Can a Mississippi county fix a 2020 tax bill mistakenly assessed against a nonprofit that should have been exempt, and void the resulting tax sale?
Subject
Correction of Ad Valorem Tax Error for Nonprofit Corporation
Recipient
Bryant W. Clark, Esq., Attorney, Holmes County Board of Supervisors
Plain-English summary
Northside Haven Association is a 501(c)(3) nonprofit ordinarily exempt from Holmes County ad valorem taxes under Section 27-31-1(dd). In 2019, the county temporarily revoked the exemption due to the nonprofit being closed for renovations and key staff illness; the parties later sorted that out and the 2019 exemption was reinstated, with no formal revocation. Through error and/or omission, the county still assessed 2020 taxes against the nonprofit. The 2020 taxes ended up at the August 2021 tax sale. The nonprofit says it never received notice that taxes were owed until 2023, when it learned the property had been sold for unpaid 2020 taxes. The 2021, 2022, and 2023 exemptions were back in place.
The county attorney asked: can the board now correct the 2020 assessment, and can the board void the tax sale and exempt the property from the 2020 taxes?
The AG answered both questions structurally. (1) Section 27-35-143(1) gives the board authority to amend, cancel, or decrease an assessment in specified circumstances, including when "the property has been assessed as subject to county and district taxes and is exempt from such taxes" (Subsection (1)(m)). But the statute caps the amendment window at "the last Monday in August next" after the assessment roll's final approval. Based on the facts in the request, that window has closed for 2020. (2) The AG cannot opine on whether the nonprofit was actually exempt for 2020; that is a mixed question of fact and law outside Section 7-5-25 authority. But Section 27-43-3 says a tax sale "shall be void" when the redemption-period notice requirements fail. Past AG opinions (Yancey, Slover) say the board may declare a tax sale void by order spread upon the minutes when it makes the requisite factual determinations. And for informational purposes, Section 27-73-7 authorizes the tax collector to refund taxes paid in error, subject to the three-year statute of limitations under Section 15-1-49 (per Rankin Cnty. Bd. of Supervisors v. Lakeland Income Prop., LLC, 241 So. 3d 1279, 1292).
What this means for you
County attorneys facing a wrongly assessed nonprofit
Section 27-35-143(1)'s amendment window is the gating issue. Once "the last Monday in August next" after the assessment roll passes, you have lost the formal correction path. Don't let prior-year correction requests sit; act within the statutory window or the door closes.
Boards of supervisors
You have two distinct tools: the Section 27-35-143(1) amendment power (time-limited) and the inherent power to declare a tax sale void by order spread on the minutes when notice failed or other voiding grounds exist (Section 27-43-3, plus Section 19-3-40(1)'s general home rule authority). Use the right tool for the situation, document the factual findings on the minutes, and consult counsel.
Nonprofit property owners
Watch your tax bill closely, especially after any year your exemption was contested. If your county assesses and you do not catch it before the assessment roll's August deadline, your formal correction options shrink fast. Tax sales add another layer of risk: you may not learn about the sale until after the redemption period has passed.
Tax sale purchasers
If a tax sale is later voided because the underlying property should not have been sold, you may face a refund process under Section 27-73-7 rather than retention of the property. Coordinate with the county on what proof and timing the refund process requires.
State Auditor staff
The interplay between Section 27-35-143(1)'s amendment window and Section 27-73-7's refund authority can be confusing for counties. Counties frequently get this wrong, and the Auditor's Technical Assistance Division is the right point of contact for ground-level guidance.
Background and statutory framework
Section 27-31-1 lists ad valorem tax exemptions, including (dd) for qualifying nonprofit corporations.
Section 27-35-143(1) gives boards of supervisors the power to "change, cancel or decrease an assessment in the manner herein provided at any time after the assessment roll containing such assessment has been finally approved by the Department of Revenue, and, except as otherwise provided in subsection (2) of this section, prior to the last Monday in August next." Subsection (1)(m) covers the case "[w]hen the property has been assessed as subject to state taxes and is exempt; or when the property has been assessed as subject to county and district taxes and is exempt from such taxes." The August deadline is the bright line.
Section 27-43-3 makes a tax sale void when redemption-period notice requirements are not met. Past AG opinions (Yancey (Aug. 4, 2000); Slover (May 29, 2015)) extend the voiding power to a board's factual findings spread on the minutes, supported by Section 19-3-40(1)'s general grant of home rule authority for matters not specifically governed by general law.
Section 27-73-7 authorizes the tax collector to refund any individual, firm, or corporation who paid ad valorem tax "through error or otherwise" in excess of what was properly due, including for "vacant and exempt land, and the purchase paid for the redemption of lands erroneously sold for taxes." The refund is subject to the three-year statute of limitations under Section 15-1-49 (Rankin Cnty. Bd. of Supervisors, 241 So. 3d at 1292), and per the Mississippi Court of Appeals, no objection at the time of payment is required (id. at 1291).
Citations
- Miss. Code Ann. § 7-5-25 (AG opinion limited to questions of law)
- Miss. Code Ann. § 15-1-49 (three-year statute of limitations)
- Miss. Code Ann. § 19-3-40(1) (board home rule for matters not specifically governed by general law)
- Miss. Code Ann. § 27-31-1(dd) (nonprofit ad valorem tax exemption)
- Miss. Code Ann. § 27-35-143(1) (assessment amendment authority and August deadline)
- Miss. Code Ann. § 27-35-143(1)(m) (correcting assessment of exempt property)
- Miss. Code Ann. §§ 27-35-145, 27-35-149 (assessment amendment procedures)
- Miss. Code Ann. § 27-43-3 (tax sale void when redemption-period notice fails)
- Miss. Code Ann. § 27-73-7 (refund of taxes paid in error)
- Rankin Cnty. Bd. of Supervisors v. Lakeland Income Prop., LLC, 241 So. 3d 1279, 1291-92 (refund limited by three-year statute; no objection at payment required)
- MS AG Op., Yancey (Aug. 4, 2000) (board may declare tax sale void by minute order)
- MS AG Op., Slover (May 29, 2015) (board may void tax sale by order spread on minutes)
- MS AG Op., Nowak (Mar. 13, 2023) (tax collector may refund taxes paid in error upon board order)
Source
- Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
- Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2023/08/B.Clark-August-3-2023-Correction-of-Ad-Valorem-Tax-Error-and-or-Omission-for-Nonprofit-Corporation.pdf
Original opinion text
August 3, 2023
Bryant W. Clark, Esq.
Attorney, Holmes County Board of Supervisors
Post Office Box 179
Lexington, Mississippi 39095
Re:
Correction of Ad Valorem Tax Error and/or Omission for Nonprofit
Corporation
Dear Mr. Clark:
The Office of the Attorney General has received your request for an official opinion.
Background
According to your request, Northside Haven Association, Inc. ("Association") is a nonprofit
corporation with 501(c)(3) tax-exempt status. The Association is exempt from ad valorem taxation
pursuant to Mississippi Code Annotated Section 27-31-1(dd). Around June 2019, the Association
was still operating and functioning but temporarily closed due to renovation, reorganization, and
the severe illness of key personnel. This resulted in Holmes County ("County") sending a notice
of revocation of tax-exempt status to the Association. However, after the Association and the
County consulted, the Association's 2019 ad valorem tax-exempt status was reinstated.
Accordingly, there was no official revocation, and the Association did not receive notice of any
revocation.
Nonetheless, through error and/or omission, 2020 ad valorem taxes were assessed against the
Association, and eventually, the 2020 taxes were sold at an August 2021 tax sale. The Association
contends that it never received notice that any taxes were owed prior to 2023. In 2023, the
Association received notice that the 2020 taxes were sold at the tax sale and were delinquent. The
Association received tax-exempt status for 2021, 2022, and 2023.
Questions Presented
1. May the board of supervisors or the tax assessor correct the 2020 assessment against the
Association?
- May the board of supervisors or tax assessor correct the tax exemption revocation mistake,
void the tax sale, and exempt the Association from having to pay the 2020 taxes?
Brief Response - Although Section 27-35-143(1) gives the board of supervisors the power to amend tax
assessments in certain circumstances, based on the information provided in your opinion
request, the amendment period set forth in Section 27-35-143(1) has passed for this matter. - Please see the response to your first question. Whether the Association was exempt from
paying 2020 taxes pursuant to Section 27-31-1(dd) is a mixed question of fact and law;
therefore, this office may not confirm such exemption via official opinion. Beyond this,
Section 27-43-3 is the only authority that specifically addresses voiding a tax sale; it
provides that a tax sale "shall be void" when the requisite notice requirements for the
expiration of the redemption period as set forth in Section 27-43-3 are not satisfied.
Applicable Law and Discussion
To begin, this office may only opine upon prospective questions of state law and may not opine
upon mixed questions of fact and law. Miss. Code Ann. § 7-5-25. Whether the Association was
exempt from 2020 ad valorem taxes pursuant to Section 27-31-1(dd) is a mixed question of fact
and law, and therefore this office may not confirm the Association's 2020 ad valorem tax-exempt
status.
Nonetheless, Section 27-35-143(1) provides the circumstances in which a tax assessment may be
changed. Relevant to this opinion request, Section 27-35-143(1)(m) provides:
The board of supervisors of each county shall have power, upon application of the
party interested, or by the assessor on behalf of such party, or otherwise as
prescribed in Sections 27-35-145 through 27-35-149, to change, cancel or decrease
an assessment in the manner herein provided at any time after the assessment roll
containing such assessment has been finally approved by the Department of
Revenue, and, except as otherwise provided in subsection (2) of this section, prior
to the last Monday in August next, under the following circumstances and no other:
. . .
(m) When the property has been assessed as subject to state taxes and is
exempt; or when the property has been assessed as subject to county and
district taxes and is exempt from such taxes.
Based on the information provided in your opinion request, the amendment period set forth in
Section 27-35-143(1) has passed for this matter. Accordingly, it is the opinion of this office that
neither the board of supervisors nor the tax assessor may change, cancel, or decrease the
Association's 2020 ad valorem tax assessment.
Regarding whether the tax assessor or board of supervisors may void the subject tax sale, the only
statutory authority that specifically addresses "voiding" a tax sale is Section 27-43-3, which
provides that a tax sale "shall be void" when the requisite notice requirements for the expiration
of the redemption period as set forth in Section 27-43-3 are not satisfied. Prior opinions of this
office have also indicated that when a board of supervisors makes the requisite factual
determinations, it may declare a tax sale void by order spread upon the minutes. See MS AG Op.,
Yancey at 1 (Aug. 4, 2000) ("The governing authorities may make the factual determination and
may spread upon the minutes that the tax sale was void."); MS AG Op., Slover at 1 (May 29,
2015) ("A board of supervisors may void a tax sale by order spread upon the minutes."); see also
Miss. Code Ann. § 19-3-40(1) (granting broad authority to boards of supervisors "to adopt any
orders, resolutions or ordinances with respect to county affairs, property and finances, for which
no specific provision has been made by general law and which are not inconsistent with the
Mississippi Constitution, the Mississippi Code of 1972, or any other statute or law of the State of
Mississippi.")
Beyond the scope of your request and for informational purposes only, in the instance the subject
tax sale is voided, Section 27-73-7 provides, in pertinent part:
The tax collector is authorized and empowered to refund any individual, firm or
corporation any ad valorem . . . tax which has been paid or collected through error
or otherwise when such person, individual, firm or corporation has paid any such
tax in excess of the sum properly due whether paid under protest or not. Taxes
erroneously paid within the meaning of this section shall include, but not be limited
to . . . vacant and exempt land, and the purchase paid for the redemption of lands
erroneously sold for taxes.
See also Rankin Cnty. Bd. of Supervisors v. Lakeland Income Prop., LLC, 241 So. 3d 1279, 1291
(noting "Section 27-73-7 contains no requirement that an objection be made" for an individual,
firm, or corporation to receive a refund); MS AG Op., Nowak at *1 (Mar. 13, 2023) (opining "a
tax collector, upon order from the board of supervisors, may refund taxes paid in error"); but see
Rankin Cnty. Bd. of Supervisors, 241 So. 3d at 1292 (citing Miss. Code Ann. §§ 15-1-49, 27-73-7) ("[T]he refund potential of Section 27-73-7 is limited by the [three-year] statute of limitations
enumerated in Section 15-1-49.").
If this office may be of any further assistance to you, please do not hesitate to contact us.
Sincerely,
LYNN FITCH, ATTORNEY GENERAL
By:
/s/ Maggie Kate Bobo
Maggie Kate Bobo
Special Assistant Attorney General