The owners of Cookeville Boat Dock, Inc. have 30 days to appeal a court order filed this week demanding they pay almost $138,000 in delinquent property taxes owed to DeKalb County from 2004 to 2013.
The written order, signed by Judge Amy Hollars, was filed Wednesday, February 3 in DeKalb County Chancery Court. The judge gave the same ruling orally on Tuesday, November 24.
(CLICK LINK BELOW TO READ THE ACTUAL COURT ORDER)
2013cv26ordercbd_rad7B968.pdf (2.47 MB)
"The total of the judgments for the years 2004 through 2013 together with all accrued interest, penalties, and fees accrued through January 31, 2016 is $137,933.34. The total is based upon a base tax for the years stated in the amount of $62,733, interest and penalty of $67,643.04, and attorney fee of $6,273.30, and court costs of $1,284", the order stated.
The court further ordered that "DeKalb County is entitled to additional penalty of 10% on all delinquent taxes" finding that T.C.A. 67-5-2410 (a)(1)(A) is the controlling statute as to additional penalty.
"It is ordered that DeKalb County is entitled to charge a 10% additional penalty on the base amount of delinquent taxes."
"It is further ordered that Cookeville Boat Dock, Inc. shall continue to accrue on any unpaid taxes, interest and penalty as set out in T.C.A. 67-5-2410 (a)(1)(A)" the order stated.
In November, Judge Hollars again found as she had earlier in the year that Cookeville Boat Dock must pay delinquent DeKalb County property taxes, but in a new ruling she granted a motion by the marina's attorney to bar the county from collecting more than 10 years in back taxes with 10 years being a statute of limitations. That ruling saved the boat dock nearly $60,000. However, the judge ruled against the boat dock when it came to the amount of interest the county could charge on the back taxes.
Judge Hollars announced her decision via a telephone conference call on November 24 with Vester Parsley, Jr., the county's tax attorney, and Jon Jones of Cookeville, the lawyer representing Cookeville Boat Dock. Clerk and Master Deborah Malone and County Mayor Tim Stribling were also present. Again, the written order was not filed until Wednesday, February 3.
The boat dock owners have refused to pay their taxes since 1998 which now comes to more than $200,000 including taxes, interest, penalty, court costs, and attorneys fees. As a result of the judge's decision, the boat dock will NOW owe the county only $137,933.04 for the delinquency from 2004-2013
Jones initially argued for the marina that Tennessee law violated the Supremacy Clause of the U.S. Constitution by discriminating against a lessee of the United States in favor of lessees of the State of Tennessee. It was argued since the boat dock pays fees to the U.S. Army Corps of Engineers which are used, in part, to pay DeKalb County a sum of "in lieu of taxes," that having to pay property tax to the county was, in effect, double taxation.
In April Judge Hollers ruled that the boat dock's challenge to the tax was invalid in part because the Supremacy Clause "does not prevent a state or local government from imposing a tax on an individual or a corporation 'using government property in connection with a business conducted for its own private gain."
The attorney for the marina later filed a motion asking the judge to reconsider her ruling. Jones argued that the county cannot collect taxes beyond 10 years; that the judge's ruling on the "Supremacy Clause" of the U.S. Constitution was incorrect; and that the amount of interest the county wants to charge is above what is allowed by law.
In the motion for "additional consideration of issues," attorney Jones pointed to a Tennessee law that states, "All taxes assessed against real property and personal property in this state shall be barred, discharged and uncollectible after the lapse of 10 years from April 1 of the year following the year in which such taxes become delinquent, whether suit be brought within that time or not to collect the taxes."
Judge Hollars sustained Jones' motion on the 10 year bar based on TCA 67-5-1806. " Here it's not an action for recovery. There has been no payment under protest or otherwise. We do not have an action that is or has been before an administrative appeal before the state board of equalization so I think I have to rule that the 10 year bar does apply here so Cookeville Boat Dock will be relieved of several years of their taxes," said Judge Hollars.
As for the interest issue, the defendants argued "prejudgment interest may be awarded by courts or juries in accordance with the principles of equity at any rate not in excess of a maximum effective rate of 10 percent per annum."
While Judge Hollars granted the motion to bar the county from collecting delinquent taxes beyond 10 years, she denied the request to prohibit the county from assessing the current rate of interest and penalty.
She also affirmed her earlier ruling on the constitutionality of the tax.