Bill Text: HI SB1204 | 2021 | Regular Session | Amended
Bill Title: Relating To Tax Appeals.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2021-06-29 - Act 118, on 06/28/2021 (Gov. Msg. No. 1220). [SB1204 Detail]
Download: Hawaii-2021-SB1204-Amended.html
THE SENATE |
S.B. NO. |
1204 |
THIRTY-FIRST LEGISLATURE, 2021 |
S.D. 2 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO TAX APPEALS.
BE IT ENACTED
BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 26-10, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) There shall be within the department of taxation
a board of review [for each taxation district] and a tax appeal court. The composition of [each] the board
of review and the tax appeal court and [its] their respective functions,
duties, and powers shall be as [heretofore] provided [by law for the boards
of review and tax appeal court existing immediately prior to November 25, 1959.]
in chapter 232."
SECTION 2. Section 232-6, Hawaii Revised Statutes, is amended to read as follows:
"§232-6 [Appointment,] Taxation board of review; appointment,
removal, compensation. (a) There is created a taxation board of review
for [each taxation district. Additional
boards may be created in any taxation district by the director of taxation where
the number of disputes to be decided cannot be reasonably decided within one year. Each taxation district shall have no more than
three boards. Each board] the State.
(b) The board shall consist of [five] no
more than ten members who shall be [citizens] residents of the
State [and residents of the district for which the board is appointed, shall
have resided at the time of appointment for at least three years in the State,]
and shall be appointed and be removable by the governor as provided in section 26-34. The governor shall designate a member of [each]
the board to act as chairperson thereof.
In addition, the governor shall designate a member of [each] the
board to act as vice chairperson who shall serve as the chairperson of the board
during the temporary absence from the State, illness, or disqualification of the
chairperson. Any vacancy in [any]
the board shall be filled for the unexpired term. Each member shall receive and be paid out of the
treasury compensation for the member's services at the rate of $10 per day for each
day's actual attendance and the member's actual traveling expenses. No officer or employee of the State shall be eligible
for appointment to [any such] the board.
(c) Any vacancy in the board shall not impair the
authority of the remaining members to exercise all the powers of the board. The governor may appoint, without regard to section
26-34, an acting member of the board during any regular member's temporary absence
from the State, temporary inability to act due to recusal, or illness. An acting member, during the acting member's term
of service, shall have the same powers and duties as the regular member; provided
further that an acting member appointed due to a regular member's recusal shall
be appointed for the case in which the recusal occurred, and the acting member's
appointment shall terminate when the final decision is filed or the case is withdrawn."
SECTION 3. Section 232-7, Hawaii Revised Statutes, is amended to read as follows:
"§232-7
[Boards] Board of review; duties, powers, procedure
before. (a) The board of review [for each district]
shall hear informally all disputes between the assessor and any taxpayer in all
cases in which appeals have been duly taken and the fact that a notice of appeal
has been duly filed by a taxpayer shall be conclusive evidence of the existence
of a dispute; provided that this provision shall not be construed to permit a taxpayer
to dispute an assessment to the extent that it is in accordance with the taxpayer's
return.
(b)
[Each] At least three board members must be present at any meeting
or proceeding of the board to constitute a quorum. The board shall hold public meetings at some
central location in [its] each taxation district at least once annually
and shall hear, as speedily as possible, all appeals presented for each year. Taxpayers and others appearing before the board
may also participate via teleconference or any other cost-efficient means of the
board's choosing.
(c) A taxpayer's identity and final documents submitted
in support or opposition of an appeal shall be public information; provided that
an individual taxpayer is authorized to redact all but the last four digits of the
taxpayer's social security number from any accompanying tax return. [Each] The board [shall have
the power and authority to] may decide all questions of fact and all
questions of law, excepting questions involving the Constitution or laws of the
United States, necessary to the determination of the objections raised by the taxpayer
in the notice of appeal; provided that [no] the board shall not
have the power to determine or declare an assessment illegal or void. Without prejudice to the generality of the foregoing,
[each] the board shall have the power to allow or disallow
exemptions pursuant to law, whether or not previously allowed or disallowed
by the assessor, and to increase or lower any assessment.
[(c)] (d) The board shall base its decision on the evidence
before it, and, as provided in section 231-20, the assessment made by the assessor
shall be deemed prima facie correct. All
decisions of the board shall be reduced to writing and shall state separately the
board's findings of fact and conclusions of law. The board shall file with the assessor concerned
its decision in writing on each appeal decided by it, and a certified copy of the
decision shall be furnished by the assessor to the taxpayer concerned by delivery
or by mailing the copy addressed to the taxpayer's last known place of residence.
[(d) Each] (e) The board and each member thereof, in
addition to all other powers, shall also have the power to subpoena witnesses,
administer oaths, examine books and records, and hear and take evidence in relation
to any subject pending before the board. The tax appeal court shall have the power, upon
request of the [boards,] board, to enforce by proper proceedings the
attendance of witnesses and the giving of testimony by them, and the production
of books, records, and papers at the hearings of the [boards.] board.
[(e) If there exists more than one board of review
in a taxation district, the chair of one board, administratively and without requirement
of any formal action, may assign a member of that board to serve as a temporary
member of the requesting board for purposes of establishing a quorum at a designated
meeting of the requesting board. The temporary
member shall serve only for the specific board meeting for which the assignment
is made and only for the period necessary to establish and maintain a quorum. A temporary member may participate in discussion
and vote on all matters before the board. Nothing herein shall prevent a member
from being assigned multiple times under this subsection.]"
SECTION 4. Section 232-13, Hawaii Revised Statutes, is amended to read as follows:
"§232-13 Hearing de novo; bill of
particulars. The hearing before the tax
appeal court shall be a hearing de novo.
Irrespective of which party prevails in proceedings before [a] the
state board of review or any equivalent administrative body established by county
ordinance, the assessment as made by the assessor, or if increased by the board,
or equivalent county administrative body, the assessment as so increased, shall
be deemed prima facie correct. Each party
shall have the right to introduce, or the tax appeal court, of its own motion, may
require the taking of [such] evidence in relation to the subject pending
as in the court's discretion may be deemed proper. The court, in the manner provided in section 232-16,
shall determine all questions of fact and all questions of law, including constitutional
questions, involved in the appeal.
The jurisdiction of the tax appeal court is limited to the amount of valuation or taxes, as the case may be, in dispute as shown on the one hand by the amount claimed by the taxpayer or county and on the other hand by the amount of the assessment, or if increased by the board, or equivalent county administrative body, the assessment as so increased.
Assessments for the same year upon other similar property situated in the State shall be receivable in evidence upon the hearing.
Upon the application of either the taxpayer,
the county, or the assessor, the judge of the tax appeal court, upon notice, may
allow and direct a bill of particulars of the claim of either the taxpayer, the
county, or the assessor to be delivered to the other, and in case of default the
judge shall preclude the person [so] defaulting from giving evidence of the
part or parts of the person's affirmative claim of which particulars have not been
delivered."
SECTION 5. Section 232-14, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) The [boards] board of review [shall
have power], consistent with this chapter and chapter 91, [to] may
make rules relating to procedure, and to prescribe forms to be used, including procedure
and forms for the issuance of subpoenas and other process by the [boards of review]
board or members thereof. The rules
shall have the force and effect of law."
SECTION 6. Section 232-14.5, Hawaii Revised Statutes, is amended to read as follows:
"[[]§232-14.5[]] Appeals
relating to claims for refund. (a) The denial in whole or in part by the department
of taxation of a tax refund claim may be appealed by the filing of a written notice
of appeal to [a] the board of review or the tax appeal court within
thirty days after notice of the denial of the claim.
(b)
An appeal may be filed with [a] the board of review or the
tax appeal court for review of the merits of a tax refund claim, upon a notice of
appeal filed at any time after one hundred eighty days from the date that the claim
was filed; provided that the department has not given notice of a denial of the
claim within that period.
(c)
Notwithstanding any law to the contrary under title 14, this section shall
apply to tax refund claims for all taxes administered by the department of taxation. The procedures for appeals from tax assessors,
[a] the board of review, and the tax appeal court provided under this
chapter and under section 235‑114 shall apply to appeals relating to tax refund
claims under this section. Any claimed tax
refund or credit appealed pursuant to this section shall be awarded only if the
claim therefor was filed within the applicable statutory period of limitation."
SECTION 7. Section 232-15, Hawaii Revised Statutes, is amended to read as follows:
"§232-15
Appeal to board of review. [The
appeal to a board of review may be either to the board of review for
the district in which the taxpayer has the taxpayer's principal place of business
or to the board of review for the district in which the taxpayer resides or has
the taxpayer's principal office or to the board of review of the first district.] The notice of appeal to the board of review
must be lodged with the board and the assessor [on or before] no
later than the date fixed by law for the taking of the appeal. An appeal to the board of review shall be deemed
to have been taken in time if the notice thereof shall have been [deposited in
the mail, postage prepaid,] postmarked and properly addressed to the
board and assessor, on or before [such] that date.
The notice of appeal must be in writing
and any [such] notice, however informal it may be, identifying the assessment
involved in the appeal and stating the grounds of objection to the assessment shall
be sufficient. [Upon the necessary information
being furnished by the taxpayer to the assessor, the assessor shall prepare the
notice of appeal upon request of the taxpayer and any notice so prepared by the
assessor shall be deemed sufficient as to its form.]
The appeal shall be considered and treated
for all purposes as a general appeal and shall bring up for determination all questions
of fact and all questions of law, excepting questions involving the Constitution
or laws of the United States, necessary to the determination of the objections raised
by the taxpayer in the notice of appeal.
[Any] If any objection involving the Constitution or laws of
the United States [may be] is included by the taxpayer in the notice
of appeal [and in such case], the [objections] objection
may be heard and determined by the tax appeal court on appeal from a decision of
the board of review; [but] provided that this provision shall not
be construed to confer upon the board [of review] the power to hear or determine
[such objections.] the objection.
Any notice of appeal may be amended at any time prior to the board's decision;
provided the amendment does not substantially change the dispute."
SECTION 8. Section 232-16, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) A taxpayer or county may appeal directly to the
tax appeal court without appealing to [a] the state board of review
or any equivalent administrative body established by county ordinance; provided
that a taxpayer appealing a real property tax assessment shall first obtain a decision
from an administrative body established by county ordinance, [prior to] before
appealing to the tax appeal court, if county ordinance requires a taxpayer to do
so. An appeal to the tax appeal court is
properly commenced by filing, on or before the date fixed by law for the taking
of the appeal, a written notice of appeal in the office of the tax appeal court
and by service of the notice of appeal on the director of taxation and, in the case
of an appeal from a decision involving the county as a party, the real property
assessment division of the county involved.
An appealing taxpayer shall also pay the costs in the amount fixed by section
232-22."
SECTION 9. Section 232-17, Hawaii Revised Statutes, is amended to read as follows:
"§232-17 Appeals from [boards] board
of review to tax appeal court. An appeal
shall lie to the tax appeal court from the decision of [a] the state
board of review, or equivalent administrative body established by county ordinance. An appeal to the tax appeal court is properly
commenced by the filing, by the taxpayer, [or] the county, or the director
of taxation, of a written notice of appeal in the office of the tax appeal court
within thirty days after the filing of the decision of the state board of review
or an equivalent county administrative body, and, in the case of any appealing
taxpayer, the payment of the costs of court in the amount fixed by section 232-22,
and service of the notice of appeal on the director of taxation and, in the case
of an appeal from a decision involving the county as a party, the real property
assessment division of the county involved.
A notice of appeal shall be sufficient if it states that the taxpayer, county,
or director of taxation appeals from the decision of the state board of review,
or an equivalent county administrative body, to the tax appeal court and
may be amended at any time. The appeal shall
bring up for determination all questions of fact and all questions of law, including
constitutional questions involved in the appeal.
In case of an appeal by the county or the director of taxation, a copy of the notice of appeal shall be forthwith delivered or mailed to the taxpayer concerned or to the clerk of the county concerned in the manner provided in section 232-7 for giving notice of decisions.
An appeal shall be deemed to have been
taken in time, and properly commenced, if the notice thereof and costs, if any,
and the copy or copies of the notice shall have been deposited in the mail, postage
prepaid, properly addressed to the tax appeal court, director of taxation, taxpayer
or taxpayers, and, if relevant, the real property assessment division of the county
involved, respectively, within the time period provided by this section."
SECTION 10. Section 232-18, Hawaii Revised Statutes, is amended to read as follows:
"§232-18 Certificate of appeal to
tax appeal court. Upon the perfecting
of an appeal to the tax appeal court, the tax assessor [of the district from
which the appeal is taken] shall immediately send up to the tax appeal court
a certificate in which there shall be set forth the information required by section
232-16 to be set forth in the notice of appeal where an appeal is taken direct from
the assessment to the tax appeal court.
The certificate shall be accompanied
by the taxpayer's return, if any has been filed; provided that the department of
taxation [is authorized to] may redact all but the last four digits
of an individual taxpayer's social security number from an accompanying tax return,
a copy of the notice of appeal to the state board of review, or an equivalent
administrative body established by county ordinance, and any amendments thereto,
and the decision or action, if any, of the state board of review or equivalent administrative
body. Failure of the assessor to comply herewith
shall not prejudice or affect the taxpayer's, county's, or assessor's appeal and
the certificate of appeal may be amended at any time up to the final determination
of the appeal."
SECTION 11. Section 232-20, Hawaii Revised Statutes, is amended to read as follows:
"§232-20 Certificate of appeal. Upon the perfection of an appeal, the [judge
of the] tax appeal court shall send to the appellate court a certificate [in
which there] that shall [be set forth, among other things:] include:
(1) A brief description of the assessment and the property involved in the appeal, if any, in sufficient detail to identify the same together with the valuation placed on the property by the assessor;
(2) The valuation claimed by the taxpayer or county;
(3) The taxpayer's or county's grounds of objection to the assessment;
(4) The valuation, if any,
placed thereon by an administrative body established by county ordinance equivalent
to [a] the state board of review; and
(5) The valuation placed thereon by the tax appeal court.
The certificate shall be accompanied by the taxpayer's return, if any, a copy of the notice of appeal from the assessment and any amendments thereof, the decision, if any, of the state board of review or equivalent county administrative body, a copy of the notice of appeal from the decision of the state board of review or equivalent county administrative body, if any, and any amendments thereof, and a transcript or statement of the evidence before and the decision of the tax appeal court, and all exhibits, motions, orders, or other documents specified by either the taxpayer, the county, or the assessor. No failure of the judge of the tax appeal court to send or properly prepare the certificate or the accompanying documents shall prejudice, limit, or in any manner affect the taxpayer's, county's, or assessor's appeal, and the certificate of appeal may be amended at any time up to the final determination of the appeal."
SECTION 12. Section 232-24, Hawaii Revised Statutes, is amended to read as follows:
"§232-24 Taxes paid pending appeal. The tax paid upon the amount of any assessment,
actually in dispute and in excess of that admitted by the taxpayer, and covered
by an appeal to the tax appeal court duly taken, shall, pending the final determination
of the appeal, be paid by the director of finance into the ["litigated]
litigated claims [fund".] fund. If the final determination is in whole or in part
in favor of the appealing taxpayer, the director of finance shall repay to the taxpayer
out of the fund, or if investment of the fund should result in a deficit therein,
out of the general fund of the State, the amount of the tax paid upon the amount
held by the court to have been excessive or nontaxable, together with from the date
of each payment into the litigated claims fund, the interest to be paid from the
general fund of the State. For purposes of
this section, the rate of interest shall be computed by reference to section 6621(a)
(with respect to interest rate determination) of the Internal Revenue Code of 1986,
as of January 1, 2010. The balance, if any,
of the payment made by the appealing taxpayer, or the whole of the payment, in case
the decision is wholly in favor of the assessor, shall, upon the final determination
become a realization under the tax law concerned.
In a case of an appeal to [a]
the board of review, the tax paid, if any, upon the amount of the assessment
actually in dispute and in excess of that admitted by the taxpayer, shall during
the pendency of the appeal and until and unless an appeal is taken to the tax appeal
court, be held by the director of finance in a special deposit. In the event of final determination of the appeal
in the board of review, the director of finance shall repay to the appealing taxpayer
out of the deposit the amount of the tax paid upon the amount held by the board
to have been excessive or nontaxable, if any, the balance, if any, or the whole
of the deposit, in case the decision is wholly in favor of the assessor, to become
a realization under the tax law concerned."
SECTION 13. Section 235-114, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Any person aggrieved by any assessment of the
tax or liability imposed by this chapter may appeal from the assessment in the manner
and within the time hereinafter set forth.
Appeal may be made either to the [district] board of review or to
the tax appeal court. The first appeal to
either the [district] board of review or to the tax appeal court may be made
without payment of the tax [so] assessed. Either the taxpayer or the assessor may appeal
to the tax appeal court from a decision by the board or to the intermediate appellate
court from a decision by the tax appeal court; provided that if the decision by
the board or the tax appeal court is appealed by the taxpayer, or the decision by
the board in favor of the department is not appealed, the taxpayer shall pay the
tax [so] assessed plus interest as provided in section 231-39(b)(4)."
SECTION 14. Any member serving a term of appointment to one of the previously existing district boards of taxation review on the effective date of this Act shall be considered to be appointed to the new statewide board of review for the remainder of the member's current term, notwithstanding section 232-6(b), Hawaii Revised Statutes; provided that, if more than ten members are still serving terms of appointment to their respective district boards on the effective date of this Act, priority preference for appointment to the new statewide board of review shall be based on length of term remaining.
SECTION
15. Any appeal or pending appeal to one of
the district boards of taxation review in which a decision has not yet been rendered
as of the effective date of this Act shall be automatically transferred to the jurisdiction
of the newly constituted statewide board of review for adjudication. This Act shall not affect rights and duties that
matured, penalties that were incurred, and proceedings that were begun before its
effective date; provided that any affected taxpayer who has already appeared before
a board but has not yet had a decision rendered in the taxpayer's appeal may elect
to either have the new statewide board issue a ruling based on all available information
in the case or request a new hearing before the statewide
board.
SECTION
16. This Act shall not affect county real
property tax appeals and the respective county boards of review to which they are
appealed, nor shall it abrogate any county ordinance relating to a county's real
property tax appeal procedures.
SECTION 17. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 18. This Act shall take effect on January 1, 2022.
Report Title:
Tax Appeals; Tax Board of Review
Description:
Replaces the 4 district tax boards of review with a single statewide board of review appointed by the Governor, consisting of 10 members with 3 required for quorum. Authorizes taxpayers and others appearing before the board to participate using cost-efficient means such as teleconferencing. (SD2)
The summary description
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not legislation or evidence of legislative intent.