IN THE OREGON TAX COURT
WASHINGTON COUNTY ASSESSOR,
Plaintiff appeals certain penalties imposed by Defendant as part of omitted property
assessments on personal property for five tax years 2000-2001 through 2004-05.1
A case management conference was held February 6, 2006. Kurt Spegel, owner of Spegel
Machining, appeared on his own behalf. Vickie Ellinwood, personal property appraiser, and Bob
Steiner, senior appraiser, appeared for Defendant. Subsequently, both parties submitted written
arguments. The record closed April 15, 2006.
I. STATEMENT OF FACTS
Plaintiff’s company, Spegel Machining, has been registered with the Oregon Corporation
Division since November 29, 1990. (Def’s Ltr at 1, Mar 8, 2006.) Defendant determined that
Plaintiff had never filed a personal property tax return in Washington County. Defendant then
mailed Plaintiff a blank 2005 personal property tax return with a “no-file letter” dated August 29,
2005. (Id.) Upon receipt of that form, Plaintiff contacted the county auditor and “express[ed]
dismay” at never having known about the personal property tax filing requirement. (Id.)
Plaintiff’s 2005 personal property tax return was received by Washington County on October 4,
2005, and a 50 percent late filing penalty was imposed for the 2005-06 tax year. (Id.)
The property is identified in Defendant’s records as Account P2137890.
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After examining the 2005 return, Defendant used that specific asset list to determine
omitted property assessments for the prior tax years 2000-2001 through 2004-05. (Id.) On
November 10, 2005, Defendant mailed Plaintiff Notice of Intent (NOI) letters for those tax years.
(Id.) Plaintiff did not sign or return the NOI letters within 20 days. Defendant proceeded to add
the value, tax, and penalty to the tax roll. (Id.) Defendant sent Plaintiff a corrected billing letter
by certified mail on December 15, 2005, notifying Plaintiff that the additional value of the
omitted personal property taxes plus penalties had been added to the tax roll for the tax years
Pursuant to ORS 308.296,2 Defendant assessed 100 percent penalties in tax years
2000-2001 and 2001-02 and 50 percent penalties in tax years 2002-03, 2003-04, and 2004-05.
(Ptf’s Compl at 2-6.) Plaintiff’s total penalties amount to $2,953.84. (Def’s ltr at 3, Mar 8,
2006.) Plaintiff did not file an appeal with the Washington County Board of Property Tax
Appeals for the 2005-06 tax year penalty; instead, on December 1, 2005, he appealed directly to
the Magistrate Division of this court. (Id. at 1.) Plaintiff disputes only the penalties assessed by
Defendant, not the value of the property. Plaintiff requests waiver of all late filing penalties.
(Ptf’s Compl at 1.)
A. Assessment of Penalties
Every person or business owning taxable personal property must file a personal property
tax return by March 1 of each year. See ORS 308.290 (3), ORS 308.296 sets out the penalty for
failure to file personal property tax returns by the March 1 deadline. That penalty is graduated
All references to the Oregon Revised Statutes (ORS) are to 2003 except as to the assessment of the
amount of the penalties. W ith regard to assessment of the amount of the penalties, references to the ORS are to 1999
for the 2000-2001 and 2001-02 tax years, to 2001 for the 2002-03 and 2003-04 tax years, and to 2003 for the 200405 tax year.
DECISION TC-MD 050966B
based on when the taxpayer files its returns. The penalty is the highest when a taxpayer files
after August 1 or completely fails to file for all applicable years. See ORS 308.296(4). The
1999 statute, which is applicable to tax years 2000-2001 and 2001-02, imposes a penalty of
100 percent of the tax attributable to the taxable personal property of the taxpayer on returns
filed after August 1. See ORS 308.296(4)(1999). The 2001 statute, which is applicable to tax
years 2002-03 and 2003-04, reduces the statutory penalty from 100 percent of the tax attributable
to the taxable personal property of the taxpayer to 50 percent of that same tax. See
ORS 308.296(4)(2001). There is no relevant change from 2001 in the 2003 statute applicable to
the 2004-05 tax year. See ORS 308.296(4)(2003). The assessor may add omitted property to the
tax roll up to five years prior to the last certified roll. ORS 311.216(1).
Because Plaintiff failed to file for all years, Defendant was correct in assessing 100
percent penalties for tax years 2000-2001 and 2001-02 and 50 percent penalties for tax years
2002-03 through 2004-05.
B. Penalty Waiver
ORS 308.296 provides for the imposition of a nonfiling penalty as part of an omitted
property assessment. Section (4) of that statute allows a taxpayer to appeal directly to this court
if a penalty under ORS 308.296 is imposed for failing to timely file a personal property return.
See ORS 311.223(4). Accordingly, Plaintiff properly appealed those penalties directly to this
court, for tax years 2000-2001 through 2004-05.
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This court is permitted to waive penalties for failure to timely file personal property
returns in limited situations. The applicable statute provides:
“If a penalty under ORS 308.295 or ORS 308.296 for the failure to timely
file a real, combined or personal property return as required by ORS
308.290 is the subject of an appeal to the tax court, the court may waive
the liability for all or a portion of the penalty upon a proper showing of
good and sufficient cause.” ORS 305.422
“Good and sufficient cause” is not defined in that statute, but this court has adopted the definition
of good and sufficient cause found in ORS 305.288. See Harold L. Center Pro Land Survey
v. Jackson County Assessor, TC-MD No 020069C, WL 1591918, at *2 (July 18, 2002) (holding
that the court will rely upon the definition of “good and sufficient cause” found in ORS 305.288);
see also Velagio Inc. v. Clackamas County Assessor, TC-MD No 021058C, WL 32107251, at *2
(Dec 16, 2002) (holding that the court relies on the “definition in ORS 305.288 because it is in
the same chapter of the statutes and contains a detailed definition of the term” and “the
legislature was * * * aware of that definition when it created ORS 305.422).”
ORS 305.288(5) defines good and sufficient cause as follows:
“(b) ‘Good and sufficient cause’:
“(A) Means an extraordinary circumstance that is beyond the control of the
taxpayer, or the taxpayer’s agent or representative, and that causes the taxpayer,
agent or representative to fail to pursue the statutory right of appeal; and
“(B) Does not include inadvertence, oversight, lack of knowledge, hardship or
reliance on misleading information provided by any person except an authorized
tax official providing the relevant misleading information.”
This court has repeatedly held that ignorance of the law does not constitute good and
sufficient cause to permit waiver of mandatory statutory penalties. See Adam Francois v.
Washington County Assessor, TC-MD No 020683C, WL 32104970, at *2 (Dec 24, 2002)
(holding that “an honest mistake borne out of ignorance of the law” is not good and sufficient
cause under the statutory definition); see also Performance Processing Group Inc. v. Lane
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County Assessor, TC-MD No 021214C, WL 215371, at *2 (Jan 24, 2003) (stating that the “court
is limited in its ability to waive or reduce the penalty to situations where the noncompliance is by
reason of good and sufficient cause; lack of knowledge is not considered to be good and
sufficient cause” because “every citizen is presumed to know the law.”). Neither the penalty
provision nor the penalty waiver statute is based on intent. See id. at * 2.
Plaintiff states in his Complaint that he did not file personal property tax returns because
he was “totally unaware” of such tax. That clearly does not fall within the definition of good and
sufficient cause. Accordingly, this court cannot waive the penalties imposed by Defendant.
The court cannot grant Plaintiff’s request for waiver of the penalty for tax years
2000-2001, 2001-02, 2002-03, 2003-04, and 2004-05 because the only reason Plaintiff gives for
failing to file personal property tax returns is lack of knowledge of the law. The definition of
good and sufficient cause specifically excludes lack of knowledge. Now, therefore,
IT IS THE DECISION OF THIS COURT that Plaintiff’s request for relief is denied.
Dated this ____ day of July 2006.
JEFFREY S. MATTSON
If you want to appeal this Decision, file a Complaint in the Regular Division of
the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563;
or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.
Your Complaint must be submitted within 60 days after the date of the Decision
or this Decision becomes final and cannot be changed.
This document was signed by Magistrate Jeffrey S. Mattson on July 6, 2006.
The Court filed and entered this document on July 6, 2006.
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