S.793 – Property Tax Procedure Act

Under state law, taxpayers can challenge the tax assessments of their property. This bill would slightly change the appeals/challenge process.

Under this legislation, the Department of Revenue (DOR) would begin notifying counties of assessment challenges filed by taxpayers and of the DOR’s rulings. This would have the effect of giving the local government the opportunity to challenge a DOR decision that was in the taxpayer’s favor.

The bill would also require the DOR to notify affected counties of challenges to a denial for tax exemptions, if the application is by a commercial or industrial taxpayer (rather than an individual).

The bill would also lengthen the time DOR has to issue a determination from nine months to one year, and the Administrative Law Court could grant a further extension of six months. If DOR does not issue a determination within that time, it would have to notify both the taxpayer and any affected county of their right to appeal the case to the Administrative Law Court. Both parties would have 30 days to appeal. However, this bill states that the 30-day limit begins when the DOR notice is mailed or when the notice was delivered to the taxpayer or the county. As this could easily be three different dates, it is unclear exactly how much time a taxpayer would have under this bill to file an appeal.

This bill would also limit the tax refunds that a taxpayer is eligible to receive if his challenge succeeds. Only the overpaid taxes from the three years immediately preceding the final ruling (not the filing of the complaint) could be refunded unless the Administrative Law Court makes an exception.

Finally, if a taxpayer files for a refund and DOR fails to make a ruling within six months, the claim is considered automatically denied.

For the most part, this bill’s provisions are relatively innocuous, as notifying all effective parties to challenges should be standard practice. However, several of the provisions (the vague language of the 30-day limit, the cap on tax refunds, and the automatic denial of a claim if DOR neglects to respond within six months) are slanted in the favor of the government and against the taxpayer. This is a concern that merits further scrutiny on the part of lawmakers.

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