Assessment of State Taxes and Due Process

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All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

In the 1884 case Hagar v. Reclamation District No, 108, the Court distinguished between the due process requirements for fixed taxes and taxes assessed based on the value of specific property.1 The Hagar Court noted that “there is a vast number [of taxes] of which, from their nature, no notice can be given to the tax-payer, nor would notice be of any possible advantage to him, such as poll taxes, license taxes (not dependent upon the extent of his business), and generally, specific taxes on things, or persons, or occupations.” 2 With respect to these taxes, where “there is nothing the owner can do which can affect the amount to be collected from him,” the Court held that no notice or hearing was required. By contrast, “where a tax is levied on property not specifically, but according to its value, to be ascertained by assessors appointed for that purpose upon such evidence as they may obtain, a different principle comes in. The officers in estimating the value act judicially.” 3 The Court noted that most states provided procedures “for the correction of errors” in such assessments, and concluded, “The law in prescribing the time when such complaints will be heard, gives all the notice required, and the proceedings by which the valuation is determined, though it may be followed, if the tax be not paid, by a sale of the delinquent’s property, is due process of law.” 4

The Court has never considered it necessary that a taxpayer shall have been present, or had an opportunity to be present, in a tribunal when liability was assessed.5 Nor is there any constitutional command that notice of an assessment and an opportunity to contest it be given in advance of the assessment. It is enough that all available defenses may be presented to a competent tribunal during a suit to collect the tax and before the demand of the state for remittance becomes final.6

However, when a political subdivision, taxing board, or court makes assessments based on enjoyment of a special benefit, the property owner is entitled to a hearing on the amount of the assessment and its determination.7 The hearing need not amount to a judicial inquiry,8 but a mere opportunity to submit objections in writing, without the right of personal appearance, is not sufficient.9 Generally, if an assessment for a local improvement is made in accordance with a fixed rule prescribed by legislative act, property owners are not entitled to be heard in advance on the extent to which the improvement benefits their property.10 On the other hand, if the area of the assessment district was not determined by the legislature, a landowner has the right to be heard respecting benefits to his or her property before it can be included in the improvement district and assessed; but, in the absence of actual fraud or bad faith, due process is not denied if the decision of the agency vested with the initial determination of benefits is made final.11 The owner has no constitutional right to be heard in opposition to the launching of a project that may result in an assessment, and once his or her land has been duly included within a benefit district, the only privilege the owner thereafter enjoys is a hearing upon the apportionment—that is, the amount of the tax he or she has to pay.12 Where the mode of assessment for a tax resolves itself into a mere mathematical calculation, there is no necessity for a hearing.13

1: 111 U.S. 701 (1884).
2: Id. at 709.
3: Id. at 710.
4: Id..
5: McMillen v. Anderson, 95 U.S. 37, 42 (1877). Where a law fixes when a tax board sits and its sessions are not secret, no obstacle prevents any one from appearing before it to assert a right or redress a wrong and this is sufficient for tax assessment purposes. State Railroad Tax Cases, 92 U.S. 575, 610 (1876).
6: Nickey v. Mississippi, 292 U.S. 393, 396 (1934). See also Clement Nat’l Bank v. Vermont, 231 U.S. 120 (1913). Rehearings and new trials are not essential to due process of law provided there is a hearing before judgment, with full opportunity to submit evidence and arguments. Pittsburgh, Cincinnati, Chi. & St. Louis Ry. v. Backus, 154 U.S. 421 (1894). One hearing is sufficient to constitute due process, Mich. Cent. R.R. v. Powers, 201 U.S. 245, 302 (1906), and the requirements of due process are also met if a taxpayer, who had no notice of a hearing, does receive notice of the decision reached there and is allowed to appeal it and present evidence and be heard on the valuation of his property. Pittsburgh, Cincinnati, Chi. & St. Louis Ry. v. Bd. of Pub. Works, 172 U.S. 32, 45 (1898).
7: St. Louis & Kansas City Land Co. v. Kansas City, 241 U.S. 419, 430 (1916); Paulsen v. Portland, 149 U.S. 30, 41 (1893); Bauman v. Ross, 167 U.S. 548, 590 (1897).
8: Tonawanda v. Lyon, 181 U.S. 389, 391 (1901).
9: Londoner v. City of Denver, 210 U.S. 373 (1908).
10: Withnell v. Ruecking Constr. Co., 249 U.S. 63, 68 (1919); Browning v. Hooper, 269 U.S. 396, 405 (1926). Likewise, committing to a board of county supervisors the authority to determine, without notice or hearing, when repairs to an existing drainage system are necessary cannot be said to deny due process of law to landowners in the district, who, by statutory requirement, are assessed for the cost thereof in proportion to the original assessment. Breiholz v. Bd. of Supervisors, 257 U.S. 118 (1921).
11: Fallbrook Irrigation Dist. v. Bradley, 164 U.S. 112, 168, 175 (1896); Browning v. Hooper, 269 U.S. 396, 405 (1926).
12: Utley v. Petersburg, 292 U.S. 106, 109 (1934); French v. Barber Asphalt Paving Co., 181 U.S. 324, 341 (1901). See also Soliah v. Heskin, 222 U.S. 522 (1912). Nor can a taxpayer rightfully complain because a statute renders conclusive, after a hearing, the determination as to apportionment by the same body that levied the assessment. Hibben v. Smith, 191 U.S. 310, 321 (1903).
13: Hancock v. Muskogee, 250 U.S. 454, 458 (1919). Likewise, a taxpayer does not have a right to a hearing before a state board of equalization before issuance of an order increasing the valuation of all property in a city by forty percent. Bi-Metallic Co. v. Colorado, 239 U.S. 441 (1915). Statutes and ordinances providing for the paving and grading of streets, the cost thereof to be assessed on the front foot rule, do not, by their failure to provide for a hearing or review of assessments, generally deprive a complaining owner of property without due process of law. City of Detroit v. Parker, 181 U.S. 399 (1901). In contrast, when an attempt is made to cast upon particular property a certain proportion of the construction cost of a sewer not calculated by any mathematical formula, the taxpayer has a right to be heard. Paulsen v. Portland, 149 U.S. 30, 38 (1893).