Does filing a lawsuit challenging property taxes get you out of paying them while the suit is pending?

property tax noticeWith proposed property tax assessments being mailed next month (and final bills being mailed in November), it’s almost the time of year where property owners think about challenging their assessments. Taxpayers must remember that filing a lawsuit to challenge your county property appraiser’s valuation of your property, or denial of an exemption from ad valorem taxes, does not get you out of paying while the suit is pending. Before filing a lawsuit, “the taxpayer shall pay to the collector not less than the amount of the tax which the taxpayer admits in good faith to be owing.” Fla. Stat. § 194.171(3). Whether to pay the entire assessment or some lesser amount is beyond the scope of this post.

What happens, though, when the lawsuit covers one tax year but goes on for more than one? The taxpayer has to pay all taxes assessed  “in years after the action is brought, which the taxpayer in good faith admits to be owing…” Fla. Stat. § 194.171(5). In a case decided late last month, an appellate court answered the question of whether that requirement includes the year that the lawsuit is filed if that is not the year being challenged.

In Forest Brooke/Hillsborough, LLC v. Henriquez, the taxpayer filed a 2009 lawsuit challenging its 2008 ad valorem assessment. The taxpayer had paid its 2008 taxes (or at least the amount it admitted in good faith to be owing), but did not pay its 2009 taxes on time. The county Property Appraiser argued that the court lost jurisdiction of the case and the trial court agreed, dismissing the case. The trial court reasoned that in requiring payment “in years after the action is brought,” the Florida legislature meant to require payment of taxes for all years after the year being challenged.

The appellate court disagreed and reinstated the taxpayer’s lawsuit. The statute says the taxpayer must pay the taxes for all years “after the action is brought,’ so that’s what is required. When the taxpayer failed to pay its taxes for the year in which it filed the lawsuit, that didn’t matter under the statute. If the case goes on for many years, the taxpayer must keep paying new taxes as they come due.

The bottom line is that a taxpayer challenging its ad valorem assessments, or denial of an exemption from assessments, must be careful to pay what the statutes require. The penalty for failure to get it right is dismissal of the lawsuit.

  • Matthew R. Chait

    Matt Chait is the Managing Partner of the West Palm Beach office of Shutts & Bowen LLP, where he is a member of the Business Litigation Practice Group. His statewide practice focuses on commercial real estate and land use litigation ...

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