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Monday, October 19, 2009
Residents Must Sue for Tax Refund
By Dan McKay
Copyright © 2009 Albuquerque Journal
Journal Staff Writer
At least two state judges have now said "tax lightning" is unconstitutional.
But that won't make property tax bills any lighter next month.
Bernalillo County Assessor Karen Montoya said she must follow the procedures outlined in state law.
So residents who bought a house in 2008 — and subsequently saw a sharp increase in how the property is valued for tax purposes, a phenomenon known as tax lightning — are out of luck. They will get a tax bill based on the higher value next month.
But once residents pay their bills, Montoya said, they can file a "refund suit" in state court to get some of their money back — the amount caused by tax lightning. She said she doesn't have the authority to carry out an administrative fix that would avoid the need for litigation, even though two judges in the 2nd Judicial District have ruled against tax lightning.
The tax mess stems from a 2001 state law that says most people are subject to a 3 percent limit on how much their property values can climb each year for tax purposes. But the cap doesn't apply if the home changes ownership.
That means new homeowners are often hit with property tax bills that are much higher than their neighbors'. In some cases, tax bills end up three times higher.
In August, District Judge Theresa Baca ruled the system violated the state constitution by creating a class of people who are taxed more based on when they bought their homes. Baca said the law would be constitutional if the 3 percent cap applied to everyone.
Judge Nan Nash made a similar ruling in a separate case this month. .
Despite the rulings, the law is still on the books, and Montoya said she is bound to follow it.
While residents who bought a home in 2008 can go to court with a refund suit, she said people who bought homes earlier than that can't seek refunds because the money has already been distributed to government agencies.
Attorney Clinton Marrs, who has successfully sued the county over tax lightning, plans to file refund suits on behalf of clients next month.
People who bought their homes in 2008 are about to see their first tax lightning bill next month. Marrs said residents can pay the bill, then file a lawsuit within 60 days seeking a refund for whatever portion of the bill is attributable to tax lightning.
Anyone in the state can file a refund suit, although the two district court rulings apply only to Bernalillo County.
State Sen. Mark Boitano, R-Albuquerque, said he hopes to have a reform measure before the Legislature's tax-policy committee next month.
"The recent court decision shows growing momentum in support of much needed property tax reform," Boitano said. "Our property tax system is unfair and terribly inequitable."
Montoya said she will work aggressively with the state Legislature for a solution, too.
The county treasurer mails tax bills Nov. 1.
Montoya's office appraises property values but doesn't actually calculate or mail out the bills.
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