2010 WI App 119
court of appeals of
published opinion
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Case No.: |
2009AP2568 |
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Complete Title of Case: |
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Northwest Wisconsin Community Services Agency, Inc.,
Plaintiff-Respondent, v. City of
Defendant-Appellant. |
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Opinion Filed: |
July 20, 2010 |
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Submitted on Briefs: |
May 25, 2010 |
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JUDGES: |
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Appellant |
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ATTORNEYS: |
On behalf of the defendant-appellant, the cause was submitted on the briefs of John J. Carter, city attorney, and Robert E. Mahoney, of Milwaukee. |
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Respondent |
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ATTORNEYS: |
On behalf of the plaintiff-respondent, the cause was submitted
on the brief of Karry A. Johnson of Maki, Ledin, |
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2010 WI App 119
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COURT OF APPEALS DECISION DATED AND FILED July 20, 2010 A.
John Voelker Acting Clerk of Court of Appeals |
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NOTICE |
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This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62. |
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Appeal No. |
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STATE OF |
IN COURT OF APPEALS |
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Northwest Wisconsin Community Services Agency, Inc.,
Plaintiff-Respondent, v. City of
Defendant-Appellant. |
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APPEAL
from a judgment of the circuit court for
Before
¶1 PETERSON, J. The City of
BACKGROUND
¶2 In February 2007, Northwest, a benevolent association, requested a property tax exemption from the City for a property it rents to low-income individuals. It claimed that it is entitled to tax exemption for property it operates for benevolent purposes, such as providing low-income housing, under Wis. Stat. § 70.11(4).[1] The City denied the request on October 14, 2008. On January 20, 2009, Northwest paid the first installment of the 2008 tax due and served the City with a notice of claim that it disputed the taxes. The City denied the claim. Northwest then sued the City, under Wis. Stat. § 74.35, alleging the taxes the City imposed after denying Northwest’s exemption request were unlawful because Northwest is entitled to tax exempt status by statute. Northwest requested a judgment ordering the City to refund Northwest’s 2008 property taxes and declaring Northwest “is exempt from property taxes ....”
¶3 The City did not timely respond to the complaint, so Northwest moved for default judgment. The circuit court granted the motion. Northwest then submitted a proposed judgment, which granted Northwest a refund of the taxes it paid on the property for 2008 plus interest and costs. The proposed judgment also declared Northwest “is exempt from future property taxes for [the] property ....” The City objected to the proposed judgment, arguing the circuit court had no authority to prospectively exempt Northwest from paying property taxes. The court denied the City’s objection and signed the judgment.
DISCUSSION
¶4 The City does not appeal the portion of the judgment ordering
it to refund Northwest’s 2008 property taxes.
Therefore, the only issue in this appeal is whether the circuit court
had the authority, under Wis. Stat. § 74.35,
to declare Northwest is exempt from future property taxes. This presents a question of law, subject to
our independent review. See WIREdata, Inc. v. Village of Sussex,
2008 WI 69, ¶45, 310
¶5 The City argues the circuit court exceeded the scope of Wis. Stat. § 74.35 when it granted Northwest prospective tax relief because the statute only authorizes courts to order the return of taxes already paid. We agree.
¶6
¶7 Northwest cannot establish it is entitled to a declaration its property is exempt from future taxes under this statute, however, because Wis. Stat. § 74.35(5)(c) requires a taxpayer to pay the tax before disputing it: “No claim may be filed or maintained under this section unless the tax for which the claim is filed, or any authorized installment payment of the tax, is timely paid ....” Thus, section 74.35 only authorizes courts to determine whether a taxpayer is exempt from taxes already paid, not taxes that might be assessed in the future.
¶8 Northwest contends it was nevertheless entitled to a declaration it is exempt from paying future taxes because its property meets the requirements of Wis. Stat. § 70.11(4). As relevant here, that statute provides:
The property described in this section is exempted from general property taxes if ... it was exempt for the previous year and its use, occupancy or ownership did not change in a way that makes it taxable.
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(4) … Property owned and used exclusively by ... benevolent associations ....
Northwest argues that because it received a judgment exempting its property under § 70.11(4) for 2008, it was reasonable for the court to conclude it is also exempt from future taxes. But Northwest also concedes that taxpayers must file a tax exemption report every other year to prove the exemption is still warranted. See Wis. Stat. § 70.337.
¶9 Thus, tax exempt status, once granted, is not automatic. It is subject to continuing review, a notion
inconsistent with the circuit court’s declaration Northwest’s property “is
exempt from future property taxes ....”
Moreover, as the City correctly observes, the legislature may change the
criteria for determining whether a taxpayer is exempt. In fact, it did so on January 1, 2009. See
2009
By the Court.—Judgment affirmed in part; reversed in part.