Opinion ID: 1224521
Heading Depth: 1
Heading Rank: 4

Heading: Ag Air's Failure To Timely Comply With The Statutory Requirement Of Depositing 20% Of The Assessed Use Tax Prior To Appealing The Decision Of The Tax Commission Deprived The District Court Of Jurisdiction To Hear Ag Air's Appeal.

Text: Section 63-3049(a) of the Idaho Code requires that an appeal from a state tax commission redetermination decision be filed within ninety-one days of receiving notice of the decision. Section 63-3049(b) requires that [b]efore a taxpayer may seek review by the district court ..., the taxpayer shall secure the payment of the tax or deficiency as assessed by depositing cash with the tax commission in an amount equal to twenty percent (20%) of the tax, penalty and interest. I.C. § 63-3049(b) (1996). It is undisputed that Ag Air failed to make the required deposit until approximately twenty-six days after the ninety-one day period for filing an appeal had run. Following a dismissal of Ag Air's appeal for failure to make the required deposit, Ag Air filed a motion to amend the judgment, arguing that the ninety-one day period in I.C. § 63-3049(a) applies only to an appeal of a tax commission redetermination, not to a declaratory judgment action attacking the constitutionality of I.C. § 63-3622D. Cf. Montejano v. Rayner, 33 F.Supp. 435 (E.D.Idaho 1939) (stating that a declaratory judgment action is the proper procedure to determine the constitutionality of a statute). Ag Air, pointing out that the Tax Commission does not have authority to review the constitutionality of tax statutes, see Wanke v. Ziebarth Const. Co., 69 Idaho 64, 75, 202 P.2d 384, 391 (1949), argued that the limitations on review contained in I.C. § 63-3049 cannot be applied to Ag Air's declaratory judgment action since the constitutionality of I.C. § 63-3622D is not subject to administrative review under that section. The district court granted Ag Air's motion to amend the judgment, permitting Ag Air to file an amended complaint seeking a declaratory judgment that the exclusion of its aircraft from the use tax production exemption in I.C. § 63-3622D violates the Equal Protection Clause of the United States Constitution. The district court reversed its decision to dismiss on two grounds: 1) Ag Air had moved to amend its complaint to seek a declaratory judgment, a cause of action over which the district court found it had jurisdiction under Chapter 12, Title 10 of the Idaho Code, and 2) by not permitting Ag Air to amend its complaint, Ag Air would have no recourse to seek judicial review of the constitutionality of I.C. § 63-3622D. Respondent Tax Commission contends that the district court erred in allowing Ag Air to proceed arguing that Ag Air's failure to satisfy the statute's 20% deposit requirement prevents the district court from having jurisdiction to hear Ag Air's appeal of the Tax Commission's decision. In originally granting the Tax Commission's motion to dismiss, the district court relied on Tarbox v. Tax Comm'n, 107 Idaho 957, 695 P.2d 342 (1984). In Tarbox, where the appellant likewise had failed to post the required bond under I.C. § 63-3049(b), this Court stated that [u]nder Idaho Code § 63-3049(b), [a district court] does not acquire jurisdiction over an appeal unless the taxpayer first pays the alleged deficiency.... Id. at 959, 695 P.2d at 344. Although the statute was subsequently amended to require only a 20% deposit, the legislature has not changed the provision that payment is a jurisdictional requirement. In Grand Canyon Dories v. State Tax Comm'n, 121 Idaho 515, 826 P.2d 476 (1992), Grand Canyon Dories, Inc. appealed a Tax Commission decision to the Board of Tax Appeals (BTA) instead of the district court. The district court affirmed the BTA's dismissal for lack of jurisdiction but allowed the case to proceed as if the appeal had been filed with the district court in the first instance. In reversing the decision of the district court, this Court held that a court has no power to avoid a jurisdictional defect caused by a failure to file an appeal by extending the time for the filing. See id. at 516, 826 P.2d 477. Because a district court's jurisdiction is limited by the requirements of I.C. § 63-3049, we hold that the district court in this case did not have the power to extend the time within which Ag Air could make the required deposit under I.C. § 63-3049(b). A declaratory judgment action may not be used to avoid the consequences of failing to comply with statutory procedural requirements. In V-1 Oil Company v. County of Bannock, 97 Idaho 807, 554 P.2d 1304 (1976), where a property taxpayer sought a declaratory judgment after failing to exhaust administrative remedies, this Court stated: [a]ctions for declaratory judgment are not intended as a substitute for a statutory procedure and such administrative remedies must be exhausted. Id. at 810, 554 P.2d at 1307. This Court, in Carter v. State, Dept. of Health & Welfare, 103 Idaho 701, 652 P.2d 649 (1982), reaffirmed this holding by stating: In V-1 Oil Company v. County of Bannock , we held that the proper method of contesting an agency or judicial decision is by appeal, and that an order or judgment may not later be collaterally attacked by means of a declaratory judgment action. The appellants' collateral attack upon their orders of commitment by means of a declaratory judgment action is thus clearly impermissible. Id. at 702, 652 P.2d at 650 (citation omitted); see also Conley v. Looney, 117 Idaho 627, 630, 790 P.2d 920, 923 (Ct.App.1990) (citing Bills v. State Dept. of Revenue and Taxation, 110 Idaho 113, 714 P.2d 82 (Ct.App. 1986)) (holding that, appellant, [h]aving failed to exercise [administrative appeal] ... cannot now collaterally attack the tax deficiency determination in an independent action.). Count I of Ag Air's amended complaint seeks review of the Tax Commission's redetermination decision on the ground that the exclusion of aircraft from the use tax exemption in I.C. § 63-3622D unlawfully discriminated against Ag Air in violation of the Fourteenth Amendment to the United States Constitution. Count II also asserted that enforcement of I.C. § 63-3622D violated the Fourteenth Amendment. Because both counts of Ag Air's amended complaint attack the decision of the Tax Commission on the same ground, permitting Ag Air to proceed under a declaratory judgment theory effectively allows Ag Air judicial review of the Tax Commission decision it originally sought without complying with the statutory jurisdictional requirements of I.C. § 63-3049. Because a district court does not have power to extend the time for complying with the requirements for filing a complaint for review of a Tax Commission decision, we hold that the district court in this case did not have authority to permit Ag Air to overcome its failure to comply with I.C. § 63-3049(b) by filing a declaratory judgment action. Therefore, the decision of the Tax Commission is now final and no longer subject to appeal. Consequently, we need not address the merits of Ag Air's appeal. The judgment of the district court is affirmed, although on other grounds. See Idaho Schools for Equal Educational Opportunity v. Evans, 123 Idaho 573, 580, 850 P.2d 724, 731 (1993).