Board Has No Authority to Abate Interest
In Chisholm v. Department of Revenue, File No. K08-R-18 (KBTA Oct. 21, 2008), the Kentucky Board of Tax Appeals (“KBTA”) held that it had no authority to abate interest assessed by the Department of Revenue (“Department”) on motor vehicle ad valorem tax admittedly owed by Chisholm, a pro se taxpayer. Accordingly, the KBTA granted Summary Judgment in favor of the Department.
The facts were undisputed. Chisholm purchased a 2006 Toyota on December 30, 2005. His vehicle was not in the County Clerk’s computer on January 1, 2006, and so, the Clerk failed to send him his 2006 tax bill in October, Chisholm’s birth month.
On July 11, 2007, the Department discovered that Chisholm had not paid the tax in October 2006, and issued a bill for tax, penalty and interest. Chisholm immediately paid the tax upon notice, and the Department waived the penalty but would not waive the interest.
Chisholm appealed to the KBTA, claiming that it was the responsibility of the Clerk to notify him of the tax due in October 2006, and that the Department’s assessment of a penalty and interest was improper. Chisholm also argued that the Department’s waiver of the penalty indicated that its assessment was improper, and therefore, it should also waive the interest assessed.
The Department countered that the owner liable for ad valorem taxes on a motor vehicle includes “a person who pursuant to a bona fide sale has received physical possession of the vehicle subject to any applicable security interest.” See KRS 186.010(7)(a). It argued that Chisholm was the owner of the vehicle and had an affirmative duty to list his property with the Property Valuation Administrator. Because he did not list it, the Department properly assessed the vehicle as omitted property, and so interest accrued on the taxes due for that assessment and could not be waived by statute.
The KBTA agreed, stating “the taxpayer has been granted all relief available” and that it was without authority to abate such interest.