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Home My WebLink AboutAgenda - 11-05-2013 - 5e 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: November 5, 2013 Action Agenda Item No. 5-e SUBJECT: Tax Refund Request - Robert H. Pope DEPARTMENT: Tax Administration PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: 1) Robert H. Pope Letter of August 12, Dwane Brinson, Tax Administrator, (919) 2013 245-2726 2) Tax Office Letter of September 23, Annette Moore, Attorney, (919) 245-2318 2013 Michael Talbert, Interim County Manager, 3) Robert H. Pope Letter of September (919) 245-2300 30, 2013 4) Tax Office Letter of October 17, 2013 5) 2004 Refund Information 6) Refund Release Blog, UNC SOG, February 14, 2013 7) UNC SOG Bulletin on Refunds and Releases, April 2010 8) Resolution to Deny Refund Request PURPOSE: To consider adoption of a resolution to deny a refund request from Mr. Robert H. Pope covering tax years 2009, 2010, 2011 and 2012. BACKGROUND: North Carolina General Statute (NCGS) 105-381 allows taxpayers to appeal to the governing body for a release or refund of taxes due or already paid. A valid defense is (a) a tax imposed through clerical error; (b) an illegal tax; (c) a tax levied for an illegal purpose. Mr. Robert H. Pope submitted a letter on August 12, 2013 requesting refund of alleged overpaid property taxes of $2,945.87 due to nonexistent square footage and overvalued real estate for tax years 2009 — 2012. A 2004 Consent Order from the Property Tax Commission was referenced, and in the letter Mr. Pope submitted that the tax office did not comply with the Consent Order. On September 23, 2013 the tax office responded with evidence that the consent order was upheld and provided clarifying and supporting information to Mr. Pope. A second letter was submitted by Mr. Pope dated September 30, 2013 stating disagreement with the information. The Tax Administrator responded to Mr. Pope with a letter dated October 17, 2013 explaining that the request for refund would be taken before the Board of Commissioners and provided further information clarifying and supporting staff's position. Mr. Pope's 2004 tax assessment was appealed in 2004. In 2005, Mr. Pope and the tax office reached an agreement on the value of said property. A representative of the Property Tax Commission issued a Consent Order detailing the revised and agreed-upon tax assessment for 2 the 2004 tax year. Orange County strictly complied with the Consent Order by placing both the market value and present-use value on official records. Orange County then issued a $148.75 refund to Mr. Pope, cited by Orange County Finance as RL# 29589 and check# 202124. During the County's 2005 countywide revaluation, the tax assessment of Mr. Pope's property increased, but it was not appealed. Nor, per staff research, was it appealed in any subsequent year until 2013. For 2013 the Board of Equalization and Review revised the property's tax assessment and changed the improvement's square footage for the current year. The statute recognizes two different situations: one where the taxpayer has already paid the tax under appeal and the other where the taxpayer has yet to pay the tax. Mr. Pope's referenced tax bills have been paid. Paraphrased, 105-381(a)(3) affords taxpayers who present a successful statement of defense relief for up to five years of taxes paid. Mr. Chris McLaughlin at the UNC School of Government and his predecessors have opined that requests such as this presented to the Board are not supported by state law. A recent blog and a Property Tax Bulletin from Mr. McLaughlin, both attached, are leaned upon heavily for staff's recommendation to the Board. In summary, it is opined that square footage differences may be assessment errors and, as such, would not qualify as either a clerical error or an illegal tax. Moreover, NC General Statute 105-322 affords taxpayers an annual opportunity to appeal a tax record and assessment. Such annual requests are mutually exclusive, too. The County Attorney notes that, as stated above, North Carolina General Statute 105-381 provides limited statutory reasons whereby a county governing board may lawfully refund taxes. The statutory reason that comes nearest to these situations is one of "clerical error". However, the North Carolina Court of Appeals in the 1997 case of Ammons v. Wake County defined clerical error as something readily apparent on the face of the instrument. This is interpreted as being a typographical error or an error of transposition, not an error of judgment, or a lack of documented available information to amend the tax record. Additionally, North Carolina General Statute 105-380(c) provides in part: a) The governing body of a taxing unit is prohibited from releasing, refunding, or compromising all or any portion of the taxes levied against any property within its jurisdiction except as expressly provided in this Subchapter. b) Taxes that have been released, refunded, or compromised in violation of this section shall be deemed to be unpaid and shall be collectible by any means provided by this Subchapter, and the existence and priority of any tax lien on property shall not be affected by the unauthorized release, refund, or compromise of the tax liability. c) Any tax that has been released, refunded, or compromised in violation of this section may be recovered from any member or members of the governing body who voted for the release, refund, or compromise by civil action instituted by any resident of the taxing unit, and when collected, the recovered tax shall be paid to the treasurer of the taxing unit. The costs of bringing the action, including reasonable attorneys' fees, shall be allowed the plaintiff in the event the tax is recovered. For the reasons stated above, the County Attorney advises the Board of Commissioners that in his opinion issuing the requested refund is not supported by current North Carolina law and could subject the individual members of the Board of Commissioners to personal liability. FINANCIAL IMPACT: Approval of Mr. Pope's request would result in a net reduction in revenue of$2,945.87 to the County, municipalities, and special districts. 3 RECOMMENDATION(S): The Interim Manager recommends the Board approve the attached resolution to deny the property tax refund request for Robert H. Pope in accordance with North Carolina General Statute 105-381. The Board should consider that County staff, the County Attorney, and the UNC School of Government staff has been unsuccessful in finding a way to approve these types of refund requests that appear to not be supported by State law. As the Board has been previously advised, current administration believes that the proposed verification of records for all properties countywide due to occur before the next revaluation scheduled for 2017 could produce numerous similar situations. Thus, actions on this request could establish the foundation for future claims and ensuing impacts. 4 Attachment1 5 6 7 8 9 Attachment2 10 Attachment3 11 Attachment4 12 13 14 Attachment5 15 Attachment6 16 17 18 19 Attachment7 20 21 22 23 24 25 26 RES-2013-085 Attachment 8 NORTH CAROLINA ORANGE COUNTY REFUND RESOLUTION (Denial) Whereas, North Carolina General Statutes 105-381 allows for the refund of taxes when the Board of County Commissioners determines that a taxpayer applying for the refund has a valid defense to the tax imposed; and Whereas, the properties listed in the attached “RefundRequest” has been taxed and the tax has been collected: and Whereas, as to the propertylisted in the Refund Request, the taxpayer has timely applied in writing for a refund of the tax imposed but has not presented a valid defense to the tax imposed as indicated on the Request for Property Tax Refunds. NOW, THEREFORE, IT IS RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF ORANGE COUNTY THAT the property taxrefund recommended for denial are denied. Upon motion duly made and seconded, the foregoing resolution was passed by the following votes: Ayes: Commissioners ______________________________________________ ________________________________________________________________________ Notes: ____________________________________________________________ I, Donna Baker, Clerk to the Board of Commissioners for the County of Orange, North Carolina, DO HEREBY CERTIFY that the foregoing has been carefully copied from the recorded minutes of the Board of Commissioners for said County at a regular meeting of said Board held on ____________________, said record having been made in the Minute Book of the minutes of said Board, and is a true copy of so much of said proceedings of said Board as relates in any way to the passage of the resolution described in said proceedings. WITNESS my hand and the corporate seal of said County, this ______day of ____________, _____. ___________________________________ Clerk to the Board of Commissioners