Wednesday, February 24, 2021
Hawai'i Free Press

Current Articles | Archives

Sunday, December 2, 2018
The County Strikes Back (part 2)
By Tom Yamachika @ 4:00 AM :: 3559 Views :: Maui County, Taxes, Tourism

The County Strikes Back (part 2)

by Tom Yamachika, President, Tax Foundation Hawaii

In last week’s article we gave some background about a case working its way through the court system.  Timeshare association sues county; county then back assesses association for $10 million. 

The first issue for our deep dive is, “Are we in the right court?”

In this state, if you have a beef with the tax collector you can’t just go suing in any old court.  We have a special court called the Tax Appeal Court that hears disputes about state taxes and county taxes.  Tax is complicated, so it makes sense to have a specialist court.  It also helps to limit the government’s downside risk because, while normal courts can have juries, issue injunctions, and award damages, the Tax Appeal Court can’t.  It’s limited to adjudicating the validity and amount of a tax assessment without a jury.  So, if the court thinks the tax people have been bad and need to be punished, there’s nothing that court can do. 

For most tax appeals, there are two avenues to court: “assessment and appeal” or “payment under protest.”

Assessment and appeal means the taxpayer must file its paperwork within a certain time after the tax authorities issue their bill.  For state tax, this can be done without paying first. For county tax, the taxpayer needs to pay to play.

Payment under protest means that the payment must be submitted with a letter of objection, and then the taxpayer must sue in Tax Appeal Court within a certain time after payment.  Payment under protest is available only for state tax. 

Now, our Maui timeshare association sued in Circuit Court, which is our court of general jurisdiction.  It went down neither the “assessment and appeal” nor “payment under protest” route. Perhaps they wanted to get a ruling that the Time Share classification was invalid and might not have seen the law forbidding declaratory rulings in tax cases. But it turns out that although most tax cases need to be in Tax Appeal Court, there are cases in which the circuit court took jurisdiction. The appellate courts took note of them but haven’t ruled on whether jurisdiction was proper. 

Once the county struck back, however, the dynamic changed.  The taxpayers claimed that they had been denied their federal constitutional rights such as due process, equal protection, and the right to petition the government for redress of grievances (i.e., sue).  There’s a federal law saying that someone whose constitutional rights have been violated by people claiming to enforce state law may sue for damages and attorneys’ fees.  And a state or local government can’t get away from the consequences by shunting the claim off to a specialized court that can’t award damages.  Thus, that part of the case needs to stay in Circuit Court.

The case has already spent five years in Circuit Court, with oodles of resources already spent on it by both sides as well as the court system itself. It would be grossly inefficient to have a new court start on this case from scratch, so it would make sense to leave the case where it is.

But at the same time, we can’t be using the circuit courts to upset the system carefully created to handle the special circumstances that tax disputes present. If there are appeal deadlines, they need to be followed. If there are procedures required, they need to be observed. If any party thinks they can waltz into court, get a ruling that a tax classification is void, and thereby open the floodgates for anyone who has ever paid that tax to get massive refunds, that party needs to think again. One of the reasons for the special tax courts is that governments need to be able to operate and can’t do it if they are threatened with financial extinction because of missteps they may have made years or decades before. 

---30----

LINK: Ocean Resort Villas v. County of Maui — The Documents

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

ALEC

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Ballotpedia Hawaii

Better Hawaii

Blaisdell Memorial Project

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

Coffee Break

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Life Alliance

Hawaii March for Life

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Hawaiian

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT