               IN THE COURT OF APPEALS OF TENNESSEE
                           AT NASHVILLE
                        Assigned on Briefs September 2, 2016

VOLUNTEER PRINCESS CRUISES, LLC v. TENNESSEE STATE BOARD
                   OF EQUALIZATION

               Appeal from the Tennessee State Board of Equalization
                No. P1351706      Executive Secretary, Kelsie Jones
                     ___________________________________

              No. M2016-00364-COA-R12-CV – Filed October 31, 2016
                     ___________________________________

A water transportation carrier company challenges the assessment of personal property
taxes against it by the Board of Equalization for tax years 2008, 2010, and 2011. With
respect to tax years 2010 and 2011, we find merit in the carrier‟s argument that the record
does not establish that the Board provided the carrier with notice sufficient to satisfy due
process and, therefore, remand for a determination as to whether the carrier received such
notice. As to the Board‟s back assessment of the carrier for tax year 2008, we affirm the
Board‟s assessment.

Tenn. R. App. P. 12 Direct Review of Administrative Proceedings; Judgment of the
  Tennessee State Board of Equalization Vacated in Part, Affirmed in Part, and
                                   Remanded

ANDY D. BENNETT, J., delivered the opinion of the court, in which J. STEVEN STAFFORD,
P.J., W.S., and THOMAS R. FRIERSON, II, J., joined.

Richard A. McCall and John E. Owings, Knoxville, Tennessee, for the appellant,
Volunteer Princess Cruises, LLC.

John Freemont Sharpe, Jr., Assistant General Counsel, for the appellee, Tennessee
Comptroller of the Treasury.


                                        OPINION

                       FACTUAL AND PROCEDURAL BACKGROUND

       Volunteer Princess Cruises, LLC (“Volunteer”), is authorized to conduct business
under the laws of Tennessee and has its principal offices in Knoxville, Tennessee. Since
2006, Volunteer has operated a commercial passenger vessel, the “Volunteer Princess,”
on the Tennessee River. Walter James LeMasurier is the president of Volunteer; the
Volunteer Princess is owned by the LeMasurier Family Trust, LLC.

        The Office of State Assessed Properties (“OSAP”), a division of the Comptroller
of the Treasury, conducts annual assessments of all tangible and intangible properties
owned by, and all personal property used or leased by, certain companies, including
“[w]ater transportation carrier companies which operate boats . . . over the waterways of
this state, for hire . . . domiciled in this state and/or owning or leasing real or personal
property located in this state.” Tenn. Code Ann. § 67-5-1301(a)(13). These assessments
are used by counties and cities for purposes of determining county and city property
taxes. See Tenn. Code Ann. § 67-5-101 (stating that all property “shall be assessed for
taxation for state, county and municipal purposes . . . .”); Tenn. Code Ann. § 67-5-1301
(providing that the Comptroller is authorized to assess water transportation carriers for
purposes of state and county taxation).

       Pursuant to Tenn. Code Ann. § 67-5-1303,1 it is the duty of certain property
owners to file property tax reporting schedules each year. Volunteer did not file a
property tax reporting schedule with OSAP in 2008 because Mr. LeMasurier was under
the mistaken belief that it was not liable for property taxes. Volunteer paid its 2009 tax
assessment based upon information LeMasurier provided to OSAP. OSAP subsequently
reevaluated its 2009 assessment and issued a back assessment dated July 30, 2010.
Volunteer filed a timely appeal to that back assessment, which is not part of the current
appeal.

       On August 2, 2010, OSAP sent a letter to Volunteer with its 2010 ad valorem tax
property assessment in the amount of $741,000. Volunteer filed an initial exception to
the assessment and, in a letter dated August 17, 2010, informed OSAP that it would not
attend the informal hearing the next day but would rely on its exception and previously
filed documents. In a letter dated September 7, 2010, addressed to Volunteer, OSAP
stated that it had reviewed Volunteer‟s exception and that the assessment remained at
$741,000. The letter further provides that any exceptions not filed by September 27,
2010 would be deemed waived. Volunteer failed to file any further exceptions.

       On July 29, 2011, OSAP sent a letter to Volunteer with its 2011 ad valorem tax
property assessment in the amount of $706,000. Volunteer filed an initial exception to
the assessment and, in a letter dated August 17, 2011, informed OSAP that it would not
       1
          Tennessee Code Annotated section 67-5-1303 states: “It is the duty of the owners of property
mentioned in § 67-5-1301, within the state, to annually file with the comptroller of the treasury on or
before April 1, under oath, schedules and statements giving the following information concerning all
properties owned or leased by such owners . . . .”


                                                 -2-
attend the informal hearing the next day but would rely on its exception and previously
filed documents. In a letter dated September 6, 2011, addressed to Volunteer‟s attorney,
OSAP stated that it had reviewed Volunteer‟s exception and that the assessment remained
at $706,000. The letter further provides that any exceptions not filed by September 26,
2011 would be deemed waived. Volunteer failed to file any further exceptions.

     On August 29, 2011, OSAP issued a back assessment for tax year 2008 in the
amount of $626,276 against Volunteer.

       On September 24, 2012, Volunteer timely filed an appeal with the Tennessee State
Board of Equalization (“the Board”) to challenge the tax year 2012 assessment. During
that appeal, Volunteer challenged the 2008 and 2009 back assessments/reassessments as
well as tax year 2010 and 2011 regular assessments.

        The administrative law judge (“ALJ”) held a hearing on October 1, 2015 to
determine whether the Board had jurisdiction to hear appeals related to tax years from
2008 through 2011. In an order entered on December 23, 2015, the ALJ decided that the
Board had jurisdiction to hear the 2009 and 2012 matters and would schedule a hearing to
address these appeals. (These tax years are not at issue in this appeal.) The ALJ
dismissed Volunteer‟s appeals of the back assessment for tax year 2008 and the regular
assessments for 2010 and 2011. Volunteer appealed this decision to the Assessment
Appeals Commission and, on March 24, 2016, the Commission ordered that the appeals
relating to the 2008, 2010, and 2011 tax years be dismissed and that this decision was a
final judgment.

      Volunteer then filed a petition for judicial review of the Board‟s decision in this
Court in accordance with Tenn. Code Ann. § 4-5-322(b)(1)(B)(iii).2 On appeal,
Volunteer raises several issues, which we summarize as follows:

        (1) Whether the ALJ erred in finding that the Comptroller “issued” 2010 and 2011
            exception review notices.
        (2) Whether the ALJ‟s application of Tenn. Code Ann. § 67-5-1327(c) to the 2010
            and 2011 tax year assessment dismissals is in violation of constitutional and
            statutory provisions or, alternatively, whether Tenn. Code Ann. § 67-5-1327(c)
            is unconstitutional.
        (3) Whether the ALJ‟s dismissal of Volunteer‟s challenge as to the tax year 2008
            back assessment/reassessment is arbitrary and capricious.


        2
          Tennessee Code Annotated section 4-5-322(b)(1)(B)(iii) states that anyone aggrieved by “a final
decision of the state board of equalization in a contested case involving centrally assessed utility property
assessed in accordance with title 67, chapter 5, part 13, shall file any petition for review with the middle
division of the court of appeals.”
                                                   -3-
                                 STANDARD OF REVIEW

       Tennessee Code Annotated section 4-5-322(h) sets forth the standards that govern
our review of cases brought under the provisions of the Uniform Administrative
Procedures Act (“UAPA”), including Tenn. Code Ann. § 4-5-322(b)(1)(B)(iii). Office of
the Att’y Gen. v. Tenn. Regulatory Auth., No. M2003-01363-COA-R12-CV, 2005 WL
3193684, at *8 (Tenn. Ct. App. Nov. 29, 2005). Tennessee Code Annotated section 4-5-
322(h) states:

      The court may affirm the decision of the agency or remand the case for
      further proceedings. The court may reverse or modify the decision if the
      rights of the petitioner have been prejudiced because the administrative
      findings, inferences, conclusions or decisions are:

      (1) In violation of constitutional or statutory provisions;
      (2) In excess of the statutory authority of the agency;
      (3) Made upon unlawful procedure;
      (4) Arbitrary or capricious or characterized by abuse of discretion or clearly
      unwarranted exercise of discretion; or
      (5)(A) Unsupported by evidence that is both substantial and material in the
      light of the entire record.
      (B) In determining the substantiality of evidence, the court shall take into
      account whatever in the record fairly detracts from its weight, but the court
      shall not substitute its judgment for that of the agency as to the weight of
      the evidence on questions of fact.

Under the UAPA, this Court must apply the substantial and material evidence standard to
the agency‟s factual findings. City of Memphis v. Civil Serv. Comm’n, 239 S.W.3d 202,
207 (Tenn. Ct. App. 2007). Substantial and material evidence is “„such relevant evidence
as a reasonable mind might accept to support a rational conclusion and such as to furnish
a reasonably sound basis for the action under consideration.‟” Macon v. Shelby Cnty.
Gov’t Civil Serv. Merit Bd., 309 S.W.3d 504, 508 (Tenn. Ct. App. 2009) (quoting Pruitt
v. City of Memphis, No. W2004-01771-COA-R3-CV, 2005 WL 2043542, at *7 (Tenn.
Ct. App. Aug. 24, 2005)). It is “„something less than a preponderance of the evidence, but
more than a scintilla or glimmer.‟” Id. (quoting Wayne Cnty. v. Tenn. Solid Waste
Disposal Control Bd., 756 S.W.2d 274, 280 (Tenn. Ct. App.1988)).

      The UAPA‟s narrow standard of review for an administrative body‟s factual
determinations “suggests that, unlike other civil appeals, the courts should be less
confident that their judgment is preferable to that of the agency.” Wayne Cnty., 756
S.W.2d at 279. This Court cannot displace the agency‟s judgment as to the weight of the
evidence even where there is evidence that could support a different result. Id.
                                          -4-
                                        ANALYSIS

                       I.     2010 and 2011 exception review notices

        Volunteer‟s first two arguments address the issue of notice under Tenn. Code Ann.
§ 67-5-1327. We have determined, after a careful review of the record, that the ALJ
failed to make sufficient findings on the issue of notice.

       Tennessee Code Annotated section 67-5-1327 provides for a two-level process of
exceptions to assessments for utilities and carriers such as Volunteer:

      (a) On or before the first Monday in August, assessments shall be
      completed and the comptroller of the treasury shall send a notice of
      assessment to each company assessable under this part.
      (b) Within ten (10) days from the first Monday in August, any owner, or
      user, the state or any county, municipality, or incorporated town may
      appear and file exceptions to such assessment, together with such evidence
      as the owner, user, state, county, municipality or incorporated town may
      desire to submit as to the value of the property assessed, and at the
      expiration of the ten (10) days, the comptroller of the treasury shall
      convene an informal hearing and examine such additional evidence and
      exceptions as may have been filed, and act thereon, either changing or
      affirming its valuation. All persons or entities authorized to file an
      exception under this section but failing to file an exception within the time
      permitted shall be deemed to have waived any objection to the assessments.
      (c) On or before the first Monday in September, the comptroller of the
      treasury shall file with the board of equalization the assessments made by
      the comptroller, together with such records as may be deemed necessary.
      The comptroller of the treasury shall send notice to any person or entity
      filing an exception to the action taken on the exception, and persons or
      entities affected by the comptroller of the treasury‟s action on the
      exceptions may file further exceptions with the state board of equalization,
      for review pursuant to § 67-5-1328. All persons or entities authorized to file
      an exception under this section but failing to do so on or before twenty (20)
      days from the first Monday in September shall be deemed to have waived
      any objection they may otherwise have raised with regard to the
      assessments.

(Emphasis added). Volunteer filed an exception to the initial notices of assessment in
2010 and 2011, but did not file an exception to the comptroller‟s action on that exception.
Thus, Volunteer was deemed to have waived further objection.

                                           -5-
      For tax year 2010, the record contains a Public Utility Ad Valorem Property Tax
Assessments letter dated August 2, 2010 addressed to Volunteer from OSAP with an
assessment amount of $741,000 (Exhibit 5); an exception letter dated August 9, 2010
from attorney Scott Hurley to OSAP (Exhibit 6); a letter dated August 17, 2010 from Mr.
Hurley to OSAP stating that he and his client would not be attending the hearing on
August 18 but would rely on their previously filed exceptions and documents3 (Exhibit
7); New Recommendation of the 2010 Ad Valorem Assessment, dated September 7,
2010, addressed to Mr. Hurley from the Comptroller, stating that Volunteer‟s exception
had been reviewed and that the assessment remained at $741,000 (Exhibit 8); and an
Order and Certification of Assessment dated September 7, 2010 (Exhibit 9).

       For tax year 2011, the record contains a Public Utility Ad Valorem Property Tax
Assessments letter dated July 29, 2011 addressed to Volunteer from OSAP with an
assessment of $706,000 (Exhibit 10); an exception letter dated August 9, 2011 from Mr.
Hurley to OSAP (Exhibit 11); a letter dated August 17, 2011 from Mr. Hurley to OSAP,
which is substantially the same as the letter sent a year earlier (Exhibit 12); a letter from
the Comptroller to Mr. Hurley dated September 6, 2011, stating that the Comptroller had
reviewed Volunteer‟s exception and that the assessment remained at $706,000 (Exhibit
13); and an Order and Certification of Assessment dated September 6, 2011 (Exhibit 14).

       At the hearing on October 1, 2015 before the ALJ, Mr. Hurley, the attorney for
Volunteer, testified regarding his recollection of the 2010 and 2011 assessment review
process. As to the 2010 tax year, Mr. Hurley was asked whether OSAP informed him of
the outcome of the August 18, 2010 hearing. He testified that he recalled seeing a letter
“in the past saying that [there had been a final determination], and I can‟t remember for
which year, . . . and that the taxpayer‟s exceptions were being disregarded, and that the
value would stand, but I do not recall ever receiving an order indicating a final
determination on any of these years.” With regard to Exhibit 8, Mr. Hurley stated that he
did not remember when he first saw this letter, but he believed that, had he seen it in
September 2010, he would have taken appropriate action. He acknowledged, however,
that he did not know when he saw the letter. On cross-examination, Mr. Hurley testified:

        Exhibit 8 purports to be a new recommendation on the 2010 ad valorem
        assessment. That‟s what it says it is, and I believe that this document was
        in my file, and I believe that I did see it back at or about that time, but I did
        not perceive this to be an order, and to my knowledge never received an
        order.[4]
        3
          In this letter, Mr. Hurley also stated: “It is my understanding that either my client and/or I will
be notified of the decision resulting in [tomorrow‟s] Hearing, and that we can then have further
opportunity for appeal to the extent that the tax payer deems the same to be necessary.”
        4
          Exhibit 8 includes the following language: “All persons or entities authorized to file an
exception pursuant to Tenn. Code Ann. § 67-5-1327(c) but failing to do so by Monday, September 27,
                                                    -6-
On redirect, Mr. Hurley stated he was not sure when he saw Exhibit 8. At the end of Mr.
Hurley‟s testimony, the ALJ asked him to clarify his statements regarding when he had
seen Exhibit 8. Mr. Hurley testified that he had “no indication whatsoever that this
document arrived in my office from any source within a matter of time that would have
allowed us to act on it.” As to Exhibit 9, Mr. Hurley stated that he had “absolutely zero
recollection of this order or any other order and to the best of my knowledge sitting here
testifying today, I did not see this order until very recently as provided by counsel.”

        Mr. Hurley‟s testimony on the 2011 review process was similarly vague.
Volunteer filed exceptions with respect to the notice of assessment. Mr. Hurley
described all of the relevant documents in the record, Exhibits 10 through 14, and stated
that he had “no recollection of ever receiving, seeing or obtaining a copy of [Exhibit 14]
certainly during that time frame other than I have recently seen it as provided by your
office, counsel.” Mr. Hurley never made a clear statement as to whether he did or did not
receive Exhibit 13 in his direct testimony. Exhibit 13 states: “The appropriate filing fees
can be found on the attached letter.” When asked whether he received anything
regarding filing fees, Mr. Hurley stated that he did not recall receiving any such
attachment. When asked at the end of his testimony to clarify when he had seen Exhibit
13, Mr. Hurley stated that he could not say.

       In his December 2015 order, the ALJ found: “On September 7, 2010, the
Comptroller issued an exception review notice stating that the tax year 2010 assessment
would be upheld at $741,000. Ex. 8.” (Emphasis added). The ALJ similarly found: “On
September 6, 2011, the Comptroller issued an exception review notice stating that the tax
year 2011 assessment would be upheld at $706,000. Ex. 13.” (Emphasis added). In
dismissing Volunteer‟s complaint, the ALJ did not address the issue of whether
Volunteer received adequate notice because, according to the ALJ, “the Comptroller was
only required to issue the notices.” The ALJ went on to suggest that even “a failure to
issue the notices would be of questionable legal import in light of the strict deadlines
imposed on taxpayers by Tenn. Code Ann. §§ 67-5-1327 and 67-5-1329(a).”

       We decline to adopt the reasoning employed by the ALJ. This court “must
construe a statute so as to avoid a constitutional conflict if any reasonable construction
exists that satisfies the Constitution‟s requirements.” Freeman Indus., LLC v. Eastman
Chem. Co., 172 S.W.3d 512, 522 (Tenn. 2005) (citing Davis-Kidd Booksellers, Inc. v.
McWherter, 866 S.W.2d 520, 529 (Tenn. 1993)). Thus, we conclude that the Board must
determine whether Volunteer received notice sufficient to satisfy the requirements of due
process. This requires a credibility determination with regard to the testimony of Mr.


2010, shall be deemed to have waived any objection that may otherwise have been raised to this
assessment.” The letter is signed “BY ORDER OF THE COMPTROLLER OF THE TREASURY:
[Signature of the Assistant to the Comptroller for Assessments].”
                                            -7-
Hurley, a determination which the ALJ, as the finder of fact, is in the best position to
make. See Scales v. Civil Serv. Comm’n, No. M2009-00621-COA-R3-CV, 2010 WL
2160749, at *3 (Tenn. Ct. App. May 27, 2010). Therefore, we vacate the ALJ‟s dismissal
of Volunteer‟s claims regarding the 2010 and 2011 tax assessments and remand for a
determination of whether Volunteer received proper notice.

                                  II.      2008 back tax assessment

        Volunteer further asserts that the trial court‟s dismissal of its challenge to the tax
year 2008 back assessment/reassessment was arbitrary and capricious. We disagree.
        The pertinent facts are as follows: Volunteer failed to file ad valorem taxes for
2008. At the hearing, Mr. LeMasurier testified that he relied, in part, upon assurances
from Shannon Tucker at OSAP that “we don‟t think you will be taxed for 2008.”5 On
August 29, 2011, OSAP sent a tax year 2008 notice of back assessment in the amount of
$626,276. Volunteer failed to file an appeal to the Board within sixty days as required by
Tenn. Code Ann § 67-1-1005(b).6 In its September 2012 appeal to the Board concerning
its tax year 2012 assessment, Volunteer sought to challenge the 2008 back assessment.

        In denying Volunteer‟s challenge to the 2008 back assessment, the ALJ reasoned,
in part, as follows:

       Testimony on behalf of the taxpayer suggested that the tax year 2008 back
       assessment/reassessment notice was never received or was untimely
       received. Respectfully, such a factual position would strain credulity given
       that the face of the exhibit bears facsimile transmission information
       indicating the document was faxed by the taxpayer on September 19, 2011,
       well within the sixty day deadline for the taxpayer to appeal the back
       assessment/reassessment

              The administrative judge further finds that given the virtually
       identical natures of the tax year 2009 back assessment/reassessment notice
       (issued prior to the tax year 2008 back assessment/reassessment notice and
       for which the taxpayer did timely file an appeal), Ex. 3, and the tax year
       2008 back assessment/reassessment notice, Ex. 1, any formal inadequacies
       in the notice were of no consequence and did not result in a “denial of


       5
          The Board raised a hearsay objection to this testimony on the ground that Mr. Tucker was
employed by a party and had not been subpoenaed. The ALJ took the objection under advisement until
the conclusion of the hearing, but never revisited the issue.
       6
          When asked whether he filed an appeal of the back assessment, Mr. Hurley testified: “Counsel,
to the best of my knowledge, I did not.”

                                                 -8-
      minimum constitutional guarantees.”7

        On appeal, Volunteer argues that Mr. LeMasurier acknowledged receiving the
letter from OSAP identified as Exhibit 1 from Knox County, but not from OSAP. The
testimony to which Volunteer cites in the record concerns tax year 2009. With respect to
tax year 2008, Mr. LeMasurier testified as follows:

      Q. All right. Do you recognize Exhibit 1?
      A. Yes.
      Q. Okay. What is it?
      A. It‟s a letter once again from Barry Murphy to the Trustee of Knox
      County, Honorable John Duncan.
      Q. All right.
      A. And it shows that they are now taxing me or assessing me for the tax
      year 2008. It is dated August the 29th, 2011. I did not receive this letter. I
      was given a copy by the Trustee‟s Office.
      Q. When were you given a copy of this letter?
      A. I don‟t – I don‟t recall. It was obviously after August 29th.
      Q. Do you recall who gave you the copy from the Trustee‟s Office?
      A. No, sir, I really don‟t. I probably went – I just don‟t remember.

      We agree with the ALJ that the following facsimile transmission data appearing on
the top of Exhibit 1 is significant: “SEP-19-2011 09:55A FROM: VOLUNTEER
PRINCESS C [followed by a telephone number and a „TO‟ number].” Tennessee Code
Annotated section 67-1-1005, which governs the procedure for back assessments,
provides, in pertinent part:

      (b) A back assessment or reassessment may be initiated by certification of
      the assessor of property to the appropriate collecting officials identifying
      the property and stating the basis of the back assessment or reassessment
      and the tax years and amount of any additional assessment for which the
      owner or taxpayer is responsible. The assessor shall send a copy of the
      certification to the owner or taxpayer. The collecting official shall then
      send a notice of taxes due based on the back assessment and reassessment.
      Any person aggrieved by a back assessment or reassessment may appeal
      directly to the state board of equalization within sixty (60) days from the
      date that a copy of the certification is sent to the taxpayer, in the manner
      provided in § 67-5-1412, and such person may be assisted or represented in
      the appeal as provided in § 67-5-1514. Accrual of delinquency penalty and
      interest otherwise applicable is suspended while the appeal is pending; but,
      during such period, simple interest shall accrue in the amount provided in §

      7
          Tenn. Code Ann. § 67-5-509(b).
                                           -9-
      67-5-1512.

(Emphasis added). Based upon the fax information at the top of Exhibit 1, we can infer
that Volunteer received timely notice of the back assessment from the Knox County
trustee and could have appealed within the sixty-day period.

       Volunteer further argues that the ALJ‟s dismissal of its appeal of the 2008 back
assessment was arbitrary and capricious because the back assessment was brought “well
beyond and outside the statute of limitations set forth in Tenn. Code Ann. § 67-1-1005.”
Volunteer did not file a reporting schedule for tax year 2008. Tennessee Code Annotated
section 67-1-1005 governs the back assessment process and time deadlines:

      (a) A back assessment or reassessment must be initiated on or before
      September 1 of the year following the tax year for which the original
      assessment was made, unless the omission or underassessment resulted
      from failure of the taxpayer to file the reporting schedule required by law,
      from actual fraud or fraudulent misrepresentation of the property owner or
      the property owner‟s agent, or from collusion between the property owner
      or the property owner‟s agent and the assessor. In the latter cases, a back
      assessment or reassessment must be initiated on or before three (3) years
      from September 1 of the tax year for which the original assessment was
      made. Additional taxes due as the result of a back assessment or
      reassessment shall not be deemed delinquent until sixty (60) days after the
      date notice of taxes arising from the back assessment or reassessment is
      sent to the taxpayer, unless the back assessment or reassessment resulted
      from failure of the taxpayer to file the reporting schedule required by law,
      from actual fraud or fraudulent misrepresentation of the property owner or
      the property owner‟s agent, or from collusion between the property owner
      or the property owner‟s agent and the assessor. In the latter cases, such
      taxes shall become delinquent as of the date of delinquency of the original
      assessment.

As mentioned earlier, property owners such as Volunteer are required by Tenn. Code
Ann. § 67-5-1303 to file an annual reporting schedule. Because Volunteer failed to file a
reporting schedule for tax year 2008, the Board‟s back assessment had to be “initiated on
or before three (3) years from September 1 of the tax year for which the original
assessment was made.” Tenn. Code Ann. § 67-1-1005(a). The Board initiated its back
assessment by sending Exhibit 1 on August 29, 2011, which is within three years of
September 1, 2008. Thus, Volunteer‟s statute of limitations argument is without merit.

        We likewise find no merit in Volunteer‟s other arguments. Mr. LeMasurier
testified that, when he consulted OSAP officials concerning his 2009 taxes, based upon
what he told them, they did not think he would owe taxes for 2008:
                                          - 10 -
      At that same meeting [with OSAP officials concerning 2009 taxes]
      incidentally I brought up the fact of this is for 2009, what about 2008, and
      his [Shannon Tucker‟s] response was because of what you have been told
      and what you have done, we don‟t think that you will be taxed for 2008.

Volunteer has presented no authority whereby a conditional statement made by an official
based upon partial information justifies reliance and nonpayment of taxes. The ALJ
heard this testimony and, implicitly, rejected it. Moreover, Volunteer‟s assertion that it
failed to file taxes in 2008 because of representations by OSAP and Knox County
officials could have been raised in an appeal of the 2008 back tax assessment.

      The ALJ‟s decision to dismiss Volunteer‟s appeal of the 2008 tax year back
assessment is not arbitrary and capricious and is supported by material evidence.

                                      CONCLUSION

        For the foregoing reasons, the decision of the Board of Equalization is vacated in
part, affirmed in part, and remanded for further proceeding consistent with this opinion.
Costs of the appeal are assessed equally against the appellant and the appellee.




                                                        ___________________________
                                                          ANDY D. BENNETT, JUDGE




                                          - 11 -
