In The Supreme Court of the United States No. 01-1061 Programmed Land, Inc., Et Al., Petitioners, v. Patrick O'Connor, Treasurer and Auditor, Hennepin County, Et Al., Respondents. On Petition for a Writ of Certiorari to the Supreme Court of Minnesota Brief Of Amicus Curiae Tax Executives Institute, Inc. In Support Of Petitioners: Interest Of Amicus Curiae.

On February 19, 2002, Tax Executives Institute filed the following brief amicus curiae with the Supreme Court of the United States concerning the constitutionality of two Minnesota counties, denying refunds of overbilled real property taxes paid by commercial property owners. The brief was filed under the aegis of the Institute's State and Local Tax Committee, whose chair is Bruce J. Reid of Microsoft Corporation. The Supreme Court denied certiorari on March 18, 2002.

Pursuant to Rule 37 of the Rules of the Supreme Court, Tax Executives Institute, Inc. respectfully submits this brief as amicus curiae in support of Petitioners. (1) Tax Executives Institute (hereinafter "TEI" or "the Institute") is a voluntary, nonprofit association of corporate and other business executives, managers, and administrators who are responsible for the tax affairs of their employers. The Institute was organized in 1944 and currently has approximately 5,300 members who represent more than 2,700 of the leading businesses in the United States, Canada, and Europe, nearly all of which are engaged in interstate commerce.

The members of the Institute represent a cross-section of the business community in North America. The Institute is dedicated to promoting the uniform and equitable enforcement of the tax laws and to reducing the costs and burdens of administration and compliance to the benefit of both the government and taxpayers, and to vindicating the Commerce Clause, due process, and other constitutional rights of business taxpayers. As tax professionals who recognize the States' and local jurisdictions' rights to collect properly levied taxes and who respect the legitimacy of government tax assessments, our members have a significant interest in the standards applied in assessing the adequacy of remedies accorded taxpayers for unlawfully imposed and collected taxes.

This case raises fundamental questions about the remedies available for taxpayers who have paid excess taxes due to undisclosed miscalculations on the part of government officials. Viewed narrowly, the issue is whether the State of Minnesota improperly denied certain commercial real property owners due process, and therefore any meaningful relief, for property taxes overpaid in reliance on the correctness of tax bills prepared and sent by county officials of Hennepin and Dakota Counties. Viewed broadly, the issue is what obstacles may a state or local jurisdiction constitutionally erect to deny taxpayers a refund of illegally collected taxes.

The Institute's members and the businesses by which they are employed have a keen and vital interest in ensuring the efficacy and effectiveness of remedies provided to taxpayers who are subjected to unlawful taxation. Given the checkered history of the States on refunding improperly collected taxes, this case promises to affect far more than Hennepin or Dakota County's authority to retain the taxes improperly exacted from the taxpayers. Amicus TEI is rightly concerned about the deleterious effect the Minnesota Supreme Court's decision could have on the equitable administration of other state and local taxing schemes relating to business taxpayers.

Because TEI members and the businesses by whom they are employed will be materially affected by the application of the Minnesota Supreme Court's decision, the Institute has a special interest in the outcome of this case.

Summary of Argument

1. The core issue in this case is whether taxpayers who have overpaid taxes in reliance on a government prepared and issued tax bill are entitled to refunds of the illegally extracted monies. Programmed Land, Inc. and the other petitioners (hereinafter "affected taxpayers") are property owners in the State of Minnesota who sought refunds of excess real property tax payments made in reliance on tax bills sent by county officials. It is undisputed that the affected taxpayers had no way to determine from the information included in the tax bills that the counties were overcharging them. Although they concede that they overbilled the affected taxpayers, Hennepin and Dakota Counties have steadfastly refused to refund the overpayments. The counties contend that the claims for refund are timed-barred because they were not brought within the time limit specified for assessment challenges in MINN. STAT. [section] 278.01 (1997).

2. An understanding of the real property tax assessment, notice, and billing cycle in Minnesota is necessary in order to assess the constitutional sufficiency of [section] 278.01 in this case. Each year an assessment notice is mailed to owners showing the assessed value and classification; if an owner disagrees, it must challenge the county's determinations by March 31st of the following year. The deadline for mailing the final tax bill is same March 31st deadline for challenging the valuation or classification. Although some affected taxpayers received their final bill before the deadline to file a protest, in many cases the deadline had already passed.

3. It should be axiomatic in tax administration that improperly collected tax payments will be refunded. Such a principle squares with the American sense of fairness and enhances voluntary compliance. It is predicated on trust -- on the notion that, if the government has done something wrong or if government officials perform their duties haphazardly or not at all -- it will not be taxpayers who suffer. For many States, however, the "end" of collecting (and keeping) revenues has increasingly justified the "means" of depriving aggrieved taxpayers of the only true remedy -- refunds. Taxpayers who in good faith had paid their taxes found themselves consigned to the role of Tantalus. Hungering and thirsting to be made whole, they reached for a refund from the bough of statutory procedure and past practice, only to have it blown out of reach by the State; belatedly told to stoop to drink relief, they discovered the possibility of a refund had long since drained away.

4. The last two decades have seen a disturbing number of state taxing statutes invalidated on constitutional grounds. Moreover, States have in many cases resisted efforts to provide refunds on grounds the taxpayer failed to abide by the affected State's procedural requirements. Reinterpreting procedural requirements to deny relief for a properly administered, albeit unconstitutional, tax is bad enough. The State of Minnesota here, however, goes even further--taxpayers who had no way of knowing they were billed incorrectly were subjected to procedural obstacles constructed to block their way to a refund of the excess tax payments. The pattern of misbehavior by state or local governments of refusing to pay over funds properly belonging to taxpayers, whether due to the unconstitutionality of the tax or a hidden miscalculation, must be stopped.

5. When presented with more than 60 applications for overpayment refunds on the same day, Hennepin County decided that the overpayment statute which it had used earlier to permit refunds was no longer applicable; instead, it argued that the one-year statute of limitations in [section] 278.01 precluded the refunds. The Minnesota Supreme Court validated this result, finding a supposed constitutionally sufficient predeprivation remedy in the assessment protest process. This was in spite of the separate overpayment statute heretofore used to grant refunds and a longstanding Minnesota Supreme Court decision--Wheeler v. Bd. of Comm'rs of Hennepin County, 87 Minn. 243 (1902)--that has almost identical facts.

6. In holding that the only option for refund available was using the assessment protest statute to contest the legality of the taxes billed, the Minnesota Supreme Court disregarded two key factors. First, as the court itself acknowledged, there is no way a taxpayer could have known that the county applied an incorrect class rate from any information provided by the counties. Second, the deadline for initiating a claim under the assessment protest statute is March 31st, the same deadline for mailing out the tax bills. In other words, the Minnesota Supreme Court adopted a statute of limitations that will in almost all cases bar recovery even before the cause of action arises. This is the very antithesis of due process.

7. In McKesson Corp v. Div. of Alcoholic Beverages & Tobacco, 496 U.S. 18, 31 (1990), this Court stated that, to satisfy the requirements of due process, the State must provide an aggrieved taxpayer either with a predeprivation hearing or with "meaningful...