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4 Property Tax Bulletin 13 refunded. The error at issue clearly is not a clerical error under the Ammons test. Nevertheless, is a refund justified because the resulting tax is illegal, in that the county taxed Tom for prop- erty (a finished third floor) that Tom has never owned? Many counties would answer yes, but this author disagrees. If valuation errors such as the one involving Tom's third floor are refundable under the illegal tax category, then the deadline for valuation appeals becomes irrelevant. Local governments would lose all certainty about the value of their tax bases and find it impossible to budget accurately. For this reason, the best interpretation of the illegal tax category is one that excludes valuation judgment errors. If a taxpayer wishes to contest the valuation of his or her property, he or she must do so through the board of equalization and review appeal process, not through the refund and release process .9 Listing errors must also be resolved during the initial appeal period to the board of equaliza- tion and review rather than through the refund and release process. For example, assume that Tom Taxpayer has listed a boat in Carolina County for several years. In November 2009 he sells the boat to his neighbor, Tina Taxpayer. In January 2010 Carolina County sends Tom a listing form that includes the boat. Tom signs and returns the form without carefully reading it. The county subsequently assesses the boat for taxation under Tom's name. When Tom receives the tax bill for the boat -, he promptly pays it. Six months later he realizes he has paid taxes on a boat he no longer owns and demands a refund from Carolina County. Tom is not entitled to a refund under G.S. 105 -381 because the tax on the boat is not illegal: Carolina County is authorized to tax the boat because it still has situs in Carolina County on January 1, 2010. Nor is Tom enti- tled to a refund under the clerical error category because the listing error does not satisfy the Ammons test. Tom's opportunity to contest the listing of the boat in his name ended when the valuation appeal period ended thirty days after he received notice of the boat's tax valuation.lo That said, refunds and releases are justified under GS 105 -381's illegal tax category for taxes levied on property that does not exist or does not have situs in the taxing unit as of the listing date. Consider the example above, but assume instead that in mid -2009 Tom sold the boat to a resident of another county who promptly removed it from Carolina County. If Tom mistak- enly listed his boat for taxation in Carolina County for 2010, he would be entitled to a refund or a release of those taxes after providing evidence that the boat did not have situs in Carolina County on January 1, 2010. The same would be true if Tom's boat was destroyed by hurricane in mid -2009 and he mistakenly listed it for taxation for 2010. Tom would be entitled to a refund or release of the taxes on the boat if he could provide evidence that the boat no longer existed as of January 1, 2010." 9. The same is true of taxability errors. As the Ammons case demonstrates, incorrect decisions by the assessor regarding applications for exemptions or exclusions do not justify refunds or releases. If a tax- payer believes that he or she is entitled to an exemption or exclusion, the taxpayer must take advantage of the application and appeal process in G.S. 105 - 282.1. The taxpayer cannot retroactively raise these issues using the refund and release process under G.S. 105 -381. 10. G.S. 105- 317.1(c). Under G.S. 105 -306, the county is permitted to correct the listing error and pro- ceed as if it had been listed in Tina's name all along. This means that if Tom had never paid the taxes, he would no longer be considered the responsible taxpayer and could not be subject to enforced collection remedies. The same conclusions would be reached under G.S. 105 -302 if the listing error concerned real property. 11. In contrast, this author believes that a refund or release is not justified under G.S. 105 -381 when a business taxpayer lists a certain cost of personal property for taxation and then later seeks a refund or release of the related taxes on the grounds that the taxpayer included in that cost amount some personal © 2010 School of Government. The University of North Carolina at Chapel Hill