In Dunn v. Sequa Corp., ___ So. 3d ___ (Ala. Civ. App. Jun. 24, 2011), the Alabama Court of Civil Appeals awarded a refund of certain property taxes that Sequa Corp. (“Sequa”) erroneously paid on abated property in 2007, 2008, and 2009. In May 2005, the Industrial Development Board of the City of Hueytown and Sequa entered into a tax abatement agreement under TIRA to which Sequa was granted an abatement of certain noneducational property taxes. In 2007 and 2008, Sequa did not reference its tax abatements on its personal property tax returns, nor, despite instructions to do so from the ADOR, did Sequa notify the Jefferson County Tax Assessor of the abatements. Accordingly, Sequa paid real and personal property taxes based on a millage rate that did not take into account the tax abatements.
In December 2009, Sequa filed a petition for refund of the noneducational portion of property taxes it paid with the Jefferson County Probate Court pursuant to Ala. Code § 40-10-160, which provides refunds for taxes paid “through any mistake…or by any error in the assessment or collection of taxes.” Although the taxing authorities argued that Sequa lost the right to its abatements by failing to notify the tax assessor, the Court concluded Sequa’s failure was an inadvertent error for which a refund was available. The Court held that while a taxpayer is generally required to notify the tax assessor of an exemption, an exception to that general rule exists where the taxpayer’s failure was a mistake or error. Therefore, the Court granted Sequa’s refund petition because nothing in the record indicated that Sequa intentionally chose to reject the tax exemptions to which it was entitled by virtue of the tax abatement agreement.