Wegener v. Commissioner of Revenue

PAGE, Justice

(dissenting).

I dissent.

I cannot join the court in substituting its sense of what Minn.Stat. § 290A.04, subd. 2h(a) (1990) should say for what it does say. The court succeeds in denying these unsympathetic taxpayers a refund, but does so at the expense of longstanding principles of statutory construction. The relators are not the only losers in today’s decision.

Minn.Stat. § 290A.04, subd. 2h(a), clearly provides for a refund of property taxes under certain circumstances. It also plainly states when the refund provisions do not apply:

This subdivision shall not apply to any increase in the gross property taxes payable attributable to improvements made to the homestead after the assessment date for the prior year’s taxes.1

*618(Emphasis added.) Relators’ home was an improvement made before the assessment date for the prior year’s taxes, and thus does not come within the exception to the refund provision. Consequently the statute entitles relators to a refund on their property taxes for the tax year in question.

The court argues that the legislature could not have intended this result. The legislature has, however, spoken as to its intention with regard to interpreting its statutes: “words and phrases are [to be] construed * * * according to their common and approved usage” and “[w]hen the words of a law in their application to an existing situation are clear and free from all ambiguity, the letter of the law shall not be disregarded under the pretext of pursuing the spirit.” Minn.Stat. §§ 645.08(1) and 645.16 (1992) respectively. The language of Minn.Stat. §§ 290A.04, subd. 2h(a) is clear and free from all ambiguity, and we are not free to disregard it.

The court’s decision departs from our traditional approach to interpreting tax statutes. When the language of a tax statute is clear, we have refused to add language the legislature omitted or overlooked, or to extend the scope of the statute beyond that clear language. Wallace v. Commissioner of Taxation, 289 Minn. 220, 229-30, 184 N.W.2d 588, 593-94 (1971); Northland Country Club v. Commissioner of Taxation, 308 Minn. 265, 241 N.W.2d 806, 807 (1976); Charles W. Sexton Co. v. Hatfield, 263 Minn. 187, 195, 116 N.W.2d 574, 580 (1962). See also Dumont v. Commissioner of Taxation, 278 Minn. 312, 317, 154 N.W.2d 196, 200 (1967) (stating that ambiguity in tax statutes must be resolved in favor of the taxpayer).

Further, it is not clear the legislature was unmindful of situations where, as here, the assessor fails to include new improvements in the assessment for the prior year. In such situations the legislature has provided that the assessment for any given year may be corrected under Minn.Stat. § 273.02, subd. 1 (1992). A properly corrected assessment for the tax year in question would require that the value of the new improvements be excluded from the refund calculation. Thus the legislature has provided a remedy for these situations.2 For some unknown reason the assessment was not properly corrected in this case. The Commissioner now seeks to ignore the express language of the statute and exclude from the refund calculation improvements made to the homestead before the assessment date for the prior year’s taxes.

Finally, given the nature of the 1990 changes to Minn.Stat. § 290.04, subd. 2h(a), the legislature either was or should have been aware of the clear and unmistakable meaning of the words used. If the literal language of this statute permits an unintended result, it is up to the legislature to correct it. We “are not free to substitute amendment for construction and thereby supply the omissions of the legislature.” State v. Moseng, 254 Minn. 263, 269, 95 N.W.2d 6, 11-12 (1959).

In addition to basing its decision on its understanding of the legislature’s intent, the court advances, albeit briefly, a constitutional argument. The court claims to find a violation of the uniformity clause, Article X, Section 1, of the Minnesota Constitution, and of the equal protection clause of the 14th Amendment of the United States Constitution, in the continuing undervaluation of rela-tors’ property. This is a curious claim. First, relators’ property has now been correctly valued. Relators sought to receive a refund on taxes due on their accurately valued and assessed property. There is no undervaluation for this court to correct.

Second, the court finds a literal reading of the tax refund exception unconstitutional. *619While I do not agree, I would be more easily persuaded that the refund statute itself, and not merely its exception, is unconstitutional. How does this statute, which gives refunds to property owners whose taxes have risen and exacts the full tax from similarly situated property owners who have consistently paid high taxes, serve to uniformly distribute the tax burden? The court seems to have swallowed a camel only to strain at a gnat.

. This language was added to the statute in 1990. Act of April 24, 1990, ch. 480, art. 5, § 12, 1990 Minn.Laws 1033, 1128-29. Previously the stat-utc provided that the refund did not. apply to increases in net property taxes payable attributable to improvements made to the homestead, *618without stating when those improvements occurred.

. The court fears that unless they read the statute to say something it does not say, the relators will “forever cast upon their neighbors the burden of taxation which is rightfully imposed on relators' property." This outcome is simply not possible. Minn.Stat. § 290A.04, subd. 2h(a) (1992) limits "refunds for property taxes payable in 1993 and thereafter” to $1,500. Further, subdivision 2h is repealed by Act of Oct. 3, 1989, ch. 1, art. 7, § 9, 1989 Minn.Laws 1st Spec.Sess. 5, 109, effective for property taxes payable in 1995 and thereafter.