The Town doesn’t have to pay you back a dime for the Sewer Tax which was illegally charged and that is because you did not know enough to complain about the tax and secondly since you didn’t complain, the statute of limitations which starts at the time of your complaint in FL for debt collection, the four years have passed and the Town owes you nothing.
The Florida Statute runs when the person has knowledge of the condition and thus makes a complaint. And since the Town of White Springs is broke and has no consideration for its citizens, only for the politicians themselves, you will not receive anything back. You will be given late charges as usual, your water will be shut off as usual and since there has been no increases in the last couple of years, expect a 3% increase on water and sewer.
Let’s go through the deliberations our Town Attorney made relative to the Law governing return of taxes already paid.
In order to recover taxes already paid, a taxpayer must demonstrate that (1) the tax was illegal and void, not merely irregular (2) The tax must have been paid under compulsion or the legal equivalent; (3) the tax must have been paid and received by the municipality, and (4) the party must not have elected to proceed with any other remedy against the tax assessor or collector (Town).
Using the above test, Ms Logan stated it is very likely that items 1, 3 and 4 have been met, leaving only 2 in dispute. Florida courts have discussed the voluntary versus involuntary nature of tax payments made, beginning with the Florida Supreme Court in Jefferson County v Hawkins 2, So. 362 (Fla 1887) when it stated:
“Money voluntarily paid upon claim of right, with full knowledge of all the facts, cannot be recovered back merely because the party, at the time of payment, was ignorant or mistook the law, as his liability……there must be…..some compulsion or coercion attending its assertion which controls the conduct of the party making the payment. To constitute such compulsion or coercion, as will render payment involuntary, there must be some actual or threatened exercise of power possessed or supposed to be possessed, by the party exacting or receiving the payment over the person or property of the party making the payment, from which the latter has no other means of immediate relief than by advancing the money.”
As it relates specifically to taxes, the Florida Supreme Court extended the voluntary payment doctrine in North Miami v Seaway Corp, 9 So. 2d 705, 707 (Fla. 1942 stating:
“ Florida law presumes all payments to voluntary until the contrary is made to appear. A mere protest when payment was not made to save arrest or the seizure or sale of goods are not in the submission to process would not relieve the payment of its presumed voluntary character. Payment in advance for the purpose of obtaining a discount is voluntary. Payment to avoid onerous penalties is generally considered as involuntary and compulsory. Payment made in pursuance of a bargain on compromise is voluntary. Payment under a mistake of fact is generally held to be involuntary.
(Let’s face it if you deducted a tax on your utility bill it would constitute you to receive a penalty of a late payment and a shut off of water and thus as far as I am concerned it would consider the payment involuntary….except for when the statute starts running)
Now this is the clincher In North Miami, the Florida Supreme Court further placed the onus for the payment of illegal taxes upon the citizen and indicated that in such circumstances there was no basis for recovery of illegally paid taxes, stating:
“Every man is supposed to know the law, and if he voluntarily makes a payment which the law would not compel him to make, he cannot afterwords assign his ignorance of the law as a reason why the state should furnish him with legal remedies to recover it. Ignorance or mistake of the law by one who voluntarily pays a tax illegally assessed furnishes no grounds for a recovery.”
Several cases since North Miami have discussed the type of onerous penalties sufficient to render payment of taxes involuntary and compulsory. For example, in Ves Carpenter Contractors, Inc. the Fourth DCA noted that payment of a tax is deemed involuntary where the penalty enacted for non payment is so severe that it constitutes coercion and duress. Examples of severe penalties for non-payment sufficient to amount to coercion or duress include inability to obtain building permits or certificates of occupancy, etc. (Ves Carpenter Contractors), inability to do business associated with inability to obtain an occupational license (Broward County v Mattel 4th DCA 1980) allowing the unpaid tax to become a cloud upon the title to real estate (North Miami v Seway Corp.)
AS IT RELATES TO THE PENALTY ASSOCIATED WITH FAILURE TO PAY THE SEWER TAX IMPOSED BY THE TOWN OF WHITE SPRINGS, THE PENALTY IS THE TERMINATION OF WATER AND SEWER SERVICE, AS THE TWO ARE LUMPED TOGETHER. SEE ORDINANCE 95-3, SECTION 8 (UPON FAILURE OF ANY PERSONS OWING FOR SUCH SERVICES TO PAY THE SAME WITHIN 15 DAYS AFTER REDITION OF THE BILL THEREFORE SAID SERVICE SHALL BE DISCONTINUED). Florida courts have held that a disruption in services due to failure to pay the unlawful tax to amount to an involuntary payment. See Disc.Sleep of Ocala LLC v City of Ocala Florida concluding that where a fire service fee appeared along side charges for water sewer and electric services and the failure to pay the fire service fee resulted in a disconnection of that person’s utility services, the bundling of legal and illegal fees created sufficient coercion as to render payment involuntary) THUS IT APPEARS THAT UNLESS THE TOWN HAS A VALID DEFENSE, RESIDENTS OF WHITE SPRINGS HAVE INVOLUNTARILY PAID THE SEWER TAX ENACTED IN 1995 AND THUS HAVE SATISFIED ALL REQUIRED ELEMENTS FOR ESTABLISHING A RETURN OF ILLEGAL TAXES ALREADY PAID.
THE TOWN’S DEFENSES – Having determined that payment of the sewer tax was involuntary, we must then consider any defenses to be asserted by White Springs from having to refund or reimburse these amounts to residents. THE TOWN OF WHITE SPRINGS SHOULD NOT HAVE TO REIMBURSE THE UNLAWFUL SEWER TAX BECAUSE OF THE STATUTE OF LIMITATIONS HAS EXPIRED AND EVEN IF IT DID NOT, EQUITABLE CONSIDERATIONS PRECLUDE REIMBURSEMENT.
S T A T U T E O F L I M I T A T I O N S
THE STATUTE OF LIMITATIONS PERIOD HAS EXPIRED. The Statute of limitations to bring suit for an unlawful tax is four years Fla. Stat. 95.11 (3) (p); H & B Builders, Inc. v City of Sunrise 199 Fl 4th Dist. Ct. App.) The statute of limitation period BEGINS TO RUN WHEN THE ORDINANCE IMPOSING THE UNLAWFUL TAX IS ADOPTED BY THE CITY OR IS APPROVED BY RESOLUTION (Fredrick v N. Palm Beach City Improvement Dist. 4th Dist. Ct. App) The limitations period does not start anew with each assessment (City of Ft Pierce v Australian Props.LLC 4th Dist Ct App 2015) or WHEN PROPERTY OWNERS BECOME AWARE OF THE ILLEGAL NATURE OF THE TAX (Keenan v City of Edgewater 5th Dist. Ct. App. 1996)
In City of Fort Pierce, the city adopted an ordinance which created a stormwater management utility fee. The City adopted the ordinance in 2005. In 2011, six years after the adoption of the ordinance, a group of citizens of the city attempted to bring a class-action suit against the city seeking refund of the unlawful fee. The trial court held that the suit had been brought within the four year statute of limitations based on the annual assessment for the relevant years; the city appealed. The appellate court reversed the four-year limitations period. It further held that because the statute of limitation bars the claims, the group of citizens lacked standing to bring suit against the city In making its decision, the appellate court adopted the reasoning of Frederick which “balanced the property owners” right to adequate notice against the city’s need for certainty in its decision and economic affairs. City of Fort Pierce – Therefore applying the rule and reasoning of City of Fort Pierce to the TOWN OF WHITE SPRINGS’S SEWER TAX, BECAUSE THE ORDINANCE IMPOSING THE TAX WAS ENACTED IN 1995 , the statute of limitations period has long run and NO TAX PAYER HAS STANDING TO BRING SUIT. THE TOWN OF WHITE SPRINGS HAS A NEED FOR CERTAINTY IN ITS ECONOMIC AFFAIRS AND THE CITIZENS OF WHITE SPRINGS, HAVE HAD MORE THAN ADEQUATE NOTICE AS TO THE IMPOSITION OF THE TAX. ACCORDINGLY, BECAUSE THE SEWER TAX AT ISSUE FOR THE TOWN OF WHITE SPRINGS WAS ENACTED BY AN ORDINANCE IN 1995 AND HAS BEEN LEVIED EACH YEAR SINCE WITHOUT THE DETERMINATION AT THE OUTSET OF EACH YEAR, THE STATUTE OF LIMITATIONS PERIOD HAS EXPIRED AND ANY CITIZEN OF THE TOWN OF WHITE SPRINGS WOULD LACK STANDING TO CHALLENGE THE ORDINANCE.
Joe and I challenged the entire ordinance well over two years ago by reason that the Tax was to pay an IRS tax the Town owed and the purpose of the 1995 ordinance was never changed but to pay off a $100,000 loan. In fact we had a hard time receiving the ordinances that followed. It was not until 2000 that the Tax was a straight 10% and in 1995 it was subject to a $5.00 limit for all utility tax and thereafter $7.00. It was not until this year until our Forensic Analyst CPA Michael Whitehead stated that we should not be charging a Sewer Tax. Isn’t it interesting that not only our previous council nor attorneys nor CPA’s knew it was wrong, but any wrong by the Municipalities will never be held in court. Nice. And our council really only cares about themselves even though there is continual mouth service to the contrary.
FINALLY THE FINAL DEFENSE OF THE TOWN:
FINANCIAL BURDEN ON THE TOWN
Even if the statute of limitation had not tolled, equitable consideration, such as the financial burden on the town, preclude repayment. While florida courts have been troubled by the onus upon ordinary citizens v3ersus local governments who are charged with enacting lawful taxes and assessments, equitable consideration still preclude reimbursements under appropriate circumstance.
North Miami v Seaway Corp 1942 offered this justification for the above criteria.
Every man is supposed to know the law, and if he voluntarily maes a payment which the law would not compel him to make, he cannot afterwards assign his ignorance of the law as a reason why the state should furnish him with legal remedies to recover it. Ignorance or mistake of the law by one who voluntarily pays a tax illegally assessed furnishes no grounds for a recovery.
Frankly, we are unpersuaded by this rationale. People pay taxes because of civic obligation and a keen awareness of the potential penalties for violating the tax laws. Thus, we respectfully suggest that it is sophistic to characterize a payment made in error as a voluntary payment. THE ONLY JUSTIFICATION TO RETAIN SUCH A PAYMENT SHOULD BE A SHOWING OF SEVERE FINANCIAL HARDSHIP ON THE PART OF THE GOVERNMENT ENTITY. Further, to argue that a tax paid pursuant to an illegal or void law is also a voluntary payment, totally lacks persuasiveness. If any presumption should be indulged, it is that the legislative branch of government enacts valid laws. Therefore, when a particular law is invalidated, taxpayers who are in good faith have relied upon the law and paid a required tax, should be entitled to an automatic refund. This view, however, is not the Law of Florida and since we are bound to follow the dictates of our Supreme Court, see Hoffman v Jones, 280 So. 2 d 431 (Fla 1973), we have attempted to adhere scrupulously to the criteria set forth in North Miami v Seaway Corp., supra.
This footnote is also significant in that while expressing difficulty with a local government’s ability to escape liability for repayment of unlawful taxes, the Courts expressly mentioned that the local government’s financial condition should be considered in determining whether or not to repay the taxes, a factor which would likely be of assistance in the Town’s argument not to repay unlawful tax, especially given the reasons the tax was initially enacted.
WHILE THE TOWN OF WHITE SPRING’S ORDINANCE WAS NOT ENACTED IN RELIANCE ON A STATUTE, IT DOES APPLY ACROSS THE BOARD WITHOUT DISCRIMINATION AMONGST CITIZENS, AND IT DOES BESTOW A BENEFIT TO THE RESIDENTS OF THE TOWN. BECAUSE IT APPEARS THAT THE TAX WAS INITIALLY ENACTED IN ORDER TO ADDRESS THE TOWN’S FINANCIAL DIFFICULTIES AND RAISE ADDITIONAL TAX REVENUES WITH WHICH TO OPERATE AND BECAUSE THE TOWN WOULD FACE SIGNIFICANT FINANCIAL HARDSHIP, IF IT HAD TO RETURN THE FUNDS, IT APPEARS THE TOWN WOULD BE JUSTIFIED IN RETAINING THE FUNDS FROM THE TAX. ACCORDINGLY, EVEN IF ANY CLAIMS ARE NOT BARRED BY THE STATUTE OF LIMITATIONS PERIOD, THE TOWN OF WHITE SPRINGS WOULD LIKELY BE ABLE TO RETAIN THE FUNDS COLLECTED FROM THE UNLAWFUL TAX BECAUSE OF THE SEVERE ECONOMIC HARDSHIP THE TOWN WOULD FACE IF FORCED TO REFUND THE MONEY.
And there you are citizens, we the citizens are bound by the law of previous court cases. I guarantee that if it were a private corporation who charged you illegal tax or charges instead of a government entity, they would have to return the money whether or not it would cause a financial burden.
These are the people you voted in. The original ordinance was enacted due to a financial burden and was restricted to $5.00 per citizen and then $7.00 per citizen but Tracy Woodard, Mayor McKire and Walter McKenzie made the 10% tax on utilities permanent without any reasoning other than leaving it to pay the $100,000 loan. In fact Jim Smith one of the signors had to check with the bank as to why the loan was still included within our ordinance and he was assured by First Federal that it had been paid. That is also a legal problem since we paid the loan what is the purpose of the continuance. We know the Town needs it but it needs to be in a legal ordinance as to why.
Karin for the blog