Opinion
Nos. 29991, 29992, 29993 and 29994
Decided April 25, 1945.
Taxation — Tax Commissioner may remit or refund taxes, when — Section 1464-3, General Code — Commissioner to investigate claimed overpayment and issue certificate of abatement, when — Appeal — Board of Tax Appeals may reverse commissioner and enter order — Section 1464-1, General Code — Commissioner denied, on jurisdictional ground, application for refund.
1. Under Section 1464-3, General Code, and within the limitations prescribed therein, the Tax Commissioner has authority to remit or refund taxes illegally or erroneously collected, or for any other reason overpaid. ( Ohio Bell Telephone Co. v. Evatt, Tax Commr., 142 Ohio St. 254, approved and followed.)
2. On written application of any taxpayer claiming to have overpaid to the Treasurer of State at any time within five years prior to the making of such application, a tax payable under a law which the Department of Taxation is required to administer, it becomes the mandatory duty of the Tax Commissioner to investigate the facts in connection with such claim and, if he shall find that there has been an overpayment, to issue to the taxpayer a certificate of abatement.
3. Upon an appeal from an order of the Tax Commissioner denying, upon jurisdictional grounds, an application for a tax refund filed in conformity with Section 1464-3, General Code, the Board of Tax Appeals, by virtue of the provisions of Section 1464-1, General Code, has authority to reverse such order and, where the facts are not in dispute, to enter the order which the Tax Commissioner should have entered.
APPEALS from the Board of Tax Appeals.
These four cases are here on appeals by the Tax Commissioner of Ohio from decisions of the Board of Tax Appeals with reference to the personal property tax returns of three Ohio banks.
We shall deal only with the factual situation presented by the record in case No. 29991. That record discloses that The Niles Bank Company made and submitted its personal property return for the year 1941 to the Department of Taxation of this state and accompanied such return with a financial statement upon which were reflected the amounts of deposits, designated as such, and an additional item of $32,252.59, designated as "hypothecated deposits."
Thereafter, on June 2, 1941, the Tax Commissioner determined that the item designated as "hypothecated deposits" should have been returned on the return as deposits and returned as such for taxation, and issued his preliminary assessment to the taxpayer on that date.
No application for review or redetermination of such preliminary assessment was made to the Tax Commissioner and no appeal from such assessment was taken to the Board of Tax Appeals.
The taxes as assessed by the Tax Commissioner for that year, 1941, were paid under protest.
Thereafter, on March 30, 1943, the taxpayer wrote a letter to the Tax Commissioner which reads as follows:
"We have been informed that according to a recent decision that 'hypothecated deposits' were declared nontaxable.
"In our 1941 financial institution return of taxable property form No. 970 report, an item of $32,252.59 (hypothecated deposits) was included in deposits; in our 1942 report — we included $119,938.84 hypothecated deposits, for which we were assessed and the assessment paid. In our 1943 report we included $138,779.78 representing hypothecated deposits, for which no assessment has been made as yet.
"If it is necessary for us to make a further request for the refund due us, will you please notify us — or send the necessary forms."
The Tax Commissioner considered the letter as an application for the issuance of a final assessment and a certificate of abatement and upon consideration thereof determined that he was without jurisdiction to issue the final assessment and certificate of abatement.
An appeal from that finding and order was perfected to the Board of Tax Appeals. The commissioner filed a motion to dismiss upon the ground that the board was without jurisdiction to consider such appeal. The motion was overruled and the cause was submitted upon a transcript of the proceedings before the commissioner and a stipulation of facts.
The board reversed the finding and order of the Tax Commissioner, granted the application and ordered him to issue a certificate of abatement for $64.50 for the year 1941.
The case is in this court upon appeal from that decision.
Case No. 29992 is between the same litigants, presents the same legal questions and involves the return of the taxpayer for the year 1942.
Case No. 29993 presents a similar controversy between The Spitzer-Rorick Trust Savings Bank and the Tax Commissioner with reference to the taxability of "hypothecated deposits" listed in its tax returns for the years 1941 and 1942.
The Board of Tax Appeals made decisions in cases Nos. 29992 and 29993 similar to its decision in case No. 29991.
Case No. 29994 presents a controversy between The First National Bank of Cincinnati and the Tax Commissioner with reference to the taxability of balances of foreign corporations.
By agreement of the parties the only question considered on that appeal was the question of the jurisdiction of the Tax Commissioner to entertain the application for exemption of such balances.
In that case the Board of Tax Appeals reversed the finding of the Tax Commissioner and ordered him to consider the application.
Mr. Thomas J. Herbert, attorney general, and Mr. Perry L. Graham, for appellant.
Mr. Walter F. MacQueen, for appellee The Niles Bank Company. Mr. Dennis W. Drennan, for appellee The Spitzer-Rorick Trust Savings Bank.
Messrs. Ernst, Cassatt Cottle and Mr. Hubert T. Campbell, for appellee The First National Bank of Cincinnati.
At the outset it should be made perfectly clear that the question of the taxability of the "hypothecated deposits" is not before the court. The Board of Tax Appeals found that such deposits were not taxable and no claim of error is predicated upon that finding.
The questions for decision in cases Nos. 29991 and 29992 as set forth by the appellant are as follows:
"Did the Board of Tax Appeals act illegally or abuse its discretion in making its determination that (1) the Tax Commissioner had jurisdiction to hear and grant the applications filed by the taxpayer on March 30, 1943, when the taxpayer had not appealed from the order of the Tax Commissioner with respect to the assessments made in 1942 and 1943 [ sic], and if he did not (2) it had the power to and did make an abatement in the absence of the determination of the Tax Commissioner of the amount of the refund?"
We shall first direct our attention to the question of jurisdiction.
The appellant insists that these cases are controlled by Sections 5394, 5395 and 5611, General Code.
Section 5394, General Code, provides the procedure for a review by the Tax Commissioner, where a tax assessor assesses any item or class of taxable property listed in a return by the taxpayer in excess of the value or amount thereof as so listed or without allowing a claim duly made for deduction from net book value of accounts receivable, or depreciated book value of personal property used in business.
Section 5395, General Code, provides the procedure for the making of a final assessment by the Tax Commissioner and the duty of the county auditor in respect thereto.
Section 5611, General Code, provides for a hearing by the Board of Tax Appeals from a final determination or order by the Tax Commissioner.
We fail to discern the applicability of those sections to the factual situations here presented. There were no final assessments in the instant cases.
The General Assembly, by the passage of Section 1464 et seq., General Code (118 Ohio Laws, 344), abolished the Tax Commission of Ohio and created the Department of Taxation.
Section 1464-1, General Code, defines the powers and duties of the Board of Tax Appeals.
Section 1464-3, General Code, reads in part as follows:
"All other powers, duties and functions of the Department of Taxation, other than those mentioned in Sections 1464-1 and 1464-2 of the General Code, are hereby vested in and assigned to, and shall be performed by the Tax Commissioner, which powers, duties and functions shall include, but shall not be limited to the following powers, duties and functions: * * *
"2. To exercise the authority provided by law relative to remitting or refunding taxes or assessments, including penalties and interest thereon, illegally or erroneously assessed or collected, or for any other reason overpaid except as provided in paragraph 9, Section 1464-1 of the General Code; and, in addition to the authority so provided by law, the Tax Commissioner shall have authority as follows: On written application of any person, firm or corporation claiming to have overpaid to the Treasurer of State, at any time within five years prior to the making of such application but not prior to January 1, 1938, any tax payable under any law which the Department of Taxation is required to administer, or on his own motion, to investigate the facts and to make, in triplicate, a written statement of his findings; and, if he shall find that there has been an overpayment, issue, in triplicate, a certificate of abatement, payable to the taxpayer or his or its assigns or legal representative and showing the amount of the overpayment and the kind of tax overpaid." (Italics ours.)
The tax payments here involved were made to the Treasurer of State.
This court had occasion to consider Section 1464-3, General Code, in the case of Ohio Bell Telephone Co. v. Evatt, Tax Commr., 142 Ohio St. 254, 51 N.E.2d 718. At page 257, Judge Williams, writing the opinion, said:
"Under Section 1464-3, General Code, and within the limitations prescribed therein, the Tax Commissioner has authority to remit or refund taxes 'illegally or erroneously * * * collected or for any other reason overpaid.' "
That pronouncement is dispositive of the question of jurisdiction. The Board of Tax Appeals was correct in holding that the Tax Commissioner had jurisdiction to hear and determine the applications for abatement and refund.
The appellant however contends that the cases of Leimbach et al., Trustees, v. Evatt, Tax Commr., 141 Ohio St. 191, 46 N.E.2d 859, and Willys-Overland Motors, Inc., v. Evatt, Tax Commr., 141 Ohio St. 402, 48 N.E.2d 468, are controlling here upon the question of jurisdiction. We do not think so. In those cases the factual situations were unlike the situation here presented and different statutes were under consideration. The conclusions there reached are not inconsistent with our present holdings.
The appellant further contends that the Board of Tax Appeals was without authority to make an order of refund or remission of personal property taxes.
Section 1464-1, General Code, grants power to the Board of Tax Appeals, "5. to exercise the authority provided by law to hear and determine all appeals * * * including appeals from any tax assessment, valuations, determinations, findings, computations or orders made by the Tax Commissioner or correction or redetermination made by him * * *." (Italics ours.)
The Niles Bank Company and Spitzer-Rorick Trust Savings Bank cases were submitted to the Board of Tax Appeals upon agreed statements of fact. In those cases, there being no dispute as to the facts, by virtue of the provisions of Section 1464-1, General Code (above quoted), the Board of Tax Appeals had authority to enter the order which the Tax Commissioner should have entered.
In the First National Bank of Cincinnati case, it being agreed that the matter was submitted upon the jurisdictional question only, the Board of Tax Appeals reversed the finding and order of the Tax Commissioner and remanded the cause with instructions to entertain and consider the application.
We are of opinion that the conclusion reached by the Board of Tax Appeals in each of the four cases was correct and therefore reasonable and lawful and that each of such decisions should be and hereby is affirmed.
Decisions affirmed.
WEYGANDT, C.J., ZIMMERMAN, WILLIAMS, MATTHIAS and HART, JJ., concur.
TURNER, J., dissents.