County Treasurer v. State Tax Commission

Hammond, J., delivered the opinion of the Court. On the day of the argument we affirmed by per curiam order the declaratory decree appealed from, for the reasons which follow. The decisive question in the case is a narrow one—does the applicable local statute specifically prescribe a tax year for Caroline County, which for almost thirty years has acted on the assumption that Ch. 321 of the Acts of 1931 prescribed the twelve months’ period from July 1 to June 30 as a tax year. The lower court held that the local law established a fiscal year but did not specifically prescribe a tax year.

The question arises because by Ch. 387 of the Acts of 1939 the Legislature provided that in any county or city in which some other period is not now “specifically prescribed”, all ordinary county and city taxes shall be levied for the calendar year and as of the first day of January as the date of finality. Before 1939 the statutory scheme was that local law set the tax year and the same date of finality for state, county and city taxes. Not covered was the situation in which a county had not specifically established a taxable year or a date of finality. The 1939 Act (now found in Code, 1957, Art. 81, Sec. 31) sought to achieve state wide uniformity.

As to tangible personal property Sec. 31 made the tax year the calendar year, and January 1st the date of finality throughout the State for state and local taxes (subsection c). As to real property it made the calendar year the tax year for state taxes (subsection a) ; county and city taxes were to be levied “for the same period” and “as of the same date of finality” as “now prescribed by local law” (subsection b), with the proviso, however, “that in any county or city in which some other period is not now specifically prescribed by statute, all ordi ⁶⁵⁵ nary county and city taxes shall be levied for the calendar year and as of the first day of January as the date of finality” (proviso 4 of subsection b), and finally that if not now “specifically prescribed by statute” the date of finality for all state, county and city taxes is to be January first of each year (proviso 5 of subsection b). The record leaves no doubt that the officials of Caroline County, at least since the effective date of Ch. 321 of the Acts of 1931, have assessed both state and local taxes on the basis of a taxable year of July 1 to June 30, and have considered June 30 the date of finality for the next ensuing twelve months’ period; and that members of the bar and the citizens of Caroline County, in making adjustments of taxes in real estate settlements, trustees’ accounts, and decedents’ estates, customarily and generally have treated the period July 1 to June 30 as the tax year. After the effective date of the 1939 Act, the State Tax Commission supervised assessments throughout the state in accordance with the Act and the opinion of the Attorney General in 24 Op.

A. G. 767, 769, which said that “* * * in a county in which a taxable year is not specifically prescribed by statute, the taxable year will be the calendar year and the date of finality will be January 1st, regardless of whether or not some other date of finality is specifically prescribed by statute.” It did not come to the attention of the State Tax Commission that Caroline County was levying taxes based upon a tax year not the calendar year and a date of finality not January 1st because, when the County paid over to the State the taxes the County had collected, it was assumed by the State that the payment was of the taxes for the then current calendar year, although the County officials thought the payment was for the tax year that had commenced the first of July. When the true situation was discovered, the Commission instructed Caroline County officials to make their practice conform with the Act of 1939. The County thereupon took the position that the 1931 local Act did prescribe a tax year and that if such a year were not spelled out in detail, the administrative practice over the long period of years from ⁶⁵⁶ 1931 showed the proper construction of the Act to be that the tax year was July 1 to June 30. The suit for declaratory judgment now before us followed.

The lower court held that with respect to county taxes on both real