City of Valdez v. Prince William Sound Oil Spill Response Corporation
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The case revolves around a dispute between the City of Valdez and the Prince William Sound Oil Spill Response Corporation, the State of Alaska, Department of Revenue, and the State Assessment Review Board. The City of Valdez appealed the State's determination that certain property was not taxable. After nearly two decades of administrative and court proceedings, Valdez won. However, due to the length of the litigation, Valdez has not been able to collect taxes on the property that should have been taxed.
The Superior Court of the State of Alaska, Third Judicial District, Anchorage, ruled that even though the State wrongly determined certain property was not taxable, the State cannot now assess taxes on this property if more than three years have passed since the taxpayer filed its tax return. According to this ruling, taxes may be assessed on this property only for the most recent tax years. Valdez appealed this decision.
The Supreme Court of the State of Alaska affirmed the superior court’s decision. The court held that the statutory text is clear and does not suggest that the legislature intended something other than the plain meaning of the text. The court also disagreed with Valdez's argument that it is impossible for a municipality to challenge a taxability determination in less than three years. The court concluded that AS 43.05.260’s three-year limitations period applies to tax assessments under AS 43.56, even if Revenue’s initial decision not to tax certain property was wrong.
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