Cochise County v. Southern Pac. Co.

Decision Date22 April 1965
Docket NumberCA-CIV,No. 1,1
PartiesCOCHISE COUNTY et al., Appellants, v. SOUTHERN PACIFIC COMPANY, a corporation, Appellee. * 32.
CourtArizona Court of Appeals

Robert W. Pickrell, Former Atty. Gen., Darrell F. Smith, Atty. Gen., by Philip M. Haggerty, Asst. Atty. Gen., for appellants.

Evans, Kitchel & Jenckes, by Joseph S. Jenckes, Jr., and William T. Boutell, Jr., Phoenix, for appellee.


Southern Pacific Company, plaintiff below, brought a suit to collect an alleged over-payment of taxes in the amount of $24,904.92, plus interest and costs. Plaintiff prevailed, and the defendants below, appellants herein, being the counties in which the plaintiff does business, and the State Tax Commission, bring this appeal. The facts and background necessary to determine this matter are basically as follows:

The Arizona statutes provide that the members of the Arizona State Tax Commission constitute the State Board of Equalization, and that said Board of Equalization shall meet annually in the office of the State Tax Commission on the first Monday in August, A.R.S. § 42-141. The said State Board of Equalization is directed to fix the rate of taxation for state purposes to be levied and collected in each county, A.R.S. § 42-143. The method used, according to testimony, is to take the sum total of all of the appropriations and subtract from this amount of appropriations the total amount of estimated receipts from sources of revenue other than property taxation, plus any surplus that may be carried over from the year before, to arrive at the amount to be raised by state property taxation. The amount to be raised by real property taxation is divided into the amount of the net state valuation, which produces the state real property tax rate per one hundred dollars valuation for that year. In the year 1959, the State Tax Commission sitting as a Board of Equalization, arrived at a figure of 1.6998. As is customary, the matter was rounded off to provide a tax rate for the year 1959, of $1.70 per each one hundred dollars of valuation.

In arriving at this figure, the State Board of Equalization used the amount of $41,674,793.00, as the amount needed for average daily attendance in the primary and secondary schools of the State of Arizona. This figure had been supplied to the State Board of Equalization by the State Superintendent of Public Instruction on 8 July, 1959, pursuant to the Arizona Revised Statutes. The statutes provide that the legislature shall appropriate for the common school and high school education the amount of $170.00 per capita, per annum, computed according to the average daily attendance, as shown by the records of the Superintendent of Public Instruction, A.R.S. § 15-1211A. The statute further provides as follows:

'B. If the legislature fails to make the appropriation prescribed by subsection A the state board of equalization, when determining the annual tax levy for state purposes, shall include an amount sufficient to meet the minimum requirements of subsection A, and subsection A shall be deemed to constitute a continuing annual appropriation of the amount as determined by the minimum requirements therein prescribed.' A.R.S. § 15-1211B.

In arriving at his computation, the State Superintendent of Public Instruction had taken the average daily attendance in elementary schools and multiplied that amount by $170.00. In the high school area, however, the Superintendent of Public Instruction computed the number of students in a different manner, called Average Daily Enrollment, rather than Average Daily Attendance. This was done on advice of the attorney general. Based on their average daily enrollment, the Superintendent of Public Instruction notified the Board of Equalization that in 1959, there were 59,501 high school students which when multiplied by $170.00 arrived at the total figure of $10,115,170.00. This was the figure used in arriving at the tax rate for the year 1959. The testimony of the secretary to the State Tax Commission who was also the secretary of the State Board of Equalization, indicates that the Board of Equalization does not make an independent determination of figures with respect to Average Daily Attendance, but that the Board relies upon the figures that are presented to them by the Superintendent of Public Instruction.

A suit was brought, and the Arizona Supreme Court held that the definition of Average Daily Attendance as required in A.R.S. § 15-1212, requires that the computation be based on attendance, rather than enrollment, Long v. Dick, 87 Ariz. 25, 347 P.2d 581, 80 A.L.R.2d 949 (1959). Had this method of computation been followed by the Superintendent of Public Instruction, the number of students in high schools for 1959, would have been computed at 56,173, rather than the number of 59,501 actually submitted by the Superintendent of Public Instruction. This would mean that the total amount estimated to be collected for the year 1959, would have to be reduced in the amount of $565,760.00, and that the real property tax rate would have been reduced from $1.70 to $1.661 per one hundred dollars of assessed valuation. Plaintiff contends that the .039 cents additional assessment cost them the amount of approximately $24,000 in additional taxes. That the number of high school students, and therefore the amount required under the formula were incorrect, there is no dispute. That the State Board of Equalization accepted these figures without question there is no dispute, and whether the State Board of Equalization would be in a position to dispute the figures presented to them by the Superintendent of Public Instruction, we do not attempt to answer at this time. It would appear clearly that the State Board of Equalization was not guilty of any wrong doing or any fraud and did not abuse its discretion in setting the tax rate. The question therefore presented to us is basically this: When the State Tax Commission, sitting as a Board of Equalization, sets the tax rate of the State of Arizona honestly and without fraud based upon the best figures available to it, which tax rate is larger because of an incorrect figure or amount determined by the Superintendent of Public Instruction, may a taxpayer, who has over-paid his tax, recover the amount of that over-payment?

Our Supreme Court has discussed this matter generally as follows:

'The rule at the common law was that taxes voluntarily paid could not be...

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1 cases
  • Cochise County v. Southern Pac. Co., 8662-PR
    • United States
    • Supreme Court of Arizona
    • 12 Enero 1966
    ...judgment in favor of plaintiff which judgment was appealed, and the Court of Appeals, Div. 1, reversed the judgment, 1 Ariz.App., 199, 401 P.2d 153. This court granted plaintiff's motion for A.R.S. § 42-301 provides, in part: 'B. On the second Monday of August each year, the state board of ......

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