7 Or. Tax 444 | Or. T.C. | 1978
Submitted on plaintiff's motion to open and modify decree, followed by memoranda.
Decision and order modifying decree rendered May 9, 1978. *445
Plaintiff has moved the court to exercise its continuing jurisdiction to reopen this case, pursuant to ORS
Plaintiff's motion results from a disagreement regarding the proper method of computing the interest on the tax refunds due plaintiff as a result of the court's decision. The disagreement centers on the proper interpretation to be given to ORS
"The interest provided by subsection (2) of this section shall be paid at the rate provided in subsection (2) of ORS
311.505 computed from the time the tax was paid or from the time the first instalment thereof was due whichever is the later. * * *"
Under this statute, if a tax is subsequently determined to have been overpaid, is the overpayment to be allocated proportionately to the four instalments (as argued by plaintiff) or is the overpayment deemed to occur when the cumulated payments first exceed the correct total (as contended by the defendant)?
[1, 2.] "Interest" means compensation for the use or forbearance of another's money. Applying this definition to the instant situation, the government had the use of the taxpayer's money when the government received from the plaintiff a tax payment in excess of that which was due. Since the statute requires the government to pay interest on property tax refunds, ORS
[3.] The statute directs that interest is to be "computed from the time the tax was paid" (but not for any *446
period prior to the due date of the first instalment). The "tax" is obviously the excess tax being refunded to the taxpayer. This leaves the court to determine when the excess tax was paid. ORS
ORS
"Interest shall be charged and collected on any taxes or instalment thereof, not so paid, at the rate of one percent per month, or fraction of a month until paid." (Emphasis supplied.)
ORS
[4, 5.] The court concludes that the excess tax was paid proportionately with each instalment and the taxpayer is entitled to have interest computed on the *447 refund from the date of each of those overpayments. This conclusion serves to put the computation of interest on property tax deficiencies and property tax refunds on the same basis.
NOW, THEREFORE, IT IS ORDERED that plaintiff's motion is approved and modification of the decree is hereby granted.
The decree shall be modified to direct that interest on the refund of taxes due plaintiff shall be calculated as though the overpayment of plaintiff's taxes had been made in equal parts, quarterly, for each tax year. Interest shall be computed for each respective quarterly overpayment from the date it was paid (but not before it was due) to the date of refund. The county assessors, tax collectors and county commissioners of the several counties here involved shall take the necessary steps to carry out the requirements of this decision, pursuant to ORS