When an economic downturn strikes, businesses are forced to make tough decisions to survive. One opportunity to reduce fixed expenses that should not be overlooked is appealing a business’s property tax liability. In Minnesota, property is taxed based on its market value. The market value is what the property would have sold for if it had sold on the assessment date, which is January 2. However, if the assessment fails to consider circumstances that negatively impacted the property’s value, or if the assessed value was excessive, the business could have a viable appeal. And any business having an interest in the property, such as a leaseholder, can bring an appeal.
In response to the current coronavirus pandemic, Minnesota has passed statutes extending certain deadlines. This includes the deadline for filing an appeal of the taxes assessed in 2019, payable in 2020 (pay2020 taxes). But the interplay of two statutes has created a question as to the proper deadline.
Which statutes have extended filing deadlines?
HF4531, signed into law March 28, extends the deadline to file a property tax appeal to May 30. Article 2 of HF4531 enacted “Covid-19 Response Provisions.” Section 18 provides that notwithstanding Minn. Stat. § 278.01, subd. 1(c) — which is the provision setting the normal deadline of April 30 to file a property tax appeal — a petitioner shall have until May 30, 2020, to file a petition “in the office of the court administrator of the district court.” This extension only applies to the pay2020 property tax assessment.
HF4556, signed into law April 15, extends deadlines generally for 60 days after the Governor lifts the state-of-emergency. Article 1 of HF4556 articulated “Covid-19 Policy.” Section 16 provides, “The running of deadlines imposed by statutes governing proceedings in the district and appellate courts, including any statutes of limitations or other time periods prescribed by statute, is suspended during the peacetime emergency . . . and for 60 days after the end of the peacetime emergency declaration.” This section expires 60 days after the end of the peacetime emergency or February 15, 2021, whichever comes first.
What is the deadline for filing property tax appeals? It should be after the state-of-emergency is lifted. Courts will interpret statutes to determine and effectuate the intent of the legislature. When the language is free from ambiguity, the court will give effect to the statute’s plain language. But on their face, these statutes could be viewed as creating an inconsistency, and thus an ambiguity. A careful reading, however, shows why this is not the case.
Even though HF4556 applies generally, it should apply to Minn. Stat. § 278.01 and HF4531 for three reasons. First, HF4556 applies to deadlines imposed by statutes governing proceedings in district courts, which includes Minn. Stat. § 278.01. Although property tax appeals are decided by the tax court, they originate in district court. Minn. Stat. § 278.01, subd. 1(c) provides that the petition must be filed “in the office of the court administrator of the district court on or before April 30,” and that “[a] petition for determination under this section may be transferred by the district court to the Tax Court.” (Emphasis added.) The normal April 30 deadline under Minn. Stat. § 278.01, subd. 1(c) is therefore a deadline imposed by statute governing proceedings in the district court.
Second, HF4531 retains the process of filing property tax appeal petitions with the district court. It states that a petitioner filing an appeal “shall have until May 30, 2020, to file copies of the petition, with proof of service, in the office of the court administrator of the district court.” (Emphasis added.) This language makes HF4531 subject to HF4556 because it is a deadline imposed by statute governing the proceedings in the district court.
Third, HF4556 also “includ[es] any statutes of limitations or other time periods prescribed by statute.” The language of “including” broadens the scope of HF4556 to cover statutes of limitation generally. Both Minn. Stat. § 278.01, subd. 1(c) and HF4531 are statutes of limitation or “time periods prescribed by statute.” As a result, both Minn. Stat. § 278.01, subd. 1(c) and HF4531 are subject to the extensions provided by HF4556.
How should a taxpayer proceed with appealing pay2020 taxes?
The safest option—file by May 30. To avoid any risk of being deemed to have missed the filing deadline for the pay2020 taxes, a petitioner should file its appeal by May 30, 2020.
A reasonable option—file within 60 days from the end of the state-of-emergency. As discussed above, there is strong statutory support that HF4556 applies to the filing deadline for property tax appeals. Nevertheless, as of the date of this publication, the Minnesota Tax Court’s website states that the deadline to appeal the pay2020 taxes is May 30, making specific reference to HF4531. Anoka County does the same. This suggests that the tax court, if faced with a petitioner who filed after May 30, could rule that May 30 is the proper deadline and dismiss the appeal. If a taxpayer is unable to file by May 30, but still elects to file an appeal within 60 days of the end of the peacetime emergency, it should be prepared for the possibility of having to litigate this issue.
Completing service during the pandemic
Before a petitioner can file its petition, it must serve the county and provide the proof of service as part of the filing. Under normal circumstances, completing service can be completed in a day. But with the pandemic, a petitioner should allow for extra time. Under the Governor’s current orders, process servers are considered essential. Even though many counties may not be completely open, they are allowing for service by e-mail or U.S. mail. The specific procedures, however, differ between counties. For example, Anoka County allows service by e-mail followed by U.S. mail. Hennepin County currently states that they will accept service through e-mail only. These procedures seem to be made in response to the current conditions, so a petitioner should consult with an attorney to understand the exact procedures required for service.
Faegre Drinker’s Coronavirus Resource Center is available to help you understand and assess the legal, regulatory and commercial implications of COVID-19.