If a Mississippi tax sale is voided, does that erase the landowner's liability for unpaid special assessments?

Plain-English summary

Parkway East is a public improvement district in Madison County. A landowner there acquired a parcel by Forfeited Tax Land Patent from the Secretary of State in 2017 and obtained a judgment confirming the patent in 2018. From 2018 through 2024, Parkway East levied special and maintenance assessments on the property. The landowner did not pay any of them. For 2018-2021, the Madison County chancery clerk presented memoranda to the board of supervisors saying that under prior AG guidance (AG Op. No. 95-0541), once property has been struck off to the State at a tax sale, it should not be sold again, so any subsequent tax sales were void. The board adopted the chancery clerk's recommendation and "approved void tax sales" for those years.

Now the landowner wants to sell. The question for the AG: does the board's voiding of those tax sales for 2018-2021 also erase the underlying liability for the special and maintenance assessments?

The AG said no. The board's action voided the tax sales, not the underlying assessments. Public Improvement District Act assessments under Section 19-31-33(3) are collected and enforced by the tax collector "in the same manner and at the same time as ad valorem taxes" and constitute a lien on the property until paid, on parity with state, county, municipal, and school board property taxes. Section 29-1-31 covers exactly this scenario: where the State's claim of title under tax sales was void and passed no title to the State, the land commissioner (with AG approval) removes the lands from the lists of state-held forfeited tax lands and notifies the chancery clerk and county assessor. The assessor then assesses the property "for the proper year or years" as property that has "escaped taxation," and the tax collector collects the taxes in the manner provided by law.

In short: voiding the tax sale does not erase the assessments. The assessor reassesses for the escaped years.

What this means for you

For public improvement districts and special assessment districts

When tax sales of property within your district are voided after the fact, your assessment lien on the property survives the void tax sale. The district's claim to the unpaid assessments does not disappear because the prior tax sale process was procedurally defective. The cure mechanism is Section 29-1-31's escaped-taxation reassessment, run through the county tax assessor and tax collector.

Coordinate with the county tax assessor to make sure that when the chancery clerk's "approve void tax sales" minutes entry sweeps a parcel out of the State's forfeited tax lands list, the parcel is reassessed for the escaped tax-sale years and the special assessments are part of that reassessment. Otherwise, the district's revenue is left on the table.

For boards of supervisors and chancery clerks

The void-tax-sale process is procedurally important to clean up the State's title records, but it is not a free pass for the landowner on years of unpaid assessments. When the chancery clerk's memorandum is presented and the board votes to void the tax sales, also direct the tax assessor to make the Section 29-1-31 escaped-taxation assessments. That ties the two halves of the cleanup together.

For tax assessors

Section 29-1-31 puts the burden on you. When the land commissioner notifies your office that lands are being removed from the lists of forfeited tax lands because the underlying tax sales were void, your duty is to "assess such lands for taxes for the proper year or years at such valuation as the assessor may deem just" in the manner provided for property that has escaped taxation. The same approach extends to special and maintenance assessments imposed by public improvement districts under Section 19-31-33, since those assessments are collected and enforced in the same manner as ad valorem taxes.

For landowners with property in a Mississippi public improvement district

Voided tax sales do not erase your underlying assessment liability. If the chancery clerk and board void prior tax sales on your property, expect a reassessment for the years that "escaped taxation" and a corresponding obligation for the special and maintenance assessments that were part of the original levy. Thoden v. Hallford, 391 So. 3d 1137 (Miss. 2024), reinforces the principle: when a tax sale is void ab initio (as if it never happened), the property owner is not allowed to have the taxes paid on her property "free of charge."

For real estate attorneys representing buyers of property with a void tax sale history

Diligence the assessment record carefully. A void tax sale on the chain of title is a flag, not a release of obligations. The seller may have years of unpaid special and maintenance assessments still owed to the district, even after the board voided the tax sales for those years. Get the district's payoff statement before closing.

Common questions

What does it mean for a tax sale to be "void"?

It means the sale was procedurally defective and passed no title. The board of supervisors recognizes this and adjudicates the sale void on its minutes. The State's name comes off the property as "forfeited tax land." But voiding the sale does not erase the underlying tax obligation; the obligation simply was not validly transferred or extinguished by the sale.

Why does Parkway East think it is still owed money?

Because the Public Improvement District Act assessments under Section 19-31-33(3) are levied and enforced in the same manner as ad valorem taxes and constitute a lien on the property. The assessment lien survives a void tax sale, and the underlying liability remains until it is paid.

What does Section 29-1-31 do?

It is the cleanup mechanism. When the State's claim under tax sales turns out to be void, the land commissioner (with AG approval) removes the lands from the forfeited-tax-lands list, notifies the chancery clerk and county assessor, and the assessor reassesses the property for the years it escaped taxation. The tax collector then collects "in the manner provided by law."

What about the Thoden v. Hallford decision?

Thoden v. Hallford, 391 So. 3d 1137 (Miss. 2024), is a Mississippi Supreme Court decision (the "So. 3d" reporter is the regional reporter for Mississippi state cases). The court discussed unjust enrichment and stated that when a tax sale is "void ab initio" (as if it never happened), a property owner "is not allowed to have the taxes paid on her property . . . free of charge." That principle reinforces the AG's conclusion that the underlying assessments survive a void tax sale.

Does this opinion apply only to public improvement districts?

The opinion's specific facts involve a PID. The reasoning, however, draws on the general escaped-taxation cleanup statute (Section 29-1-31), which applies to ad valorem taxes generally. PID assessments are collected the same way as ad valorem taxes per Section 19-31-33(3), so the same principle should apply to other special assessment districts whose assessments are collected through the ad valorem tax framework.

Can the AG validate or invalidate the past board action voiding the tax sales?

No. The AG opinion expressly says it neither validates nor invalidates the past actions. The opinion is written on the assumption that the void was effective, and it answers the prospective question of whether the underlying assessments still exist.

Background and statutory framework

Public Improvement District Act, Sections 19-31-1 et seq. Sections 19-31-1, et seq., authorize public improvement districts. Section 19-31-33(3) provides that benefit special assessments and maintenance special assessments shall be levied and payable in annual installments, collected and enforced by the tax collector "in the same manner and at the same time as ad valorem taxes." The assessments "shall constitute a lien on the property against which assessed until paid and shall be on a parity with the lien of state, county, municipal and school board property taxes."

Section 29-1-31, escaped-taxation assessment. Where the State's claim of title under tax sales was void and passed no title, the land commissioner, with AG approval, removes the lands from the forfeited-tax-lands list and notifies the chancery clerk and county assessor. The assessor then assesses such lands "for taxes for the proper year or years at such valuation as the assessor may deem just" in the manner provided by law for property that has escaped taxation. The tax collector collects.

Thoden v. Hallford, 391 So. 3d 1137, 1146 (Miss. 2024), discusses unjust enrichment in the void-tax-sale context: when a tax sale is declared void ab initio, the property owner is not allowed to have the taxes "paid on her property . . . free of charge."

Section 7-5-25. Limits AG opinions to prospective questions of state law and prevents the AG from validating or invalidating past actions.

Citations

• Miss. Code Ann. §§ 19-31-1 et seq.
• Miss. Code Ann. § 19-31-33(3)
• Miss. Code Ann. § 29-1-31
• Miss. Code Ann. § 7-5-25
• Thoden v. Hallford, 391 So. 3d 1137 (Miss. 2024)
• AG Op. No. 95-0541 (cited in the chancery clerk's memorandum)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2024/12/J.Martin-December-10-2024-Liability-for-Unpaid-Special-and-Maintenance-Assessments-on-Void.pdf

Original opinion text

December 10, 2024
John P. Martin, Esq.
Attorney, Parkway East Public Improvement District
Post Office Box 1039
Canton, Mississippi 39046
Re:

Liability for Unpaid Special and Maintenance Assessments on Void
Tax Sale

Dear Mr. Martin:
The Office of the Attorney General has received your request for an official opinion.
Background
According to your request, Parkway East is a public improvement district in Madison County,
Mississippi. A Parkway East property owner has contracted to sell a parcel of land (the "Property")
that is subject to special and maintenance assessments within Parkway East. The landowner has
reached out to Parkway East to determine the amount of special and maintenance assessments
currently owed on the Property. The assessments due and owing for the tax years 2022-2024 are
not at issue. However, while the dollar amounts of the special and maintenance assessments levied
against the Property for tax years 2018-2021 are known, whether these amounts are still owed has
been questioned due to the following facts:

• The landowner (a private, nonpublic owner) acquired the Property from the Mississippi
  Secretary of State by Forfeited Tax Land Patent in 2017.
• The landowner obtained a judgement confirming tax patent in 2018.
• Parkway East levied special and maintenance assessments on the Property for the tax years
  2018-present.
• The landowner did not pay the special and maintenance assessments on the Property for
  tax years 2018-present.
• However, for each of the tax years of 2018-2021, the Madison County Chancery Clerk
  presented a Memorandum to the Madison County Board of Supervisors, stating as follows:

Pursuant to AG Opinion No. 95-0541, once property has been struck off to
the state at a tax sale, the property should not be sold again. Therefore, once
the land was struck to the state, all subsequent sales are void. The Board of
Supervisors should so adjudicate by Order spread upon its minutes. Because
all tax sales subsequent to the land being struck to the state were void, the
purchaser, upon request, is entitled to a refund of the purchase price paid at
the tax sales, but is not entitled to payment of interest, except that portion
of the purchase price that represented interest due on the taxes prior to the
tax sale.

I am requesting you allow me to void tax sales on the following parcels
being truck to the state or matured to the state and should not have sold
again.

• For each of the tax years from 2018-2021, the Madison County Board of Supervisors made
  an entry in its minutes to "Approve Void Tax Sales Struck to State," which list included
  the Property each such year.
• As a result of the minute entries for the tax years of 2018-2021, the Property has not been
  struck off to the State of Mississippi for nonpayment of special and maintenance
  assessments.

Question Presented

Does the Madison County Board of Supervisors' action in setting aside the tax sales on the
Property for the tax years 2018-2021 void the landowner's underlying liability for unpaid special
and maintenance assessments for the same tax years?
Brief Response
No. Pursuant to Mississippi Code Annotated Section 29-1-31, in instances such as the one
provided, the tax assessor must assess the Property for the years it escaped taxation — or in this
case special and maintenance assessments — and collect such taxes in the manner provided by law.
Applicable Law and Discussion
To begin, we note that this opinion is written with the understanding the subject 2018-2021 tax
sales were voided by the Madison County Board of Supervisors — a fact provided by the requestor.
This office can neither validate nor invalidate past actions. Miss. Code Ann. § 7-5-25.
Sections 19-31-1, et seq., are known as the Public Improvement District Act (the "Act"), and
Section 19-31-33 therein addresses assessments under the Act. Pursuant to Section 19-31-33(3),
Benefit special assessments and maintenance special assessments authorized by
this section shall be levied and payable in annual installments for each year for
which bonds secured by the assessment are outstanding. The tax collector shall
collect and enforce benefit special assessments and maintenance special
assessments in the same manner and at the same time as ad valorem taxes. Benefit
special assessments and maintenance special assessments shall constitute a lien on
the property against which assessed until paid and shall be on a parity with the lien
of state, county, municipal and school board property taxes.
(emphasis added).
Section 29-1-31 addresses "cases where it appears that the claim of title of the state to the lands on
the records of the land office . . . was acquired under tax sales which were void and which passed
no title to the state." Under Section 29-1-31, the land commissioner, with the approval of the
attorney general, is authorized and directed to remove lands from the lists of lands sold to the state
for delinquent taxes. The land commissioner must then notify the clerk of the chancery court of
the county in which the lands are situated and the county assessor of such lands. Miss. Code Ann.
§ 29-1-31. It is then
the duty of the assessor to assess such lands for taxes for the proper year or years
at such valuation as the assessor may deem just. Such assessment shall be made in
the manner provided by law for the assessment of property which has escaped
taxation for former years. And the tax collector shall collect the taxes on such lands
in the manner provided by law.
Id. (emphasis added).
In summary, nothing within Section 19-31-33(3) or Section 29-1-31 indicates that the Madison
County Board of Supervisors' action in voiding tax sales on the subject Property for the years
2018-2021 — that would have otherwise been struck to the State of Mississippi for nonpayment —
would likewise void the landowner's underlying liability for unpaid special and maintenance
assessments for the same tax years. Rather, pursuant to Section 29-1-31, the tax assessor must
assess the Property for the years it escaped taxation, or in this case unpaid special and maintenance
assessments, and collect the same in the manner provided by law.
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

See also Thoden v. Hallford, 391 So. 3d 1137, 1146 (Miss. 2024) (discussing unjust enrichment and stating
that when a tax sale is declared "void ab initio" — i.e., as if it never happened — a property owner "is not allowed to
have the taxes paid on her property . . . free of charge").