TAXATION - EXEMPTION - REFUND OF PROPERTY TAXES TO PERSONS EXEMPT UNDER RCW 84.36.128.
A person exempted from paying the first $50 of a given year's real property tax under RCW 84.36.128, who nevertheless pays this amount by reason of mistake, inadvertence or lack of knowledge, need not have claimed his exemption between February 15 and April 30 in order to set the stage for a valid refund claim under § 1 (7) of chapter 224, Laws of 1969, Ex. Sess.; instead, we would deem it to be sufficient compliance with the statute for a taxpayer to prove his eligibility for the exemption (as of the time his payment was made) when he files his application for a refund.
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October 28, 1969
Honorable Paul Klasen
Ephrata, Washington 98823
Honorable Ronald L. Hendry
County City Building
Tacoma, Washington 98402
Cite as: AGO 1969 No. 21
By letters previously acknowledged, each of you have requested the opinion of this office on a matter pertaining to the refunding of property taxes to certain elderly retired persons under the provisions of RCW 84.69.020, as amended by § 1, chapter 224, Laws of 1969, Ex. Sess. Although your respective inquiries were somewhat differently worded, we believe the essential issue raised by both requests to be the same; accordingly, we have consolidated them for disposition in this single opinion. The question to be considered may be stated as follows:
In order to be entitled to a refund of property taxes paid by mistake, inadvertence or lack of knowledge by a person "exempted from paying property taxes or a portion thereof pursuant to RCW 84.36.128," is it necessary that such person, in [[Orig. Op. Page 2]] addition to having made claim for the refund on or before October 30 of the year for which the taxes have been paid, also have filed a claim for exemption between February 15 and April 30 of said year?
We answer this question in the negative for the reasons set forth in the following analysis.
We think that an understanding of our analysis and resulting conclusion will be aided by a brief recapitulation of the historical background of the legislation in question. We start by noting the provisions of § 2, chapter 168, Laws of 1965, Ex. Sess., by which the legislature added a new section to chapter 84.36 RCW, granting an exemption
". . . from the first fifty dollars of real property taxes due and payable in any one year, . . ."
to heads of households meeting each of the following conditions:
"(1) A male head of a household shall be sixty-five years of age or older prior to February 15th of the year in which the real property is assessed and the taxes levied thereon;
"(2) A female head of a household shall be sixty-two years of age or older prior to February 15th of the year in which the real property is assessed and the taxes levied thereon;
"(3) The person claiming exemption shall have owned, either in fee or by contract purchase, the real property for which the exemption is claimed for at least five years or have been a resident of the state of Washington for at least ten years if not qualified under the five year ownership limitation;
"(4) A claim for exemption can only be made for a single family dwelling;
[[Orig. Op. Page 3]]
"(5) Said single family dwelling as provided in subsection (4) above cannot be permanently occupied by anyone who is not solely dependent upon the head of the household for his support;
"(6) The head of the household and spouse shall be retired from all gainful employment for at least one year prior to application for such exemption and shall not be actively engaged in any type of business;
"(7) The combined income of the head of the household and his spouse, from all sources whatsoever, shall not be in excess of three thousand dollars ($3,000) for the calendar year immediately preceding the year in which the real property is assessed and the taxes levied thereon."
Section 3 of this act declared the effectiveness of this tax exemption to be contingent upon the passage of an enabling amendment to the state constitution. See, AGO 65-66 No. 99. This amendment, Amendment 47, added a new section (§ 10) to Article VII of the constitution, and was approved by the voters at the November 8, 1966, election. It provided as follows:
"Notwithstanding the provisions of Article 7, section 1 (Amendment 14) and Article 7, section 2 (Amendment 17), the following tax exemption shall be allowed as to real property:
"The legislature shall have the power, by appropriate legislation, to grant to retired property owners relief from the property tax on the real property occupied as a residence by those owners. The legislature may place such restrictions and conditions upon the granting of such relief as it shall deem proper. Such restrictions and conditions may include, but are not limited to, the limiting of the relief to those property owners below a specific level of income and those fulfilling certain minimum residential requirements."
Thereafter, in AGO 65-66 No. 122, a copy enclosed, we advised that the exemption statute did not
[[Orig. Op. Page 4]]
". . . automatically grant an immediate exemption to those persons who may be qualified under its terms. The exemption must be affirmatively claimed."1/
Then, noting the legislature's reference to the exemption as running against "real property taxesdue and payable in any one year" (emphasis supplied), we concluded that the exemption from payment of the first fifty dollars of real property taxes, for a given year, had to be claimed during the period that such taxes were "due and payable."
In addition, answering a separate question, we concluded that under the tax refund statutes then in effect, no authority existed for payment of any sort of a refund to an otherwise eligible taxpayer who inadvertently paid his taxes (for a given year) in full without claiming the exemption. In thus concluding, we particularly noted that the only grounds for refunding erroneously paid property tax, under then existing law, were the six set forth in RCW 84.69.020, which read as follows:
"On order of the board of county commissioners ad valorem taxes paid before or after delinquency shall be refunded if they were:
[[Orig. Op. Page 5]]
"(1) Paid more than once; or
"(2) Paid as a result of manifest error in description; or
"(3) Paid as a result of a clerical error in extending the tax rolls; or
"(4) Paid as a result of other clerical errors in listing property; or
"(5) Paid with respect to improvements which did not exist on assessment date; or
"(6) Paid under levies or statutes adjudicated to be illegal or unconstitutional.
"No refunds under the provisions of this section shall be made because of any error in determining the valuation of property."
The 1967 session of the legislature responded to this opinion in so far as it related to the procedures to be followed in claiming an exemption by a person meeting all of the prescribed qualifications through its enactment of § 2, chapter 132, Laws of 1967, Ex. Sess. (cf., RCW 84.36.129), providing as follows:
"Claims for exemption shall be made annually and filed between February 15 and April 30 of the year in which the taxes are payable and solely upon forms as prescribed and furnished by the department of revenue."
In addition, it modified these qualifications to some extent repealing § 2, chapter 168, Laws of 1965, Ex. Sess., supra, and replacing it with a new section (§ 1, chapter 132, Laws of 1967, Ex. Sess., now codified as RCW 84.36.128). For our present purposes, we need only note the text of the opening paragraph of this new section which reads as follows:
"A person shall be exempt from any legal obligation to pay the first fifty dollars of real property taxes due and payable in any one year if the following conditions are met: . . ."
[[Orig. Op. Page 6]]
However, nothing was done by this 1967 session of the legislature (in terms of enacted legislation) with respect to the refund question a fact which we pointed out with considerable concern on June 7, 1967, when, in AGO 1967 No. 20, copy enclosed, we said:
"However, because the legislature has still enacted no provision for the refund of taxes paid as a consequence of an inadvertent failure to claim the tax exemption, we have no other alternative than to conclude that no refund of 1967 taxes paid without protest by a mortgagee of property 'owned' by a person eligible for the tax exemption can be obtained."
Again, in this opinion (as in AGO 65-66 No. 122, supra) we examined the six grounds for tax refunding which were contained in RCW 84.69.020, supra, but found none of them applicable to the situation at hand saying:
". . . Here, the reason for the excessive payment is the failure of the person entitled to the exemption to make a timely claim for it, and not any of the reasons listed in RCW 84.69.020. . . ."
This time, apparently, the message was effective. In response, the 1969 legislature succeeded in expressly amending the refund statute whose shortcomings we had twice pointed out so as to cause it to read as follows:
"On order of the board of county commissioners ad valorem taxes paid before or after delinquency shall be refunded if they were:
". . .
"(7)Paid as a result of mistake, inadvertence, or lack of knowledge by any person exempted from paying real property taxes or a portion thereof pursuant to RCW 84.36.128: PROVIDED, That a claim for such refund is made on or before October 30 of the year for which the taxes have been paid; . . ." (Emphasis supplied.)2/
[[Orig. Op. Page 7]]
This amendment was contained in § 1, chapter 224, Laws of 1969, Ex. Sess. On the other hand, § 2 of this enactment, while amending RCW 84.36.129, supra, in certain respects, left intact the 1967 procedure for claiming the exemption "between February 15 and April 30 of the year in which the taxes are payable." The essence of your question iswhether the legislature intended to make the strict compliance with this procedure an additional condition precedent3/ to the payment of any refund to a person who was (in the words of RCW 84.36.128, supra) "exempt from any legal obligation to pay the first fifty dollars of real property taxes due and payable" in a given year but who, "by mistake, inadvertence or lack of knowledge" paid the full amount stated in his property tax statement4/ without filing his claim for exemption during the specified period.
In determining the intent of the legislature, we are (as usual) to be guided by the established rules of statutory construction. Before pointing out the several rules of construction which seem most applicable to the matter at hand, let us first note one such rule which at first blush might appear relevant but which, on closer examination, is not. We have in mind the rule (noted in AGO 65-66 No. 122, supra) that statutes granting tax exemptions must [[Orig. Op. Page 8]] be strictly construed against the taxpayer claiming the exemption. See,Crown Zellerbach v. State, 45 Wn.2d 749, 757, 278 P.2d 305 (1954). Here, however, the scope of the exemption provided for by RCW 84.36.128 is not in issue; instead, the question being considered only relates to the manner of obtaining the fruits of the exemption.
In determining this question, we draw, chiefly, upon the several interrelated rules of construction which will be found in the following excerpt from our state supreme court's recent decision in Wilson v. Lund, 74 W.D.2d 950 [[Wn.2d 945]], 447 P.2d 718 (1968), at pp. 951-952:
"We said inIn re Horse Heaven Irrigation Dist., 11 Wn.2d 218, 226, 118 P.2d 972 (1941):
"The courts, in pursuance of the general object of giving effect to the intention of the legislature, are not controlled by the literal meaning of the language of the statute, but the spirit or intention of the law prevails over the letter thereof.
". . . .
"It is a rule of such universal application as to need no citation of sustaining authority that no construction should be given to a statute which leads to gross injustice or absurdity.
"See alsoLenci v. Seattle, 63 Wn.2d 664, 388 P.2d 926 (1964).
"As stated inNationwide Papers, Inc. v. Northwest Egg Sales, Inc., 69 Wn.2d 72, 76, 416 P.2d 687 (1966):
"Language within a statute must be read in context with the entire statute and construed in a manner consistent with the general purposes of the statute.
"A learned writer has explained:
"The presumption is that the lawmaker has a definite purpose in every enactment and has [[Orig. Op. Page 9]] adapted and formulated the subsidiary provisions in harmony with that purpose; that these are needful to accomplish it; and that, if that is the intended effect, they will, at least, conduce to effectuate it. That purpose is an implied limitation on the sense of general terms, and a touchstone for the expansion of narrower terms. This intention affords the key to the sense and scope of minor provisions. From this assumption proceeds the general rule that the cardinal purpose or intent of the whole act shall control, and that all the parts be interpreted as subsidiary and harmonious. 'A statute is to be construed with reference to its manifest object, and if the language is susceptible of two constructions, one which will carry out and the other defeat such manifest object, it should receive the former construction.' 2 Sutherland, Statutory Construction § 4704 (3rd ed. Horack).
"We approach the issue in this case with the above principles of statutory construction in mind."5/
The critical language to be construed, in this case, is contained in the phrase "by any person exempted," appearing in the new subsection (7) which was added to RCW 84.69.020 by § 1, chapter 224, Laws of 1969, Ex. Sess., supra. Under a narrow or limited view of this language, the argument is available that since an eligible taxpayer is required to establish his right to the exemption provided for by RCW 84.36.128, supra, by filing a claim for exemption between February 15 and April 30 of the year in which the taxes against which the exemption is claimed are payable, he cannot be regarded as being a "person exempted," for purposes of the refund statute, unless he has strictly followed this procedure. However (considering the obvious fact that in order for a refund to be granted to a taxpayer, he must have first paid something in excess of that which he was required to pay) it will be seen that under this view the statute [[Orig. Op. Page 10]] would only benefit a person who (a) inadvertently or mistakenly paid the amount stated in his tax statement prior to April of the given year without filing his claim for exemption; and then, upon realizing the mistake (b) promptly also, prior to April 30 filed his exemption claim.
Yet, having thus filed his exemption claim, this person would then be allowed a full six month period (i.e., until October 30 "of the year in which the taxes have been paid") to file hisrefund claim. Why, it seems appropriate to ask, would the legislature have established such a procedure as this?
On the other hand, if "any person exempted" (as used in the 1969 amendment) is construed to mean, simply, any person who meets all of the conditions specified in RCW 84.36.128, supra thereby being "exempt from any obligation to pay the first fifty dollars of property taxes . . ." without regard to when he claims the exemption, the entire 1969 statute is rendered coherent and meaningful. This construction, in short, effects what we think to have been the obvious legislative intention of overcoming the consequences of our opinions as expressed in AGO 65-66 No. 122 and AGO 1967 No. 20, supra. And, unquestionably, it is a permissible construction of the phrase, in view of the terminology used in the opening paragraph of RCW 84.36.128, to which express reference is made in the amendment.
From this construction it follows, in direct answer to your question, that a person exempted from paying the first fifty dollars of a given year's real property taxes (under RCW 84.36.128), who nevertheless pays by reason of mistake, inadvertence, or lack of knowledge, need not have claimed his exemption between February 15 and April 30 in order to set the stage for a valid refund claim; instead, we would deem it to be sufficient compliance with the statute for such a taxpayer to prove his eligibility for the exemption (as of the time his payment was made) when he files his application for refund meaning at some time on or before October 30 of the subject year.6/
[[Orig. Op. Page 11]]
We trust that the foregoing will be of some assistance to you.
Very truly yours,
DONALD FOSS, JR.
Assistant Attorney General
PHILIP H. AUSTIN
Assistant Attorney General
*** FOOTNOTES ***
1/See, subsections (8) and (9) of § 2, chapter 168, Laws of 1965, Ex. Sess., supra, which provided that:
"(8) All claims for exemption shall be made and signed either before a notary public or the county assessor or his deputy in the county where the real property is located. Any person signing a false claim shall be subject to either civil or criminal perjury;
"(9) Claims for exemption shall be made annually and solely upon forms as prescribed by the Washington State Association of County Assessors."
2/See, § 1, chapter 224, Laws of 1969, Ex. Sess. In addition, this 1969 amendment added two further grounds for refunding erroneously paid property taxes, as follows:
"(8) Overpaid as a result of mistake, inadvertence, or lack of knowledge by any person paying the same: Provided, That a claim for such refund is made on or before October 30 of the year for which the taxes have been overpaid; or
"(9) Paid on the basis of an assessed valuation which was appealed to the state board of tax appeals and ordered reduced by the board: Provided, That the amount refunded shall only be for the difference between the tax paid on the basis of the appealed valuation and the tax payable on the valuation adjusted in accordance with the board's order."
3/I.e., in addition to filing a claim for refund on or before October 30 of the year for which the taxes have been paid.
4/See, RCW 84.56.050.
5/See, also, AGO 1967 No. 15, at p. 5 and cases cited therein. Cf., 2 Corinthians 3:6 (King James): "Not of the letter, but of the spirit: for the letter killeth, but the spirit giveth life."
6/We base this conclusion on the above construction of subsection (7) of § 1, chapter 224, Laws of 1969, Ex. Sess.; however, it should be noted, at least, that a plausible argument might also be made for the applicability of new subsection (8) of this 1969 act, as an alternative basis for refunding overpayments of taxes to individuals within the class under consideration. Repeated for ease of reference, this subsection authorizes the refunding of erroneously paid taxes where:
"(8) Overpaid as a result of mistake, inadvertence, or lack of knowledge by any person paying the same: Provided, That a claim for such refund is made on or before October 30 of the year for which the taxes have been overpaid; . . ."
It would appear to us that a person paying the full amount appearing on his tax statement, notwithstanding his right to have the first fifty dollars "exempted" would have "overpaid" his taxes; if this is a result of mistake, inadvertence or lack of knowledge, the statute would seem to fit.