Opinion ID: 1449642
Heading Depth: 2
Heading Rank: 4

Heading: interest and penalties

Text: The final issue before us is whether the Borough may demand interest [14] and penalties [15] on the tardily-assessed taxes. [16] In answering this question, we believe it is necessary to distinguish between real property taxes and personal property taxes. As to real property the responsibility for assessing taxable parcels and for notifying a taxpayer of his tax liability rests solely with the borough. As we have previously ruled, a tax on real property is ineffective until the borough discharges its responsibilities by making an assessment, notifying the taxpayer of his liability, and providing the taxpayer with an opportunity to pay his taxes. [17] Until the borough has exercised its right to demand real property taxes in the manner provided by statute there can be no valid tax and hence no delinquency within the meaning of AS 29.53.180, which authorizes penalties and interest on delinquent taxes. As to personal property taxes, however, the taxpayer participates in the taxing process by furnishing the borough with a personal property tax return listing his taxable property. [18] When a taxpayer underreports his holdings, the borough will have no reason to assess the omitted property until its independent investigation reveals the taxpayer's omission. This kind of situation is governed by our ruling in Hickel v. Stevenson, 416 P.2d 236, 239 (Alaska 1966), where we held that, for purposes of assessing interest, a taxpayer's income tax is delinquent on the date that his income should have been reported and his tax paid rather than when the deficiency was later discovered and the additional tax demanded. [19]