent tax will not lie, but if cumulative the present suit was properly brought, and, as the facts are undisputed, the judgment should have been for the city.); see also Missouri ex rel. Steed v. Nolte, 345 Mo. 1103, 138 S.W.2d 1016 (1940) (en banc) (identifying the procedure for fourth-class cities to collect delinquent taxes); Kansas City v. Field, 285 Mo. 253, 226 S.W. 27 (1920) (outlining cases); City of Carondelet, to Use of Reuter v. Picot, 38 Mo. 125, 1866 WL 4243, at  (Mo.1866) (cannot bring action to compel the payment of taxes unless the tax statute authorizes the action). Alltel has not pointed to any cases in which the exclusive tax remedy doctrine was used to dismiss a claim involving the legal issue of whether a tax was valid or whether it applied to a particular taxpayer. Alltel's assertion that a Missouri court would have to dismiss Springfield's claim for declaratory judgment is unfounded because the doctrine does not apply to Springfield's claim. Because there is no established precedent indicating that Springfield's claim for declaratory judgment may not be heard until after the administrative procedures for tax assessment and collection have been completed, we conclude that the doctrine would not require a Missouri court to dismiss Springfield's claim for declaratory judgment. This conclusion is supported by several cases in which Missouri courts have considered the legal issue of the validity or the applicability of a tax ordinance without requiring the exhaustion of administrative assessment and collection procedures. See Council House Redev. Corp. v. Hill, 920 S.W.2d 890 (Mo.1996) (en banc) (trial court erroneously dismissed taxpayer's claim for declaratory judgment; administrative exhaustion not required when the issue was only whether the taxpayer was exempt from taxation, not the valuation of the tax assessment); Nicolai v. City of St. Louis, 762 S.W.2d 423 (Mo.1988) (en banc) (taxpayer sought declaratory judgment that St. Louis did not have authority to tax his premises as a cat kennel; circuit court dismissed for failure to state a claim and failure to exhaust administrative remedies, but the Missouri Supreme Court reversed and issued declaratory judgment even though neither St. Louis nor the taxpayer had pursued administrative collection or appellate procedures); B & D Inv. Co., Inc. v. Schneider, 646 S.W.2d 759 (Mo. 1983) (en banc) (It is a firmly established principle that when an administrative remedy is adequate, ordinarily that remedy is exclusive.... However, the availability of an administrative remedy does not bar other remedies under all circumstances. For instance, when a taxpayer does not question the valuation of his property, but asserts it is not subject to the tax, he need not appear before the Board of Equalization but may enjoin the enforcement of the tax.); Washington Univ. v. Baumann, 341 Mo. 708, 108 S.W.2d 403 (1937) (en banc) (allowing taxpayer an injunction against the sale of property for the collection of taxes even though administrative remedies were not exhausted because the taxpayer was contractually immune from taxation, one judicial proceeding on the issue of exemption could avoid a multitude of litigations, and the taxpayer would suffer irreparable injury without the injunction); United Rys. Co. of St. Louis, 263 Mo. 387, 174 S.W. 78 (giving res judicata effect to prior federal court case that held the railroad was subject to a city tax); Holland Furnace Co. v. City of Chaffee, 279 S.W.2d 63 (Mo.Ct.App.1955) (considering claim for declaratory judgment regarding the validity of a tax ordinance). Alltel asserts that any case in which a taxpayer requested a declaratory judgment that it was not subject to a tax ordinance is inapposite because, in the case before us, Springfield is the entity seeking a declaratory judgment and is thereby attempting to avoid its own administrative procedures. We disagree. If, under the exclusive tax remedy doctrine, Missouri courts will address the pure legal issue of whether a tax applies in a particular situation before the parties complete the administrative tax assessment and collection procedures, it should not matter which party is seeking the declaratory judgment. Furthermore, we note that completing the administrative procedures in this case would be time-consuming, expensive, and ultimately unnecessary if the ordinance is held to not apply to the defendants. Additionally, the pure legal issue involved in this case is more suited for judicial determination than for administrative determination. See State Tax Comm'n v. Admin. Hearing Comm'n, 641 S.W.2d 69, 75 (Mo. 1982) (en banc) (Agency adjudicative power extends only to the ascertainment of facts and the application of existing law thereto in order to resolve issues within the given area of agency expertise. The declaratory judgment is a judicial remedy.... The declaration of the validity or invalidity of statutes and administrative rules thus is purely a judicial function. (internal citations omitted)); see also Springfield, Mo., Code §§ 70-131 through 70-157 (administrative hearings do not have formality requirements such as the rules of evidence). Accordingly, we conclude that the district court properly decided that the Missouri exclusive tax remedy doctrine did not require it to dismiss Springfield's claim for declaratory judgment on the issue of liability.