William Alexander Richards, Jr. (petitioner) was convicted
by a jury of trafficking marijuana by manufacture, possession and
transportation. Based on petitioner's possession of 64,864 grams
of marijuana, the Department of Revenue gave petitioner notice that
he owed unauthorized substance excise tax and penalty in the amount
of $317,833.60, plus interest. Petitioner objected to the assessment and requested a hearing
before the Secretary of Revenue. A hearing was conducted by the
Assistant Secretary of Revenue who issued a final decision
upholding the assessment. Petitioner filed a petition seeking
administrative review of the final decision of the Assistant
Secretary of Revenue. The Tax Review Board held a hearing and
issued a decision affirming the final decision of the Assistant
Secretary. Then, petitioner filed for judicial review and an
alternative complaint for declaratory judgment in the Superior
Court of Buncombe County. The North Carolina Tax Review Board and
E. Norris Tolson, Secretary of Revenue for the North Carolina
Department of Revenue (respondents) filed a motion to dismiss on
the ground, inter alia, that the superior court lacked subject
matter jurisdiction. The trial court granted respondents' motion
to dismiss for lack of subject matter jurisdiction. Petitioner
Petitioner contends the trial court erred in granting
respondents' motion to dismiss. We disagree.
Our General Assembly has prescribed two avenues by which a
taxpayer may appeal from an administrative assessment of taxes:
N.C. Gen. Stat. § 105-267 (2005) and N.C. Gen. Stat. § 105-241.1 to
-241.4 (2005). See Javurek v. Tax Review Bd.
, 165 N.C. App. 834,
836, 605 S.E.2d 1, 2 (2004), appeal dismissed
, 359 N.C. 411, 612
S.E.2d 321 (2005). Pursuant to N.C. Gen. Stat. § 105-267, a
taxpayer may sue the Secretary of Revenue for a refund of acontested tax, but such a suit may be filed only after the taxpayer
has first paid the tax in full. Id.
Pursuant to N.C. Gen. Stat.
§ 105-241.1 to -241.2 (2005), a taxpayer may contest an assessment
before the Secretary of Revenue and an administrative review before
the Tax Review Board. Id
. Neither the hearing before the
Secretary of Revenue, nor the administrative review before the Tax
Review Board requires the taxpayer to pay the assessment in
advance. N.C. Gen. Stat. §§ 105-241.1(d) and -241.2(a). However,
a taxpayer aggrieved by the decision of the Tax Review Board must
pay, among other things, the tax in order to appeal the decision to
the superior court. N.C. Gen. Stat. § 105-241.3 (2005).
Here, petitioner opted to utilize N.C. Gen. Stat. §§ 105-241.1
to -241.4 to contest the tax assessment at issue. Petitioner
argues that, while North Carolina's pre-payment jurisdiction
requirements are arguably constitutionally permissible as to those
taxpayer individuals who have the ability to pre-pay the taxes at
issue, . . . [the pre-payment] requirements are clearly not
constitutionally permissible as to those taxpayer individuals who
do not have the ability to pre-pay the taxes at issue. Petitioner
contends the pre-payment requirements . . . should be struck down
[as violative of federal and state due process requirements] in
those cases whe[re] the taxpayer does not have the ability to pay
the taxes at issue.
Our Court has a duty to examine a statute and determine its
constitutionality when the issue is properly presented, rather than
to assume the role of policy maker, which has been entrusted by ourConstitution to the legislature. State v. Whiteley
, 172 N.C. App.
772, 778, 616 S.E.2d 576, 580 (2005). In reviewing the
constitutionality of statutes, '[w]e presume that the statutes are
constitutional, and resolve all doubts in favor of their
This powerful presumption of constitutionality is sufficient,
in our opinion, to withstand the accusation that this statute is
unconstitutional as to taxpayers who cannot afford to pay their
taxes. In a similar case, the issue presented by the plaintiff was
whether G.S. 105-267, when applied to the controlled substance tax
procedure, . . . [was] constitutional. Salas v. McGee
, 125 N.C.
App. 255, 257, 480 S.E.2d 714, 716, disc. review denied
, 345 N.C.
755, 485 S.E.2d 298 (1997). As already stated, N.C. Gen. Stat. §
105-267 requires the taxpayer to pay the tax prior to demanding a
refund in superior court. In Salas
, the plaintiffs did not pay,
and stated they could not pay, the assessed tax and therefore they
were unable to avail themselves of the procedures mandated in G.S.
at 258, 480 S.E.2d at 716. We noted that '[w]e are
convinced this procedure comports with due process under the United
States Supreme Court's jurisprudence on the subject as it relates
to taxation. That Court has long held that postdeprivation
remedies in the area of taxation can comport with due process.'
In addition, although not precedent, an unpublished opinion by
our Court addressed the issue asserted by petitioner. See Skwerer
v. N.C. Dep't of Revenue
, No. COA04-674, 2005 WL 589835 (N.C. Ct.App. March 15, 2005). In the opinion, a plaintiff contended that
section 105-241.3 is unconstitutional because it requires a
taxpayer to pay the disputed tax prior to having judicial review
over the taxpayer's obligation to pay the tax. Id.
at *1. The
plaintiff argued that since he cannot pay the tax assessed against
him, . . . section 105-241.3 unconstitutionally restricts his
access to the courts and deprives him of due process. Id.
However, citing several cases including Salas
, we stated that
payment of a tax prior to a court having subject matter
jurisdiction to hear the matter has been determined to be
In addition, we saw no reason not to apply
the jurisprudence of section 105-267, holding that prepayment of
the tax is constitutional, to that of N.C. Gen. Stat. § 105-241.3,
which also requires prepayment. Id.
Accordingly, we disagree with petitioner. We hold that the
prepayment requirement of N.C. Gen. Stat. § 105-241.3 is
Judges BRYANT and STROUD concur.
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