Baker v. Tax Commission , 520 P.2d 203 ( 1974 )

ELLETT, Justice:

This is an original action in the nature of certiorari to review a decision of the Tax Commission of Utah, hereafter called the Commission. Only two matters of law are presented for our determination:

1. Can the Commission remove from the assessment rolls property which is exempt from taxation but which was wrongfully taxed?

2. Was the appeal from the County Board of Equalization (hereafter called the Board) timely filed?

The plaintiff is the duly elected and qualified assessor of Salt Lake County. He caused certain properties to be assessed for taxes which in the past had been considered exempt. There were more than ninety petitions filed with the Board, and thereafter that many appeals were taken to the Commission. The property in question belongs to various organizations including the Episcopal, Lutheran, Evangelical, and L. D. S. Churches, and also the Y. M. C. A., the Masonic Temple, eleven labor unions, cemeteries, gymnasiums, the Ladies Literary Club, and others.

The plaintiff urged the Commission to dismiss the appeals on the ground that the determination of whether or not property was exempt involved a legal determination of the meaning of the Constitution and of the statutes and that the Commission was not able to make that determination. He further claimed that the appeals from the ruling of the Board were not timely filed; therefore, the Commission was without authority to entertain the appeals.

The Commission denied the motions and ruled that it had power to determine the matters before it.

The assessor then filed this suit to have the ruling of the Commission reversed.

It is of interest to note that while the plaintiff claims that the commission is not qualified to pass on the legality of these matters, he has no such doubt as to his own ability to determine them correctly.

In this matter we are not called upon to determine whether the assessor was correct or not in making the assessment. The question is whether an owner of realty which is improperly taxed must pay the tax under protest and then sue in the courts to recover the same, as provided by Section 59-11-11, U.C.A.1953. That section says that a dissatisfied taxpayer may pay under protest, etc.

Section 59-11-14, U.C.A.1953, reads:

The remedy hereby provided shall supersede the remedy of injunction and all other remedies which might be invoked to prevent the collection of taxes or licenses alleged to be unlawfully levied or demanded, except in umisual cases where the remedy hereby provided is deemed by the court to be inadequate. [Emphasis added.]

This section has reference to remedies in courts and does not purport to prevent appeals to the Commission. This section is to be read in connection with Section 59-11-10, U.C.A.1953, which is as follows:

No injunction shall be granted by any court or judge to restrain the collection of any tax or any part thereof, nor to restrain the sale of any property for the nonpayment of the tax, except where the tax, or some part thereof sought to be enjoined, is illegal, or is not authorized by law, or the property is exempt from taxation. .

This case would seem to be unusual because the assessor has reversed the determination of all his predecessors and has unilaterally made assessments on properties which had heretofore been considered exempt from taxation. If in fact the property is not exempt, then the assessor is to be commended for his industry and wisdom, and the fact that it is unusual is not to be considered in derogation of his work, but if it is exempt, then the taxpayers should have remedies in the administrative field without going to the expense of a court trial.

Section 59-7-1, U.C.A.1953, requires the Board to complete the business of equalizing taxes by June 20 and further provides that all complaints regarding the assessment of properties where notice has not been given of a hearing are deemed denied as of that date. The section is silent as to those cases where notice has been given and the matters are being contested.

The petitions were not decided by the Board until after June SO. However, the Commission extended the time for the Board to act in the matters pursuant to Section 59-5-46(10), U.C.A.1953, which reads:

To reconvene, whenever the tax commission may deem necessary, any county board of equalization; and it may in its discretion extend the time for which any county board of equalization may sit for the equalization of assessments. .

There is no merit to the contention that the Commission lost jurisdiction simply because these appeals from the ruling of the Board were not taken within five days after June 20, when those rulings were not even made until September 15.

As to the power of the Commission to remove exempt property from the assessment rolls, the law is set forth in 72 Am.Jur.2d, State and Local Taxation, § 800, as follows:

Power of a county board of taxation to “revise and correct the assessment in accordance with the true value of the taxable property” necessarily includes the right to cancel the assessment entirely where the property is determined to be not taxable. .

See also the case of City of Newark v. Fischer, 3 N.J. 488, 70 A.2d 733, 21 A.L.R.2d 280 (1950).

Section 59-7-10, U.C.A.1953, pertaining to appeals to the Commission from rulings of the County Boards of Equalization provides for notice and a hearing and states the power of the Commission in the following language:

. At the hearing on said appeal the tax commission may admit additional evidence and make. such order as it deems just and proper, and make such correction or change in the assessment or order of the county board of equalization as it may deem proper. .

The Commission thus has the power to correct or change the orders of the Board, and it may make such an order as it deems proper. If it errs in making the order, then, of course, the assessor or any aggrieved person may have this court review the error.¹

The fact that administrative appeals are provided for by law compels one to believe that the judgment of the Commission is superior to that of the Board and that of the Board is superior to that of the assessor. At least such is the case until some court of competent jurisdiction finally determines the matter.

The case of County Board of Equalization of Kane County v. Tax Commission, 88 Utah 219, 50 P.2d 418 (1935) is controlling here. There the assessor and Board of Equalization improperly assessed property. An appeal was taken to the State Tax Commission, which cancelled the assessment. The matter was brought before this court on a writ of review, and in affirming the Commission this court at pages 226 and 227 of the Utah Reports, 50 P.2d at page 422, said:

Since the commission has general supervision over the tax laws of the state and over those charged with the enforcement of those laws, and has the power on appeal to make such correction or change in the order of the county board of equalization as it may deem proper, it must necessarily follow that it is authorized to cancel, vacate, or change an assessment when, upon a proper showing, it has been determined that the assessment should be so cancelled, vacated, or changed. .

We hold that the Commission does have the power to remove from the assessment rolls property which it finds to be constitutionally or statutorily exempt from taxation and that it is not necessary for a taxpayer to pay under protest and be put to the expense of a lawsuit until he has exhausted his administrative remedies.

The ruling of the Commission that it does have the power to exclude from the assessment rolls property which it finds to be exempt is affirmed. No costs are awarded.

CROCKETT, J., concurs.

1 . Sec. 59-5-76, U.C.A.1953.