State Dept. of Assessments and Taxation v. Clark
| Decision Date | 07 December 1976 |
| Docket Number | No. 272,272 |
| Parties | STATE DEPARTMENT OF ASSESSMENTS AND TAXATION et al. v. Fitzhugh T. CLARK et al. |
| Court | Court of Special Appeals of Maryland |
H. Christopher Malone, Asst. County Atty., with whom were Richard S. McKernon, County Atty. and Robert G. Tobin, Jr., Deputy County Atty. on the brief, for appellant Director of Finance for Montgomery County, Maryland.
Murray L. Deutchman, Rockville, with whom were Bullard & Deutchman, P. A., Rockville, on the brief, for appellees.
Argued before THOMPSON, MENCHINE and LOWE, JJ.
In establishing tax rates on real property, government must first have determined the assessed value of the property it may tax. This presupposes a cutoff date after which the valuation will remain fixed for purposes of the succeeding taxable year. That cutoff date, statutorily designated 'the date of finality', is at the root of the issue appealed here. The tax statute, Md.Code, Art. 81, designates this 'date of finality' as the 1st day of January preceding the tax year. Art. 81, § 2(20), § 29A. Procedural protection is provided a dissatisfied taxpayer by first requiring that notice of assessment be given to him. He is then given an opportunity and a time within which he may protest the assessment to Recognizing the absolute adherence to an inflexible date of finality may cause injustice to both taxpayer and State, the legislature specifically provided for a reassessment when property is subdivided or when the property's character or use is changed after the date of finality (January 1st) but before the semi-annual date of finality (July 1st). Art. 81, § 19(a). Furthermore, for property damaged or destroyed, after the date of finality but before the semi-annual date, by fire or any other event which should cause the property to be removed from the tax rolls, Art. 81, § 31(f)(2) alleviates taxes for the last 6 months of the taxable year and provides for refund if taxes have already been fully paid. Aside from these particular provisions, however, there is no statutory right to relief from an assessment for the taxable year after the date of finality. The taxpayer is of course free to apply for reassessment of the property prior to the next date of finality for the ensuing tax year and comply with the protest requirements thereafter.
the Supervisor of Assessments (from whom it originally emanated). Art. 81, § 29(a). In the event of further dissatisfaction, he may protest to the local Property Tax Assessment Appeal Board and, beyond that, to the Maryland Tax Court. Art. 81, § 255. Limited review of the Maryland Tax Court's judgment is available in the circuit courts. 1 These [367 A.2d 72] courts may not second-guess the assessment, but may determine only whether it was supported by substantial evidence on the record or was erroneous as a matter of law. See American Oil Co. v. Bd. of Appeals, 270 Md. 301, 310-311, 310 A.2d 796; Ch. 338, Laws of 1976. These statutory remedies are exclusive, see Tanner v. McKeldin, 202 Md. 569, 577, 97 A.2d 449, and one who does not avail himself of them is generally bound by the assessment as of the date of finality, with but preciously limited relief
Undoubtedly recognizing that even these specific exceptions still left possibilities of unforeseeable injustice, the legislature enacted Ch. 732, Laws of 1949, declaring it to be an emergency measure. It is currently codified as Art. 81, § 67. At the time this litigation arose, that section read as follows:
2
Appellees' dissatisfaction with the way in which relief was granted under this section prompted the litigation below.
Appellees own a five-and-one-half acre parcel of land located at the intersection of Muddy Branch Road and In May 1972 a sewer moratorium, which had the effect of preventing sewer extensions and attachments to appellants' land, was proclaimed by the Washington Suburban Sanitary Commission. The foundation for the increased assessment was thus denied realization, at least temporarily.
Interstate 70S (now 270) in Montgomery County. Upon their initiative, the property was rezoned on August 25, 1970 from rural-residential to multiple family, medium density residential. As a result of that rezoning they were notified on December 10, 1971, pursuant to Md.Code, Art. 81, § 29, that their land assessment was increased from the previous year's (1971) $12,640 assessment to $132,150 for the prospective year (1972). Agreeing that the rezoning had substantially enhanced the value of their land, appellants did not protest or appeal the assessment within the time provided by Md.Code, Art. 81, § 255. On January 1, 1972, therefore, the assessment became final.
On August 29, 1972, appellees wrote to the Supervisor of Assessments requesting 'reassessment of the property to be effective for the next 6 month period' in view of the cloacal restrictions. Because the legislature had not provided for reassessments within the taxable year following the date of finality, the Supervisor treated the request as a petition under Art. 81, § 67, the only statutory relief after the date of finality. That section, as indicated, authorizes the decrease or abatement of an assessment after the date of finality 'in order to correct erroneous or improper assessments and to prevent injustice. . . .' The relief may be granted whether a protest against the assessment was filed before the date of finality or not; however, it may only be granted by the joint action of three officials-the final assessing authority, the Supervisor of Assessments and the County Treasurer (or in Montgomery County, the Director of Finance).
Recommending a reduction from $132,150 to $99,110, the Supervisor forwarded the matter to the Appeal Tax Court for Montgomery County. 3 After holding a hearing, during
which appellees were afforded the opportunity to present evidence and argue their position, the Appeal Tax Court issued a memorandum and order authorizing the reduction recommended by the Supervisor. The order was forwarded to the Director of Finance, and he approved it on February 23, 1973. The Appeal Tax Court then notified appellees, by letter dated March 7, 1973, that an order had been entered in their case reducing the land assessment from $132,150 to $99,110 for the taxable year 1972. Appellees filed a petition of appeal to the Maryland Tax Court on April 9, 1973 4 and, on April 11, 1973, brought a 'declaratory action' in the Circuit Court for Montgomery County. They sought:
1. to enjoin the collection of taxes levied without providing a rehearing on the question of the value of their property as affected by the sewer moratorium; and,
2. to declare Md.Code, Art. 81, § 67 unconstitutional as applied to them on the grounds that it violated appellants' rights to equal protection of the laws, due process, 'and amounts to a taking without just compensation.'
Following the customary procedural skirmishing during which both sides sought discovery and filed motions for summary judgment, the circuit court ruled that it had jurisdiction, that the amount of the reduction had been reached arbitrarily and that the matter was not moot because appellees had already paid the tax, albeit in escrow. The court denied appellants' motions and granted appellees' motion to the extent of remanding the case to the Supervisor of Assessments, Director of Finance, and Property Tax Assessment Appeal Board for further proceedings. Although not reaching the constitutional question, the trial judge filed
a well written and convincingly reasoned opinion that lacked excellence primarily in that it was wrong. The issues therein abiding were three: jurisdiction, arbitrariness of proceeding, and right to refund; but the greatest of these was jurisdiction. The State Department of Assessments and Taxation, the Supervisor of Assessments for Montgomery County, the Property Tax Assessment Appeal Board and the Director of Finance for Montgomery County have appealed.
Appellants contend that by its very language § 67 is a creature of legislative grace and provides no entitlement to relief. 5 They rely primarily upon LaBelle v. State Tax Comm., 217 Md. 443, 142 A.2d 560, cert. den. 358 U.S. 889, 79 S.Ct. 135, 3 L.Ed.2d 117. The question involved there was:
'. . . whether the State Tax Commission had jurisdiction to hear an appeal by the property owner from the refusal of the taxing authorities of Montgomery County to reduce an assessment that had become final...
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State Dept. of Assessments and Taxation v. Clark
...under its inherent power. The trial court held that it had jurisdiction. The Court of Special Appeals agreed. State Dept. of Assess. & Tax. v. Clark, 34 Md.App. at 147, 367 A.2d 69. Appellees had also asserted in their motion for summary judgment that appellants' action under § 67 in arrivi......
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