6 Or. Tax 116 | Or. T.C. | 1975
Decision on briefs for defendant rendered June 18, 1975.
Affirmed
There is no dispute that the subject property had been classified and approved by the county assessor as coming within the farm use value statutes and that it had been assessed accordingly as of January 1, 1973, and January 1, 1974. The problem presented is the construction of Or Laws 1973, ch 503, § 13, codified as ORS
"Interests in real property passing by reason of death that had received special assessment as farm use land under subsection (1) of ORS
308.370 for the tax year immediately preceding the date of death of the decedent shall be valued for the purposes of ORS118.005 to118.840 at its value for farm use determined by the assessor under subsection (1) of ORS308.370 for the tax year immediately preceding the date of the death of the decedent." (Emphasis supplied.)
Under its construction of this statute, the defendant, pursuant to the rule-making power found in ORS
"Land which is within a farm use zone and had received special assessment under ORS
308.370 (1) for the tax year immediately preceding the date *118 of death shall be valued for inheritance tax purposes at its farm use value determined by the assessor for the tax year immediately preceding the date of death. For a death in the calendar year 1974, the farm use value determined as of January 1, 1973 under ORS308.215 (5) is applicable." (Emphasis supplied.)
It is the plaintiff's position that the "tax year immediately preceding the date of the death" referred to in ORS
The defendant contends, as stated in its opinion and order: "Land is assessed every 12 months on January 1. It is this 'tax year' that the statute refers to." The opinion of the defendant goes on to state:
"The Petitioner [plaintiff] interprets 'tax year' in the property tax sense as meaning the July 1-June 30 period. If the property tax definition of 'tax year' is adopted, it appears that the Petitioner might be correct. However, we are dealing here with the inheritance tax statute and, within this context, the only reasonable construction of 'tax year' under ORS
118.155 is as a reference to the prior calendar year. Otherwise, as the Petitioner now contends, the estates of decedents dying prior to July 1 of a calendar year could report the value of farmland in the estate from a determination made over two years prior to the decedent's death, *119 while ignoring a value determination made one year closer in time. * * *"
The question presented to the court is the intent of the Legislative Assembly in its use of the words "tax year" in Or Laws 1973, ch 503, § 13, an act relating to farmlands and containing amendments to sections on zoning, property tax assessment, the amendment to ORS chapter 118 herein construed, and an amendment to the personal income tax law found in ORS chapter 316.
The court has been unable to find a definitive construction of the words "tax year" in the statutes or the case law. The term is ambiguous because, for many years, it has regularly been used by the legislature in connection with the "assessment year" beginning January 1, and also in connection with the state and local fiscal year beginning July 1. An examination of the pertinent property tax chapters, ORS 308, 309, 310 and 311, and of the effective dates used in ad valorem property tax acts proves this conclusion.
[1.] It is ordinarily recognized that January 1 is the "assessment date" for each tax year, the date as of which the true cash value is determined by the county assessor as to each item of taxable property (ORS
It is also clearly understood that the fiscal administration of the state and of local governments is on a fiscal-year basis, beginning on July 1 and ending on the following June 30 (ORS
The Department of Revenue and its predecessor, the State Tax Commission, over a substantial period of *120
time, have published a useful "Calendar of Assessment and Taxation Procedures,"1 listing in chronological order all the statutory dates specified in the various property tax acts. The list vividly illustrates the myriad of details required for the metamorphosis of an assessment roll (ORS
The examination of ORS chapters 308 to 311 reveals many references to tax periods, variously described. The expressions "current year," "ensuing year," "prior year," and even "tax year" are frequently found without definition but the meaning is readily determinable by the context. Some references are applicable to years beginning January 1, others to years beginning July 1. In many instances, both in old and new statutes, additional words are used which clearly distinguish the years referred to, indicating a legislative recognition of an "assessment year" (beginning January 1) and a "tax year" (beginning July 1), but there is no overall consistency and there is some outright contradiction.
In support of the view that "tax year" means the fiscal year, beginning July 1, are the following examples *121 given in their numerical order by ORS reference (emphasis being supplied by the court in each instance):
308.207. "* * * The assessed value [for bonding purposes] shall be the value * * * used for the most recent fiscal year, * * *."
308.219, relating to "printouts" required when assessment and tax rolls do not constitute written records, provides:
"(3) The assessment and tax roll shall be printed out in full, as of the June 30 which is the end of the fiscal year for which the roll was prepared. * * *"
310.125, relating to a special rule for computing maximum amount of certain continuing levies:
"(1) Effective for the fiscal year 1962-1963 and subsequent fiscal years, the authorized amount of any continuing property tax levy * * *."
310.395(2), relating to ballot statements to be submitted to a vote of the people, there is required to be printed the amount "the levy of property taxes for the fiscal yearbeginning July 1 of the current calendar year is increased or decreased * * *" as follows:
"If this measure is approved, the operating budget to be financed by local taxes for the tax year 19__-19__ will be $__________ greater (or less) than the operating budget financed by local taxes for the preceding year."
310.595 refers to the "tax roll for the fiscal year."
310.608(1) refers to "each tax year beginning on July 1 of the following years: * * *" (running from 1969 to 1979), and subsection (2) refers to "[f]or tax years beginning on July 1, 1980, and thereafter, * * *."
311.275 provides that, as between the grantor and the grantee of real property, when there is no express *122 agreement as to payment of the taxes on the property becoming due and payable "for the fiscal year in which the sale occurs, the grantor is liable for the same proportion of the taxes as the part of the fiscal year prior to the day of the sale of the property bears to the whole of the fiscal year, and the grantee is liable for the remainder of the taxes."
311.361(1), describing the form of the tax receipt to be given to the taxpayer, provides:
"(1) Every tax receipt shall state plainly on its face the name of the county, the fiscal year for which the taxes entered therein have been levied followed by the word 'Taxes.' * * *"
311.375, an old statute providing for forwarding state taxes collected by county tax collectors and paid over to county treasurers, with the proviso that the county treasurer, on or before December 1 is to pay to the state treasurer "one-half of the amount of state taxes charged to his county for thefiscal year then current. In similar manner the county treasurer shall pay over one-quarter of such taxes on or before March 15, and remainder of such taxes on or before June 30, ofthe fiscal year."
311.531, relating to the tax collector's annual statement compiled from the tax rolls, requires a statement "showing separately for each tax year for the prior seven years the following information as to transactions during the past fiscalyear ending June 30: * * *."
On the other hand, January 1 is often found related to the "assessment" or the "assessment year." See ORS
"Chapter 586, Oregon Laws 1951, shall be given effect retroactively to include the tax year commencing on, and the assessment date of, January 1, 1951."*123
The impact of this is somewhat diluted by a later statute, ORS
Since Oregon Laws 1951 is referred to in "anomalous" ORS
Inasmuch as the effective date clause of a newly enacted measure is often regarded by the Legislative Counsel as a "temporary section," effective date provisions enacted by the legislature may often be found in the session laws and not in the Oregon Revised Statutes. For a further examination of the legislative use of language in this area, an examination has been made *124 of ad valorem property tax statutes enacted by the legislature and printed in Oregon Laws 1973. (The court has supplied the emphasis in the examples which follow.)
In Or Laws 1973, ch 17, § 62, at 51, an amendment to ORS
"The assessed valuation of locally assessed taxable property assessed by the county assessor's office in __________ county, as entered on the *125 [19__-19__] assessment roll for January 1, 19__, is __ percent of the true cash value of such property."
Chapter 503, at 1053, contains § 13, the section being construed in the subject case, now codified as ORS
Plaintiff has relied on the case of Ewauna Box Co. et al. v.Weyerhaeuser,
"Property is assessed only once for each tax year, and we hold that the tax year for personal property commences with the first day of January and terminates on the 31st day of December in each year. Although, in fact, the levy of the tax is not made until the month of July, the assessment is completed and the tax is regarded as assessed on the first day of January * * *."
By analogy, the plaintiff concludes that the "tax year" for real property must be the fiscal year July 1-June 30, inasmuch as the statute provides that the lien date for real property is July 1.
The court's decision in Ewauna Box Co., supra, notes that its conclusion that the personal property tax year commences on January 1 and terminates on December 31 is confirmed by the effective date clause used by the legislature in Or Laws 1951, ch 586, § 30, which reads, at 1045:
"This Act shall be given effect retroactively to include the tax year commencing on, and the assessment date of, January 1, 1951." (Emphasis supplied.)
The case illustrates this court's thesis that the use of "tax year" by the legislature, in connection with effective dates, has been used ambiguously but that the legislative intent can be found in the context with sufficient certainty for practical purposes. *127
Having come to the conclusion that the words "tax year" in ORS
"As a general rule, the time as of which the value of property is to be determined for inheritance tax purposes is the date of the decedent's death. ORS113.165 ; * * *. ORS118.155 allows farm use land to be valued at its farm use value rather than full market value. In order to expedite this valuation, the statute creates an exception to the general rule by providing that the farm use value already established on the tax roll will be used rather than attempting to determine farm use value as of the decedent's death. Thus, we have an inheritance tax statute utilizing an established property tax valuation in order to expedite the inheritance tax process.
"Within this inheritance tax setting, the only reasonable construction of the words 'tax year' is as a reference to the preceding calendar year. Using the assessment as of January 1 of the preceding calendar year would insure that the valuation has had time to be scrutinized by a board of county equalization and by the Department of Revenue, has been placed on the tax rolls and has given the taxpayer an opportunity to challenge that valuation. In addition, the date of valuation would not be too far removed from the critical inheritance tax date, the date of the decedent's death.
"The facts at hand demonstrate the unreasonable result that is reached by using the property tax definition of 'tax year.' Mrs. McCoy died on February 21, 1974. Her farm land had been recently valued as of January 1, 1974. To use this valuation could easily lead to a challenge of that valuation *128 and a consequent delay in the closing of the estate.3 Utilizing the established valuation as of January 1, 1973 would avoid such a problem and expedite the closing of the estate. The plaintiff, however, argues for the January 1, 1972 valuation, 25 months prior to the decedent's death, by using the property tax definition of 'tax year.' Such a construction is unreasonable within the context of the inheritance tax process.
"Under the plaintiff's construction of the statute, the estates of decedents dying prior to July 1 of a calendar year would report the value of farm land in the estate from a determination made over two years prior to the decedent's death, while ignoring a value determination made one year closer in time. The estates of decedents dying after July 1 of a calendar year would, in contrast, be required to use the more recent value determination for valuation of the farm land in their estates. Under a construction of the words 'tax year' as meaning calendar year, all farm land in the estates of decedents dying in any one calendar year would all be valued as of the same date.
"It is apparent that the words 'tax year' are susceptible to two possible constructions, * * *."
The brief then cites Curly's Dairy v. Dept. of Agriculture,
"* * * 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.
"Further, the interpretation of an ambiguous statute by an agency charged with its administration is entitled to great weight, although it is not *129
binding on the courts. Van Ripper v. Oregon Liquor Cont. Com.,
[2.] The court finds that in the construction of ORS
The defendant's Order No. IH 75-1 is affirmed.
Defendant is entitled to its costs and disbursements incurred herein.
An examination of the first eight ad valorem property tax measures filed in the House of Representatives reveals the following effective date clauses: HB 2149, "Section 7. This Act * * * applies to tax years beginning after June 30, 1976." HB 2202: "Section 2. This Act applies to assessment yearsbeginning on or after January 1, 1976, * * *." HB 2327: "Section 2. The amendments * * * apply to tax years beginning on and after July 1, 1975." HB 2333: "Section 5. This Act applies to assessment years beginning on or after January 1, 1976." HB 2367: "Section 2. The amendments * * * apply to taxyears beginning on and after January 1, 1975." HB 2462: "Section 5. This Act applies to tax years beginning on andafter January 1, 1977." HB 2463: "Section 7. * * * the amendments * * * apply to assessment years beginning on andafter January 1, 1976." HB 2549: "Section 6. This Act shall apply to property taxes levied for the fiscal years beginningon and after July 1, 1976."