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Back in 2014, we about a nasty Honolulu City and County rule involving real property tax appeals. That rule said that if you as a property owner didn’t like your real property tax assessment and you wanted to appeal it, the appeal had better be in by Jan.15.

It didn’t matter if the government was open on Jan. 15. If the appeal came in after the 15th, the appeal would be late, and the city would have it dismissed.

Along comes a taxpayer, Kalaeloa Ventures, LLC. It wanted to file 14 different real property tax appeals against the city taxing authorities.

However, it wasn’t quite ready to file on Friday, Jan. 13, 2017. (How unlucky!)

The government closed for the weekend, which included Sunday, Jan. 15, and Monday, Jan. 16, which was Martin Luther King, Jr. Day. It reopened for business on Tuesday, Jan. 17, and the taxpayer filed Notices of Appeal to the Tax Appeal Court in all 14 cases.

Cackling with glee, city attorneys marched straight to Tax Appeal Court and asked the court to throw out all 14 appeals.

“Tsk, tsk. Late,” they said. “The court doesn’t have jurisdiction over late appeals.”

“Wait a minute,” the taxpayer said. “There’s a , HRS section 1-32, allowing acts that are legally required to be performed on a particular date to be done the next business day when the deadline day is a Sunday or a holiday. Under that statute, we’re good to go.”

“No, you’re not,” the city contended. “Our tax appeal ordinance, , specifically says that the appeal must be in on or before Jan. 15. The city also has an ordinance regarding due dates on a Saturday, Sunday or holiday, namely , and that ordinance specifically does not apply to tax appeals. So, a tax appeal must be in by Jan. 15 whether the city government offices are open or not.”

“But you forgot one thing,” said the taxpayer. “The tax appeal court is a state court. It deals with appeals from all the different counties. The law governing state court procedure is state law. There is no state exception for property tax appeals. Therefore, the appeal was on time!”

“Absolutely not!” huffed the city attorney, with a noticeably quickening pulse. “The Hawaii Constitution expressly says, ‘all functions, powers and duties relating to the taxation of real property shall be exercised exclusively by the counties.’ All functions, powers and duties mean we, not the state, get to specify not only the property tax system, but also the procedure surrounding it. So, the state statutes are trumped by the property tax ordinances when it comes to property tax!”

The High Court Rules

This dispute then played out through the court system. The Tax Appeal Court thought the city had the better of the argument and tossed out the appeals. The taxpayer appealed the dismissals, and the arguments were made before the Supreme Court of Hawaii.

On July 27, 2018, the Supreme Court of Hawaii . Apparently, the court couldn’t stomach the thought of having a state court subject to numerous procedural rules created by each county, and that the state statutes and court rules creating the court would have questionable validity because they would not be exercised exclusively by the counties. Judgment for the Taxpayer!

A word of caution: This decision might not apply when real property tax appeals are made to the Board of Review, which is a county creation, as opposed to the Tax Appeal Court, which is part of the state judiciary. To prevent taxpayer confusion, we hope that the counties won’t be too “hard head” about this and allow the weekend rule to apply across the board.

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