No. 3-66
Merchants and manufacturers tax valuation cannot be reduced after statements mailed out because of mistake in valuation. If assessment raised by Equalization Board and no notice given, increase void. County court can correct erroneous valuation under Section 137.270. Taxes may be collected from bankrupt and his bondsman. Collector given credit for uncollectible taxes by county court.
Cite as Mo. Op. Att'y Gen. No. 3-66
TAXATI ON (MERCHANTS & MANUFACTURERS) :
Merchants and manufacturers tax
valuation cannot be reduced after
statements mailed out because of mistake in
valuation. If assessment raised by Equali-
zation Board and no notice given, increase
void.
County court can correct erroneous
valuation under Section 137.270.
Taxes may
be collected from bankrupt and his bondsman.
Collector given credit for uncollectible
taxes by county court.
MERCHANTS:
MANUFACTURERS:
COUNTY COURT:
ERRONEOUS TAXES:
BOARD OF EQUALIZATION:
COUNTY BOARD OF EQUALIZATION:
BANKRUPTCY:
August 16, 1966
OPINIONS NO. 2 and 3 (1966)
Honorable Don E. Burrell
Prosecuting Attorney for Greene County
Springfield, Missouri
Dear Mr. Burrell:
Fl LED
~+3
This is in response to your two requests for opinions concerning
certain assessments of Merchants and Manufacturers Taxes which requests
we have consolidated.
Your first question is as follows:
I.
"1.
A new manufacturer in the County reported
his total investment and inventory.
Since he
was assessed on April, 1963, and tax statements
were not mailed until October 15, 1963, he has
had no opportunity to appear before the Board
to request an adjustment in his tax .
This was
reported on the prescribed assessment list and
mailed into the Assessor in the regular and ac-
cepted manner."
Perhaps, some general state~ent of the applicable law is in order
so as to make our answer to this question more understandable.
Under Section 150.310, RSMo 1959, manufacturers are required to
pay a tax on the highest amount of inventory of raw materials and fin-
ished products as well as tools, machinery and applicances possessed
by them between the first Monday in January and the first Monday in
April.
They are required to make a report of this amount to the asses-
sor on the first Monday in May of each year who enters it in a tax book,
Section 150. 320, RSMo 1959.
Prior to the first Monday in May of each year, the assessor is re-
quired to inspect manufacturers facilities for the purpose of obtaining
such information as is needed to accurately compare the facts with the
manufacturers report, Section 150. 325.
A report of the assessor's find-
ings i s made to the county Board of Equalization and the tax book turned
over to it on or before the second Monday of July.
Honorable Don E. Burrell
If, after comparing the assessor's reports and the manufacturer's
statement, the county Board of Equalization raises the valuation of
the statement, it must give notice to the person involved by mail and
advise that the Board will meet on the second Monday in August to hear
reasons why the increase should not be allowed, Section 150.330, RSMo
1959.
With respect to your questions set out above, you mention that the
tax statement was not mailed until October 15, but you do not mention if
the tax was based on the manufacturers own statement (in which case he
has no cause to complain,) or if it was raised by the Board of Equali-
zation in view of the assessor's report.
The latter could only be done
after giving notice as required by Section 150.330, supra, before the
second Monday in August so that objections could be made on that date.
Absent such notice, the increase is void, State v. Wilson, 332 SW 2d
867, 872.
Your second question is as follows:
II.
"2.
The Board erroneously put on the books an
assessment on a merchant who had been in business
in the County in prior years, but had removed his
business from this County the latter part of 1962.
He operated in another county during 1963 and paid
his tax in said county.
What procedure and under
what authority do you strike this type of error
from your tax books?"
There is no valid basis for the assessment of a merchant or manu-
facturer who was not doing business in Greene County during the year
for which he was assessed.
Section 137.270 RSMo is applicable in this
situation.
Such Section provides as follows:
"The county court of each county may hear and
determine allegations of erroneous assessment,
or mistakes or defects in descriptions of lands,
at any term of the court before the taxes are
paid, on application of any person who, by af-
fidavit, shows good cause for not having at-
tended the county board of equalization for the
purpose of correcting the errors or defects or
mistakes. If any lot of land or any portion
thereof has been erroneously assessed twice
for the same year, the county court shall re-
lease the owner or claimant thereof upon the
payment of the proper taxes.
Valuations placed
on property by the assessor or the board of
equalization shall not be deemed to be errone-
ous assessments under this section. "
-
2 -
Honorable Don E. Burrell
It is our view that Section 137.270, is applicable to all assess-
ments of tangible property and is not applicable only to real estate
assessments.
Such Section provides for correction of erroneous assess-
ments of all tangible property and correction of mistakes or defects in
descriptions of lands.
It follows therefore, that the county court can correct an erro-
neous assessment of a merchant or manufacturer under Section 137.270.
III.
"3.
The assessed has filed bankruptcy and this
office has filed proper papers to the referee .
The assessed had proper bond filed with bonds-
men qualified on the application for license.
Do you hold the bondsmen liable for the tax?"
The federal bankruptcy act contains two provisions applicable here
which are too lengthy to set out in view of the position we take upon
this question.
Title 11, Section 35, u.s.c., sets out those debts which shall not
be deemed affected by a discharge in bankruptcy.
Among them are taxes
levied by the United States, or any state, county, district, or munici-
pality. Title 11, Section 34 u.s.c., provides that the liability of a
surety for a bankrupt shall not be altered by discharge of such bankrupt.
There has been a large number of cases decided under these two
sections involving myriad facets of the problem.
Since you provide us
with no information concerning the time the tax debtor filed his peti-
tion in bankruptcy with respect to the time his tax obligation matured
(which may have something to do with the case,) we can do nothing more
than to advise you that, in all likelihood, you should be permitted to
proceed against the surety forthwith, the petition in bankruptcy not-
withstanding.
Before proceeding however, we recommend that you famil -
iarize yourself with the cases set out under the foregoing federal
statutes in the United States Code Annotated.
IV •
"4.
The assessed was a small operator and closed
the business in the early part of the year and is
not available for collection. ••
You do not state whether the individual was a merchant or a manu-
facturer. If he was a merchant Section 150.200 RSMo would be appli-
cable.
Such Section provides as follows:
- 3 -
Honorable Don E. Burrell
"The county court, at each regular term thereof,
shall settle and adjust the accounts of the col-
lector for licenses delivered to him giving him
credit for all blank licenses returned, and charg-
ing him for all licenses not returned, according
to the statement required to be filed by the per-
son having license, and the statement of the bonds
required to be returned; provided, however, that
when the collector shows that he has exercised
due diligence to collect outstanding merchants'
taxes against the merchant and upon his bond or
bondsmen and that the same is uncollectible, the
county court, upon a showing of said facts may
allow the collector credit for the amount thereof.
11
If the individual inquired about was a manufacturer, Section
150.200 would be applicable under the provision of Section 150 .310,
RSMo, which provides that manufacturers are taxed in the same manner
as provided by law for the taxing and licensing of merchants.
It follows that if the collector shows that he has exercised
due diligence to collect outstanding merchants' and manufacturers'
taxes and they are uncollectible, the court may credit him for the
amount thereof.
v.
"5.
Is there any authority after tax statements
have been mailed out to reduce the valuation re-
turned for merchants' and manufacturers' tax when
a greater amount than the actual value of the goods,
wares and merchandise is actually turned in by the
merchant or manufacturer .
11
We find no statute that authorizes such a change to be made af-
ter tax statements have been mailed.
Such assessment may be incorrect
because of the excessive valuation but it is not an erroneous assess-
ment within the meaning of Section 137.270 RSMo, supra, which provides
that valuations placed by the assessor or Board of Equalization are
not erroneous assessments under such Section.
CONCLUSION
It is the opinion of this office:
1.
Any increase in assessment for merchants' and manufacturers'
taxes by a county board of equalization without notice is void.
- 4 -
Honorable Don E. Burrell
2.
Assessments erroneously made of merchants' and manufac-
turers' taxes may be corrected by the county court under provisions
of Section 137.270 RSMo.
3.
A discharge in bankruptcy does not exonorate the bankrupt
or his bondsmen from payment of merchants' and manufacturers' taxes
already assessed.
4. If a collector shows that he has exercised due diligence
to collect outstanding merchants' and manufacturers' taxes and such
taxes are uncollectible, the county court may credit him for the
amount thereof.
5.
An excessive valuation by a merchant or manufacturer listed
in his return for merchants' and manufacturers' tax cannot be cor-
rected after tax statements based on such valuation have been mailed
out.
The foregoing opinion which I hereby approve was prepared by my
Assistant, Mr. c. B. Burns, Jr.
yours,
NO
•
Attorney General