HomeMy WebLinkAboutAgenda - 09-07-2005-5eI
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 7, 2005
Action Agenda
Item No. 5-e,.
SUBJECT: Property Tax Refund Request
DEPARTMENT: Assessor's Office PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
Resolution
6/09/05 Refund Request Letter
8/02/05 Assessor Letter
INFORMATION CONTACT:
John Smith, ext. 2101
TELEPHONE NUMBERS:
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 336-227-2031
PURPOSE: To consider adoption of a refund resolution related to one (1) request for property
tax refund.
BACKGROUND: The Assessor's Office has received one (1) request from a taxpayer for
refund of property taxes paid in prior fiscal years. General Statute 105-381(b), "Action of
Governing Body" provides that "upon receiving a taxpayer's written statement of defense and
request for release or refund, the governing body of the Taxing Unit shall within 90 days after
receipt of such a request determine whether the taxpayer has a valid defense to the tax
imposed or any part thereof and shall either release or refund that portion of the amount that is
determined to be in excess of the correct liability or notify the taxpayer in writing that no release
or refund will be made". North Carolina law allows the Board to approve property tax refunds
for the current and four previous fiscal years. Under GS105-380 "the governing body of a
taxing jurisdiction 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". Per
the same statute, any tax that has been refunded in violation of law may be recovered from any
members of the governing body who voted for the refund,
In this case, the taxpayer has requested a refund for tax years 2000 through 2004, but there is
no basis for granting a refund. In response to the taxpayer's inquiry, his property was re-
measured in February 2005, The onsite review led to a small reduction in square footage of
living area. However, in accord with the 2005 adopted schedule of values, the total building
value actually increased slightly. Since the remeasurement produced an increase in property
value, there can be no assumption that the tax value was improperly high for tax years 2000
through 2004, and thus no basis for granting the requested relief.
2
It is a reasonable question to ask how a decrease in living space square footage can lead to an
increase in overall property value. The schedule of values recognizes that the cost to construct
single-floor square footage is greater per square foot than the cost to construct multi-floor
square footage, since the foundation and roofing costs much less when building up as opposed
to building out. For example, if one builds a 2000 square foot single floor dwelling the
foundation and roof must both cover 2000 square feet. However, when building a 2000 square
foot multi- floor dwelling (1000 square feet per floor) the foundation and roof must cover only
1000 square feet, half as many square feet as in the first instance. In addition, the schedule of
values recognizes the theory that the cost to build a structure is less per square foot as the size
increases. It is therefore reasonable that the larger the component of the structure is the lower
the cost will be. This is also evident in marketing. The price of a 12-pack of sodas is less per
soda than to purchase 12 sodas individually. In this particular property, the square footage was
reduced slightly therefore the rate charged per square foot increased. Initially the value of the
2448 square feet was $109.48 per square foot and after reducing the size to 1920 square feet,
the rate increased to $117.65 per square foot. In addition to this change, and area coded "AA"
(single story attached addition) was changed from 408 square feet to 720 square feet. There
are also design factors that the schedule of values recognizes. It is for these reasons, and in
accord with the adopted schedule of values, that the total value of the property increased even
though the total square footage decreased, After receiving notice of the higher value and its
explanation, the taxpayer decided to appeal the increased valuation to the 2005 Orange County
Board of Equalization and Review.. The E&R Board decided to uphold the valuation determined
by the Assessor and to make no further adjustments to the value.
It is the Tax Assessor's recommendation that the requested refund be denied. This
recommendation is being made for several statutory reasons. First, measurement adjustments
do not constitute an illegal tax. The Assessor has worked closely with the County Attorney in
defining what can and what cannot be considered an illegal tax. By definition, an illegal tax is a
duplication of taxation, a situation where one is taxed twice for the same property, An example
of this would be where the same house is taxed on two different tracts of land, when it only
existed on one tract.. An illegal tax could also occur when the county appraiser mistakenly
appraises the home as having two floors when only one floor exists.
Second, measurement adjustments do not constitute a clerical error. Again, the Assessor has
worked closely with the County Attorney in defining what can and cannot be considered a
clerical error. By definition, a clerical error is an error of transposition. For example, a clerical
error would result when the clerk is keying from the appraiser's property record card and the
clerk keys two stories, when the appraiser indicated on the property record card that the house
is a single story, Another example might be when the appraiser indicates that the house was
built in the year 2000 but the clerk keys 2000 into the data entry area for fireplaces. By statute,
a difference in square footage is not an illegal tax and it is not a clerical error. It is an
adjustment that should be corrected for the current tax year and carried forward.
Finally, the value of the taxpayer's home actually increased when the property characteristics
were properly keyed into the appraisal system. Therefore, no harm has been done to the
property owner and there has been no overage of taxes charged or paid.
FINANCIAL IMPACT: Denial of this application for refund will result in no reduction in monies
from the County, municipalities, and special districts.
RECOMMENDATION(S): The Manager recommends that the Board approve the attached
resolution denying one (1) property tax refund request in accordance with N.C. General Statute
105-381.
NORTH CAROLINA
ORANGE COUNTY
RE, FUND/RELEASE RESOLUTION (Denial)
Whereas, North Carolina General Statutes 105-381 and/or 330,2(B) allows for the refund and/or
release of taxes when the Board of County Commissioners determines that a taxpayer applying for the
refund/release has a valid defense to the tax imposed; and
Whereas, the properties listed in each of the attached "Request for Property Tax Refund/Release"
has been taxed and the tax has been collected: and
Whereas, as to each of the properties listed in tare Request for Property Tax Refund/Release, 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 Refund/Release.
NOW, THEREFORE, IT IS RESOLVED BY THE BOARD OF COUNTY
COMMISSIONERS OF ORANGE COUNTY THAT the presented property tax refund(s) and
release(s)are denied,
Upon motion duly made and seconded, the foregoing resolution was passed by the following votes:
Ayes: Commissioners
Noes:
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
, 2005
Clerk to the Board of Commissioners
S
Der-Rua Edward Tang
7208 North Hill Drive
Chapel Hill, NC 27514
June 9, 2005
Mr, John Smith, Jr., CAE FILED
Assessor, Orange County
200 South Cameron Street
P. O. Box 8181 'JUN 13 2005
Hillsborough, NC 27278
Dear Mr. Smith: ORANGE 00. TAX OFF'30F
RE: Tract)6 755966
As the Review Board instructed yesterday, I am writing this letter to request
for refund on the property taxes over paid between year 2000 to year 2004.
I have been paying property taxes based on the assessment of 3300 square feet
while the actual footage is 3026 square feet (measured by your staff in
February, 2005), As a result, I have overpaid taxes for 274 square feet
(3300 sq ft - 3026 sq ft = 274 sq ft) for the past 5 years.
For your convenience, I enclosed copies of my payment records:
Year Property tax paid
2000 4976.00 ($1 .51/sq ft)
2001 5079,32 ($1 .54/sq ft)
2002 5151.41 ($1, 56/sq ft)
2003 5334,01 ($1. .62/sq ft)
2004 5545.20 ($1. 68/sq ft)
Over payment:
2000 $1..51 x 274 sq ft = $413.74
2001 $1.54 x 274 sq ft = $421,96
2002 $1,56 x 274 sq ft = $427.44
2003 $1.62 x 274 sq ft = $443.88
2004 $1.68 x 274 sq ft = $460.32
Total over payments $2,167..34
Please send the refund to 7208 North Hill Drive, Chapel Hill, NC 27514, at
your earliest convenience.
Thank you very much.
Sincerely,
-jr- ua dwwd Tang
C thia C. Tang
UU,
ORANGE COUNTY TAX OFFICE
JOHN SMITH, Jr, CAE 200 SOUTH CAMERON STREET JUDY RYAN
ASSESSOR P.O. BOX 8181 DEPUTY ASSESSOR
HILLSBOROUGH, NORTH CAROLINA 27278
TELEPHONE (919) 732-8181, Bit 2100, PAX 644-3091
August 2, 2005
Der-Hua Edward Tang
7208 North Hill Drive
Chapel Hill, NC. 27514
RE: Tract # 755966 Refund Request
Dear Mr. & Mrs. Tang:
This letter is in reference to your correspondence of June 9, 2005 requesting a refund of taxes.
North Carolina General Statute 105;381allows for the refund of taxes under very limited circumstances.
Since receiving your refund request we have tried to find a way to legally honor your request. We keep
ending up at the same conclusion that this situation falls under a category that statutorily is not refundable.
Instead, the proper step is to make the correction for the current tax year and future years. In accord with
these conclusions, I am enclosing a copy of your 2005 property record card to assist you in determining that
you are properly taxed. Please review the property record card and let me know if there are any further
changes or questions. If it would be helpful I will he glad to have an appraiser meet with you at your home
to go over everything and make certain everything is correct
We always endeavor to find a way to make refunds. Sometimes we are not successful. Refunds have to be
approved by the Board of County Commissioners. If the commissioners were to make a refund not
authorized by the statutes those commissioners individually become personally liable for those improperly
refunded funds. Due to this liability we are always careful and diligent in determining the legality of each
refund request.
On the basis of our findings, a refund is not authorized under NC GS 105-381and could not be
recommended to the county commissioners for approval.
If I can provide any further explanation or assistance of any kind, please do not hesitate to call.
Sincerely,
Judy Ryan
Deputy Assessor
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