LITTLE SCHOLARS OF ARKANSAS FOUNDATION D/B/A LISA ACADEMY AP CONSOLIDATED THEATRES II L.P. CSRC CHARTER LISA, LLC AND KLS Leasing LLC, ON BEHALF OF THEMSELVES AND ALL OTHERS INTERESTED v. PULASKI COUNTY, ARKANSAS DEBRA BUCKNER, IN HER OFFICIAL CAPACITY AS PULASKI COUNTY TREASURER JANET TROUTMAN WARD, IN HER OFFICIAL CAPACITY AS PULASKI COUNTY ASSESSOR
689 S.W.3d 428
Ark.2024Background
- LISA Academy and its landlords (Appellants) challenged Pulaski County's assessment and collection of property taxes on properties used by public charter schools in Pulaski County, which they claim are exempt under the Arkansas Constitution.
- The Pulaski County Assessor denied their requested constitutional tax exemption for property used exclusively for school purposes.
- Appellants filed an illegal-exaction and declaratory judgment action in circuit court, arguing also that Ark. Code Ann. § 6-21-118 is unconstitutional as it alters a constitutional exemption.
- The circuit court dismissed the case for lack of subject-matter jurisdiction, holding that county courts have exclusive original jurisdiction over county tax matters, not circuit courts.
- This decision was appealed to the Arkansas Supreme Court, which affirmed the dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the circuit court had jurisdiction over illegal-exaction claims for property tax exemption on school properties | Circuit court has concurrent jurisdiction over illegal-exaction claims and exemption denials constitute illegal exaction | Only county courts have original jurisdiction in assessment/exemption disputes | No, circuit court did not have jurisdiction; only county court does |
| Whether county courts have exclusive original jurisdiction over assessment disputes | This is an illegal-exaction claim, not an assessment dispute—belongs in circuit court | The dispute is over exemption/assessment, not the legality of the tax itself—county court has jurisdiction | Yes, county courts have exclusive original jurisdiction over assessment/exemption disputes |
| Distinction between exemption disputes and illegal-exaction claims | Assessment contrary to constitutional exemption constitutes illegal exaction | Illegal-exaction requires the tax itself to be illegal, not merely misapplied | Exemption disputes do not amount to illegal-exaction claims |
| Whether declaratory judgment action on constitutionality of tax statute is within circuit court jurisdiction | Circuit courts can decide constitutionality and grant declaratory judgments | The matter is within county court jurisdiction as it's tied to a tax assessment dispute | Circuit court lacks jurisdiction unless county court hears it first |
Key Cases Cited
- Robinson v. Villines, 362 S.W.3d 870 (Ark. 2009) (defining illegal exaction and jurisdiction framework)
- White v. Ark. Capital Corp./Diamond State Ventures, 226 S.W.3d 825 (Ark. 2006) (distinguishing types of illegal-exaction cases)
- Pockrus v. Bella Vista Village Prop. Owners Ass’n, 872 S.W.2d 416 (Ark. 1994) (procedural flaws in assessment don't make exaction itself illegal)
- Young v. Jamison, 828 S.W.2d 831 (Ark. 1992) (county court has exclusive jurisdiction over tax exemption disputes)
- Comcast of Little Rock, Inc. v. Bradshaw, 385 S.W.3d 137 (Ark. 2011) (illegal-exaction suits do not cover exemption disputes)