|
Updated March 2010
Fee Simple, If Unnumbered - The Saga Continues
The ongoing litigation interpreting the charging section of the Ontario Assessment Act as it defines “current value” (market value) continues.
At issue is the meaning of “fee simple, if unencumbered” as the basis of establishing that value. It has been alleged by the assessment authority that it is a valuation concept incorporated into the legislation. As taxpayers, we are alleging it as a legal interest defined. At issue is whether in valuing significant commercial office buildings it is appropriate to value those buildings as vacant given that the direction to establish value utilizing a fee simple interest, if unencumbered contemplates vacant possession on closing. The taxpayers were successful at the first level (Assessment Review Board). The decision of the Assessment Review Board, however, was overturned by the Divisional Court (first level of appeal). Leave to appeal has been granted, however, to the Ontario Court of Appeal (the equivalent of a State Supreme Court) and the issue will ultimately be determined by that court. Needless to say, millions of dollars are at stake as the decision if favourable to the taxpayers seriously disrupts the valuation principles utilized by the assessment authority for the valuation of significant commercial and industrial property throughout the Province. It is anticipated that the appeal will be heard at the Court of Appeal in June 2010.
Richard N. Poole
Walker Poole Nixon LLP
American Property Tax Counsel (APTC) - Canada
<---Back to Top
Updated March 2010
New Sections of Assessors’ Handbook to Address Proposition 13 Issues
California’s Proposition 13 continues to play a significant role in the administration of the state’s property tax system. Proposition 13 requires real property to be re-valued whenever a property changes ownership or is newly constructed. In order to assist assessors and taxpayers, the California State Board of Equalization is continuing its work on two Sections of the Assessors’ Handbook which relate to these aspects of Proposition 13. A draft of Section 401, titled “Change in Ownership,” was issued in late 2009, and an interested parties’ meeting to discuss portions of the draft is anticipated during the first part of this year. In addition, Section 410 of the Assessors’ Handbook, titled “Assessment of Newly Constructed Property,” continues to be considered by the State Board of Equalization’s Staff. Both of these publications will help to explain the many issues that assessors and taxpayers face in applying Proposition 13’s requirements to property transfers and new construction.
Cris K. O’Neall
Cahill, Davis & O'Neall, LLP
American Property Tax Counsel (APTC)
<---Back to Top
Updated December 2009
Will Tiger’s Tale Lower Property Taxes
Recently a friend of mine mentioned that he never liked Tiger Woods. Since Tiger’s popularity, my friend found it more difficult to schedule tee times at his golf club. We have all heard how Tiger Wood’s success in golf has spurred on a new generation of golfers.
Private golf courses are taxed, among other ways, based upon income generated. As golf’s popularity increased, so did golf course revenue and golf course value (to the extent that the value was separated from the value of the homes surrounding the golf course). Now that Tiger Wood’s reputation has suffered, many are speculating that many of his endorsements will be withdrawn. Some are also speculating that the popularity of golf will wane was well. Consequently, revenue to golf courses may decline which should translate to a decrease in value of golf courses. Lower value should equal lower taxes.
Kenneth S. Kramer
Berenbaum Weinshienk PC
American Property Tax Counsel (APTC)
<---Back to Top
Updated June 2009
Property Valuation Topics:
Unusual Event: Three Appraisers Agree
The taking of a former Volkswagen auto dealership and repair facility consisting of approximately 2.5 acres with a gross building area of slightly more than 19,000 square feet generated a confluence of appraisal opinion perhaps not seen since the last solar eclipse.
An opinion not otherwise notable for establishing new law (it was not necessary) or in parsing a difficult fact pattern addressed the property owner's appeal of the Connecticut Commissioner of Transportation's award of $2,129,000. Happily for the appellant, the Commissioner's appraisal was "updated" to $2,786,000.
The second appraiser who testified at trial for the State of Connecticut valued the property at the time of taking at $2,750,000. The property owner's appraiser put forth a market value of $2,785,000. All appraisers used methodologies other than the sales approach.
As Judge Trial Referee Samuel Freed observed, "In most cases of this sort, the court is charged with taking into account the divergent opinions expressed by the witnesses of the claims advanced by the parties. . . . What is quite noteworthy in this case is the lack of diversity in the opinions advanced by the experts presented by the parties." Essentially, the court observed, the appraisers' conclusion was "unanimous".
State of Connecticut v. Auto Corner, LLC , Docket No. CV‑0740‑32622, March 31, 2006.
Elliott B. Pollack
Pullman & Comley, LLC
American Property Tax Counsel (APTC)
<---Back to Top
For Jurisdiction's news please contact Member Firm
Wilkes Artis, Chtd.
American Property Tax Counsel (APTC)
<---Back to Top
The Florida Department of Revenue recently approved the adoption of new rules governing the state’s Value Adjustment Boards and the process of contesting property tax assessments. The DOR has been working on these rules for a number of years and has sought public input through numerous workshops.
The revised rules aim to create uniformity in the VAB process throughout the state. The rules are anticipated to become effective on
March 30, 2010 and the DOR will issue a “uniform policies and procedures manual” prior to such date.
The rules cover many aspects of the appeals process including uniform training for magistrates, rules governing counsel to the VAB, procedures for telephonic hearings, procedures for remand of cases to the property appraiser, guidance on late filing of petitions, the right to reschedule hearings for good cause and the petitioner’s right to be heard on a scheduled petition within a reasonable amount of time.
Julie M. Schwartz, Esq.
Berman Rennert Vogel & Mandler, P.A.
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
Property Taxes Leap Into The Headlines
As we warned, 2009 was a critical year for Georgia taxpayers to be proactive in filing returns of fair value. Relatively few taxpayers did, despite pleas and plummeting property values, resulting in the predicted gnashing of teeth by taxpayers who received no property tax assessment reductions but higher tax bills from increased millage rates; they have no remedy.
One result is an unprecedented series of articles in the Atlanta Journal Constitution (ajc.com) running for eight consecutive days entitled “Why you’re paying too much in property taxes.” The Sunday article alone dominated the front page and four full interior pages. While the articles stress residential inequities between stated and actual property values, the same applies even more so to commercial and industrial valuations. Atlanta was especially impacted because of county-wide reassessments carried out in 2007 which impacted 2008 values before the plunge. Subsequent articles targeted each of the major Atlanta metropolitan counties and the responses and defenses of the county property tax officials regarding actions they took.
While it is too late to address 2009 inequities where no return was filed, once again we urge taxpayers to file returns proactively asserting the proper values prior to March 1 or April 1, 2010, depending on the county. It is critical to retain professional help to make sure the returns are properly filed and that appropriate analysis is done to ascertain and to assert a proper and defensible value; relying upon counties to reduce assessed values in 2009 was fruitless, and relying upon them to do so in 2010 is nothing less than reckless. Values may well remain locked into 2008 prices (much less 2009) with rocketing millage rate increases (Gwinnett County, for example, increased its millage rate by 21%.) In Georgia property tax returns cannot be ignored, and appropriate action must be taken no later than April 1 (and in some counties, by March 1.)
Owners and advisors waiting for new notices may be sadly disappointed because many counties may again not sent out new notices, hoping to keep existing values. If the value is the same, there is nothing to appeal, and the debacle of 2009 will be repeated in 2010, only worse. If you want the proper value on your property in Georgia, you must timely assert it and defend it.
Lisa F. Stuckey
William J. Seigler III
Herbert H. Gray, III
Ragsdale, Beals, Seigler, Patterson & Gray, LLP
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
Idaho Woos Tax Weary Neighbors
Idaho Governor Butch Otter has just published a self-styled “love letter” to Oregon and Washington businesses inviting them to consider the tax advantages of relocating to the Gem State. Governor Otter reports that he and his Department of Commerce started receiving calls after the November election in which Oregon voters approved higher income taxes on both businesses and wealthy individuals. Washington legislators, Governor Otter points out, are considering even larger tax increases to deal with a deficit that exceeds the amount of the entire state budget in Idaho. Governor Otter touts a superior business climate, including “Project 60” that aims to grow Idaho’s gross domestic product from $51 billion to $60 billion. While Oregon Governor Ted Kulongoski appears to be holding his fire for now, Washington Governor Christine Gregoire struck back swiftly with statistics and rankings intended to show that the Evergreen State is the better place to do business.
Norm Bruns
Garvey Schubert Barer
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
An Opportunity for Cook County Taxpayers
Cook County employs a Classification System for the Assessment of properties for real estate tax purposes. Through 2008, the classification scheme required commercial properties to be assessed at 38% of their Fair Cash Value, industrial properties at 36%. Our Supreme Court has determined that Fair Cash Value is equivalent to Market Value.
The Illinois Constitution gives each county the option to adopt an Assessment Classification System but states clearly that the highest assessment Ratio can be no greater than 2 ½ times the lowest ratio. Cook County is the only County to take advantage of that option.
In 2008, the Cook County Assessor proposed a revision of the Local Ordinance authorizing Classification in Cook County. Residential properties would be assessed at 10% and commercial and industrial properties would in turn be assessed at 25% to comply with the Illinois Constitution. That proposal was approved by the Cook County Board and became effective beginning January 1, 2009.
The 2009 Assessments have now been published for all of Cook County. For the most part, the 2009 Assessments have remained very close to the 2008 Assessments. That one fact gives rise to important considerations for Cook County Taxpayers. There is an essential relationship between a property’s market value and its assessment. Both the Illinois Constitution and the Illinois Property Tax Act tie Assessment Value and Market Value together. They are the foundation upon which our Real Estate Tax system is built. The 2009 Assessments as published do not appear to be tied to value.
A simple example will illustrate the point. An office building had an assessed value of $1,000,000 in 2008. The 2009 Assessed Value has also been set at $1,000,000. The big difference is that in 2008 the property was assessed at 38% of market value and in 2009 it was assessed at 25% of market value. That means that the 2008 Assessment was based on a market value of $2,631,550 but the 2009 Assessment was based on a Market Value of $4,000,000.
An Assessment cannot be created from a prior assessment, it must be based on a property’s value. Without the relationship of Assessment to Value, the Tax System has no objective standards. There are remedies available to Cook County Taxpayers. Contact us if you are interested.
James P. Regan
Fisk Kart Katz and Regan, Ltd.
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
Appeal Deadlines from Spring 2010 Tax Bills
Unlike in the past, Notices of New Assessments will not be mailed in most Counties throughout Indiana this year. Although some taxpayers may receive Notices alerting them to changes in the assessed value for their property, it is more likely that any assessment changes will appear on the taxpayer's 2010 tax bill issued this Spring. Once the tax bill is issued, showing a change in an assessed value, the taxpayer will have 45 days from the date the tax bill is issued to file an appeal contesting the new assessment. It is imperative that taxpayers closely monitor the Spring tax bills, and be aware of appeal deadlines from those bills.
Stephen H. Paul
Vickie L. Norman
Baker & Daniels LLP
American Property Tax Counsel (APTC)
<---Back to Top
Please contact Douglas R. Oelschlaeger or visit our Archives
Douglas R. Oelschlaeger
Shuttleworth & Ingersoll, PLC
American Property Tax Counsel
<---Back to Top
Updated March 2010
2010 Valuations Are Out - Time to File an Appeal ?
The 2010 appeal season is upon us. Most, if not all, of the new 2010 real property values are mailed in the month of March to property owners across Kansas. If you did not receive a 2010 valuation notice, you can contact the county appraiser’s office ( http://www.kansas.gov/kcaa/appraisers/main.htm ). Some counties have valuation information on-line. To see if the county has on-line information, check here. http://www.kansas.gov/kcaa/links.htm .
Taxpayers desiring to appeal their 2010 valuation have 30 days from the date the valuation notice was mailed. The directions to appeal are required by state law to be included on the valuation notice. The first level of appeal is with the county. If you are not satisfied with the results of that informal hearing, the next level of appeal is to the Kansas Court of Tax Appeals (“COTA). Additional information on how to protest can be found on the COTA website. http://www.kansas.gov/cota/
MISS THE APPEAL DATE? No problem. Kansas generously permits a taxpayer to avail themselves of one (and only one) of three opportunities to pursue property valuation reductions. A taxpayer can (1) file an appeal within 30 days of the date the valuation notice is mailed, or (2) pay the first half taxes under protest on or before December 20 th; or (3) pay the second half tax under protest on or before May 10 th of the year after the valuation year. If the ownership of the property changes during the calendar year, the new owner can also pursue a tax appeal even if the prior owner had.
Linda Terrill
Neill, Terrill & Embree, L.C.
American Property Tax Counsel
<---Back to Top
Updated March 2010
Kentucky Assessment Notices to Be Mailed Soon
Most Kentucky counties will be mailing out their 2010 assessment notices in April. Kentucky law requires that a taxpayer be notified in writing of any increase in its real property tax assessment. Taxpayers wishing to challenge their tax assessments must do so during the statutory appeal period, generally the first two weeks of May. Taxpayers whose assessments do not increase may still challenge their assessments; however, they must also do so within the appeal period, and they generally will not receive written notice of the dates for appeal.
Appeal dates may differ from county to county, so taxpayers must check with the local assessing authority for the correct appeal dates.
Given the continued economic downtown, there may be a significant opportunity for a reduction in a property tax assessment – but only if the taxpayer acts within the appeal dates. Failure to request an assessment conference with the county property valuation administrator during this period will generally preclude the taxpayer from any further challenge to the assessment or the tax bill for that year.
Bruce F. Clark
Michele M. Whittington
Stites & Harbison PLLC
American Property Tax Counsel
<---Back to Top
Updated March 2010
Major Developments in Louisiana
- At the time of publication, the Louisiana Supreme Court had not yet rendered its decision in the interstate natural gas pipeline commerce clause case captioned Transcontinental Gas Pipeline Corporation, et al vs. Louisiana Tax Commission, et al, 2009-0628 (La. App. 1 st Cir. 8/10/09), --- So.3d ----, 2009 WL 2461597† .
- Based upon the holding of the Louisiana Court of Appeal, First Circuit in the Transcontinental Gas Pipeline Corporation case, Louisiana Assessors have requested local filing information from pipelines that have historically been centrally assessed by the Louisiana Tax Commission. Taxpayers have filed pleadings with the Louisiana Tax Commission requesting that the Tax Commission take action to protect both the Taxpayers and the Assessors from deadlines and other legal requirements should the Louisiana Supreme Court render a decision requiring pipelines to be locally assessed. The Tax Commission is expected to conduct a public hearing on the issue on March 23, 2010.
- The Louisiana Tax Commission is taking the position that taxpayers who contest real estate values during the middle of the reappraisal cycle must rely on evidence of value as of the last reappraisal date. Under the current economic conditions this position will cause real estate to be overassessed. Louisiana Assessors are required to revalue real estate at least every four years. La. R.S. 47:1952 states that value shall be based upon the status and condition of property as of January 1 of each year. We believe that the four year mandatory cycle is designed to keep Assessors from letting assessed values get stale, but that taxpayers have the right to contest value each year based upon the January 1 value of the property.
† Transcontinental Gas Pipeline Corporation was dismissed from the litigation prior to hearing
Christopher J. Dicharry
Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, L.L.P.
American Property Tax Counsel (APTC)
<---Back to Top
Updated June 2009
Maine Tax Bills Are Being Committed
In Maine many jurisdictions are in the process of committing their 2009 tax bills. These tax bills have an assessing date of April 1, 2009. The tax bills are usually sent out to the taxpayers within a few weeks of the commitment date. The taxpayer must file an abatement application with the local assessor within 185 days from the commitment date. The assessor has sixty days to either act on the abatement application, unless the applicant has consented in writing to further delay. If the assessor fails to act, the applicant is deemed to be denied. The applicant then has a right to further appeal to the municipal Board of Assessment Review if one has been establish by the municipality. If the municipality has not established a Board of Assessment Review, most commercial property appeals will be before the State Board of Property Tax Review.
David G. Saliba
Saliba & Saliba
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
Do Not Ignore The Assessors’ Requests For Information
In most cases communities in Massachusetts will not send out their actual fiscal year 2011 property tax bills until the end of 2010. The fiscal year 2011 has an assessing or valuation date of January 1, 2010. In most cases it is the condition of the property either physical and/or financial on January 1, 2010 and the twelve months proceeding January 1, 2010 that is most pertinent in valuing property. The assessors are now or have recently sent out requests for information inquiring as the income, expenses, and conditions of certain properties as of January 1, 2010 and Calendar Year 2009. These requests are purportedly to assist the assessors at arriving at a fair market value for the upcoming fiscal year 2011. The failure to answer these requests will probably bar the right of any fiscal year 2011 tax appeals. Please do not ignore these requests.
David G. Saliba
Saliba & Saliba
American Property Tax Counsel (APTC)
<---Back to Top
For Jurisdiction's news click here
Wilkes Artis, Chtd.
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
Clearing the Air Regarding Michigan Classification Appeals
The Michigan Department of Treasury recently announced it had filed almost 10,000 property tax classifications for the 2009 tax year. In light of the MBT credit for industrial personal property tax paid and the reduced property tax rates for industrial and commercial property, Treasury's action likely will increase taxes for many taxpayers. The mass appeals announcement has caused a flurry of "advisories" and newsletters from various consultants and interested parties. It has come to our attention that some of these communications have significant inaccuracies.
To set the record straight, the Tax Tribunal is supposed to send each property owner the Petition that Treasury filed along with notice that the property owner has 28 days, from the date of service, to respond. While this will still require taxpayers to act quickly, and there may be cases where taxpayers do not receive notice, the system should provide much more notice than some have suggested. Additionally, the ramifications of these appeals need to be evaluated on a case by case basis. These appeals will significantly increase taxes for some, but not all, taxpayers. As a result, taxpayers should be on the lookout for such Tax Tribunal notices and they should carefully review their 2010 assessment notices to make sure each property classification is correct. If property is not correctly classified, then a timely appeal must be made to the March Board of Review.
Honigman has been at the forefront of the battle on classification issues and currently is handling the lead case which soon will be appealed to the Michigan Supreme Court. If you have concerns about the classification appeals and want to know how they could impact your taxes, you can call one of our property tax professionals.
Another Favorable Decision on the Uncapping of Taxable Value
The Court of Appeals in Klooster v Charlevoix recently held that a transfer of property from parents to their son, through the creation and termination of a joint tenancy, was exempt from uncapping, even though a direct transfer of property from parents to their children would have triggered an uncapping of taxable value. Under Klooster and the earlier Court of Appeals’ decision in Moshier v White Water Twp, it may also be possible to transfer property to an unrelated third party buyer without uncapping. The manner in which a property transfer is structured is critical to the uncapping consequences. Honigman property tax professionals can provide guidance regarding Michigan transfer/uncapping issues.
Stewart L. Mandell
Honigman Miller Schwartz and Cohn, LLP
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
April 30 Filing Deadline for Minnesota Taxpayers
Minnesota law permits property taxpayers to file a petition challenging value, level of assessment, and other claims by April 30, 2010. The filing deadline is absolute, and if missed, costs the taxpayer a chance to challenge its tax assessment.
Public attention has focused on the subprime lending crisis, and the woes in the residential real estate market over the last two years. Only recently has the freefall in commercial values started to manifest in foreclosures, prominent vacancies, and media attention. The assessment community is tuning into the problems in the commercial sector, and significant reductions in value and taxes are now possible.
Filing opportunities should not be ignored in this environment.
Assessors and Tax Court officials are bracing for a near-record number of tax petition filings this year. Values that have been held flat, or even cut 5-10% are almost certainly high, with some property sectors estimated to have lost 30% or more of value from just two years ago. Taxpayers should ensure that the April 30 deadline does not pass without a review of their assessment.
Mark K. Maher
Smith, Gendler, Shiell, Sheff, Ford & Maher, P.A.
American Property Tax Counsel (APTC)
<---Back to Top
Updated December 2009
Appeal Deadline Confusion Reigns
In an effort to achieve consistency concerning filing deadline dates for appeals to the County Boards of Equalization, the Missouri legislature may have created more confusion than it abated. Recent legislation (Senate SB 711 (2008)) designates the 2 nd Monday in July the Board of Equalization appeal date for non-first class counties and St. Louis City but did not amend Section 137.385 RSMo controlling the date for appealing in first class counties. The deadline for appealing to the Board of Equalization in first class counties remains “before the 3 rd Monday in June.” The books aren’t delivered to the Clerk until July 1.
The prudent course is to appeal prior to the 3 rd Monday in June though the assessor’s values may not be known.
SB 711 attempts to allow political subdivisions until October 1 to set levies. There remains an unchanged provision in 67.110.1 RSMo setting levies by September 1.
This confusion can be viewed by accessing the Missouri State Tax Commission’s website which includes a real property assessment timeline
Jerome Wallach
The Wallach Law Firm
American Property Tax Counsel
<---Back to Top
Updated December 2009
Property Tax Bills for the 2010-11 Tax Year Are To Be Sent Soon
The Nevada property tax appeals season is very compressed. Taxpayers unaware of the deadlines can easily miss an opportunity to challenge their property’s valuation. Most Nevada counties will be mailing out their 2010-11 tax year notices of value between the middle and end of December 2009. Nevada law requires that the values be posted prior to January 1, 2010. A taxpayer dissatisfied with the county assessor’s valuation may file an appeal with the county board of equalization by January 15, 2010. Failure to file a timely appeal bars any further challenge to valuation of the property. State law requires that all county board of equalization hearings be completed by the last day of February. Taxpayers aggrieved by the county board of equalization’s decision may file an appeal to the State Board of Equalization no later than March 10, 2010.
Douglas S. John
Bancroft, Susa & Galloway
American Property Tax Counsel
<---Back to Top
Updated March 2010
The Finder of Fact is Powerful
In New Hampshire the taxpayer has the option of appealing a decision of the local assessors to the State Board of Tax and Land Appeals (BTLA) or to the Superior Court in the County where the subject property is located. In either case the BTLA and the Superior Courts are afforded a very wide latitude of discretion in determining market value. The BTLA or Superior Court may accept any one of the traditional approaches to value (comparable sales, income, cost) on any type of property. No one approach is favored over the other. In many cases where the subject property is an owner occupied commercial property the BTLA or Superior Court will not accept the comparable sales approach and/or income approach to value. They will often opt to utilize the cost approach to value. This can result in an unrealistically high market value that is extremely difficult to overturn.
David G. Saliba
Saliba & Saliba
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
April 1st - Crucial Date for All Taxpayers
All property owners in New Jersey should be aware of the fact that the deadline for filing tax appeals is April 1, 2010. Any appeal filed after that date will be dismissed no matter how meritorious the appeal may be. The only exception to this rule is for a revaluation. When a revaluation takes place the deadline to file a tax appeal is extended to May 1, 2010.
The other significant component that must be adhered to in order to perfect the filing of an appeal is that all property taxes must be paid in full at the time of the filing of the appeal. If a taxpayer files an appeal without paying in full the outstanding taxes, the appeal is subject to dismissal by the taxing authority.
John Garippa
Garippa, Lotz & Giannuario
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
Class and Type of Property Determine Assessment Methodology in NYC
New York City utilizes a sales based method to determine the fair Market value of 1, 2 & 3 family homes, and then assesses them using an equalization ratio of 6% of FMV. This assessment is further limited by a cap on increases of no more than 5% a year or 20% for any five-year period. Other residential properties, cooperatives and condominiums and rental apartments are valued using a gross income multiplier formula (from 2% to 5% of gross income) and the assessment is 45% of that figure. For residences with more than 3 or less than 10 units, increases are capped at no greater than 8% a year or no more than 30% in any five year period. Other residential properties have no caps but with increases phased in over a five-year period. Utility properties are assessed at 45% of fair market value using a cost approach. All other non residential properties, commercial, retail, office, industrial, hotel or theatre are assessed on a capitalization of net income and applying a 45% ratio. Increases are phased in on a five-year period.
Joel Marcus
Marcus & Pollack, LLP
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
Court of Appeals Restates Law on Situs of Personal Property for Property Taxation
In the Matter of Appeal of Amusements of Rochester Inc, COA 09-234, the NC Court of Appeals held that the situs of personal property of the Taxpayer was properly in NC. The carnival equipment in question, while subject to being transported around the mid eastern US for carnivals, was maintained and stored in Pender County, NC for 6 months each year. Taxpayer, a New York corporation, argued that situs was properly in New York. The court observed that the burden of proof was on taxpayer, and that although it was a NY corporation, it had established Pender County as its domicile in NC., where its principal place of business in NC was located. The property was in NC on January 1 of each year at its NC location, where maintenance personnel were located. The court placed considerable weight on the fact that the Taxpayer did not pay taxes on the equipment in any other state. The court held that the Taxpayer was a resident of NC under GS 105-304(c)(2) and that it had failed to establish tax situs elsewhere.
Charles B. Neely, Jr.,
Williams Mullen
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
Time Is Not the Only Measurement in Determining If a Sale Is Recent
Like many states, the sale price in a recent, arm’s length transaction is strong evidence of property value for real estate tax purposes.1 The Ohio Supreme Court recently held that in properly deciding whether a sale is recent, more than just the proximity in time must be considered.
In Worthington, the sale occurred eighth months from tax lien date. Although not adopted at the board of revision level, upon appeal the Board of Tax Appeals determined the value of the property to be the sale price. The Supreme Court vacated and remanded the case, holding that the BTA had not properly considered2 other factors relevant to recency, such as an immediate loss of tenants after purchase, the subsequent failure to sell, and lower values that were reflected in later appraisals.
1. BereaCity School District Bd. of Edn. v. Manlaw Investment Co, Ltd. (2005), 106 Ohio St.3d 269, 2005-Ohio-4979.
2 Worthington City Schools Bd. of Edn v. Franklin Cty. Bd. of Revision (2009), 124 Ohio St.3d. 27, 2009-Ohio-5932.
Cecilia Hyun
Siegel Siegel Johnson & Jennings LLC
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
Oklahoma Tax Filing Deadlines are Fast Approaching
Oklahoma assessors are currently mailing notices of increased valuation to real property owners. An owner receiving such notice has twenty (20) working days from the date notice was mailed to file a request for informal hearing. Once notice of the informal hearing decision is mailed, the owner has ten (10) working days to file a request for formal hearing before the Board of Equalization. A Board decision must be appealed to District Court within ten (10) calendar days after final adjournment of the Board. If valuation of the property is unchanged from the previous year, the owner can still contest the value by filing a protest by the first Monday in May.
Personal property must be rendered by March 15 th. The same deadlines apply to personal property.
William K. Elias
Elias, Books, Brown & Nelson, P.C.
American Property Tax Counsel (APTC)
<---Back to Top
Updated October 2009
December 31st Is Due Date for Filing Property Tax Appeals in Oregon
Property tax bills have arrived in the mail and, understandably, you are upset with the fact that in the current economic climate your taxes are going up, while your property value is going down. You have a right to appeal your property tax assessment to either the local county Board of Property Tax Appeals (BOPTA) or, if you are an industrial taxpayer, directly to the Magistrate Division of the Oregon Tax Court. However, your appeal must be filed by December 31, 2009, to be considered by BOPTA or the Tax Court.
So, what are you appealing? Unfortunately, the amount of property taxes you are paying cannot be the basis for appealing the assessment. Property taxes are the product of multiplying two numbers: the tax rate and the assessed value of the property. The tax rate is limited to 1.5 percent of real market value by Ballot Measure 5, plus any local option property tax approved by voters in your district. Only in very limited circumstances may property owners challenge the tax rate.
What you are appealing is the property’s assessed value. The assessed value is the lower of the Maximum Assessed Value (MAV) or the real market value (RMV) of the property. Under Ballot Measure 50, except for six exceptions, assessed value may not be increased by more than three percent per year – which becomes the property’s MAV. RMV, on the other hand, is the amount the property would sell for between a willing buyer and a willing seller in the open market in an arm’s length transaction. Both the RMV and the assessed value appear on the property tax bill. Typically, the assessed value will be a lower value than RMV, in which case you are being assessed on the property’s MAV.
To be successful in a property tax appeal, you must prove that the actual price for which you could sell your property as of January 1, 2009, its actual RMV (as opposed to the RMV appearing on the tax bill), is below the assessed value. How do you know what is the actual RMV of your property? First, if you recently purchased the property for less than the assessed value, the sale price is a very good indication of the property’s RMV. However, do not base your appeal upon the assessed value of other properties. The Tax Court has ruled that the assessed value of other properties is not a sufficient legal basis for seeking a property tax reduction.
An examination of the income generated by your income-producing property may give you an indication if the assessed value is too high. Income may be generated by lease or rental rates of commercial real estate that have been suffering from high vacancy rates. In the case of owner-occupied industrial property, RMV may be measured by the cash flow generated by the operating facility. If the income generated from the property is far below the expected rate of return of the debt and equity capital invested in the property, this may indicate that the property is overassessed because it suffers from functional or economic obsolescence.
Aside from the sale of your property at or near the assessment date, the best evidence of the property’s actual RMV is an appraisal of the property by a qualified expert for property tax purposes. It may be that your property has been appraised already for other purposes – insurance, partnership buyout, or estate planning purposes. These appraisals may give you an indication whether the assessment of your property is inappropriately high, or not. However, appraisals for property tax purposes require that the appraiser render an opinion of the real market value of the fee simple interest of the property as of January 1 st of the tax year. An insurance appraisal that estimates insurable or replacement value is not sufficient. Likewise, an appraisal for estate planning or investment purposes may not fit the requirements necessary for a property tax appeal.
A competent appraiser will determine the RMV of the property by use of one or more of the three approaches to value: the cost approach, the sales comparison approach, and the income approach. The cost approach adds the land value to the depreciated cost of the property’s improvements. The sales comparison approach compares the sale price (not assessed value) of comparable properties with the property being appraised and makes adjustments for any differences between the two. Finally, the income approach capitalizes either the market rental rate or the cash flow of the property by an appropriate rate of return that reflects the return on, and return of, the investment. Not all of these approaches may be applicable to the specific property being appraised, but all three will be considered by a competent expert.
Taxpayers who own residential or commercial properties must first appeal their assessments to the BOPTA of the county in which the property is located. Taxpayers who own industrial property may elect to appeal to BOPTA, or skip BOPTA and appeal directly to the Magistrate Division of the Oregon Tax Court. It is highly recommended that taxpayers who desire to appeal the assessment of commercial or industrial property consult with a professional familiar with property taxation and the appeal process. However you chose to proceed, please remember that your appeal must be filed no later than December 31, 2009.
David L. Canary, Esq.
Garvey, Schubert & Barer- Portland Office
American Property Tax Counsel (APTC)
<---Back to Top
Updated June 2009
Pennsylvania Long Held Ruling on Leased Fee Assessments is at Risk
The Commonwealth Court of Pennsylvania has recently decided Tech one Associates v. Bd of Property Assmnt and Rev. of Allegheny Cnty..No. 103 C.D. 2008 (June 1, 2009). In Tech One, the court stated that “fee simple, a fee simple determinable, a leasehold interest, or month to month lease are irrelevant.” The Court went to state that the Pennsylvania Supreme Court did not recognize “that leased property and non-leased property could be treated differently for real estate tax purposes” Further interpreting the Supreme Court in Maple Springfield, regarding uniformity stating that “a tax must be applied upon similar kinds of property with substantial equality of the tax burden on all members of the class.”
What does all of this mean? According to the dissenting opinion the court is requiring both the lease fee and the leasehold to be valued. Because the fee simple interest is the combination of both leased fee and the leasehold interests in the property; the state of Pennsylvania may require a fee simple approach to valuation. Although not startling to many taxpayers outside of Pennsylvania, this is a departure from nearly 17 years of leased fee decisions. Finally, it should be noted that the decision indicates that Marple Springfield is still good law. The case may not be final as the tax payer may have taken an appeal to the Supreme Court.
J. Kieran Jennings
Siegel Siegel Johnson & Jennings Co, LPA (Pennsylvania)
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
Now May Be The Time To Review Assessments
Many communities in Rhode Island are in the process of revaluing for tax year 2010. The tax year 2010 has a valuation date of December 31, 2009. In most cases the tax bills will be sent out during the summer of 2010. Some communities are notifying taxpayers of the proposed tax year 2010 assessments in advance of sending out the tax bills. If that is the case it may be a good opportunity to discuss the assessment with the assessor and correct any errors before the bills are sent out. If the tax year 2010 tax bills are sent out and the taxpayer decides to file an appeal it must be filed with the local assessor within ninety days from the date the first tax payment is due. The assessor then has forty five days to review the appeal, render a decision, and notify the taxpayer of the decision.
David G. Saliba
Saliba & Saliba
American Property Tax Counsel (APTC)
<---Back to Top
Updated September 2009
Roll Back Taxes On South Carolina Agricultural Real Property
The South Carolina Tax Code (the “Code”) requires each county to appraise and equalize properties once every fifth year.* In 2007, the South Carolina General Assembly enacted the South Carolina Real Property Valuation Reform Act (the “Act”) which limited increases in reappraisals to fifteen percent in most circumstances.** The limitation does not apply when title is transferred or when use classifications change.
The Code establishes classifications of property for ad valorem taxation.*** Property classified as “agricultural” real property is assessed based on the fair market value of the property when used for agricultural purposes.**** Because agricultural real property is assessed at the “fair market value for agricultural purposes,” taxpayers owning agricultural real property and classified as such, pay significantly less in yearly ad valorem taxes than they would if the property were classified as residential or commercial properties.
The Act has created substantial difficulties for governments looking to replace lost revenues from property tax collections. One of the areas where county governments appear to be looking to recover lost revenues appears to be from large acreage tracts which had been classified as agricultural prior to development into residential and commercial projects.
The Code provides that a change in use of a property to any use other than agricultural triggers the assessment of roll back taxes. Roll back taxes allow the county to assess and collect taxes against the property in an amount equal to the difference, if any, between the taxes paid or payable on the basis of the valuation and the assessment of the property as agricultural and the taxes that would have been paid or payable had the property been classified, valued, assessed, and taxed for other uses such as residential.***** South Carolina statutes allow the taxing authority to collect roll back taxes for the year in which the use of the property changed and each of the five tax years immediately preceding in which the real property was valued, assessed, and taxed as agricultural real property.****** The amount can be substantial.
In the current economy, some taxing authorities are seeking to increase current tax revenues by reclassifying agricultural properties and potential future tax revenues by reappraising non-agricultural values of agricultural properties. The Code does not limit reassessment for roll back purposes. The practice is particularly difficult to track in that the agricultural property owner often does not notice the increase since the current agricultural taxes are subject to the fifteen percent (15%) limitation. By using this practice, counties appear to be looking to collect substantial roll back taxes when the property’s classification changes from an agricultural use. Taxpayers should be cognizant of any increase in the appraised value of agricultural property even in circumstances where the immediate impact will not be felt since such an increase may significantly increase a taxpayer’s roll back tax liability upon a change in use of the property.
*S.C. Code Ann. § 12-43-217 (Supp. 2008).
** S.C. Code Ann. § 12-37-3140(B) (Supp. 2008).
***
S.C. Code Ann. § 12-43-220 (Supp. 2008).
****
S.C. Code Ann. § 12-43-220(d)(1)(A) & (B) (the assessment ratio is determined by the taxpayer’s ownership structure).
*****S.C. Code Ann. § 12-43-220(d)(4).
******
S.C. Code Ann. § 12-43-220(d)(4).
Morris A. Ellison
William T. Dawson
Buist Moore Smythe McGee P.A.
American Property Tax Counsel (APTC)
<---Back to Top
Updated December 2009
Tennessee Property Tax Deadlines
As the new year approaches, Taxpayers should be familiar with key dates throughout 2010 so that appeals and payments will be timely.
January 1
Statutory assessment date. Property is valued “as of” that date.
March 1
Deadline to file personal property schedules in Tennessee counties.
May 20
Assessors certify values and, in the case of an increase, send out Notices of Assessment.
June 1
County Boards of Equalization convene to hear appeals. Taxpayers may lose their appeal rights if they do not appeal to the County Board.
August 1
General deadline for appeals to the Tennessee State Board of Equalization, or 45 days from the date the notice of the county board action was sent, whichever is later.
October 1
The majority of property taxes are due in most jurisdictions. The taxes become delinquent on February 28 of the following year.
It is important for taxpayers to be aware of these key dates for timely compliance, appeals, and payments.
Andy Raines
Evans & Petree PC
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
Notices of Appraisal Value Arriving in the Mail
Appraisal Districts will mail, during April and May, Notices of Appraised Value which set forth the taxable value of a property. It is important to note that these notices are sent only to the last known address in possession of the District and only if the value increases over last year or a notice is requested in writing.
A taxpayer may contest the taxable value by filing a Notice of Protest with the Appraisal Review Board for the District by May 31 or within 30 days of delivery of the Notice of Appraised Value.
A taxpayer may protest that the taxable value of the property exceeds the market value of the property. Market value is determined on a fee simple basis, which considers market, rather than actual, rent, expenses and vacancy.
In addition, a taxpayer may protest based on equality and uniformity that the taxable value exceeds the median taxable value of a reasonable number of comparable properties appropriately adjusted
Jim Popp
Popp, Gray & Hutcheson, LLP
American Property Tax Counsel (APTC)
<---Back to Top
Updated December 2009
Operating Property Leased by the Taxpayer is to be Included in Property Tax Assessments
Non-capitalized leased assets (“operating leased” assets) can pose a concern for appraisers. The cost of these assets does not show up on the taxpayer’s balance sheet, but the lease payments will be shown as a deduction on the income statement. These lease payments reflect the income going to the lessor of the operating leased assets. If the appraiser is preparing an income indicator of value these lease payments are effectively removing a portion of the value of the operating leased assets from the income indicator. If one is in a state that requires the valuation of the fee interest in the property, an adjustment may need to be made to the income approach to add the lessor’s interest in the leased property back into the assessment. The Utah State Tax Commission recently affirmed a method for adding a value for operating leased property into a yield capitalization income approach. The Commission explained that it would be appropriate to estimate the value of the operating leased property by capitalizing the resultant amount of the lease payments made for the property less depreciation associated with lease property. This capitalized amount for the leased property would then be added to the yield capitalization income amount derived for the taxpayer owned operating property.
David J. Crapo
Wood Crapo LLC
American Property Tax Counsel (APTC)
<---Back to Top
Updated March 2010
Legislative Progress in Virginia
Property owners in Virginia have complained about surprises at Board of Equalization hearings including requests to increase assessments and evidence provided for the first time to support the challenged assessments.
Changes adopted by the General Assembly and expected to be signed into law should help to mitigate the risk and bring an element of fairness to appeals before Virginia’s Boards of Equalization. These changes include the following:
- a fourteen day notice period before a jurisdiction can request an increase in the assessment;
- a prohibition against the jurisdiction introducing evidence at the hearing to support the assessment which was been previously requested by the appellant but was not provided to it;
- a requirement for an independent appraisal to support a request to increase in assessment.
There are additional changes associated with appeals before the Board of Equalization and the assessment of affordable housing. Please call for more details.
Ilene Baxt Boorman
Wilkes Artis, Chtd.
American Property Tax Counsel
(APTC)
<---Back to Top
Updated March 2010
Values Down, But Taxes Up?
The recently mailed tax bills may have surprised you. Many taxing districts raised their levy rates, so even taxpayers whose values went down might see their taxes go up. The levy rate in downtown Seattle went up 13.4 percent, for example, and in downtown Bellevue the rate increased 14.4 percent. If value did not go down by at least as much, taxes went up. In counties on a multi-year revaluation cycle, the double whammy could be higher levy rates combined with values determined several years ago. Taxpayers who did not file an administrative appeal last year may still take another look at the values on this year’s tax bills. One appeal option is a trial de novo in court. The court option does not require exhaustion of administrative remedies, but it does require that the taxes must be paid under protest with an explanation of the grounds for the protest.
Norm Bruns
Garvey Schubert Barer
American Property Tax Counsel (APTC)
<---Back to Top
For news in this jurisdiction please Contact Us
Updated March 2010
Wisconsin Department of Revenue Revamps Proposal To Overhaul State Assessment System
Last fall, the Wisconsin Department of Revenue proposed a substantial overhaul of the state’s assessment system, under which all assessment functions for locally assessed property would be transferred from the municipal level to the county level over a five-year period. The goals of the overhaul were to eliminate inefficiency and duplication, and achieve uniformity in the application of statewide assessment standards. Currently there are 1,851 municipal taxation districts in Wisconsin, far more than in any other state.
The Department’s proposal was vehemently opposed by the state’s municipalities, and the Department withdrew the proposal.
The Department has now issued a new proposal under which municipalities would be required to join newly created assessment districts, which would take over all assessment functions for all locally assessed property in the municipalities making up those assessment districts. Under the Department’s proposal, there would be a maximum of 400 assessment districts.
The Department believes that consolidation of assessment functions through this new proposal would still meet the goals of the
initial proposal, i.e., creating efficiency and achieving uniformity in assessment practices, while permitting local governments to retain control over all assessment and board of review functions. Ceding such control to county government was one of the main bases for the municipalities’ objections to the Department’s original proposal.
Under the new proposal, as under the original proposal, annual full value assessment of all state property would be mandated. The changes, if enacted by the Legislature, would be phased in over five years. Manufacturing and utility property would continue to be centrally assessed by the Department, as under current law.
The new proposal also creates a Board of Tax Exemptions, which would assist local assessors on property tax exemption issues, in an effort to provide statewide consistency on exemption issues.
Information on the Department’s proposal is available at the Wisconsin Department of Revenue website, at http://www.revenue.wi.gov/news/PAR031010.pdf
Robert L. Gordon
Michael Best & Friedrich LLP
American Property Tax Counsel (APTC)
<---Back to Top
Content Copyright © 2007-2010 American Property Tax Counsel
|
Website designed by: Cherryoneweb.com 
