Curtis Cox v. Department of Revenue

BEFORE THE STATE TAX APPEAL BOARD
OF THE STATE OF MONTANA
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CURTIS COX, )
) DOCKET NO.: PT-1997-49
Appellant, )
)
-vs- )
)
THE DEPARTMENT OF REVENUE ) FINDINGS OF FACT,
OF THE STATE OF MONTANA, ) CONCLUSIONS OF LAW,
) ORDER and OPPORTUNITY
Respondent. ) FOR JUDICIAL REVIEW
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The above-entitled appeal came on regularly for
hearing on the 4th day of August, 1998, in the City of Thompson
Falls, Montana, in accordance with an order of the State Tax
Appeal Board of the State of Montana (the Board). The notice
of the hearing was duly given as required by law. The
taxpayer, represented by Curtis Cox, presented testimony in
support of the appeal. The Department of Revenue (DOR),
represented by Sheryl Vinson, office supervisor, Edward
Thompson, appraiser, and William Haines, appraiser, presented
testimony in opposition to the appeal. Testimony was
presented, exhibits were received and the Board then took the
appeal under advisement; and the Board having fully considered
the testimony, exhibits and all things and matters presented to
it by all parties, finds and concludes as follows:

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FINDINGS OF FACT
1. Due, proper and sufficient notice was given of
this matter, the hearing hereon, and of the time and place of
said hearing. All parties were afforded opportunity to
present evidence, oral and documentary.
2. The property which is the subject of this appeal
is described as follows:
Personal property, various items of equipment
including a Cat D4D bulldozer, batch plant,
tractor-loader, and a forklift.
3. For the 1997 tax year, the DOR appraised the
subject property at a value of $32,950. (Ex A)
4. The taxpayer appealed to the Sanders County Tax
Appeal Board requesting a reduction in value to $0.
5. The county board denied the appeal.
6. The taxpayer then appealed that decision to this
Board.
7. The issue of ownership of the described property
is central to this appeal.
8. The DOR has made an estimated assessment on the
subject property.
TAXPAYER'S CONTENTIONS
Mr. Cox argued that the Cat bulldozer was not in
Sanders County on January 1, 1997 nor was it owned by him on

3
that date; therefore, in his opinion, it is not taxable in
Sanders County nor is it properly taxable to him personally. He
stated the engine in the subject bulldozer needs to be replaced
and because of that the value is greatly diminished. His
estimate of value, if it were located in Sanders County, would
be approximately $4,000. The bulldozer was purchased for
$16,500 from "Cummings" at "closer to ten years than one year"
ago.
The subject bulldozer had to be repossessed for Mr.
Cox by the sheriff of Mineral County from its location in
Mineral County. Mr. Cox stated that 1804, Inc. was the legal
owner of the property on January 1, 1997. The repossession was
actually described by him as a return of stolen property, since
there had been no sale of the bulldozer to the party who
removed it from Sanders County.
Mr. Cox testified that the tractor-loader was
purchased from the John Deere dealer in Missoula, Montana by
1804, Inc. for $3,200, approximately sometime in the middle of
the year prior to the January 1, 1997 lien date. He stated
that the tractor which has a diesel engine is not currently
running and is not worth more than the $3,200 paid for it at
the time of purchase.
Mr. Cox addressed the cement plant, assessed by the
DOR at $1,000, as not owned by him personally nor does it

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reside on land owned by him. He stated the equipment is run by
an electric motor that requires three phase electric power.
That amount of power is not available at the location where the
cement plant is located. Mr. Cox estimated it would cost
$3,000 to have that kind of electrical power made available to
that location. As such, he argued the equipment has $0 value
in its current location. The cement plant is owned by 1804,
Inc, according to Mr. Cox and is, therefore, not taxable to
him.
The subject forklift is an electrically powered
forklift that operates on batteries. He testified that the
batteries that are in the forklift at this time need to be
disposed of and replaced. He estimated that it would cost in
excess of $10,000 to replace the batteries. As such the
forklift has a value of $0 in its current condition. He added
that the forklift is not owned by him personally and is,
therefore, not subject to taxation to him. He identified the
owner of the forklift as "Pasta Pacifica", a Wyoming
corporation with which he has involvement. The forklift is
currently located on land owned by 1804, Inc.
Mr. Cox believes no one has management or control
over the forklift since "it ain't going to go nowhere."(Mr. Cox
testimony) Pasta Pacifica obtained the forklift in 1985 when
"Mrs. Reese Macaroni Co" was acquired by Pasta Pacifica, and it

5
came into Montana in 1990 or 1991. Mr. Cox was unable to
differentiate between ownership and management and control of
the forklift.
Mr. Cox testified that he did not file a personal
property reporting form indicating that he was the owner of the
property. He also stated that 1804, Inc. did not file a
personal property reporting form for the equipment nor was it
asked to. 1804 Inc., is a corporation, the shareholders of
which is a trust in California. He stated that he responded to
the assessment notice sent to him personally within the 30 days
required by filing an appeal with the Sanders County tax appeal
board. He stated that as the "assistant secretary" for 1804,
Inc., he was never asked by the DOR to file a personal property
reporting form. The officers of the 1804, Inc. corporation
rotate through the various corporate offices, and without the
corporate documents Mr. Cox could not testify as to who was the
holder of those various offices on January 1, 1997.
DOR'S CONTENTIONS
The DOR mailed Mr. Cox a personal property reporting
form early in 1997 with instructions to fill out the form and
return it to the Sanders County DOR office. He failed to do
so, and the DOR performed an estimated assessment for the
subject property. (Ex A) Each piece of equipment that has been

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assessed and the value of each is listed on exhibit A. The DOR
presented photographs of the Case tractor (Ex B), the forklift
(Ex C), and the cement batch plant (Ex D) taken when Mr. Haines
and Mr. Thompson discovered the property. Ms. Vinson testified
that the DOR was unsure as to many of the particulars
concerning the property such as age, purchase date, or purchase
amount.
The D4D bulldozer value was determined by the DOR
from the value placed on it for the Twentieth Judicial District
Court in cause #DV-97-38, Cox v. Middlemiss. (Ex F)
Ms. Vinson stated that a 10% penalty should have been
added to the assessment but that was "missed" by the clerk and
there is not a penalty applied on the assessment. Since the
equipment was not reported as had been requested, the equipment
has been valued to the best of the DOR's "knowledge".
BOARD'S DISCUSSION
Mr. Cox was very careful in the argument that the
property was not owned by him personally but did answer
questions concerning who the owner of the subject property was
on January 1, 1997. It is apparently his argument that if the
DOR cannot determine ownership, and that if the DOR mistakenly
mails the required form to the wrong entity, albeit entities
that are not clearly identified to them through proper
reporting, that the error is the DOR's and, as such, the

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property is not properly assessed. He did not argue that the
property was not subject to taxation, only not taxable to him
personally. It would have been much simpler to merely
straighten out the ownership issues, determine the party in
interest with the DOR, provide the required reporting so the
assessment was mailed to the proper owner, than to involve the
appeal system to the extent done here.
Mr. Cox apparently acquired the D4D Cat bulldozer
sometime between January 1, 1997 (the lien date) and February
1, 1997, a date upon which Mr. Cox claimed ownership in an
affidavit filed with the Twentieth Judicial District Court on
the matter of Cox v. Middlemiss, DV 97-38. (Ex C, CTAB hearing)
It is obviously a difficult task to maintain an up to date
ownership list when the property seems to change ownership on
such a rapid basis. It is also obvious that statements of
value may vary in such short time spans since the estimated
value of the D4D cat to 1804, Inc., on January 1, 1997, is
$4,000 according to Mr. Cox, yet for the Court action referred
to above, the value is stated as $16,500. We know it is the
same piece of equipment because Mr. Cox identified it as such
in response to questions from this Board. He opined that the
difference in value is in the operating condition of the
equipment. It was not in operating condition on January 1,
1997, is his testimony. The difference he explained is in the

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value in which it was returned to him.
It is the opinion of this Board that the batch plant,
regardless of the proximity of three phase power, does have
value. The functionality may in fact be impaired, but it is
not valueless. The three items of subject equipment that were
identified by Mr. Cox as being in the ownership of 1804, Inc.
are: the Cat D4D bulldozer, the cement batch plant, and the
tractor-loader are subject to taxation as assessed by the DOR.
The forklift with the stated owner as Pasta Pacifica, Inc. was
located in the State of Montana and is taxable property. As a
result of the hearing before this Board, the DOR has the
correct information to properly assess the subject property for
taxation for the tax year 1997 and should do so according to
the proper and legal procedures as allowed.
This appeal, is therefore, granted in part and denied
in part. The appeal as to ownership of the property is granted
in so far as Mr. Cox, personally, is not the owner of the
property; however, Mr. Cox, because of his various positions
and identity with the corporations that he has indicated as the
owners, has the capacity to see to it that, once assessed, the
taxes, and penalties and interest (if any) are paid by the
owner. The appeal as to the value of the subject property is
denied since the taxpayer failed to prove that the values as
determined by the DOR are in error. A cooperative atmosphere

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as far as completion of the personal property reporting form
would have been helpful in arriving at the value initially.
CONCLUSIONS OF LAW
1. 15-8-301, MCA. (1) The department may require
from a person a statement under oath setting forth specifically
all the real and personal property owned by, in possession of,
or under the control of the person at midnight on January 1.
The statement must be in writing, showing separately:
(a) all property belonging to, claimed by, or in the
possession or under the control or management of the person;
(b) all property belonging to, claimed by, or in the
possession or under the control or management of any firm of
which the person is a member;
(c) all property belonging to, claimed by, or in the
possession or under control or management of any corporation of
which the person is president, secretary, cashier, or managing
agent;
(d) the county in which the property is situated or in
which the property is liable to taxation and, if liable to
taxation in the county in which the statement is made, also the
city, town, school district, road district, or other revenue
districts in which the property is situated;
2. 15-8-306, MCA. Upon discovery, any property
willfully concealed, removed, transferred, or misrepresented by
the owner or agent thereof to evade taxation must be assessed
at not exceeding 10 times its value, and the assessment so made
must not be reduced by the county tax appeal board.
3. 15-8-309, MCA. (1) Every person who refuses to
furnish the statement hereinbefore required or to make and
subscribe such affidavit respecting his name and place of
residence or to appear and testify when requested so to do by
the department, as above provided, for each and every refusal
and as often as the same is repeated forfeits to the people of
the state the sum of $100 to be recovered by action brought in
the name of the state in any city or justice's court.
4. 15-8-409, MCA. All other taxable property must
be assessed in the county, city, or district in which it is
situated.
5. 15-8-501, MCA. (1) If the owner or claimant of
any property not listed by another person is absent or unknown,
the department must make an estimate of the value of such

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property.
(2) If the name of the absent owner is known to the
department, the property must be assessed in his name; if
unknown, the property must be assessed to unknown owners.

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ORDER
IT IS THEREFORE ORDERED by the State Tax Appeal Board
of the State of Montana that the subject personal property
shall be entered on the tax rolls of Sanders County by the
assessor of that county at the 1997 tax year value of $32,950
as determined by the Department of Revenue and affirmed by the
Sanders County Tax Appeal Board.
Dated this 10th of November, 1998.
BY ORDER OF THE
STATE TAX APPEAL BOARD
________________________________
PATRICK E. McKELVEY, Chairman
( S E A L )
________________________________
GREGORY A. THORNQUIST, Member
LINDA L. VAUGHEY, Member
NOTICE: You are entitled to judicial review of this Order in
accordance with Section 15-2-303(2), MCA. Judicial review may
be obtained by filing a petition in district court within 60
days following the service of this Order.