What Happens After a Property Tax Appeal is Filed in Minnesota?
Minnesota's deadline to file a real estate tax appeal for taxes payable in 2018 is April 30, 2018, but what happens after the appeal is filed?
Minnesota requires tax appeals to be filed by an attorney for any property not owned by an individual. Accordingly, throughout this article the reference to taxpayer means the taxpayer or counsel for the taxpayer. The tax appeal must be properly served and filed before April 30. Once filing is complete, the appeal will make its way to the desk of the county or city assessor in charge of the subject property. However, at this point in the appeal it is unlikely for the property owner to hear from the assessor. Assessors usually wait for contact from the taxpayer or until the second year of the appeal before reaching out to the taxpayer.
Following the filing of the appeal, taxes for the first half of the year are due May 15. While it may be possible to withhold some taxes during an appeal if hardship can be demonstrated, it is best to pay the taxes as usual, because non-payment of taxes results in an automatic dismissal of the appeal.
If the property is an income producing property, the taxpayer must provide income and expense statements and other financial information as identified in Minn. Stat. § 278.05, subd. 5. The disclosures must be provided to the assessor no later than Aug. 1 of the year the taxes are payable – the same year as the appeal. If the disclosures are deficient, or not made, the appeal will most likely be dismissed.
The taxpayer can negotiate with the assessor any time after filing the petition. Assessors do their best to work with the taxpayer when a taxpayer calls, but it is not uncommon for negotiations to not progress in the first year of the appeal.
If the appeal is not settled in the first year, the tax court will generally become involved in the second year. Usually around the end of the first year, or within a few months into the second, the tax court will issue a scheduling order. The most recent version of the tax court scheduling orders outline litigation activities that must occur during the next 12 months. The requirements include filing a joint statement of the case, identifying appraisal experts, participating in discovery, filing written appraisal reports, and being-trial ready. Like with the disclosures, the scheduling orders are to be taken seriously. When parties are non-responsive or fail to follow the scheduling order they risk having their appeal dismissed.
If the appeal is not resolved before the deadline for the following year, the taxpayer must file an appeal again in order to preserve the ability to seek reductions for all years. If the taxpayer does not file an appeal in the second, year the taxpayer will only be able to seek adjustments for the initial tax year. After the taxes have been levied, in order to receive an adjustment, an appeal must be filed before the deadline. In addition, reductions cannot be made retroactively unless an appeal has been made.
Most tax appeals will result in a settlement for a lower value or a voluntary dismissal, depending on the merits of the case. However, if those results do not occur, litigation through the tax court is the next step. Based on the timing of the scheduling orders a tax appeal becomes ready for trial approximately two years after the initial appeal is filed.
Regardless of how the case is resolved, taxpayers should be wary of the many pitfalls that can cause dismissal throughout the entire process of a tax appeal in Minnesota. This is undoubtedly why Minnesota, law in most cases requires that the taxpayer be represented by counsel in order to file a tax petition in tax court.