2022 Wisconsin Statutes & Annotations
Chapter 74 - Property tax collection.
74.35 - Recovery of unlawful taxes.

74.35 Recovery of unlawful taxes.

(1) Definitions. In this section “unlawful tax" means a general property tax with respect to which one or more errors specified in s. 74.33 (1) (a) to (f) were made. “Unlawful tax" does not include a tax in respect to which the alleged defect is solely that the assessor placed a valuation on the property that is excessive.

(2) Claim against taxation district.

(a) A person aggrieved by the levy and collection of an unlawful tax assessed against his or her property may file a claim to recover the unlawful tax against the taxation district which collected the tax.

(b) A claim filed under this section shall meet all of the following conditions:

1. Be in writing.

2. State the alleged circumstances giving rise to the claim, including the basis for the claim as specified in s. 74.33 (1) (a) to (e).

3. State as accurately as possible the amount of the claim.

4. Be signed by the claimant or his or her agent.

5. Be served on the clerk of the taxation district in the manner prescribed in s. 801.11 (4).

(2m) Exclusive procedure. A claim that property is exempt, other than a claim that property is exempt under s. 70.11 (21) or (27), may be made only in an action under this section. Such a claim may not be made by means of an action under s. 74.33 or an action for a declaratory judgment under s. 806.04.

(3) Action on claim.

(a) In this subsection, to “disallow" a claim means either to deny the claim in whole or in part or to fail to take final action on the claim within 90 days after the claim is filed.

(b) The taxation district shall notify the claimant by certified or registered mail whether the claim is allowed or disallowed within 90 days after the claim is filed.

(c) If the governing body of the taxation district determines that an unlawful tax has been paid and that the claim for recovery of the unlawful tax has complied with all legal requirements, the governing body shall allow the claim. The taxation district treasurer shall pay the claim not later than 90 days after the claim is allowed.

(d) If the taxation district disallows the claim, the claimant may commence an action in circuit court to recover the amount of the claim not allowed. The action shall be commenced within 90 days after the claimant receives notice by certified or registered mail that the claim is disallowed.

(4) Interest. The amount of a claim filed under sub. (2) or an action commenced under sub. (3) may include interest at the average annual discount rate determined by the last auction of 6-month U.S. treasury bills before the date of filing the claim per day for the period between the time when the tax was due and the date that the claim was paid.

(5) Limitations on bringing claims.

(a) Except as provided under par. (b), a claim under this section shall be filed by January 31 of the year in which the tax is payable.

(b) A claim under this section for recovery of taxes paid to the wrong taxation district shall be filed within 2 years after the last date specified for timely payment of the tax under s. 74.11, 74.12 or 74.87.

(c) No claim may be filed or maintained under this section unless the tax for which the claim is filed, or any authorized installment payment of the tax, is timely paid under s. 74.11, 74.12 or 74.87. This paragraph does not apply to taxes due and payable in 2020 if paid by October 1, 2020, or by any installment date for which taxes are due after October 1, 2020, nor to taxes due and payable in 2021 if paid by October 1, 2021, or by any installment date for which taxes are due after October 1, 2021.

(d) No claim may be made under this section based on the contention that the tax was unlawful because the property is exempt from taxation under s. 70.11 (21) or (27).

(6) Compensation for taxation district. If taxes are refunded under sub. (3), the governing body of the taxation district may proceed under s. 74.41.

History: 1987 a. 378; 1989 a. 104; 1991 a. 39; 1997 a. 237; 2007 a. 19; 2019 a. 185; 2021 a. 80, 162.

This section only authorizes courts to determine whether a taxpayer is exempt from taxes already paid, not taxes that might be assessed in the future. Tax exempt status, once granted, is not automatic. It is subject to continuing review, a notion inconsistent with a declaration that property is exempt from future property taxes. Northwest Wisconsin Community Services Agency, Inc. v. City of Montreal, 2010 WI App 119, 328 Wis. 2d 760, 789 N.W.2d 392, 09-2568.

An installment payment is timely within the meaning of sub. (5) (c) if it meets the criteria contained in s. 74.87 (7). An installment payment is not considered timely simply because it is not considered delinquent under s. 74.87 (6). Because the taxpayer in this case failed to timely pay its March installment payment, the taxpayer did not meet the statutory requirements to pursue its claim under this section. WGLB Scholarship in Memory of Joel J. Kinlow, Inc. v. City of Milwaukee, 2021 WI App 43, 398 Wis. 2d 760, 963 N.W.2d 110, 19-2352.

Separate installment payments do not give rise to their own separate claims. In other words, a taxpayer is allowed to file and maintain one claim under this section for a given tax assessment. WGLB Scholarship in Memory of Joel J. Kinlow, Inc. v. City of Milwaukee, 2021 WI App 43, 398 Wis. 2d 760, 963 N.W.2d 110, 19-2352.

Although the legislature, in sub. (5) (c), did not write “each and every" or “all" authorized installment payments of the tax, interpreting this section in context with s. 74.87 to avoid absurd or unreasonable results, it is not the case that simply any installment payment must be timely made in order for a taxpayer to maintain a claim. WGLB Scholarship in Memory of Joel J. Kinlow, Inc. v. City of Milwaukee, 2021 WI App 43, 398 Wis. 2d 760, 963 N.W.2d 110, 19-2352.

Under sub. (2) (a), all claims regarding the recovery of taxes on an allegedly exempt property must be filed against the taxation district by the taxpayer who was aggrieved by the “levy and collection" of the challenged tax. The statute clearly anticipates a claim being filed with the taxation district “after" the taxpayer has paid the challenged tax. In this case, there had been no collection of the challenged tax at the time that the taxpayer filed its claims with the city. Thus, the city's motion to dismiss should have been granted. Saint John's Communities, Inc. v. City of Milwaukee, 2021 WI App 77, 399 Wis. 2d 729, 967 N.W.2d 151, 20-1696.

In Hermann, 215 Wis. 2d 370 (1998), the court held that the uniformity clause claim made by the plaintiffs was inherently a claim of excessive assessment for which there was a statutory scheme that was the exclusive means by which taxpayers could make an excessive tax challenge. The same circumstances apply to a claim under this section. Pursuant to sub. (2) (a), there are necessary requirements involved in filing a claim asserting tax exemption, and further, under sub. (2m), this section is the exclusive means for filing such a claim. Saint John's Communities, Inc. v. City of Milwaukee, 2021 WI App 77, 399 Wis. 2d 729, 967 N.W.2d 151, 20-1696.