Appellate court nixes Sprint’s suit against SLO County
July 20, 2015
A California Court of Appeal ruled Thursday that Sprint Telephone companies cannot sue for reimbursement of $9 million in taxes on property that had been over assessed in 50 California counties including San Luis Obispo County, because Sprint failed to check a box on a State Board of Equalization assessment appeals form asking for the refund.
In 2008, the Board of Equalization staff assessed Sprint’s property assets in the 51 counties at $2.5 billion. Two months later, Sprint appealed the agency’s staff assessment to the elected Board of Equalization, alleging that Sprint’s property assets were worth $1.3 billion, using a Board of Equalization form which included a printed portion that said, “This is a request for refund according to the Revenue and Taxation Code section 5148(f)” which was followed by two boxes, one for marking “Yes” and one for marking “No.”
However, the Sprint representative that filled out the form failed to check either box. No other statement on the Board of Equalization form, or in a letter from Sprint transmitting it to the Board, mentioned any request for a refund.
In December 2008, the Board of Equalization ruled on Sprint’s Appeal, granting a reduction in the property tax assessment to $2 billion which would have reduced the tax liability by million of dollars if the yes box had been checked.
The reduced assessment was applied to the amount of taxes due for 2009, but not retroactively to taxes paid for 2008.
The appellate court judges grappled with the complexity created by a 1987 amendment to Revenue and Taxation Code that simplified assessment appeals for companies like Sprint. Presiding Justice Humes explained that infrastructure businesses like pipelines, railways, telephone companies, gas companies, and electric companies are treated differently than most property owners by those amendments.
Another complexity the court noted results from each individual county collecting the tax assessed by the State Board of Equalization on Sprint’s property in that county. Companies like Sprint were held to be able to simply file a form notice of assessment appeal with the California Board of Equalization without filing a claim in any county, or letting any county know that the taxes paid might be subject to a challenge and a subsequent refund.
According to the Court these large entities enjoy a four year statute of limitations within which to sue for a refund, when other tax payers have an obligation to file a claim in a county where they own property within six months, pay the tax and bring suit shortly after their assessment appeal is denied.
The Justices held that because Sprint’s notice of appeal sent to the Board of Equalization had never in any way stated that a property tax refund was requested, suit against San Luis Obispo and the other 50 counties for an alleged $9 Million refund was barred even though the assessment for 2008 had been lowered following Sprint’s successful appeal to the Board of Equalization.
Stewart Jenkins is an attorney practicing in San Luis Obispo since 1978. Jenkins handles tax payer suits, municipal law, estate planning and family law. Contact Jenkins at (805) 541-5763.