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Bob Ferguson

AGO 1952 No. 276 -
Attorney General Smith Troy


In absence of statute or ordinance, refunds of the county real estate sales tax may only be made by court order and only if payment was nonvoluntary.  The county general fund is liable but reimbursable.

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                                                                    April 1, 1952 

Honorable Ronald R. Hull
Yakima County Prosecuting Attorney
102 County Court House
Yakima, Washington                                                                                                              Cite as:  AGO 51-53 No. 276

 Dear Sir:

             You have requested our explanatory opinion

                         relative to the circumstances under which refunds of the county excise tax on sales of real estate be made.

             We conclude:

                         1. That the legislature, and/or the county, by ordinance, may provide for, and reasonably limit, refunds and interest.

                         2. That refunds may otherwise be madeonly upon court order under the following limitations:

                         (a) Voluntary payments may not be refunded unless made under mistake of fact even though the tax may be later declared unconstitutional.

                         (b) Involuntary payments,i.e., made under compulsion, may be refunded.  Written protest is but evidence that payment was nonvoluntary.

                         (c) Interest upon refunds may not be allowed in absence of statute or ordinance.

                         3. If the tax monies have been distributed, the county general fund is liable but reimbursable out of subsequent collections.

              [[Orig. Op. Page 2]]


             Preface:  Chapter 11, Laws of 1951, Ex. Sess., as amended (chapter 28.45 RCW) permits the counties by ordinance to levy an excise tax on the sale or transfer of real property.  Neither the statute nor, to our knowledge, any of the ordinances enacted thereunder provide for refunds.  The proposed uniform ordinance enacted by most counties does not so provide.


             A. Statute:

             The legislature may provide for both retroactive and prospective refunds and impose limitations thereon.  TheBoard of Commissioners, etc., v. Lucas, Treas., 93 U.S. 108 (Otto 1876); cited and approved in State ex rel. Savings Union v. Whittlesey, 17 Wash. 447, 454-455 (1897);Commonwealth v. The Ferries Co., 120 Va. 827, 92 S.E. 804 (1917).  The refund of an invalid tax is but the discharge of a just and moral duty.  SeeUnited States v. Realty Co., 163 U.S. 427 (1896); Civic Federation v. Salt Lake Co., 22 Utah 6, 61 Pac. 222 (1900);Cooley on Taxation (4th Ed. 1924) 25012507, § 1259.

             B. Ordinance:

             Although chapter 11 does not specifically authorize counties to enact refunding ordinances, the same considerations of justice obtain.  As with the legislature, the power to levy taxes normally includes the power to provide for just refunds.  Therefore, it is but logic that since the counties have been granted the power to levy, and nothing contrary appearing in the granting statute, that counties have authority to authorize proper refunds.  Blum Company v. Town of Hastings, 76 Fla. 7, 79 So. 442-443 (1918).  Such merely comports with

             "honesty and fair dealing."

             See also Bart v. Pierce County, 60 Wash. 507, 111 Pac. 582 (1910) and the cases cited therein.

             C. Interest:

             The power to authorize refunds carries with it the power to provide reasonable interest.  See cases cited in  [[Orig. Op. Page 3]] 57 A.L.R. 364-366 (1928) and 76 A.L.R. 1012-1015 (1932).

             D. Refunds by County Officers:

             In absence of statute or ordinance, county officers have no authority to grant refunds.  See 3Cooley on Taxation, supra, 2506:

             "No executive or ministerial officer has authority to refund taxes unless that authority is expressly conferred."

             The courts use strong language in denying an official the right to grant a refund at his own discretion.  SeeState v. Eves, 6 Idaho 144, 53 Pac. 543 (1898);People v. Salomon, 54 Ill. 46 (1870); People ex rel. Dox v. Judge, et al., 12 Iowa 237 (1861); and cases cited therein.

                         II. REFUNDS BY COURT ORDER


             In the absence of statute or ordinance, refunds may only be made by court order and no interest may be allowed.  The following rules govern.

            A. Voluntary payments:

             The well settled rule is that, absent statutory authority, a taxpayer has no right to recover back a tax, assessment or license he has voluntarily paid.  64 A.L.R. 10, et seq., (1929) and cases cited therein; 51 Am.Jur. 1005, Taxation, § 1167,et seq.  This is true even though the statute levying the tax is later determined to be unconstitutional, 48 A.L.R. 1381 (1927), or the taxpayer, while knowing the facts, misapprehends the law.  SeeCorwin Investment Co. v. White, 166 Wash. 195, 6 P. (2d) 607 (1932);Robinson v. Kittitas County, 101 Wash. 422, 172 Pac. 553 (1918);Pittock & Leadbetter Lumber Co. v. Skamania County, 98 Wash. 145, 167 Pac. 108 (1917); Stimson Timber Co. v. Mason County, 97 Wash. 205, 166 Pac. 251 (1917); andPhelps v. Tacoma, 15 Wash. 367, 46 Pac. 400 (1896).

             B. Involuntary Payment:

             A tax to be paid involuntarily must be paid under on immediate and urgent necessity therefor, as for example,  [[Orig. Op. Page 4]] to release the person or property from detention, or to prevent its seizure.  United States v. New York and C. Mail S. S. Co., 200 U.S. 488 (1906); Union R. R. Co. v. Commissioners, 98 U.W. 541 (1878);Great Northern R. R. Co. v. State, 200 Wash. 392, 93 P. (2d) 694 (1939);Texas Co. v. Cohn, 8 Wn. (2d) 360, 394, 2 P. (2d) 522 (1941).

             A mere unwillingness or reluctance to pay the tax does not render its payment involuntary.  Singer Sewing Machine Co. v. Teasley, 198 Ala. 673, 73 So. 969 (1916); 64 A.L.R. 17.  The situations in which payment of the tax here involved would be "involuntary" within the above rule would seem rare‑-probably only when necessary to prevent immediate foreclosure and sale.

             C. Protests:

             At common law, payment under protest was a condition precedent to recovery of the tax.  Moore Ice Cream Co. Inc. v. Rose, 289 U.S. 373, 375-376 (1933) and cases cited.  The purpose of protest is generally held to preserve the taxpayer's right to assert that the payment was under compulsion and it is but evidence thereof, see 51 Am.Jur. 1021, sec. 1189; 48 A.L.R. 1381, 1386 (1927).  It does not normally change the character of the payments from voluntary to involuntary.  As stated inGreat Northern R. R. Co. v. State, supra, 200 Wash. at 419-420, the protest is

             "only one class of evidence that the payment was made under coercion."

             See Tozer v. Skagit County, 34 Wash. 147, 75 Pac. 638 (1904); 48 A.L.R. 26 (1929).

             Protest is often given much weight, however.  Owings v. City of Olympia, 88 Wash. 289, 152 Pac. 1019 (1915); Pittock & Leadbetter Lumber Co. v. Skamania County, supra;Corwin Investment Co. v. White, supra; see alsoNorthwestern and Pacific Hypotheekbank, et al. v. Adams County, 174 Wash. 447, 24 P. (2d) 1086 (1933).

             D. Mistake of Law:

             Although involving different considerations, courts in dealing with mistakes of law and fact often use the terms of "voluntary" and "involuntary."  A payment made under a  [[Orig. Op. Page 5]] mistake of law is "voluntary" and a refund may not be allowed.  In other words, payment of the tax with full knowledge of the facts is not made involuntary (and recoverable) because made under a mistake of law or a misapprehension of the payer's legal rights.  See cases cited 64 A.L.R. 33 (1929).

             E. Mistake of Fact:

             The majority, but sometimes deviated from, rule is that such payments are involuntary and may be recovered.  64A.L.R. 35, supra; Puget Realty Co. v. King County, 50 Wash. 349, 97 Pac. 226 (1908); andChilds v. Spokane County, 100 Wash. 64, 170 Pac. 145 (1918).

                         III. THE FUND LIABLE

             A. Ordinance:

             If the county may enact refund ordinances, it may by ordinance, as is necessary and proper, provide for payments out of the fund over which it has statutory jurisdiction.

             B. Court Order ‑ Tax undistributed:

             If the court orders a refund before the tax monies have been distributed, it would appear most equitable to reimburse the taxpayer out of the undistributed funds.  See 61C.J. 984, § 1262.

             C. Court Order ‑ Tax Distributed ‑ County GeneralFund:

             The Washington, although not the universal, rule is that the action may not be defeated because the illegally collected tax has already been disbursed among the various taxing districts.  Montgomery v. Cowlitz, 14 Wash. 230, 235, 44 Pac. 259 (1896), questioned on other grounds inTozer v. Skagit County, supra; Byram v. Thurston County, 141 Wash. 28, 251 Pac. 103, 252 Pac. 943 (1926); and Stimson Timber Co. v. Mason County, supra.

             The county general fund is liable.  Northwestern and Pacific Hypotheekbank, et al. v. Adams County, supra; foll. in 174 Wash. 447, 24 P. (2d) 1086 (1933).  However, we feel that because (1) the county is in form a trustee  [[Orig. Op. Page 6]] of these monies for the various county school districts, (2) these districts have received monies to which they were not legally entitled, and (3) the county general fund has borne the loss, the county should, in all practical fairness, be able to properly reimburse itself from subsequent real estate sales tax collections prior to disbursement among those districts.  There is little law on this problem but the same considerations of justice which require a refund to the taxpayer, require the school district to reimburse the county.  Under no circumstances will the state school equalization fund be liable.


             We realize that many questions remain but we cannot attempt to anticipate the many and varied factual and legal problems which will arise.  The legislature has made this a county tax, to be county administered, and the refund procedures, within the limits of the above rules, must be county determined.

             We hope, however, the above has been of assistance.

 Yours very truly,
Attorney General

Assistant Attorney General