RES-2013-085 Resolution denying Property Tax Refund Request of Robert H. Pope

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€ � � 21 � Refunds and Releases � I s i ! Can a clerical error by the taxpayer ever justify a refund or a release?No. Based on the lan- € � guage in G.S. 105-381, a refund or release is justified only if the tax is"imposed through clerical error"and only the government can impose a tax. Consider the situation in which Tina Taxpayer forgets that her mortgage company is escrow- ing her property tax payments and mal<es a payment to the tax office. Can Tina's payment be refunded based on the fact that her mortgage company will pay the tax bill later in the year with the escrowed funds?No. Even though Tina's error may be a clerical one,it does not sat- isfy G.S. 105-381 because the tax on her home was not imposed due to her error. Tina's refund request should be directed to her mortgage company, not to the tax office. Similarly, a refund is not justified if a taxpayer mistal<enly pays the taxes on property that he or she sold to another taxpayer at some point after the listing period, The taxpayer may have made a clerical error when he or she wrote the wrong parcel number on the payment checl<,but that does not mean the taxes on that parcel were imposed due to clerical error.The taxpayer's remedy, if any,would be from the new owner of the property,not the tax office. Illegal Taxes Taxes that are either illegal or leviecl for an illegal purpose may be released or refunded under G.S. 105-181. Situations in which refunds may occur include: l. Double taxation,when the same property is taxed more than once; 2. Situs mistal<es,when a taxing unit taxes property that has no situs in the unit's jurisdiction; 3. Procedural defects,when a taxing unit levies a tax without a required ordinance or referendum;6 4. Excess taxation,when a taxing unit levies a tax in excess of the applicable cap on that tax;'and 5. Improper purposes,when a taxing unit levies a tax for a purpose not permitted by the General Assembly.$ This author believes some local governments inapp'ropriately shoehorn valuation errors and/ or judgment errors into the illegal tax category and authorize refunds for matters that should be resolved during the valuation appeal process. For example, consider the situation in which the assessor's office incorrectly assumes during a reappraisal that Tom Taxpayer's house has a finished third floor. Two years later, Tom dem- onstrates to the assessor that his house has never had a finished third floor. Tom asl<s that his assessment be reduced retroactively and that his excess tax payment for the past two years be 6.For example,county and municipal property taxes must be included in the government's annual budget ordinance.G.S. 159-13.Rural fire district taxes require a petition signed by 35 percent of the affected landowners and voter referendum in the proposed district, G.S.69-25,1. 7.For example,with some exceptions general county and municipal property tax rates are capped at $1.50. G.S. 153A-149; G.S. 160A-209.Rural fire district tax rates are capped at either 10 cents or 15 cents, depending on the language of the authorizing referendum. G.S.69-25.�k. 8,G.S. 153A-149 and G.S. 160A-2091ist the approved purposes for general county and municipal prop- i erty taxes. Special service district taxes may be used only for the provision of additional services in those districts such as beach erosion control,sewer systems,fire protection(counties only),and downtown revitalization projects(municipalities only). G.S. 153A-301;G.S. 160A-536.Rural fire district taxes may be used only for the provision of fire protection services in these districts.G.S.69-25.4. O 2010 School of Government.The University of North Carolina at Chapel Hill