Pay Your Property Taxes “Under Protest” to Preserve Your Entitlement to a Possible Refund

Do you think your property taxes are too high? If so, remember to pay the taxes “under protest” to preserve your entitlement to a possible refund of the overpaid taxes.

The month of April is when the first half property taxes are due in Washington. Under most circumstances owners can pay their taxes in two installments, on April 30th and October 31st. This year (2016) April 30th falls on a Saturday, which means the first half taxes do not have to be paid until Monday, May 2, 2016. Taxes are considered timely paid if postmarked on or before the due date.

If the owner of the property feels that the taxes being levied are unlawful or excessive in whole or in part, the taxes must be paid “under written protest.” The law in Washington (RCW 84.68.020) requires the written protest to set forth all of the grounds upon which the tax is claimed to be unlawful or excessive. It is not sufficient to write “paid under protest” or any similar notation on the face of the check in payment of the taxes. Instead, the protest requirement can best be satisfied by writing a letter that will accompany the check and will notify the county of the protest and explain the reasons why the taxes are being paid under protest as required by law.

If the taxes are paid in two installments—as most property owners do in this state—the taxes must be paid under protest with each installment. In other words, a protest letter must accompany each payment, on April 30 and October 31. If a written protest is not included with each payment, any future refund will apply only to the half of the property tax payment that included the written protest.

Thus, if the property owner does not send a protest letter with the first half payment, the owner can still include a letter with the second half payment but the potential refund will be cut in half. Likewise, if the owner protests the first half payment but neglects to protest the second half payment, again, the maximum refund would be limited to one-half of the overpaid taxes.

The protest letter will not result in a refund of overpaid property taxes. The property owner must generally take further action, which is to file a refund lawsuit in superior court. The payment-under-protest requirement only allows the property owner the right to file a refund claim in court and does not guarantee that the owner will actually receive a refund. When a county is served with a refund suit, it will check to see if the taxpayer paid the taxes under protest. If the county has no record of a written protest at the time the property taxes were paid, it will move to dismiss the lawsuit, which motion will very likely be granted.

When an owner properly pays property taxes under protest, the owner must also be aware that there is a fairly short statute of limitations period within which to file the refund lawsuit in superior court. Under RCW 82.68.060, the action must be commenced no later than “the 30th day of the next succeeding June following the year in which said tax became payable.” Thus, a superior court refund claim for taxes paid under protest in 2016 must be filed no later than June 30, 2017.

The county treasurer will not give property owners any legal advice related to the payment under protest requirement, so it is best to consult with a lawyer. This article highlights some of the very strict requirements for obtaining a refund of overpaid property taxes. The property tax is the only major tax in Washington that imposes a payment-under-protest requirement to obtain a refund of the overpaid taxes. It also has one of the shortest—if not the shortest—statute of limitations for filing a claim in court. In short, there are many “traps for the unwary taxpayer” when dealing with Washington property taxes.

The refund procedure discussed above is one of two ways to reduce property tax levies. The other is to file an administrative appeal to the county board of equalization at the time the assessment is made by the county assessor. This topic will be covered in a separate and future blog article.