2007 Minnesota Statutes

CHAPTER 278. REAL OR PERSONAL PROPERTY TAX; OBJECTION, DEFENSE

278.01 DEFENSE OR OBJECTION TO REAL AND PERSONAL PROPERTY TAXES;
SERVICE AND FILING.
    Subdivision 1. Determination of validity. (a) Any person having personal property, or any
estate, right, title, or interest in or lien upon any parcel of land, who claims that such property
has been partially, unfairly, or unequally assessed in comparison with other property in the (1)
city, or (2) county, or (3) in the case of a county containing a city of the first class, the portion
of the county excluding the first class city, or that the parcel has been assessed at a valuation
greater than its real or actual value, or that the tax levied against the same is illegal, in whole or
in part, or has been paid, or that the property is exempt from the tax so levied, may have the
validity of the claim, defense, or objection determined by the district court of the county in which
the tax is levied or by the Tax Court by serving one copy of a petition for such determination
upon the county auditor, one copy on the county attorney, one copy on the county treasurer, and
three copies on the county assessor. The county assessor shall immediately forward one copy
of the petition to the appropriate governmental authority in a home rule charter or statutory city
or town in which the property is located if that city or town employs its own certified assessor.
A copy of the petition shall also be forwarded by the assessor to the school board of the school
district in which the property is located.
(b) In counties where the office of county treasurer has been combined with the office of
county auditor, the county may elect to require the petitioner to serve the number of copies
as determined by the county. The county assessor shall immediately forward one copy of the
petition to the appropriate governmental authority in a home rule charter or statutory city or town
in which the property is located if that city or town employs its own certified assessor. A list
of petitioned properties, including the name of the petitioner, the identification number of the
property, and the estimated market value, shall be sent on or before the first day of July by the
county auditor/treasurer to the school board of the school district in which the property is located.
(c) For all counties, the petitioner must file the copies with proof of service, in the office
of the court administrator of the district court on or before April 30 of the year in which the tax
becomes payable. A petition for determination under this section may be transferred by the
district court to the Tax Court. An appeal may also be taken to the Tax Court under chapter 271 at
any time following receipt of the valuation notice required by section 273.121 but prior to May
1 of the year in which the taxes are payable.
    Subd. 2.[Repealed, 1992 c 511 art 4 s 28]
    Subd. 3. Exception. The procedures established by this section are not available to contest
the validity or amount of any special assessment made pursuant to chapters 429, 430, any
special law or city charter.
    Subd. 4. Filing of appeal deadline; exception. Notwithstanding the April 30 date in
subdivision 1, whenever the exempt status, valuation, or classification of real or personal property
is changed other than by an abatement or a court decision, and the owner responsible for payment
of the tax is not given notice of the change until after February 28 of the year the tax is payable or
after July 1 in the case of property subject to section 273.125, subdivision 4, an eligible petitioner,
as defined and limited in subdivision 1, has 60 days from the date of mailing of the notice to initiate
an appeal of the property's exempt status, classification, or valuation change under this chapter.
History: (2126-1) 1935 c 300 s 1; 1977 c 118 s 3; 1977 c 423 art 4 s 8; 1978 c 672 s 9; 1978
c 749 s 1; 1980 c 443 s 2; 1982 c 523 art 17 s 1; 1983 c 342 art 7 s 9,10; 1984 c 502 art 11 s 4;
1Sp1985 c 14 art 4 s 80; art 20 s 6; 1986 c 444; 1986 c 473 s 4; 1Sp1986 c 3 art 1 s 82; 1989 c
277 art 2 s 39; 1989 c 324 s 23; 1991 c 291 art 12 s 13; 1992 c 511 art 4 s 14; 1993 c 375 art 3 s
32; 1994 c 587 art 5 s 14; 1996 c 471 art 3 s 24; 2002 c 377 art 9 s 4; 2003 c 127 art 2 s 18

278.02 PETITION MAY INCLUDE SEVERAL ITEMS OR PARCELS.
Such petition need not be in any particular form, but shall clearly identify the items of
personal property, or the land involved, the assessment date, and shall set forth in concise
language the claim, defense, or objection asserted. No petition shall include more than one
assessment date. Several items of personal property and several parcels of land in or upon which
the petitioner has an estate, right, title, interest, or lien may be included in the same petition, but
only if they are in the same city or town, except that contiguous property overlapping city or town
boundaries may be included in one petition.
History: (2126-2) 1935 c 300 s 2; 1989 c 324 s 24; 1992 c 511 art 4 s 15; 1993 c 375
art 3 s 33

278.03 PAYMENT OF TAX.
    Subdivision 1. Real property. In the case of real property, if the proceedings instituted by
the filing of the petition have not been completed before the 16th day of May next following the
filing, the petitioner shall pay to the county treasurer 50 percent of the tax levied for such year
against the property involved, unless permission to continue prosecution of the petition without
such payment is obtained as herein provided. If the proceedings instituted by the filing of the
petition have not been completed by the next October 16, or, in the case of class 1b agricultural
homestead, class 2a agricultural homestead, and class 2b(2) agricultural nonhomestead property,
November 16, the petitioner shall pay to the county treasurer 50 percent of the unpaid balance
of the taxes levied for the year against the property involved if the unpaid balance is $2,000 or
less and 80 percent of the unpaid balance if the unpaid balance is over $2,000, unless permission
to continue prosecution of the petition without payment is obtained as herein provided. The
petitioner, upon ten days' notice to the county attorney and to the county auditor, given at least ten
days prior to the 16th day of May or the 16th day of October, or, in the case of class 1b agricultural
homestead, class 2a agricultural homestead, and class 2b(2) agricultural nonhomestead property,
the 16th day of November, may apply to the court for permission to continue prosecution of the
petition without payment; and, if it is made to appear
(1) that the proposed review is to be taken in good faith;
(2) that there is probable cause to believe that the property may be held exempt from the tax
levied or that the tax may be determined to be less than 50 percent of the amount levied; and
(3) that it would work a hardship upon petitioner to pay the taxes due,
the court may permit the petitioner to continue prosecution of the petition without payment,
or may fix a lesser amount to be paid as a condition of continuing the prosecution of the petition.
Failure to make payment of the amount required when due shall operate automatically to
dismiss the petition and all proceedings thereunder unless the payment is waived by an order
of the court permitting the petitioner to continue prosecution of the petition without payment.
The petition shall be automatically reinstated upon payment of the entire tax plus interest and
penalty if the payment is made within one year of the dismissal. The county treasurer shall,
upon request of the petitioner, issue duplicate receipts for the tax payment, one of which shall
be filed by the petitioner in the proceeding.
    Subd. 2. Personal property. In the case of personal property, if the proceedings instituted by
the filing of the petition have not been completed before May 16 next following the filing of the
petition, the petitioner shall pay to the county treasurer 50 percent of the tax levied for the year
against the property involved, unless permission to file the petition without payment is obtained
as provided in this subdivision. The petitioner, upon ten days' notice to the county attorney and to
the county auditor, given at least ten days before May 16, may apply to the court for permission to
file the petition without such payment; and, if it is made to appear:
(1) that the proposed review is to be taken in good faith;
(2) that there is probable cause to believe that the property may be held exempt from the tax
levied or that the tax may be determined to be less than 50 percent of the amount levied; and
(3) that it would work a hardship upon petitioner to pay 50 percent of the tax.
The court may permit the petitioner to continue to prosecute the petition without payment, or
may fix a lesser amount to be paid as a condition to the right to continue to prosecute the same.
Payment of the amount so fixed shall be endorsed on the order by the county treasurer.
History: (2126-3) 1935 c 300 s 3; 1937 c 483 s 1; 1978 c 672 s 10; 3Sp1981 c 2 art 1 s
34; 1983 c 342 art 7 s 11; 1Sp1986 c 1 art 4 s 32,51; 1989 c 277 art 2 s 40; 1989 c 324 s 25;
1993 c 375 art 3 s 34

278.04 TREASURER MUST STAMP TAX LISTS.
Upon the filing of such petition, the county treasurer shall write or stamp opposite the
description of such items of personal property or parcel on the tax list the notation, "Petition for
review filed," and such parcel or item of personal property shall not be included in the delinquent
tax list for such year.
History: (2126-4) 1935 c 300 s 4; 1993 c 375 art 3 s 35; 1994 c 416 art 1 s 32

278.05 TRIAL OF ISSUES.
    Subdivision 1. Trial. The petition, without any answer, return, or other pleading thereto,
shall be tried at the next term of court. The Tax Court or district court shall without delay
summarily hear and determine the claims, objections or defenses made by the petition and shall
direct judgment to sustain, reduce or increase the amount of taxes due, and the trial shall disregard
technicalities and matters of form not affecting the merits.
    Subd. 2. Responsible attorney; school district representatives. If the property on which
the taxes have been levied is located in a home rule charter or statutory city or town which
employs its own certified assessor, the attorney for that governmental unit may, within 20 days
after receipt by the governmental unit of the copy of the petition forwarded by the county auditor,
give notice to the county attorney and to the petitioner or the petitioner's attorney that the home
rule charter or statutory city or town is taking charge of and prosecuting the proceeding. If the
attorney for the home rule charter or statutory city or town does not give notice, the attorney of the
county in which these taxes are levied shall take charge of and prosecute the proceedings, but the
county board may employ any other attorney to assist the county attorney. If the school board has
responded within 30 days of receipt to a notice provided pursuant to section 278.01, indicating
that it desires to be notified of further proceedings in the case, a representative of the school
district in which the property is located shall be notified of all proceedings and all offers to reduce
valuations and shall be given an opportunity to appear and testify on any trial of the issues raised.
    Subd. 3. Assessor's records; evidence. Assessor's records, including certificates of real
estate value, assessor's field cards and property appraisal cards shall be made available to the
petitioner for inspection and copying and may be offered at the trial subject to the applicable rules
of evidence and rules governing pretrial discovery and shall not be excluded from discovery or
admissible evidence on the grounds that the documents and the information recorded thereon are
confidential or classified as private data on individuals. Evidence of comparable sales of other
property shall, within the discretion of the court, be admitted at the trial.
    Subd. 4. Sales ratio studies as evidence. The sales ratio studies published by the Department
of Revenue, or any part of the studies, or any copy of the studies or records accumulated to prepare
the studies which is prepared by the commissioner of revenue for use in determining education
aids shall be admissible in evidence as a public record without the laying of a foundation if the
sales prices used in the study are adjusted for the terms of the sale to reflect market value and
are adjusted to reflect the difference in the date of sale compared to the assessment date. The
Department of Revenue sales ratio study shall be prima facie evidence of the level of assessment.
Additional evidence relevant to the sales ratio study is also admissible. No sales ratio study
received into evidence shall be conclusive or binding on the court and evidence of its reliability or
unreliability may be introduced by any party including, but not limited to, evidence of inadequate
adjustment of sale prices for terms of financing, inadequate adjustment of sales prices to reflect
the difference in the date of sale compared to the assessment date, and inadequate sample size.
No reduction in value on the grounds of discrimination shall be granted on the basis of a
sales ratio study unless
(a) the sales prices are adjusted for the terms of the sale to reflect market value,
(b) the sales prices are adjusted to reflect the difference in the date of sale compared to
the assessment date,
(c) there is an adequate sample size, and
(d) the median ratio of the same classification of property in the same county, city, or town
as the subject property is lower than 90 percent, except that in the case of a county containing
a city of the first class, the median ratio for the county shall be the ratio determined excluding
sales from the first class city within the county.
If a reduction in value on the grounds of discrimination is granted based on the above criteria,
the reduction shall equal the difference between 95 percent and the median ratio determined by
the court.
    Subd. 5. Offer to reduce valuation. Any time after the filing of the petition and before the
trial of the issues raised thereby, when the defense or claim presented is that the property has been
partially, unfairly, or unequally assessed, or that the property has been assessed at a valuation
greater than its real or actual value, or that a parcel which is classified as homestead under the
provisions of section 273.13, subdivision 22 or 23, has been assessed at a valuation which exceeds
by ten percent or more the valuation which the parcel would have if it were valued at the average
assessment/sales ratio for real property in the same class in that portion of the county in which
the parcel is located, for which the commissioner is able to establish and publish a sales ratio
study, the attorney representing the state, county, city or town in the proceedings may serve on the
petitioner, or the petitioner's attorney, and file with the court administrator of the district court, an
offer to reduce the valuation of the property or a portion of the property to a valuation set forth
in the offer. If, within ten days thereafter, the petitioner, or the attorney, gives notice in writing
to the county attorney, or the attorney for the city or town, that the offer is accepted, the official
notified may file the offer with proof of notice, and the court administrator shall enter judgment
accordingly. Otherwise, the offer shall be deemed withdrawn and evidence thereof shall not be
given; and, unless a lower valuation than specified in the offer is found by the court, no costs
or disbursements shall be allowed to the petitioner, but the costs and disbursements of the state,
county, city or town, including interest at six percent on the tax based on the amount of the offer
from and after the 16th day of October, or, in the case of class 1b agricultural homestead, class
2a agricultural homestead, class 2b(2) agricultural nonhomestead property, and manufactured
homes treated as personal property, the 16th day of November, of the year the taxes are payable,
shall be taxed in its favor and included in the judgment and when collected shall be credited to
the county revenue fund, unless the taxes were paid in full before the 16th day of October, or,
in the case of class 1b agricultural homestead, class 2a agricultural homestead, and class 2b(2)
agricultural nonhomestead property, and manufactured homes treated as personal property, the
16th day of November, of the year in which the taxes were payable, in which event interest
shall not be taxable.
    Subd. 6. Dismissal of petition; exclusion of certain evidence. (a) Information, including
income and expense figures, verified net rentable areas, and anticipated income and expenses,
for income-producing property must be provided to the county assessor no later than 60 days
after the applicable filing deadline contained in section 278.01, subdivision 1 or 4. Failure to
provide the information required in this paragraph shall result in the dismissal of the petition,
unless (1) the failure to provide it was due to the unavailability of the evidence at the time that
the information was due, or (2) the petitioner was not aware of or informed of the requirement
to provide the information.
If the petitioner proves that the requirements under clause (2) are met, the petitioner has an
additional 30 days to provide the information from the time the petitioner became aware of or was
informed of the requirement to provide the information, otherwise the petition shall be dismissed.
(b) Provided that the information as contained in paragraph (a) is timely submitted to the
county assessor, the county assessor shall furnish the petitioner at least five days before the hearing
under this chapter with the property's appraisal, if any, which will be presented to the court at the
hearing. The petitioner shall furnish to the county assessor at least five days before the hearing
under this chapter with the property's appraisal, if any, which will be presented to the court at the
hearing. An appraisal of the petitioner's property done by or for the county shall not be admissible
as evidence if the county assessor does not comply with the provisions in this paragraph. The
petition shall be dismissed if the petitioner does not comply with the provisions in this paragraph.
History: (2126-5) 1935 c 300 s 5; 1937 c 483 s 2; 1977 c 118 s 4; 1977 c 423 art 4 s 9;
1980 c 443 s 3; 1982 c 523 art 17 s 2; art 23 s 3; 1983 c 342 art 2 s 23; art 7 s 12; 1984 c 502
art 11 s 5; 1Sp1985 c 14 art 4 s 81; 1986 c 444; 1986 c 473 s 5,6; 1Sp1986 c 1 art 4 s 33,51;
1Sp1986 c 3 art 1 s 82; 1987 c 268 art 7 s 47; 1989 c 277 art 2 s 41,42; 1990 c 604 art 3 s 35;
1991 c 291 art 1 s 31; art 12 s 14; 1992 c 511 art 2 s 24; 1994 c 416 art 1 s 33; 1994 c 587 art 5 s
15; 2003 c 127 art 2 s 19

278.06 OTHER STATUTES TO APPLY.
Sections 279.18, 279.19, 279.21, 279.23, and 279.25 shall apply in so far as they are
applicable thereto, except as herein otherwise provided. References in those sections to "answers"
shall be understood as referring to petitions, and references to the "delinquent list" or "list" as
referring to the tax list filed with the county treasurer.
History: (2126-6) 1935 c 300 s 6; 1987 c 384 art 2 s 70

278.07 JUDGMENT; AMOUNT; COSTS.
Judgment shall be for the amount of the taxes for the year as the court shall determine the
same, less the amount paid thereon, if any. If the tax is sustained in the full amount levied or
increased, costs and disbursements may, in the discretion of the court, be taxed and allowed as
in delinquent tax proceedings and shall be included in the judgment. If the tax so determined is
decreased from the amount originally levied, the court may, in its discretion, award disbursements
to the petitioner, which shall be taxed and allowed and be deducted from the amount of the
taxes as determined unless there has been a previous offer of reduced taxes that was rejected by
the petitioner, in which case the award of costs and disbursements is governed by Minnesota
Rules of Civil Procedure, rule 68. If there be no judgment for taxes, a judgment may be entered
determining the right of the parties and for the costs and disbursements as taxed and allowed.
History: (2126-7) 1935 c 300 s 7; 1986 c 473 s 7; 1997 c 231 art 16 s 8

278.08 INTEREST.
    Subdivision 1. Interest; penalty. In the case of real or personal property, the judgment
must include the following interest:
(1) if the tax is sustained in full, interest on the unpaid part of the tax computed under section
279.03, subdivision 1, at the rate provided in section 549.09;
(2) if the tax is increased, interest on the unpaid part of the tax as originally assessed
computed under section 279.03, subdivision 1, at the rate provided in section 549.09;
(3) if the tax is reduced, interest on the difference between the tax as recomputed and the
amount previously paid computed under section 279.03, subdivision 1, at the rate provided in
section 549.09.
If the tax is sustained or increased, penalty on the unpaid part of the tax as originally assessed
computed under section 279.01 must be included in the judgment.
    Subd. 2. Refund. In the case of real or personal property, if the petitioner has overpaid
the tax determined or stipulated to be due, the county auditor shall compute interest on the
overpayment from the date of the filing of the petition for review or from the date of payment
of the tax, whichever is later, until the date of issuance of the refund warrant. Interest shall be
calculated on the overpayment under section 279.03, subdivision 1, at the rate provided in section
549.09 for the year the tax became or remained overpaid. For the purposes of computing interest
due under this subdivision, an overpayment occurs on the date when the cumulative total of the
payments made by the taxpayer for the payable year exceed the final total tax amount determined
for that payable year. In determining whether an overpayment has occurred, taxpayer payments
are allocated first to any penalty imposed due to late payment of installments, then to the tax due.
History: (2126-8) 1935 c 300 s 8; 1980 c 443 s 4; 1982 c 523 art 39 s 1; 1986 c 473 s 8;
1989 c 324 s 26; 1993 c 375 art 3 s 36; 1994 c 416 art 1 s 34; 1996 c 471 art 3 s 25

278.09 CERTIFIED COPIES TO AUDITOR AND TREASURER.
Upon entry of judgment a certified copy thereof shall be delivered to the county auditor and to
the county treasurer if the tax list be still in the treasurer's possession, who shall correct the tax list
and assessment rolls in accordance with the judgment, writing or stamping opposite such parcel
or item of personal property in the tax list a notation "judgment entered" and the date thereof.
History: (2126-9) 1935 c 300 s 9; 1993 c 375 art 3 s 37

278.10 TO BE ENTERED IN JUDGMENT BOOK.
Upon entry of the judgment referred to in section 278.07, the county auditor shall bill the
taxpayer for the unpaid portion of the judgment, if any, plus the allowable costs, interest, and
penalties that have accrued to the date of entry, as provided in section 278.08. If the judgment
referred to in section 278.07 is not paid within 30 days of the billing, the county auditor shall
enter the same in the certified copy of the real estate tax judgment book received by the auditor
pursuant to section 279.23 for the year for which such taxes were levied, with the same effect
as if judgment had been entered under chapter 279, except that interest shall not accrue during,
nor apply to, the 30-day payment period. In the event the judgment under section 278.07 shall
be entered subsequent to the real estate tax judgment sale under section 280.01 for the taxes on
the applicable delinquent list, and if such judgment shall remain unpaid for 30 days after billing,
then interest shall again begin to accrue, and the parcel of land, against which such judgment
was entered, shall be immediately bid-in for the state, and all subsequent events, deadlines,
and periods related to the enforcement of the judgment against the affected real estate shall be
measured from the bid-in date under this section.
History: (2126-10) 1935 c 300 s 10; 1947 c 163 s 1; 1986 c 444; 1998 c 300 art 3 s 5

278.11 MAY PAY FULL TAX.
Where a petition has been filed, as provided in this chapter, the taxes levied, or any balance
thereof, may be paid without such payment waiving any of the claims, defenses, or objections set
forth in such petition, and such proceeding shall continue as if such payment had not been made.
History: (2126-11) 1935 c 300 s 11

278.12 REFUNDS OF OVERPAYMENT.
If upon final determination the petitioner has paid more than the amount so determined to
be due, judgment shall be entered in favor of the petitioner for such excess, and upon filing a
copy thereof with the county auditor the auditor shall forthwith draw a warrant upon the county
treasurer for the payment thereof; provided that, with the consent of the petitioner, the county
auditor may, in lieu of drawing such warrant, issue to the petitioner a certificate stating the amount
of such judgment, which amount may be used to apply upon any taxes due or to become due for
the taxing district or districts whose taxes or assessments are reduced, or their successors in the
event of a reorganization or reincorporation of any such taxing district. In the event the auditor
shall issue a warrant for refund or certificates, the amount thereof shall be charged to the state and
other taxing districts in proportion to the amount of their respective taxes included in the levy
and deduct the same in the subsequent distribution of any tax proceeds to the state or such taxing
districts, and upon receiving any such certificate in payment of other taxes, the amount thereof
shall be distributed to the state and other taxing districts in proportion to the amount of their
respective taxes included in the levy; provided that if in the judgment the levy of one or more of
the districts be found to be illegal, to the extent that the tax so levied is reduced on account of
the illegal levies, the amount to be charged back shall be charged to the districts and the amount
thereof deducted from any distributions thereafter made to them.
History: (2126-12) 1935 c 300 s 12; 1986 c 444

278.13 JUDGMENT TO BE FINAL.
The judgment entered in such proceedings, except for the right of review on appeal, shall
be final and conclusive as to the taxes involved therein. No defense or objection which might
have been interposed by proceedings hereunder shall be interposed in delinquent tax proceedings
except the defense that the taxes levied have been paid or that the property is exempt from the
taxes so levied.
History: (2126-13) 1935 c 300 s 13

278.14 REFUNDS OF MISTAKENLY BILLED TAXES.
    Subdivision 1. Applicability. A county must pay a refund of a mistakenly billed tax as
provided in this section. As used in this section, "mistakenly billed tax" means an amount of
property tax that was billed, to the extent the amount billed exceeds the accurate tax amount due
to a misclassification of the owner's property under section 273.13 or a mathematical error in the
calculation of the tax on the owner's property, together with any penalty or interest paid on that
amount. This section applies only to taxes payable in the current year and the two prior years. As
used in this section, "mathematical error" is limited to an error in:
(1) converting the market value of a property to tax capacity or to a referendum market value;
(2) application of the tax rate as computed by the auditor under sections 275.08, subdivisions
1b, 1c, and 1d ; 276A.06, subdivisions 4 and 5; and 473F.07, subdivisions 4 and 5, to the property's
tax capacity or referendum market value; or
(3) calculation of or eligibility for a credit.
The remedy provided under this section does not apply to a misclassification under section
273.13 that is due to the failure of the property owner to apply for the correct classification as
required by law.
    Subd. 2. Procedure. A refund of mistakenly billed tax must be paid upon verification of
a claim made in a written application by the owner of the property or upon discovery of the
mistakenly billed tax by the county. Refunds of overpayments will be made as provided in
section 278.12.
    Subd. 3. Appeals. If the county rejects a claim by a property owner under subdivision
2, it must notify the property owner of that decision within 90 days of receipt of the claim.
The property owner may appeal that decision to the Tax Court within 60 days after receipt of
a notice from the county of the decision. Relief granted by the Tax Court is limited to current
year taxes, and taxes in the two prior years.
History: 2000 c 490 art 5 s 19