Jean H. Tyson v. Department of Revenue

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BEFORE THE MONTANA TAX APPEAL BOARD |

JEAN H. TYSON, )
) Docket No. PT-2014-2
Appellant, ) |
-v8- )

) FINDINGS OF FACT,
) CONCLUSIONS OF LAW

DEPARTMENT OF REVENUE ) ORDER and OPPORTUNITY
OF THE STATE OF MONTANA, ~ ) FOR JUDICIAL REVIEW
)
Respondent. )

Statement of Case
Jean H. Tyson (Taxpayer) appealed the final decision of the Department of
Revenue (DOR) concetning the Department's denial of her application for the
Property Tax Assistance Program (PTAP).

_ The DOR sent a letter dated July 10, 2014 to the Taxpayer informing her
that she did not qualify for PT'AP, and rescinding a prior letter granting her
property tax assistance under the program. The Vaxpayet appealed. As requested
by the Taxpayer, this appeal was considered on the record without a heating in -
Helena, Taxpayer and DOR submitted written exhibits for this boatd to consider
in out opinion. The Board, having fully considered: the exhibits and any other

written submissions, finds and concludes the following:

Issue

‘The issue before this Boatd is whether the Department of Revenue
appropriately denied approval of the Taxpayer’s application for property tax
assistance for tax year 2014.

Summa

Jean H. Tyson is the taxpayer in this proceeding and, therefore, has the burden

of proof. Based on a preponderance of the evidence, the Board upholds the final

- decision of the Department of Revenue.

Evidence Presented

1. The Property Tax Assistance Program is a statutory program that allows a low-
income taxpayer to pay reduced property tax. This law requires taxpayers to
have owned and occupied the property as their primary residence for at least
seven months during the preceding calendar year. §15-6-134(4)(a)@), MCA.

2. This matter was heard on the record, and both parties were afforded the
opportunity to submit exhibits and documentation to the Board.

3. Ms. ‘Tyson timely applied for property tax assistance on January 9, 2014. Her
application was processed by DOR at the Lake County office. DOR Exh. B.

4, DOR notified Taxpayer in writing on February 20, 2014 that she had met the

eligibility requirements for property tax assistance. DOR Exh. B.

. The DOR sent a follow-up letter on July 10, 2014 denying Taxpayer’s property

|

tax assistance. ‘This determination reversed the prior approval for this
assistance due to a “clerical error.” The July decision rescinded eligibility for the
assistance because “the property did not meet ownership and/or occupancy
requirements established by law.” DOR Exh. B.

. Department of Revenue Office supervisor Debra Doney attested that a new
employee had failed to present het work for review during her training period
and had mistakenly qualified Taxpayer for property tax assistance. Doney Aff. J]
5-6; DOR Exh. A. |

. When a taxpayer submits an application for PT'AP, the application is approved
ot denied based upon residency and income information from the prior year.
Doney Aff. 13; DOR Exh. A.

. Upon review of the Taxpayer's Warranty Deed, the DOR determined the Z
Taxpayer had not occupied the property long enough to meet the legal
requirement for property tax assistance. See Wartanty Deed dated July 25, 2013, |
conveying the property to Jean and Charles Tyson. DOR Exh. B.

. DOR?’s denial of the assistance rests on the fact that if Taxpayer did not own
the property until July of 2013, as evidenced by the date on the Warranty Deed, ~-
seven months of occupancy could not have elapsed in 2013 to qualify het for

the 2014 PTAP program. DOR Exh, B.

_ 10, Taxpayer timely appealed the DOR decision directly to this Board on July 23,

Ser eran eee ee

2014. In a letter to the Board requesting relief she wrote: “the boatd should

approve me for this year because this was the property tax office’s fault, not
mine.”

Principles of Law

1. The State Tax Appeal Board has jurisdiction over this matter. §15-2-302,
MCA.

2, The Property Tax Assistance Program reduces the property taxes of low-
income taxpayers who have owned and occupied the property as their
primary residence for at least seven months during the preceding calendar
year. §15-6-134(4)(a) a), MCA.

3. The person claiming exemption from taxation has the burden to show that
property claimed to be exempt belongs to a class which is specifically
exempt. See Container Corp. of Am. v. Franchise Tax Bd., 463 U.S. 159, 175,

103 S. Ct, 2933, 2945, 77 L. Ed. 2d 545 (1983); Poorman v. State Bd. of

Equalization, 99 Mont. 543, 45 P.2d 307 (1935); In re Maller Land ¢ Livestock
Co., 56 F. Supp. 34 (D. Mont. 1944).
4. DOR may not grant property tax assistance to any taxpayer who does not meet

statutory requirements for residency. §15-6-134(4)(a)@), MCA.

Findings of Fact, Conclusions of Law and Board Discussion
The Board must determine, based on a preponderance of the evidence,

whether the DOR properly denied Ms. Tyson property tax assistance for tax year

2014. See Family Promise of Greater Helena v: Dept. of Revenue, Montana Tax Appeal Board

decision, May 23, 2013, (http://mtab.mt.gov/decisions/taxexempt.aspx), and.

WL 2300626; Bods » Dept of Revenue, Montana Tax Appeal Board decision, March 28,
2013, (http://mtab.mt gov/decisions/ptropertytax.aspx), and WL 1287970. Based
upon a preponderance of the evidence, we find that denial of property tax assistance
is cottect in this instance.

We find the evidence presented indicates the Taxpayer did not meet the legal
requirements to qualify for the PTAP program as set out in §15-6-134(4)(a)(), MCA.
The Taxpayer has not provided any legal arguments or credible evidence to prove that
she did qualify.

The Warranty Deed dated July 24, 2013 demonstrates that Ms. Tyson was
not the owner of record for the property during the seven months of 2013, as
required in §15-6-134(4) (a)(i), MCA. See Exh. B. The late July purchase indicates
she occupied the property at most, five months in 2013. Therefore, we find that
she did not meet the statutory requirement for property tax assistance. No other

evidence was provided to contradict this finding.

Ms. Tyson’s only argument is that the mistake by DOR in granting assistance
should not be cotrected until the following tax yeat. In fairness to other Montana
taxpayers, allowing a taxpayer to use a tax reduction program, without qualifying,
provides a tax burden to other taxpayers even though the taxpayer initially received
the exemption in error.

‘The granting of a property tax exemption is “a matter of grace” and not a right,
and so the legislative language is to be strictly and narrowly construed. Gary Drilling
Co, v. Dept. of Revenue, 250 Mont. 313, 318, 820 P.2d 428, 432 (1991); BA props. ». Gov't
of the United States V1, 299 F.3d 207, 210 (2002). This Board has no authority to
circumvent the directive of the statute as set by the Montana Legislature, which
requires owner fesidency in the property for a period of time before qualifying for
property tax assistance, See §15-6-134(4 (aq, MCA. ‘Thus, we uphold the DOR’s
determination of denial of assistance.

The DOR has requested retroactive payment of property taxes owed. We
would note that it would be improper for the DOR and local government to require
penalties and interest owed in this instance when a low-income taxpayer was granted
assistance in error by the government. We would urge the Department to assist this

Taxpayer with lenient repayment options.

ORDER
IT IS HEREBY ORDERED by the Montana Tax Appeal Board that the
-application by Jean H. ‘Tyson for qualification under the Property Tax Assistance

Program for 2014 be denied.

DATED this le “day of December, 2014.

BY ORDER OF THE
MONTANA TAX APPEAL BOARD

co ud fel

<AREN E, POWELL, Chairwoman

Dah. MBA ——

DAVID L. McALPIN, Membeé|

Notice: You ate entitled to judicial review of this Order in accordance with
Section 15-2-303(2), MCA. Judicial review may be obtained by filing a petition in

district court within 60 days following the service of this Order.

CERTIFICATE OF SERVICE
The undersigned hereby certifies that on this of December, 2014, a copy
of the foregoing order was served on the parties hereto by placing a copy in the US.

Mail and addressed as follows:

Jean, H. ‘Tyson 1<_US. Mail, Postage Prepaid

P.O, Box 974 Interoffice

Polson, Montana 59860 Hand delivered

Michele Crepeau | . US. Mail, Postage Prepaid
Tax Counsel ~~ _Interoffice

Office of Legal Affairs Hand delivered
Department of Revenue

PO Box 7701

Helena, MT 59604-6601

Core ANN NELSON, office manager

tats