Clarke County Democrat

Suit challenges tax boards, tax collections

Grew out of Boise tax dispute case



A class action lawsuit has been filed against Alabama’s Revenue Commissioner Tim Russell and State Treasurer Kay Ivey, charging that the Alabama Department of Revenue is not properly utilizing authorized citizen “boards of equalization” in many counties to set and oversee ad valorem taxes and to hear tax disputes as prescribed by state law.

The suit was filed in Clarke County Circuit Court by Gil Gilmore and Hardie Kimbrough of the Gilmore Law Firm of Grove Hill on the behalf of five property owners in Clarke, Choctaw, Marengo and Washington counties as well as many other “thousands or tens of thousands of individuals and/or legal entities who own property which is subject to ad valorem taxes” in the counties, the complaint states.

The complaint grew out of the firm’s participation in the defense of Boise’s Jackson paper mill operations before the Clarke County Board of Equalization. Boise contested its ad valorem taxes and appealed to the board for a lower rate, as allowed by law.

The law specifies that three board members are to be nominated by different governing bodies in the county with the state revenue commissioner selecting three to serve and the governor giving final approval. Despite nominations from the county, the state—either the revenue commissioner or the governor— failed to fill vacancies on the county board and the only legitimate board member at Boise’s hearing in September 2006 was Joe Merida, a Clarke County resident. Two Department of Revenue employees were appointed to fill the two vacancies on the hearing board.

Attorney and retired Circuit Judge Kimbrough argued at a court hearing on the Boise case earlier this year that the board was not a legal body and could not hear or act on the dispute because of the lack of local citizen members.

It was not brought out in court, but Boise’s attorneys later said that one of the Department of Revenue employees who sat on the board to hear Boise’s appeal had also helped make the tax assessment that was being contested.

The Boise case was eventually settled by mediation with the company paying over $3 million in taxes for the 2006 and 2007 tax years. However, a $154,000 late penalty has not been paid and remains pending in court with penalty interest now pushing the bill over $170,000.

Gilmore and Kimbrough said the state law authorizes boards of equalization in each county also details their duties including inspecting, reviewing, revising and fixing the value of all properties.

The Department of Revenue is to act in an advisory capacity only, the attorneys say, again referencing state law.

“Yet, from January 1, 2002, to the present, either at various times or during the entire time period, there have not been properly appointed and functioning Boards of Equalization in Clarke County, Choctaw County, Marengo County and Washington County, among counties that have a population of less than 600,000. Therefore, either currently or in the recent past certain property taxes were not assessed in accordance with Alabama law,” the complaint states.

Jefferson County is the only county with a population over 600,000 and reportedly operates under laws specific to it.

The lawyers contend that while Clarke’s board has been lacking members, other counties— Choctaw and Marengo among others—operate without boards of equalization with the tax assessor or revenue commissioner handling and deciding all property tax issues.

The complaint cites the Department of Revenue as operating an “Alternative Tax System” that is contrary to state law and equal rights and due process rights guaranteed by the U.S. Constitution.

Clarke County property owners cited as class plaintiffs include Harold Agee, Nettie Dotson, Manuel E. and Deidretta Jones, and Frances Lancaster. By virtue of simply owning property in the county, all had their property taxes assessed in violation of state law and were subjected to an “entirely different process of taxation” from other Alabama counties.

Clarke County Revenue Commissioner Chris Beverly reviewed the complaint and did not wish to comment on it directly but did say there are other state laws governing ad valorem taxes that were not cited by the plaintiffs’ attorneys that could have a bearing on the matter.

The complaint seeks a jury trial in Clarke County that would declare the “dual tax system” employed by the Department of Revenue to be illegal and that would prohibit it from continuing to collect ad valorem taxes in such a matter. Unspecified damages for taxes “improperly assessed and collected” since Jan. 1, 2002 are sought from the Department of Revenue and the State Treasurer.

Listing as “of counsel” with the plaintiffs is attorney John A. Barney of Franklin, Tenn.

Gil Gilmore was associated with Barney and other Tennessee lawyers in discrimination class action suits against several major automobile finance companies a few years ago that resulted in multi-million dollar settlements for blacks and other minorities who had been charged higher loan rates, allegedly because of their race.


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