A state appellate panel has upheld a lower court ruling that
the Illinois Property Tax Code allows the Cook County Assessor’s Office to
reach back three years, to claim unpaid taxes on a south suburban house that
had an invalid homestead exemption.
The March 16 decision was rendered by Justice Margaret
McBride of the Illinois First District Appellate Court, with concurrence from Justices
David Ellis and Eileen O’Neill Burke. The decision favored the Cook County
Assessor’s Office in its dispute with homeowner Barbara R. Mulry.
Mulry inherited a house, adjacent to her home in Evergreen
Park, from her late uncle. She had a homestead exemption for her house, but
said she did not know her uncle had also had one for his home, which remained
in place after his death. Mulry said she never lived in the inherited house,
but rather rented it out.
To qualify for a homestead property tax exemption, a house
must be the owner’s primary residence. Other exemptions are given to homeowners
with other demographic and legal qualifications, including senior citizens,
military veterans and long-term occupants.
In 2014, the assessor’s office told Mulry she had not been
entitled to an exemption on the inherited house for 2010, 2011 and 2012. As a
consequence, they billed Mulry for $4,188 in unpaid taxes and interest,
according to the assessor.
The assessor relied on the “Erroneous homestead exemptions”
section of the Illinois Property Tax Code, which the General Assembly adopted
in 2013. The section sets out procedures for the Cook County assessor to use in
recouping unpaid taxes, with 10 percent annual interest, when the assessor
determines an exemption has been wrongly granted. The section also allows for
the imposition of liens and 50 percent penalties.
Mulry contested the tax bill at an administrative hearing in
May 2014, claiming the 2013 statute could only be employed from the date of its
enactment forward. Instead, Mulry alleged the assessor was retroactively
applying the law, violating her due process.
At the hearing, the assessor introduced computer printouts
of assessor records, to show Mulry enjoyed exemptions for two properties.
Mulry’s attorney objected to the printouts, contending computers were not
trustworthy for keeping records. The administrative hearing officer rejected
the contention, allowed the printouts and ruled Mulry owed the money.
Mulry then went to Cook County Circuit Court, to have a
judge review the case. However, Mulry again struck out, as Judge Sharon
Sullivan affirmed the hearing officer’s decision. Mulry continued fighting,
taking the case to appellate court, but again losing.
Mulry argued legislators did not intend for the erroneous
exemptions statute to be retroactive from the date it was enacted. Appellate
Justice McBride did not buy the argument.
“Mulry misconstrues the significance of a statute’s
effective date, which is simply the date that legislation takes effect or, in
other words, becomes governing law. A statute’s effective date is not enough to
tell us about the General Assembly’s intended temporal reach of this enactment.
The ‘traditional rule’ is that statutes do not apply retroactively unless the
legislators have expressly stated this temporal reach,” McBride said.
McBride went on to point out the statute’s language “clearly
and unequivocally” permits the assessor to take action against improper
exemptions “during any of the 3 collection years immediately prior to the
current collection year.”
McBride further noted the 2013 statute does not “attach new
consequences to prior conduct,” because McBride should never have had
simultaneous exemptions on two properties in the first place.
In addition, McBride disagreed with Mulry’s stance the
three-year retroactivity was “harsh and oppressive,” noting the Tax Code gives
the state 20 years to collect delinquent taxes and 20 years for a Cook County
taxpayer to request a refund when they have overpaid.
McBride deleted Mulry’s other contention the assessor’s
computer printouts did not constitute bona fide records. In advancing this
argument, Mulry cited cases that were decades old, including one from 1969, in
which computerized record keeping was questioned as a reliable method of maintaining
McBride dismissed the case law as out-of-date, because
digitalized record keeping is now “ubiquitous and routine.”