Just before Halloween, Oregon property owners opened envelopes containing their property tax assessments and received either a trick or a treat.

The amount taxpayers pay in property taxes is determined by only two factors; the tax rate and the assessed value. Not much can be done about the tax rate - it's set by Measure 5 and any special bond levies that have been approved by voters in the district.

The assessed value is the lower of Measure 50's maximum assessed value (MAV) or the real market value (RMV) of a property - that is, what the property could be sold for in the open market in an arm's-length transaction. If the assessor has overestimated either the MAV or the RMV, the property's owner or lessee can either pay the over-assessment or file an appeal in protest.

Taxpayers cannot complain about an over-assessment if they do not appeal it. The clock is ticking. This tax year, appeals must be filed on or before Jan. 2, 2007.

The reasons for over-assessment are numerous. Each year the assessor must determine both the MAV and RMV of each piece of property in the county. Because it is impossible to inspect physically and appraise individually each property, the assessor uses a number of shortcuts to assess properties.

Without ever leaving the office, an assessor may simply add up a taxpayer's historical investment in a property that has been reported each year and equate the cumulative sum of the investment to the RMV of the property - without any regard to current market conditions. The assessor may look at the cost of new construction from building permits and add that to last year's assessed value to arrive at the MAV without considering whether the new construction added much value to the existing structure. The assessor may use capitalization rates or market rent to value an income-producing property that were reasonable last year but do not reflect the current market. Or the assessor may rely upon sales of properties in the same class that are outdated or not comparable to a taxpayer's property.

Whatever the reason for over-assessment, a property owner must appeal the assessment timely or wait until next year to protest if he or she wants relief.

Fortunately, Oregon's procedure for appealing over-assessment is simple and straightforward.

There is no "pay to play" requirement in Oregon. That is, taxpayers are not required to pay their taxes to pursue an appeal, although delinquent tax payments accumulate 16 percent interest until paid.

And, if taxpayers do choose to pay their taxes on Nov. 15 to take advantage of the 3 percent discount, Oregon - unlike Washington state - does not require the tax payments be made under protest.

Most taxpayers are required to appeal first to the county board of property tax appeals (BOPTA). Owners or lessees of industrial properties may appeal either to the BOPTA or directly to the Magistrate Division of the Oregon Tax Court.

Typically, the county BOPTA is made up of a three-member panel. In some cases, the panel is made up of one or more county commissioners. Other panels are made up of everyday citizens who are appointed to the board. Hearings before the board are informal and may take anywhere from 30 minutes to an hour. A taxpayer is not required to appear with an attorney or an appraiser. however, because a county BOPTA has limited time and expertise, taxpayers are given relief only in obvious cases of over-assessment.

A taxpayer not satisfied with the decision of the county BOPTA may appeal the board's decision to the magistrate Division of the Oregon Tax Court within 30 days from the date of mailing of the BOPTA decision. Unlike a county BOPTA, the magistrate has attorneys with specific expertise in property tax disputes.

From the Magistrate Division, an appeal may be made to the Regular Division of the Oregon Tax Court, where there is only one statewide-elected tax court judge to hear the case. In essence, an appeal to the Regular Division is a second bite at the apple.

Proceedings in the Regular Division of the Oregon Tax Court are de novo -- meaning new evidence may be introduced and the decision below by the magistrate has no effect. And proceedings before the Regular Division are formal affairs. The rules of civil procedure and rules of evidence are enforced, and a taxpayer may only be represented by an attorney.

A taxpayer who prevails in the Regular Division has the statutory right to petition the tax court judge for an award of attorney's fees and costs - including the costs of an appraiser.

To be successful at either the magistrate or regular divisions of the Oregon Tax Court, a taxpayer is well advised to seek the assistance of a property tax professional, be it an attorney or an appraiser, to assist in gathering and presenting evidence of over-assessment.

Everyone may complain about taxes and the weather. But unlike with the weather, there is something taxpayers can do about the amount of taxes they pay on their properties if they believe they've been over-assessed. But the clock is ticking.

For the past 18 years, David L. Canary has specialized in state and local tax litigation. First, as an Assistant Attorney General representing the Oregon Department of Revenue and, for the past 13 years, as an owner in the Portland office of Garvey Schubert Barer. Mr. Canary has the distinction of trying several of the largest tax cases in Oregon’s history. He is the Oregon member of American Property Tax Counsel and an active member of Association of Oregon Industries’ Fiscal Policy Council.