Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2014
 

Revenue and Taxation Code

Property Taxation

Part 9. Corrections, Cancellations, and Refunds

Chapter 5. Refunds

Article 1. Refunds Generally

Section 5097

5097. Conditions. (a) No order for a refund under this article shall be made, except on a claim:

(1) Verified by the person who paid the tax, his or her guardian, executor, or administrator.

(2) Except as provided in paragraph (3), filed within four years after making the payment sought to be refunded, or within one year after the mailing of notice as prescribed in Section 2635, or the period agreed to as provided in Section 532.1, or within 60 days of the date of the notice prescribed by subdivision (a) of Section 4836, whichever is later.

(3) (A) Filed within one year, if an application for a reduction in an assessment or an application for equalization of an assessment has been filed pursuant to Section 1603 and the applicant does not state in the application that the application is intended to constitute a claim for a refund, of either of the following events, whichever occurs first:

(i) After the county assessment appeals board makes a final determination on the application for reduction in assessment or on the application for equalization of an escape assessment of the property, and mails a written notice of its determination to the applicant and the notice does not advise the applicant to file a claim for refund.

(ii) After the expiration of the time period specified in subdivision (c) of Section 1604 if the county assessment appeals board fails to hear evidence and fails to make a final determination on the application for reduction in assessment or on the application for equalization of an escape assessment of the property.

(B) Filed within six months, if an application for a reduction in an assessment or an application for equalization of an assessment has been filed pursuant to Section 1603 and the applicant does not state in the application that the application is intended to constitute a claim for a refund, after the county assessment appeals board makes a final determination on the application for reduction in assessment or on the application for equalization of an escape assessment, and mails a written notice of its determination to the applicant and the notice advises the applicant to file a claim for refund within six months of the date of the county assessment appeals board's final determination.

(b) An application for a reduction in an assessment filed pursuant to Section 1603 shall also constitute a sufficient claim for refund under this section if the applicant states in the application that the application is intended to constitute a claim for refund. If the applicant does not so state, he or she may thereafter and within the period provided in paragraph (3) of subdivision (a) file a separate claim for refund of taxes extended on the assessment which the applicant applied to have reduced pursuant to Section 1603 or Section 1604.

(c) If an application for equalization of an escape assessment is filed pursuant to Section 1603, a claim may be filed on any taxes resulting from the escape assessment or the original assessment to which the escape relates within the period provided in paragraph (3) of subdivision (a).

History.—Stats. 1963, p. 4344, in effect September 20, 1963, added the second paragraph. Stats. 1966, p. 682 (First Extra Session), in effect October 6, 1966, added "Section 1607 or" to the second paragraph. Stats. 1967, p. 2118, in effect November 8, 1967, added "or within one year . . . whichever is later," after "refunded" in subsection (b); and added everything after "refund under this section" in the first sentence of the second paragraph; and added the second sentence of the second paragraph. Operative as to any payment made more than once prior to effective date and to any payment made after. Stats. 1970, p. 1037, in effect November 23, 1970, substituted "four" for "three" in subsection (b) of the first paragraph. Stats. 1975, Ch. 224, p. 605, in effect January 1, 1976, substituted "Section 1603" for "Section 1607 or Section 1760" in the first sentence of the second paragraph. Stats. 1976, Ch. 499, p. 1239, in effect January 1, 1977, substituted "Section 1603 or Section 1604" for "Section 1607 or Section 1760" in the second sentence of the second paragraph. Stats. 1978, Ch. 732, in effect January 1, 1979, designated the first sentence of the first paragraph as subdivision "(a)", the second sentence as "(a)(1)" in place of (a), the third sentence as "(a)(2)" in place of (b). Substituted the second paragraph as subdivision "(b)" substituted "provided in paragraph (2) of subdivision (a)" for "provided in subdivision (b)", and added subdivision (c). Stats. 1983, Ch. 1224, in effect January 1, 1984, added "or the period agreed to as provided in Section 532.1," after "Section 2635," in subdivision (a)(2). Stats. 1984, Ch. 946, in effect September 10, 1984, added subdivision (d). Stats. 1987, Ch. 1184, in effect January 1, 1988, operative July 1, 1988, added "or her" after "his", in subdivision (a)(1); added "or she" following "he" in the second sentence of subdivision (b); and deleted former subdivision (d), which pertained only to refunds of property taxes levied by the City of Fresno. Stats. 2008, Ch. 329 (AB 2411), in effect January 1, 2009, substituted "Except as provided in paragraph (3), filed" for "Filed" before "within four years", deleted "of" after "years after making", added a comma after "to be refunded", and added "or within 60 days of the date of the notice prescribed by subdivision (a) of Section 4836," after "in Section 532.1," in the first sentence of paragraph (2) and added paragraph (3) to subdivision (a); substituted "paragraph (3)" for "paragraph (2)" after "period provided in" and added "the" after "the assessment which" in the second sentence of subdivision (b); and substituted "paragraph (3)" for "paragraph (2)" after "period provided in" and deleted "or within 60 days from the date the board of equalization makes its final determination on the application, whichever is later" after "of subdivision (a)" in the first sentence of subdivision (c).

Note.—Section 4 of Stats. 2008, Ch. 329 (AB 2411), provided that: (a) The amendments made by this act to Sections 5097 and 5151 of the Revenue and Taxation Code shall not affect any litigation involving property tax refunds pending before January 1, 2009, that assert either of the following:

(1) Claims of miscalculation of interest paid under Section 5151 of the Revenue and Taxation Code.

(2) Claims interposing noncompliance with Section 2635 of the Revenue and Taxation Code to revive property tax refund claims otherwise outside the tax refund limitation period of Section 5097 of the Revenue and Taxation Code.

(b) Nothing in the legislative history of the amendments made by this act shall be construed as any indication of the meaning of the law as it existed prior to the effective date of the amendments made by this act.

Section 5 thereof, provided that if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

Construction.—This section does not include delinquency penalties. People ex rel. Strumpfer v. Westoaks Inv. #27, 139 Cal.App.4th 1038. The four-year statute of limitations in this section applies to an action seeking a refund of fraud penalties imposed under previous versions of Sections 503 and 504. JP Morgan Chase Bank, N.A. v. City and County of San Francisco, 174 Cal.App.4th 1201.

Necessity for claim.—Correction of a base-year value under Section 51.5 does not automatically entitle the taxpayer to a refund. Refunds are governed by separate statutes, and the taxpayer may only recover a refund by complying with those statutes. Sunrise Retirement Villa v. Dear, 58 Cal.App.4th 948. Federal declaratory action by taxpayer, seeking determination that federal law preempted assessor's ruling that a taxable change in ownership occurred with respect to property, did not fulfill taxpayer's duty to file a timely tax refund claim. JP Morgan Chase Bank, N.A. v. City and County of San Francisco, 174 Cal. App. 4th 1201.

Verification.—Substantial compliance with the requirement that a claim for refund be verified by the person who paid the tax is achieved if representatives of the class verify the claim for refund for the class. Schoderbek v. Carlson, 113 Cal.App.3d 1029. (Disapproved by Woosley v. State of California, 3 Cal.4th 758.) Although taxpayers' refund claims were improperly signed by their attorney rather than by them, and hence, were not properly verified, the defect was not fatal to taxpayers' claims; therefore, taxpayers properly exhausted their administrative remedies. Generally, the object of a verification is to assure good faith in the averments or statements of a party. Where there is no allegation of counsel's bad faith, a claim of inadequate verification is without merit. Mission Housing Development Company v. City and County of San Francisco, 59 Cal.App.4th 55.

Class action.—Class actions for refunds of taxes are not authorized unless specifically provided for by statute. Woosley v. State of California, 3 Cal.4th 758.

This section does not provide for a class action. Neecke v. City of Mill Valley, 39 Cal.App.4th 946. (This decision construed Woosley v. State of California, 3 Cal.4th 758 as overruling Schoderbek v. Carlson, 113 Cal.App.3d 1029.)

Interest.—There is no implied contract that interest will be paid on all claims for refund. Interest may be paid only pursuant to a specific statute. Ball v. Los Angeles County, 82 Cal.App.3d 312, cert. den. 439 U.S. 1116.

Statute of limitations.—Claims for refunds of taxes erroneously collected must be made, in the case of installment payments, within three years from the date of payment of the last installment. McDougall v. Marin County, 208 Cal.App.2d 65. Unless a taxpayer states in an application for reduction of assessment that the application is intended to constitute a claim for refund, under this section, the taxpayer must file a separate refund claim within four years of paying the tax. Thus, a claim for refund filed on November 19, 1986, was not timely for taxes paid prior to November 19, 1982. Osco Drug, Inc. v. Orange County, 221 Cal.App.3d 189.

Taxpayers were required to meet the four-year limitation period of subdivision (b), even though they were awaiting a decision by the assessment appeals board on their applications for reduction in assessment, which were timely filed. Mission Housing Development Company v. City and County of San Francisco, 59 Cal.App.4th 55. Where taxpayer asserts entitlement to a refund because of exemption from ad valorem taxes under the "welfare exemption" pursuant to Section 268, he is not excused from filing his claim for refund within the three-year period. Hartford v. Los Angeles County, 218 Cal.App.2d 613.

Code of Civil Procedure Section. 355, which allows one year for the filing of a new lawsuit when a judgment for the plaintiff in a prior suit is reversed other than on the merits, does not extend the time in which to file a Section 5097 claim when the taxpayer was not the plaintiff in the prior litigation. JP Morgan Chase Bank, N.A. v. City and County of San Francisco, 174 Cal.App.4th 1201.

The language of subdivision (b) is clear that the limitation period commences on the "making of the payment" and not on the date the tax becomes delinquent. The right to offset, under Code Civ. Proc., section 431.70, claims for refund of liability for previous years is independent of the right to a refund under subsection (b). Singer Co. v. Kings County, 46 Cal.App.3d 852.

Application.—The four-year statute of limitations in this section applies to applications for refund of overpayments of special benefit assessments imposed pursuant to Public Utilities Code section 33000 et seq. Hanjin International Corporation v. Los Angeles County Metropolitan Transportation Authority, 110 Cal.App.4th 1109. The four-year statute of limitations in this section applies to an action seeking a refund of fraud penalties imposed under previous versions of Sections 503 and 504. JP Morgan Chase Bank, N.A. v. City and County of San Francisco, 174 Cal.App.4th 1201. This section has no application to a claim for refund of personal property taxes erroneously assessed by a City to a taxpayer. Pasadena Hotel Development Venture v. City of Pasadena, 119 Cal.App.3d 412.

This section does not include delinquency penalties. People ex rel. Strumpfer v. Westoaks Inv. #27, 139 Cal.App.4th 1038.

Note.—The cases McDougall v. Marin County, 208 Cal.App.2d 65, and Hartford v. Los Angeles County, 218 Cal.App.2d 613, construed Section 5097 when the three-year period of limitations was applicable; however, Stats. 1970, Ch. 540, in effect November 23, 1970, extended the period of limitations to four years.