CYNTHIA A. NORTON, Bankruptcy Judge.
Chapter 13 Debtor Miesha C. Caldwell filed a "Motion for Personal Property Tax Waiver." In sum, the Debtor is asking the Court to either require Clay County, Missouri, to issue a waiver of the payment of personal property taxes that came due on her vehicle December 31, 2015, or, alternatively, to require the Missouri Department of Revenue to issue the Debtor's license plate registration tags without either a paid receipt or a waiver of the property tax from the County.
This Court held a hearing on September 22, 2016, at which counsel appeared for the Debtor. In addition, Clay County and the Missouri Department of Revenue each filed limited objections and appeared at the hearing through separate counsel. For the reasons that follow, the Missouri Department of Revenue will be ordered to renew the Debtor's vehicle license plate registration without the presentation of a receipt or waiver.
In order to renew vehicle license plates in the State of Missouri, a vehicle owner must, inter alia, provide the Missouri Department of Revenue with either: (a) a receipt showing that the personal property taxes have been paid for the previous year (if requesting a one-year registration) or two prior years (if requesting a two-year registration); or (b) a statement showing that no property tax was owed.
The Debtor filed this Chapter 13 bankruptcy case on September 1, 2016. Her schedules show that she owned at least two vehicles on January 1, 2015, and, therefore, the personal property taxes on those vehicles became due on December 31, 2015.
As Clay County's counsel stated at the hearing, there is no statutory provision or other authority for a "waiver" of a personal property tax in the sense that a debtor does not have to pay it. Rather, counties are only obligated under statute to provide a "Statement of No Tax Due" if the person did not actually own personal property, such as a vehicle, on January 1 of the year in which the tax came due. Nevertheless, it would appear that many counties in Missouri, including Clay County, have been routinely issuing some sort of "waivers" to vehicle owners upon receiving proof that the owner is in a Chapter 13 bankruptcy case. The debtors then take that "waiver" to the Missouri Department of Revenue, who issues the license registration despite the fact that the debtor has not paid the prepetition tax in full, nor obtained a true "Statement of No Tax Due."
Although this process is not authorized by statute, it has apparently worked smoothly over the years (without court involvement) and has allowed Chapter 13 debtors to register their vehicles so long as they are paying their prepetiton taxes through the plan, and are current on their postpetition taxes. However, counsel for Clay County stated at the hearing that this practice has become burdensome for its county collector, in part because debtors have begun, rather routinely, asking for "waivers" for postpetition taxes, which, in contrast to prepetition taxes, must be paid when they come due, not through a Chapter 13 plan.
As a practical matter, because of this confusion, Clay County's attorney stated that debtors are bringing in proof that they are in a bankruptcy case, and are now routinely being given waivers without an examination as to whether the tax is one that is being paid through the Chapter 13 plan, or not. In addition, the County is not, according to counsel, in a position to determine whether a vehicle owner who presents proof of having filed a Chapter 13 case is still in the Chapter 13 case, or whether such person's case has been dismissed. The County does not have staff with the legal expertise, or the time, to determine whether the waiver being requested pertains to a tax being paid through a plan. Counsel for Clay County stated at the hearing that Platte County, Missouri is experiencing the same problem. Therefore, those counties have stopped issuing the waivers, which are not authorized by statute in any event.
Likewise, the Missouri Department of Revenue, which is responsible for actually issuing the vehicle registration tags, has similar concerns. Although it has apparently been accommodating Clay and Platte County debtors by registering vehicles owned by people who demonstrate they are in a Chapter 13 case, but without producing waivers, the statute does not authorize this, and, like the county collectors, the State does not have the staff to research the status of bankruptcy cases for every debtor who comes in with a bankruptcy petition. Clay County and the State both said at hearing that they support the concept of Chapter 13 debtors having current and legal license registrations while paying prepetition debts through the plan, but both say that they are without the resources to make a case-by-case analysis of whether every person wanting a waiver is entitled to one.
All that said, the State's attorney represented to the Court at the hearing that it would issue Debtor Miesha Caldwell's license registration if it had an Order from this Court in place of the "waiver" from the County. I agree that such an Order is appropriate.
However, while that solves the issue in this case, the systemic problem remains. At the hearing, the Court heard different suggestions from counsel as to how to allow debtors who are paying prepetition taxes through their plan to continue to license their vehicles, yet prevent those who have not paid postpetition taxes from getting a bye while they remain in Chapter 13. A further concern is that, while I am convinced that the issue as it now stands has become overly burdensome for the State and Clay and Platte Counties, this Court is not aware of the scope of this problem district-wide, and any attendant strain on this Court's administration which would be caused if the Court had to deal with this issue in every Chapter 13 case with unpaid personal property taxes. Counsel for Clay County suggested that it would be helpful for each debtor to list the county collector for that debtor's county on the mailing matrix in the case, so the county would be aware of each case, when it was filed, and whether it was subsequently dismissed. But Clay County's attorney does not speak for all counties in the state, some of which may not want to be burdened with notices in every case involving a debtor living in that county.
The Debtor cited no basis in her Motion for the relief she requests, and what she is asking this Court to do is in contravention of the state statute regarding the licensing of vehicles in Missouri. At the hearing, I inquired of the Debtor's attorney as to the legal basis for granting the requested relief. I also inquired as to which entity — the County or the State — should be ordered to take what action. One possible argument is that the refusal to issue a waiver (or license registration) to a Chapter 13 debtor violates § 362's automatic stay, since it is arguably action taken by a governmental entity in its proprietary capacity, the purpose of which is to force a debtor to pay a prepetition debt. However, the Debtor here did not demonstrate that debt collection is the purpose of the statute. In addition, if there is a violation of the stay here, it is not clear which agency is violating it (and thus, which agency should be ordered to do something different) since it is the County who collects the tax, but the State which has the enforcement mechanism, namely, declining to renew a vehicle registration necessary to legally drive a vehicle in Missouri. And, counsel for the County pointed out at the hearing that the county collector is actually only a conduit for the most part, inasmuch as most of the money it collects goes to school districts, water districts, and so forth. Finally, if this were a violation of the stay in a Chapter 13 case, it would also be a violation in Chapter 7 cases as well, regardless of whether the debtor intends to pay the nondischargeable taxes. In sum, this situation does not fit neatly within the automatic stay, and the Debtor in this particular case did not establish that either the County or the State has violated it here.
Likewise, § 525, which prohibits a governmental entity from discriminating against someone who files a case and is discharging the entity's debt,
Rather, the most likely basis for granting relief here appears to be § 105, on the ground that issuance of the license is necessary or appropriate to carry out the provisions of Title 11.
ACCORDINGLY, the Missouri Department of Revenue is ORDERED to issue the license registration to Debtor Miesha C. Caldwell, since having a car which can be legally driven is necessary to the success of her Chapter 13 case. Therefore, her Motion for Personal Property Tax Waiver is GRANTED as to the Missouri Department of Revenue, which shall issue the license tags to the Debtor immediately.
IT IS SO ORDERED.
