Saturday, July 20, 2024
Hawai'i Free Press

Current Articles | Archives

Sunday, December 9, 2018
The County Strikes Back (part 3)
By Tom Yamachika @ 5:01 AM :: 5682 Views :: Maui County, Taxes, Tourism

The County Strikes Back (part 3)

by Tom Yamachika, President, Tax Foundation Hawaii

We continue with our series about a timeshare association suing the county, with the county then back assessing the association for $10 million. 

Here we examine: “Are back assessments of property tax legal?”

In most of our counties, the ordinances say that the assessor is to make a tax assessment list each year by a certain time. The county then sends out bills to the property owners with the numbers off the list. Owners then either pay, or appeal.

But what if your property isn’t on the list?

This can happen very easily if you have just signed a lease for state lands. The state doesn’t have to pay real property tax because governments generally don’t tax each other, so there is no previous assessment of the land. A lessee of state lands, however, isn’t a government and therefore needs to pay real property tax. But let’s say, for whatever reason, the real property tax bill doesn’t come in the mail for a couple of years. The ordinances call that “omitted property,” and they say that the county can assess the current year, and any back years, whenever the county gets around to doing that. And when they do, if you want to appeal the assessment you need to do it within 30 days – which isn’t much time.

If you go to the county and say that the assessment is unfair and illegal, you won’t get much sympathy. “You’ve received fire and police protection, trash pickup, and many other benefits that come with occupying that property,” they’ll say. “Didn’t you think it strange that you were receiving all these valuable benefits for free while everyone else in the county has to pay for them through their property taxes?”

As it turns out, there is a court case holding that this type of assessment, called an omitted property assessment, is perfectly legal.

In our Maui case, however, the facts were quite different. The plaintiffs were time share associations. The county had assessed the property – but they didn’t assess the intervals or the condominium units, they assessed the master parcel. The county sent the bills to the associations, and the associations paid the assessments in full.

“Oho!” the county said. “We didn’t assess the intervals, which are the units of property that are being bought and sold. They are therefore omitted property, and we get to assess them whenever we want!”

So, the county back assessed the interval owners, and they assessed a lot more tax because the method they used to assess the master parcel was based on its cost while the method they used to assess the intervals was based on market value. But then they needed to figure out what to do about the payments that already had been made on the property. And they decided to credit each of the interval owners for a proportionate part of the payments that were previously made.

Fair, perhaps; but it was also an admission that tax previously had been paid on the property assessed, so the county had no business calling it omitted property.

“[I]f the County can retroactively assess already-assessed real property to change the valuation and impose additional taxes, even many years later as it argues it can here,” the Maui judge wrote, “property owners can never have confidence that they have satisfied their tax obligation for any previous years. Potential buyers can never have confidence that a purchased property will not later be burdened by a hefty ‘amended assessment’ for some year long before their purchase.”

Well said, Judge; now we’ll see how well his judgment fares in the appellate courts.



The County Strikes Back (part 1)

The County Strikes Back (part 2)


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii