Tax & Accounting Blog

New Property Tax Bills in Kentucky and Oregon are Notable Issues for Taxpayers

ONESOURCE, ONESOURCE Property Tax August 15, 2013

refund

Kentucky — Court Case Regarding Refund Procedure

Recently a Supreme Court case was heard involving property taxpayers’ refund procedures for the Kentucky Department of Revenue. The taxpayer underwent a tangible personal property tax audit and afterwards paid the balance of the bill. The taxpayer then filed refund claims on taxes the DOR incorrectly placed as manufacturing assets on the non-manufacturing schedule of the tangible return. The DOR denied the refund based on the fact that the taxpayer did not protest the discrepancy before he paid the audit bill.

 Two statutes came into play: §131.110, which allows a taxpayer to protest an assessment before paying taxes within 45 days, and §134.590, a refund statute that allows taxpayers 2 years to seek a refund on taxes that were not owed.

The case was taken to the Court of Appeals, which ruled that mandating a taxpayer to protest prior to payment as a contingency for submitting a refund claim would repeal §134.590, as the taxpayer legally has 2 years to claim a refund. Also, the taxpayer is not legally required to protest the assessment before paying. The DOR appealed to the Supreme Court, which upheld the ruling of the Court of Appeals.

(Source: Ky. S. Ct., Dkt. No. 2010-SC-000794-DG)

Oregon —Refund Due to Incorrect County Advice

Senate Bill 505 establishes a refund for taxpayers who request exclusion from special assessment while acting on advice from the county that was subsequently found to be inaccurate. The refund is of the difference between the property tax on assessed value and the tax on the specially assessed value. The refund is offered to property tax years beginning on July 1, 2007 and before July 1, 2014.