Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2017

Revenue and Taxation Code

Property Taxation

Part 9. Corrections, Cancellations, and Refunds

Chapter 5. Refunds

Article 2. Refund Actions by Taxpayers*

Section 5144

5144. Scope of judgment. If the court finds that an assessment is void in whole or in part, it shall render judgment for the plaintiff for the amount of the taxes paid on that portion of the assessment that is found to be void. The taxes paid on the portion of the assessment not found to be void shall constitute valid taxes which, if paid after delinquency, shall carry penalties, interest, and costs.

Construction.—The use of the term "void" in this section corresponds in meaning with the term "validity" used in Revenue and Taxation Code Section 5143, implying that "void" refers to any taxes which are invalid. An invalid tax means any assessment which a taxpayer is not legally responsible for paying. Norby Lumber Company, Inc. v. Madera County, 202 Cal.App.3d 1352.

Judicial Review.—Against a claim that a valid valuation method has been applied erroneously, the Board's decision is equivalent to a trial court determination, and the court may review only the record presented to the Board and may overturn the Board's decision only when no substantial evidence supports it. Where a taxpayer challenges the validity of a valuation method itself, the court must determine as a question of law whether the challenged method is arbitrary, in excess of discretion, or in violation of standards prescribed by law. ITT World Communications, Inc. v. Santa Clara County, 101 Cal.App.3d 246. If the local board of equalization has used an improper method of value or has failed to use proper criteria in valuing the property, and there is no evidence or there is a conflict in the evidence from which a proper value can or should be made, the trial court must remand the matter to the local board for further proceedings. The constitutional responsibility to assess falls to the local board, not to the courts. Norby Lumber Company, Inc. v. Madera County, 202 Cal.App.3d 1352.

When reviewing an equalization determination properly before it in a property tax refund action, a court may correct an assessment and grant a tax refund if value is calculable as a matter of law without remanding to the county board of equalization. However, when judgment must still be exercised as to value, a remand to the local board of equalization is required. Accordingly, to the extent a stipulated judgment between a taxpayer and a county in a tax refund action represented an exercise of judgment as to value, it improperly invaded the constitutional authority of the board of equalization and granted relief which the court had no authority to grant under any circumstances. Plaza Hollister Limited Partnership v. San Benito County, 72 Cal.App.4th 1.

Decisions Under Former Section 5103, Court action authorized.

Judicial review.—The current standard of judicial scrutiny consists of arbitrariness, abuse of discretion or failure to follow the standards prescribed by the Legislature. When a taxpayer challenges the erroneous application of a valid method of appraisal, a court may review only the record of the equalization hearing to determine whether there is substantial evidence to support the decision. When the challenge is to the validity of the method, per se, the court is faced with a question of law which invokes the current standard. Bret Harte Inn, Inc. v. San Francisco, 16 Cal.3d 14.

City taxes collected by county.—Where recovery is sought of city taxes only which were collected by the county, the action may be brought against the county as well as the city. Southwest Exploration Co. v. Orange County, 44 Cal.2d 549.

* Article 2 was added by Stats. 1976, Ch. 499, p. 1240, in effect January 1, 1977.