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Each quarter our members take a close look at their local counties and municipalities and review any changes or notable events in the areas of property taxes, tax assessments, personal property tax and other taxation issues, here is the most recent local tax update available.

Alabama Property Tax Updates

UPDATED March 2017

2017 Alabama Protest Cycle Has Begun

The 2017 protest cycle has begun in Alabama. In Alabama, property tax valuation notices are sent out on a county by county basis, typically between March and August each year. Each county will have its own protest deadline, which is 30 days from the date of the valuation notice. Madison County sent out its 2017 valuation notices in early March, and protests there must be filed no later than Friday, April 7th.

Protests are heard by the Board of Equalization in each county. Appeals must be filed in Circuit Court within 30 days of the BOE’s final decision.

Assessors are only required to send notices for properties that have increased in value from the previous year, so an owner and/or its representatives must be aware of the deadlines in each county regardless of whether a notice is received. For the 2017 tax year, values are based on the property's "fair and reasonable market value" as of October 1, 2016.

Aaron D. Vansant
DonovanFingar, LLC
American Property Tax Counsel (APTC)

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Arizona Property Tax Updates

UPDATED July 2017

Rooftop Solar Systems Cannot be Assessed by the Arizona Department of Revenue

In a unanimous published opinion at the Arizona Court of Appeals, the Court held that rooftop solar systems cannot be assessed or taxed by the Arizona Department of Revenue (“ADOR”).  Starting in 2013, ADOR reversed years of practice by unilaterally deciding that it could assess and tax rooftop solar systems owned by companies that lease and install the systems on customers’ properties.  ADOR argued that the panels were subject to assessment as equipment involved in the operation of an electric generation facility.  Taxpayers – represented by Mooney, Wright & Moore, PLLC – sued for declaratory relief in the Arizona Tax Court, arguing that ADOR did not have authority to assess the rooftop solar systems because they were not part of an electric generation facility.  Taxpayers also argued that the systems had no value for property taxation purposes pursuant to A.R.S. 42-11054(C)(2) because they were designed primarily for on-site consumption. 

Taxpayers sought a quick resolution, filing a motion for summary judgment within thirty days of filing the lawsuit.  Through various discovery delays, however, ADOR did not respond to the motion for summary judgment for over seven months.  Ultimately, ADOR responded with a cross-motion for summary judgment, arguing that ADOR had the authority to tax the solar systems and that, alternatively, A.R.S. 42-11054(C)(2) was unconstitutional and the systems should be assessed by local counties.  The Tax Court issued a declaratory judgment agreeing with Taxpayers that ADOR had no authority to assess the rooftop solar systems.  The Tax Court further ruled, however, that the rooftop systems were assessable locally by the counties and that A.R.S. 42-11054(C)(2) was unconstitutional. 

Both parties appealed.  In a complete victory for Taxpayers, the Court of Appeals (Division 1) affirmed the Tax Court’s ruling that ADOR did not have authority to assess or tax the systems.  The Court also reversed the Tax Court’s ruling that A.R.S. 42-11054(C)(2) was unconstitutional (under either the Exemptions Clause or Uniformity Clause).  The Court also reversed the ruling that the counties in Arizona should be taxing such equipment.  The also reversed the Tax Court’s denial of attorneys’ fees to Taxpayers – holding that the Tax Court abused its discretion by failing to grant Taxpayers their fees and costs as the prevailing party pursuant to A.R.S. 12-348.  Finally, the Court granted Taxpayers request for attorneys’ fees on appeal.  The opinion represents a victory for all taxpayers in curtailing an overreach by ADOR and a significant victory for the solar industry in Arizona.  It can be found at SolarCity Corp. v. Arizona Dept. of Rev., No. 1 CA-TX 15-0008 (May 18, 2017) (2017 WL 2180393).

 
Mooney, Wright & Moore, PLLC
American Property Tax Counsel (APTC)

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California Property Tax Updates

UPDATED December 2017

Split-Roll Initiative May Appear on State’s November 2018 Ballot

The California League of Women Voters has filed an initiative designed to undo certain protections afforded commercial property owners under California’s Proposition 13. The initiative would modify California’s Constitution by taking away Prop. 13’s two percent (2%) cap on value increases, instead requiring that all commercial properties be assessed at full market value every year. The full market value standard would be phased in over a period of three years. If approved by California’s voters during the November 2018 election, the initiative’s supporters say it would increase taxes on commercial properties by $11.4 billion every year. The initiative is not directed at residential properties, and it would not impact properties used for agricultural purposes on land zoned for such purposes. The initiative also excludes commercial properties with market values under $2 million. The League of Women Voters’ filing permits the organization to start gathering signatures to qualify the initiative to appear on the November 2018 ballot.Paste or type article here.

Cris K. O'Nealll, Esq.
Greenberg Traurig, LLP
American Property Tax Counsel (APTC)

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Canada Property Tax Updates

Updated July 2017

New Rules in Ontario

The Assessment Review Board (“ARB”), which provides the first and only level of administrative law review of assessment appeals in Ontario, has changed its rules.

The ARB new rules are effective April 1, 2017. There are 122 rules and several Practice Directions.  Most significantly, all appeals will be grouped as either “General” or “Summary”.  General proceedings have a detailed schedule to be adhered to unless it is altered by the parties with the consent of the ARB. All appeals are deemed to be general proceedings unless they are specified as summary proceedings.  The details include specified hard dates for inspections, productions, examinations for discovery, motions, exchange of witness statements and reports.

All of this means that the litigation before the ARB will be increasingly complex and rule-bound. It is not an area for amateurs. 

J. Bradford Nixon
Nixon Fleet & Poole LLP
American Property Tax Counsel (APTC)

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Colorado Property Tax Updates

Updated March 2015

Colorado Begins Its 2015 Reassessment

Bi-annually, Colorado Assessors perform a revaluation/reappraisal for purposes of assessing the value of Colorado property using a “base period” method. In tax years 2013 and 2014, nonresidential property values were based on sales, income and cost data from a “base period” commencing on January 1, 2011 and ending on June 30, 2012. A new “base period” with its likely higher values now comes into play. 2015 is a revaluation year in which Colorado County Assessors will reappraise the value of real property. Under Colorado law, 2015 and 2016 nonresidential property values will be based on sales, income and cost data from a base period commencing January 1, 2013 and ending June 30, 2014.

Given the general upward trend in real estate values since the last base period ending June 30, 2012, many property owners may expect to see an increase in their property values and consequently, their property taxes for 2015 and 2016. The assessors are required by law, absent significant changes in the property after the base period, to use the same value for tax years 2015 and 2016. Even if an appraised value does not increase, budget demands will likely incentivize cities, counties and other taxing entities to maximize tax revenues by increasing the mil levies that determine the assessed value and the resulting tax, to the extent permissible by a Colorado Constitutional Amendment that limits tax increases called the "Tabor Amendment".

Beginning May 1, 2015, County Assessors will mail the 2015 Notices of Valuation for real property. The property owner will have a very short period of time to evaluate these notices and protest the value set on the property. Protests of valuation for most Colorado counties must be filed by May 31, 2015. Protests of valuation for Denver County properties must be filed no later than November 15, 2015. Our property tax attorneys know the critical legal and business factors that affect real property values and classifications. We are prepared to meet with property owners to assist in evaluating their property tax situation and, when appropriate, plan their strategies for their 2015 property tax protests.

Larry R. Martinez, Esq.
Berenbaum Weinshienk PC
American Property Tax Counsel (APTC)

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Connecticut Property Tax Updates

Updated March 2016

Tax Appeal Settlement Enforced

After engaging in extended settlement discussions, the owner of a shopping center and the City of Waterbury agreed to settle a tax appeal with a verbal understanding which touched all pertinent items. Indeed, a Superior Court noted that “[t]he terms of this agreement could not be clearer. There is no question . . . that the parties clearly understood the basis of an agreement and the impact on each of the parties.”

Well after discussions concluded, the City asserted the lack of authority of its Corporation Counsel to bind the City, especially as to the aspect of the case involving a penalty waiver for nonpayment of taxes. Arguing that Connecticut law and City of Waterbury ordinances did not permit her to waive the penalty, the Corporation Counsel nevertheless “admitted during (oral) argument that other similar penalty assessments may have been settled without specific . . . approval . . . . also.”

Holding that the property owner should not forfeit the benefit of its settlement under these circumstances, its motion to enforce the agreement was granted.

Elliott B. Pollack
Pullman & Comley, LLC
American Property Tax Counsel (APTC)

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Delaware Property Tax Updates

UPDATED September 2017

Delaware Court Unlocks Opportunities to Reduce Property Tax Burden

Managing expenses is one of the best ways to ensure the long-term profitability of investment properties.  Owners of real property know that achieving reductions in property tax assessments can be challenging under the best of circumstances, and distinctions between state tax systems can make minimizing the real estate tax burden across a commercial or industrial portfolio a daunting task.  But a recent decision by the Delaware Supreme Court provides taxpayers with a new, yet surprisingly familiar, opportunity to reduce the burden of property taxes on their properties in The First State.

Delaware’s tax assessment system shows its age
Under Delaware Law, property must be valued at its “true value in money,” a term interpreted to mean the property’s “present actual market value.”  However, in order to implement the Delaware Constitution’s mandate of tax uniformity, Delaware applies a base year method of assessing property, meaning that all property in a jurisdiction is assessed in terms of its value as of a certain date, then that value remains on the property indefinitely until the jurisdiction performs a general reassessment.  For Delaware’s northernmost county, New Castle County, the last reassessment occurred in 1983, so all property in the County is valued as of July 1, 1983.

A major challenge to contesting property tax assessments in Delaware is that a taxpayer must determine the property’s market value in 1983.  Determining what a property is worth today is not always easy, but proving a property’s value three decades ago has proven increasingly difficult.  Furthermore, because the County makes no regular adjustments to a property’s assessed value, the County asserts that a property should be valued as it existed in 1983 or, if it was built after 1983, as if it is new and undepreciated.

Delaware’s courts have explained that taxpayers have two options in assessment appeals: they can use data from the base year (by, for example, finding sales of comparable properties in or around 1983, or using prevailing market rents and capitalization rates from 1983) or they can calculate the current market value of the property and “trend back” that amount to 1983.  The County Board of Assessment Review has expressed a near-absolute preference for 1983 data, and rarely finds a taxpayer’s trending formula acceptable.

The inequities of this system are blatant.  Under the county’s interpretation of the base year system, a 34-year-old building located next door to a similar new building should be assessed and taxed at the same level, despite that buyers, sellers, and tenants might value the buildings quite differently.  If the owner of the 30-year old building wanted to contest its assessment, the owner would have to identify data for new buildings in 1983.  Of course, as time marches on and years turn to decades, relevant data from the base year becomes increasingly difficult to find.

Taxpayers highlight the system’s obsolescence
Taxpayers have raised many challenges to Delaware’s assessment system, but most successful challenges are fact-specific, and no recent court has gone so far as to order Delaware’s counties to complete a reassessment.  But after several attempts, the taxpayers in Commerce Associates LP v. New Castle County Office of Assessment underscored the largest flaw in the system.

One Commerce Center is an office condominium building in Wilmington, Delaware.  Each office condominium was originally assessed by the County upon construction in 1983.  After keeping the same tax assessment for decades, the owners of several of the condominiums challenged their assessments in 2015.

Before the County Board of Assessment Review, the owners presented five different analyses: two relied on comparable sales transactions (one using 1983 sales of buildings that were about 32 years old, and one using modern asking prices trended back to 1983 using the Consumer Price Index); two relied on income (one using 1983 data, and one using 2015 data trended back to 1983 using CPI); and a cost approach using the original construction costs and reflecting depreciation.  These approaches showed that the properties were overassessed by more than 40%.

The County presented evidence of the condominiums’ sale prices in 1985, when each unit was relatively new.  The County also presented an income approach using 1983 data and a cost approach reflecting no depreciation.  The County’s approaches all supported the original assessed values, and the Board ultimately denied the taxpayers’ appeals.

Delaware’s Court approves a decrease in value
After having their appeals denied by the Superior Court, the taxpayers brought their challenge to the Delaware Supreme Court.  In a tersely-worded decision, the Supreme Court reiterated that all relevant factors bearing on the value of a property in its current condition must be considered.  While the County argued that no depreciation was needed because the properties were brand new in 1983, the Court noted that the properties were, in reality, more than 34 years old.  Failing to account for their age and the resulting depreciation (or appreciation) resulted in a flawed value.

Although the Court’s decision has yet to be implemented by the County, its effects will likely be widely felt.  Most properties in New Castle County built after 1983 are assessed without any depreciation.  Because each tax year brings with it a new opportunity to challenge an assessment, property owners can bring a new appeal to the Board every year reflecting the property’s current depreciation.  Ultimately, this could result in the downfall of the decades-old base year assessment, as the County finds it necessary to update assessments for a larger number of properties.

A number of questions remain unanswered by the Court’s ruling.  How should properties be valued in areas that were rural in 1983 but are now highly developed?  How can appreciation and depreciation be quantified and reconciled?  Future cases will need to resolve these questions, but for now, owners of Delaware property should evaluate their portfolios and determine whether opportunities exist to improve profitability by reducing property taxes.

Benjamin A. Blair
Faegre Baker Daniels LLP
American Property Tax Counsel (APTC)

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Florida Property Tax Updates

UPDATED December 2017

10% Cap on Commercial Tax Assessment Increases

It is important to review the capped assessed value of your commercial property each year to ensure it does not improperly exceed the permitted 10% increase.  Recently, we have seen examples of county property appraisers aggressively interpreting when an increase in excess of the 10% cap is allowed.  Many property appraisers are treating interior buildout or tenant improvements as new construction and adding the value of these tenant improvements to capped values.  While the value of new construction may be added above the 10% cap, the property appraiser may not exceed the 10% cap for construction which is a repair or replacement.  On the other end of the spectrum, if a “qualifying improvement” increases the value of a property more than 25%, a complete re-set of the cap is permitted.  In order to avoid these increases, property owners must demonstrate that the buildout is a repair or replacement, such as tenant improvements which are necessary to retain the value of the property by re-letting the space.  

Julie Schwartz, Esq..
Rennert Vogel Mangler & Rodriguez, P.A.
American Property Tax Counsel (APTC)

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Georgia Property Tax Updates

UPDATED December 2017

Public Property Exemption for Hospital Questioned

In Columbus Bd. of Tax Assessors v. Med. Ctr. Hosp. Auth., ___ Ga. App. ___, ___ S.E.2d ___ (Case No. S17G0091, decided October 16, 2017), the Georgia Supreme Court reversed the Court of Appeals’ decision which had affirmed the trial court’s decision that the hospital authority’s leasehold interest in a continuing care retirement facility was a “public property” and therefore, exempt from taxation. The Supreme Court held that the prior orders in the bond validation proceedings did not specifically decide the issue of taxability because the orders were not conclusive as to whether the leasehold interest of the hospital authority was “public property” for ad valorem property tax purposes; the superior court should have drawn its own conclusions about taxability. The case was remanded for a determination by the trial court as to whether the hospital authority held the leasehold interest for public purposes in furtherance of the legitimate functions of the hospital authority, rather than for private gain or income.  Mere ownership of property by a hospital authority does not exempt it from property taxes; bond validation proceedings that establish that bonds have a public purpose do not inevitably establish that the property associated with the bonds is public property.

Lisa F. Stuckey
Ragsdale, Beals, Seigler, Patterson & Gray, LLP
American Property Tax Counsel (APTC)

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Idaho Property Tax Updates

Updated December 2017

Supreme Court Rules against J.R. Simplot Foundation

Two weeks after oral argument on December 6, the Idaho Supreme Court has denied the J.R. Simplot Foundation a property tax exemption for a charitable building during construction. As a completed public park, agricultural museum, and community center owned by a charitable foundation, it is now exempt. But during construction, it was not used exclusively for charitable purposes, according to the court. Tours and meetings at the property during construction did not qualify because they were minimal, provided no public benefit, and did not further the Foundation’s specific charitable purposes. Also, the legislature acted in 1999 to address another court’s refusal to exempt a hospital under construction. But the legislature limited construction-period relief to hospitals. The court felt it could not expand the legislative relief to other charitable buildings. This leaves the parties with the difficult task of estimating the market value of a partially constructed special purpose facility.
 
Michelle DeLappe
Garvey Schubert Barer
American Property Tax Counsel (APTC)

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Illinois Property Tax Updates

Updated March 2015

The Story of Real Estate Taxes - 2015

Chicagoans should be wary about their 2015 Real Estate Tax Bills. Up to now, Chicago Taxpayers have fared much better than their suburban neighbors when it comes to real estate taxes. Tax Year 2015 may well mark the beginning of a “Perfect Tax Storm” in Chicago.

In 2015, all property lying within Chicago will be re-valued. It seems very clear that the Assessor has determined that the Great Recession has become an event of history and that most segments of the real estate market are well on the way to recovery.

Thus far, new valuation Notices have only been sent to the property owners in one of the eight townships that comprise the City of Chicago. We have been able to review the new values. On average, the assessed values in that township have increased approximately fifteen (15%) percent. Multi-family residential properties have increased beyond twenty (20%) percent, single family residences and condominiums have risen to triple digit increases in some cases. Based on what we have seen in the first townships, we have to forecast even greater increases for most of the other townships.

Real estate values are only one component in the calculation of real estate taxes. The other critical component is the Tax Rate. The Tax Rate is determined by dividing the total budgets of all the Municipal and County agencies which provide services to the public by the total taxable value of the service area. That will include school districts, police, fire, park districts and more.

In 2015 and 2016, the pension deficits of the City agencies are about to reach catastrophic proportions. The Mayor’s staff is looking to Real Estate Taxes to reduce these deficits.

A PERFECT TAX STORM!

James P. Regan
Fisk Kart Katz Regan & Levy, Ltd.
Telephone:  (312) 726-1833
American Property Tax Counsel (APTC)

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Indiana Property Tax Updates

UPDATED December 2017

Indiana Tax Court Affirms 81% Charitable Purposes Exemption for Mental Health Facility

On December 8th, the Indiana Tax Court in Starke County Assessor v. Porter-Starke Services, Inc. upheld a charitable purposes exemption applied to a medical building as of the March 1, 2015 assessment date.  Taxpayer operated a community mental health center (CMHC), which was certified by the Indiana Family and Social Services Administration, in the building.  It administered a variety of programs that provided medical and psychiatric care, including addiction treatment, to long- and short-term patients of all ages.  Services were overseen by an unpaid board of directors and both volunteers and paid employees.  Taxpayer received subsidies and financial assistance from several governmental sources. 

The County Board rejected Taxpayer’s exemption claim.  The Indiana Board of Tax Review, following a hearing, granted an 81% exemption for the building.  The Indiana Board concluded that Taxpayer provided a public benefit by fulfilling an essential government obligation.  The Assessor agreed that “providing mental health services constitutes good and noble deeds,” but she nevertheless appealed.  The Assessor claimed that the CMHC was not entitled to a “per se” charitable purposes exemption.  The Court observed that its prior rulings “evaluate whether property is entitled to a charitable purposes exemption by analyzing whether the taxpayer’s acts both relieve human want and provide a public benefit sufficient to justify the loss of tax revenue.”  Different results in those cases were due to the differences in evidence presented and arguments made therein.  A non-profit certified as a CMHC is not automatically exempt from property tax.  Here, the Indiana Board had weighed all the evidence in concluding the exemption was warranted.  It did not find the property was “per se” exempt. 

The Court further noted that Indiana has “taken on the burden of providing mental health care for the indigent.”  Once an organization is certified as a CMHC, it is entitled to county and state funding.  Starke County had high rates of drug and alcohol abuse but limited access to mental health services for residents.  Taxpayer charged fees on a sliding scale based on a patient’s ability to pay, and it provided free treatment to the indigent.  And Taxpayer worked with local law enforcement, assuming some of the County’s burden to fight abuse and addiction and the treatment of mental illness.  Thus, the record evidence supported the Indiana Board’s determination. 

Brent A. Auberry
Faegre Baker Daniels LLP
American Property Tax Counsel (APTC)

 

Indiana Tax Court Breathes New Life into Ministry’s Property Tax Exemption Appeal.

The Indiana Tax Court in Lake County Trust Co., Trust No. 6 v. St. Joseph County Assessor on October 17th reversed the dismissal of an exemption appeal by a 501(c)(3) non-profit, Flowers for Heaven, Inc., operating a pro-life ministry in South Bend for the 2013 assessment date. The Ministry filed an exemption application for its real and personal property; the County Board granted the exemption for personal property but denied it for real property. On the real property denial, the County Board incorrectly identified the owner as the Lake County Trust Company, Trust No. 6. – not the Ministry. The County Board denied the exemption because, it claimed, the “property is not in the charitable entity’s name.”  The Trust received the denial and, in response, filed a Petition for Correction of Error, asserting the County Board issued its denial under the wrong name. The Petition was rejected, and the Trust appealed that rejection to the Indiana Board of Tax Review. The Indiana Board dismissed the appeal without a hearing, claiming the Petition “failed to assert correctable errors of omission.”  

The Tax Court held that the Indiana Board’s regulation “expresses as an absolute that a motion must precede” a dismissal order, which was “consistent with the long-held preference for allowing the parties an opportunity to respond to the motion before the Indiana Board acts.” The Tax Court further concluded that the County Board’s act of listing the wrong taxpayer name as the property owner on its denial was an error that could be addressed in the Petition. However, the record was “bereft of any analysis by the Indiana Board regarding the property’s ownership.” The Court remanded the matter to the Indiana Board to determine if the Ministry’s ownership interest in the real property entitled it to the exemption.  

Brent A. Auberry
Faegre Baker Daniels LLP
American Property Tax Counsel (APTC)

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Iowa Property Tax Updates

UPDATED March 2017

Narrow property tax appeal window opens in April 2017

Iowa property owners will have a narrow window to appeal their January 1, 2017, assessments – which values essentially apply to both the 2017 and 2018 tax years. Appeals to the local board of review may be filed no later than April 30, 2017.   Taxpayers may be able to achieve a reduction before the local Board of Review. If not, the Taxpayer may pursue relief before a local District Court or the Iowa Property Assessment Appeal Board. 

Brent A. Auberry
Faegre Baker Daniels LLP
American Property Tax Counsel (APTC)

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Kansas Property Tax Updates

Updated June 2014

New Changes To Kansas Property Tax Appeal Procedures

Commercial taxpayers alarmed by recent Kansas Court of Tax Appeals ("COTA") decisions initiated a call for reform of the system. The initial group of taxpayers contacted legislators directly. Soon they were joined by many groups including the Kansas State Chamber of Commerce and the Kansas Association of Realtors. The recommendations received wide-spread support and House Substitute for Senate Bill 231 was signed by Governor Brownback.

Some provisions in the new law include:

  • Changes the name of the state agency from the Court of Tax Appeals back to the Board of Tax Appeals ("BOTA") to eliminate any confusion that COTA is a real court instead of a state agency.
  • Provides for optional de novo review. This change would ensure a taxpayer could have court of competent jurisdiction hear the taxpayer's evidenc e and decide the case. A party could also appeal directly to the Court of Appeals on the record if they choose.
  • Requires one member of BOTA to be a licensed general real property appraiser. That person will join the other two positions be filled with an attorney and a CPA. This change will occur upon the next vacancy.Directs BOTA to issue a Summary Order within 14 days of the hearing. If either party wants to appeal they have 14 days to request BOTA prepare a Final Order. BOTA will have 90 days to prepare that Order. If neither party wants to appeal, the matter will be over without BOTA issuing a Final Order. If the Order is not done within the 90 day time period, BOTA must refund to the taxpayer any filing fees paid.
  • If a case is not decided in the year it was filed and a protective appeal must be filed for a subsequent year(s), the taxpayer will not be charged a filing fee.
  • Open up the Small Claims Division to more appeals by raising the valuation ceiling from $2 million to $3 million.
  • And required BOTA to change their policy and now require a simultaneous exchange of evidence in cases.

Few expect BOTA to embrace the change as they have already issued Directives and Memoranda with new procedures that appear to be the first salvos to circumvent the law. Watch here for updates!

For a full copy of the bill go to www.kslegislature.org.

Property Tax Law Group, LLC
Linda Terrill, Attorney
American Property Tax Counsel (APTC)

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Kentucky Property Tax Updates

UPDATED March 2017

Kentucky Assessment Notices to Be Mailed Soon

Most Kentucky counties will be mailing out their 2017 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.  This year, the appeal period will generally run from May 1 - 15.  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.

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.

Lexington/Fayette County taxpayers whose property has been subject to an agricultural exemption in the past should check their property's status, since a number of the exemptions have been revoked under a recent policy change.  

Michele M. Whittington
Stites & Harbison PLLC
American Property Tax Counsel (APTC)

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Louisiana Property Tax Updates

Updated June 2016

30 Days From What? Days from What? Louisiana Property Tax Appeal Deadline Clarified

The statutory and regulatory deadline for appealing an adverse decision of the Louisiana Tax Commission is clearly thirty (30) days, but identifying the event that triggers commencement of the deadline has not always been easy. The applicable statute provides that the appeal deadline runs from the date the decision is “entered,” while the applicable administrative rule provides that the deadline runs from the date the decision is “mailed.” A decision from the Fourth Circuit Court of Appeal had previously held that a decision was “entered” on the day that the members of Commission signed the decision. In that case, the decision was signed and mailed on the same day.

The Fourth Circuit revisited the issue in Erroll Williams v. Hotel Ambassador NOLA, LLC, No. 2016-CA-0015 (La. App. 4 Cir. 6/15/16), ___ WL _____ , a case in which the Commission mailed its decision some eight (8) days after the decision was signed by the members of the Commission. There, the aggrieved litigant appealed within thirty (30) days of the mailing date, but the district court found the appeal to be untimely. On appeal, the Fourth Circuit noted that the applicable statute did not provide a specific definition of “entry” of judgment. Surveying the cases, the Court noted that entry of judgment may be the date of signing, but it may also include the date of distribution or the date of mailing. The Court gave great weight to the fact that the decision itself stated that it would become effective upon date of issuance (yet another term that is not defined in the applicable statute or administrative rule), and that the decision bore a “true copy” stamp that suggested that the Commission had entered the decision into its own records on that date.

Accordingly, the court concluded that entry of judgment occurs on the date that the decision is mailed such that the appeal at issue had been timely filed. In a concurrence, one judge noted that the panel was compelled by principles of due process to hold that entry of judgment cannot occur earlier than the date on which the decision is mailed: “To hold otherwise would allow the time period for an appeal to lapse before the affected party is sent notice of the decision against it.” The Court reversed and remanded the case to the district court for further proceedings.

Christopher J. Dicharry
Angela W. Adolph
Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, L.L.P. 
American Property Tax Counsel (APTC)

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Maine Property Tax Updates

Updated December 2014

Ignoring The Assessor's Inquiries Can Be Fatal To Your Appeal

In Maine the assessor may require the taxpayer to answer in writing all proper inquires as to the nature, situation, and value of the taxpayer's property liable to be taxed. This request can include income, expenses, manufacturing or generational efficiencies, manufactured or generated sale price trends, or other related information. A taxpayer has thirty days to respond to the inquiring. Upon written request a taxpayer has an automatic thirty day extension to respond to the inquiring. The failure to supply the information will bar the taxpayer the right of appeal. Please be aware that some assessors use this provision of the law to inundate the taxpayer with inquires. The property of some of these inquires is questionable and some inquires appear to be patently improper. These inquires can be a cynical attempt to have the taxpayer's appeal dismissed for failing to comply with an inquiry.

David G. Saliba
Saliba & Saliba
American Property Tax Counsel (APTC)

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Maryland Property Tax Updates

UPDATED September 2017

Tax Rates and Tax Bills

The Counties and Incorporated Cities have all sent their tax bills that are due by the end of September. Some jurisdictions allow for two payments in September and December which is notes on the tax bills. While we saw a 2% decrease in the tax rate in Montgomery County for this tax year, this came after several years of tax rate increases. Therefore, for budgeting purposes, we recommend being conservative with future year tax rates.

Make sure that the tax bills are paid by September 30th to avoid steep penalties and interest.

Emily K. Betsill, Esq
Wilkes Artis, Chtd.
American Property Tax Counsel (APTC)

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Massachusetts Property Tax Updates

UPDATED December 2017

Beware Massachusetts Fiscal Year 2018 property tax bills have been sent

The 2018 Fiscal Year 2018 for cities and towns in Massachusetts runs from July 1, 2017 to June 30, 2018. Most jurisdictions have sent out there actual fiscal year 2018 property tax bills in December of 2017. The actual property tax bill is the first tax bill of the fiscal year that contains an assessed value and a tax rate. It is from this actual property tax bill that rights of appeal accrue. In most cases the fiscal year 2018 filing deadline is February 1, 2018. It is important to review your actual property tax bill as many of the 351 cities and towns in the Commonwealth are revaluing in their jurisdictions for fiscal year 2018. It is important to note that generally the timely payment of all property taxes is a jurisdictional prerequisite to a valid tax appeal. Timely payment means that payment must be post marked by the due date.

David G. Saliba
Saliba & Saliba
American Property Tax Counsel (APTC)

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Michigan Property Tax Updates

UPDATED DECEMBER 2017

Michigan Taxpayers: Get Ready for 2018!

Michigan Taxpayers will again face some challenges and opportunities in the coming year. The Proposal A “inflation rate” for 2018 is 2.1% which means that taxable values (on which taxes are based), will increase where a property’s state equalized value exceeds its taxable value.

Taxpayers should receive their assessment notices during the first quarter of 2018, and most taxpayers will have them before March arrives, so taxpayers should be looking out for them. Some assessors have already let it be known that many taxpayers will see assessed values increase by double digits.

Recent changes to Michigan law will make it easier for taxpayers to comply with certain personal property tax exemption filing deadlines. On December 28, 2017, Public Acts 261-264 were signed. These Acts made multiple changes impacting both the Small Business Taxpayer Exemption and the Eligible Manufacturing Personal Property Exemption (EMPP).

The deadline for filing the Small Business Taxpayer exemption has been changed to February 20, 2018. Also, Form 5076, which is used to claim the exemption, has been changed from an Affidavit to a Statement, which permits assessors to receive either a facsimile or electronic signature. Additionally, under this new legislation, can accept a proper claim of exemption for EMPP if the envelope is postmarked by February 20, 2018. Last, the new legislation changed the appeal procedure for both the Small Business Taxpayer Exemption and the EMPP Exemption so that the March Board of Review can grant exemption if an otherwise proper claim was filed late.

The State Tax Commission has advised that in early 2018 it will be issuing guidance about the new legislation. The guidance is to include updated Frequently Asked Questions.
 
Stewart L. Mandell
Honigman Miller Schwartz and Cohn LLP
American Property Tax Counsel (APTC)

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Minnesota Property Tax Updates

Updated December 2017

Minnesota Property Tax Update

Many Minnesota property taxpayers with pending appeals before the Minnesota Tax Court have seen their petitions resolved recently. The court expedited the trial calendar by compressing scheduling orders, eliminating a large backlog of filed, unresolved appeals.  It is expected that the pay 2017 appeals, filed last spring, will soon receive scheduling orders from the court.

Minnesota assessing jurisdictions are busy posting values for the 2018 pay 2019 assessment. Assessors are evaluating the active sale transaction market for both commercial and multifamily properties, and deciding what sectors will see increases.   Overall value increases in most jurisdictions over the last few years have led to significant drops in the effective tax rates, which have helped temper the tax impact from valuation increases.  Apartment owners in particular are bracing for increases, as the sale market for this property type has continued be very active, and jurisdictions continue to follow that activity up.

As always, commercial and apartment property owners are advised to have their assessments reviewed annually by a professional, to ensure that their properties stay competitive and are not overassessed. In Minnesota, the deadline for filing a petition to challenge the pay 2018 taxes is April 30th, 2018.

Mark Maher.
Smith, Gendler, Shiell, Sheff, Ford & Maher
 American Property Tax Counsel (APTC)

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Missouri Property Tax Updates

Updated June 2016

Personal Property Statute

On August 28, 2015 the Missouri Legislature enacted Section 137.122.1 which requires county assessors to apply the “standardized schedule of depreciation” to determine assessed value of personal property which will be “presumed to be correct.”

Owners may challenge the assessment by presenting substantial and persuasive evidence of value.

It appears many county assessors are resisting using the depreciation concept in setting assessed value. Only time will tell how this plays out.

Jerome Wallach
The Wallach Law Firm
American Property Tax Counsel (APTC)

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Nevada Property Tax Updates

Updated December 2017

Whether to challenge a valuation is an increasingly complicated decision.

County assessors in Nevada mailed their tax year 2018-19 notices of value in early December 2017. Many of these notices reflect double digit increases in valuation. These values can be challenged by filing an appeal to the county board of equalization. The deadline for doing so is January 15, 2018. However, the partial abatement from property tax, which is commonly referred to as the tax cap, has made the decision of whether to challenge a property’s valuation more complicated.

Despite an increase in a property’s valuation, the amount taxes can increase from year to year is limited by a tax cap that applies to the tax liability, not the taxable value. The tax cap is calculated by (a) increasing the taxes paid in the preceding tax year by an applicable tax cap factor and (b) adding the tax attributable to “any improvement to or change in the actual or authorized use of the property” that was not included in the assessment for the prior year.

The applicable tax cap factor is determined annually for each county. It is the greater of the following two criteria:  (a) the average percentage change in the assessed value of all taxable property in the county over the preceding 9 years, or (b) twice the percentage increase in the CPI for the immediately preceding calendar year.  But, in no event can the applicable percentage be less than zero or more than 8%. The official percentage will not be announced until later this spring, but for Clark County the tax cap factor for tax year 2018-19 should be 4%.

In a rising market, the cumulative effect of calculating the tax based on the tax cap, instead of a property’s valuation, can be dramatic. For example, we successfully reduced the taxable value of an industrial property to $11,500,789 for tax year 2013-14. Now, five years later, the valuation of the property has increased by over 51%, but the net tax has only increased by 10% - an average annual increase of approximately 2%.

The advent of the tax cap in Nevada has complicated the question of whether or not a valuation appeal is warranted. Despite an increase in a property’s value, the tax cap often obviates the need for an appeal. But, when an appeal is warranted the tax cap will often extend the benefit of the reduction to future tax years. Our property tax attorneys know the critical legal and valuation factors that affect the tax treatment of property in Nevada and are prepared to assist property owners in evaluating and, when appropriate, challenging that tax treatment.
 
Paul D. Bancroft
McDonald Carano
American Property Tax Counsel (APTC)

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New Hampshire Property Tax Updates

Updated December 2017

New Hampshire Property Tax Bills are soon to Issue

Most communities in New Hampshire have sent out their 2017 property tax bills during October and November of 2017. These tax bills have an assessing date of April 1, 2017. The property tax assessment should equal the fee simple market value of the property as of April 1, 2017, multiplied by the jurisdiction's median assessment ratio. If your property is assessed in excess of that amount you may have grounds for a property tax appeal. In general abatement applications must be filed with the local assessors by March 1, 2018. If you are aggrieved by the action or inaction of the local assessors, you may file a petition with the State Board of Tax and Land Appeals or the Superior Court in the County where the property is located. There you will be afforded a full hearing on the merits where the rules of evidence will apply.

David G. Saliba
Saliba & Saliba
American Property Tax Counsel (APTC)

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New Jersey Property Tax Updates

Updated September 2017

New Jersey Tax Court’s Increasingly Heightened “Why and Wherefore” Standard

A recent unpublished New Jersey Tax Court opinion typifies the Tax Court’s trend towards requiring heightened support for evidence of property value. In Benedetto v. Little Ferry Borough, the Tax Court reduced the assessments under appeal subsequent to a lengthy scrutiny of the appraisers' reports/testimony. The Tax Court explained that “the court is faced with the responsibility of applying its own judgment to the evidence presented to determine the true market value of the subject property.” Benedetto v. Little Ferry Borough, No. 006900-2014, 2017 N.J. Tax Unpub. LEXIS 53, at 31 (N.J. Tax Ct. Sept. 6, 2017). For example, the Tax Court rejected plaintiff’s appraiser’s 5% downward market condition/time adjustment to three comparable rentals because “plaintiff's appraiser offered no objective market data or surveys to support his 5% adjustment.” Id at 28.  Although the Tax Court acknowledged that the country experienced an economic recession during such time, accounting “for ‘rapidly declining’ rental rates between [January 2009] and the October 1, 2009 valuation date” was insufficient support for the adjustment. Id.

Additionally, the Tax Court rejected four of the defendant’s comparable sales as accurate evidence of true market value. The Tax Court explained that “defendant's appraiser failed to offer any data or credible market evidence disclosing that a 7.5% downward supportive office adjustment is justified for a warehouse with 20% supportive office… yet no downward supportive adjustment is warranted for a warehouse with 18% supportive office.” Id at 61.

In rejecting the above and other adjustments/comparables, the Tax Court explained that under N.J.R.E. 703, an expert must provide the “why and wherefore” of his or her opinion – an expert’s testimony must be rooted in facts, science, data, or the opinions of other experts. Id at 59.

Although in Benedetto the Tax Court reduced the assessments after its own value analysis, other recent Tax Court cases have simply affirmed assessments under a similar rationale. For example, in VBV Realty, LLC v. Scotch Plains Twp., the Tax Court affirmed the assessments under appeal because neither appraiser adequately justified and supported value opinions upon sufficient information and data. The Tax Court accorded no weight to plaintiff's appraiser's sales comparison approach or income capitalization approach because he did not verify or consult with any individual involved in the transactions/sales of property used to value the subject property. Furthermore, the Tax Court was unable to determine fair market value for the subject property based upon defendant's appraiser's value opinion because he did not provide a base of data to support the value adjustment. VBV Realty, LLC v. Scotch Plains Township, 29 N.J. Tax 548, 553 (N.J. Tax Ct. 2017).

Gregory S. Schaffer, Esq.
Garippa, Lotz & Giannuario
American Property Tax Counsel (APTC)

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New York City Property Tax Updates

Updated June 2015

Assessing Generators in New York City

The Department of Finance, after years of not assessing generators owned by tenants or used by media companies is now beginning to assess them. Questionnaires have been sent out to owners and to tenants about generators. Owners and tenants should check to see if they have received anything in the mail, as the Department of Finance has been sending them to the last known address they have on file, which is not always accurate or adequate notification. Determine if you have an emergency power generator which is being separately assessed, and contact your attorney. These assessments can carry huge penalties and interest if not paid even if they are sent improperly, and can be a threat.

Joel R. Marcus, Esq.
Marcus & Pollack, LLP
American Property Tax Counsel (APTC)

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New York State Property Tax Updates

Updated December 2002

Hijacking the Assessment Review Process 

New York consistently ranks as one of the highest taxed states in the nation, and local property taxes are 79 percent higher than the national average. Boards of Assessment Review face high rates of complaints and increased pressure by the local governing body to control refund liability.

The evidentiary demands of many Boards have escalated sharply and many initiatives have been criticized as mere attempts by the local governing body to deliberately discourage taxpayers from exercising their right to seek a fair assessment, in conflict with the spirit of New York's Real Property Tax Law.

Perhaps the most flagrant attempt to hijack the review process as a tool to curtail the property owner's right to a fair assessment is found in a recently proposed local law by the new Nassau County Executive. The controversial proposed law requires only commercial property owners who file appeals of their property's assessments to submit a certified appraisal as a condition precedent to reducing an assessment. In the alternative, owners may submit a "bona fide" counteroffer - defined as no less then 85 percent of the County's assessment, or withdraw the appeal altogether. Owners who fail to exercise one of the above options forfeit their right to judicial review and are subject to a $5,000 fine.

Nassau County spends approximately $150 million annually to pay down a $1.1 billion debt from past tax refunds even as taxpayers file more than 100,000 protests annually. More than 80 percent of the annual refund liability goes to commercial property owners. The proposed law by the new County Executive seeks to punish commercial property owners for exercising their constitutional right to a fair assessment and equitable tax burden.

The controversial law must be codified by the Nassau County Legislature as well as the New York State Legislature, which must issue a "home rule" message to authorize the change. However, State Senator Craig Johnson (D-Port Washington) has rejected the County Executive's request to introduce the state legislation, citing concerns that the legislation would be unfair to commercial property owners and was unconstitutional on its face. Of the many concerns with the proposed law, it was rejected by Sen. Johnson because it is punitive and bullies commercial property owners to settle within a 15 percent margin that deprives the owner of the right to a fair assessment and an opportunity to be heard.

Michael Martone
Koeppel Martone & Leistman, L.L.P.
American Property Tax Counsel (APTC)

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North Carolina Property Tax Updates

Updated September 2015

North Carolina

The North Carolina General Assembly has enacted legislation which exempts from property tax the increase in the value of real property held for sale by a builder. Effective for tax years beginning January 1, 2016, and applicable to improvements made after July 1, 2015, improvements to single family or duplex residential real property held for sale by builders and commercial real property held for sale by builders are excluded from taxation as long as the property is held for sale. Applications for exclusion must be filed annually.

Charles B. Neely, Jr.
Nancy S. Rendleman
Williams Mullen
American Property Tax Counsel (APTC)

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Ohio Property Tax Updates

UPDATED December 2017

Sale prices used to set property tax assessments in Ohio must reflect the price of the real estate only

In a case brought to the Ohio Supreme Court by Siegel Jennings on behalf a local business owner and property owner, the Court reaffirmed that sale prices used to set real property tax assessments should not include the value of non-real estate assets (Orange City School District Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, Slip Opinion No. 2017-Ohio-8817).  The case involved a retail property that was purchased by the tenant exercising its lease’s option to purchase.  The local school district filed an increase complaint based on a recorded sale price of $951,776. This amount was labeled the "purchase price" in the written purchase agreement, however $51,776 of that amount was payment for past due rent including past rent concessions owed by the tenant.  The Ohio Supreme Court rejected the school district's argument that parol evidence rule of contract interpretation prohibited considering evidence to allocate the portion of the price paid for non-real estate items.  Instead, the Court affirmed that the amount to be taxed is real property alone, a concept that Siegel Jennings has long been advocating: "The 'sale price' for tax-valuation purposes is the amount paid for property-title transfer -- not amounts paid for other assets."

Ohio 2017 Tax Year Property Tax Assessment Review Period Approaching

Ohio's 2017 tax year property tax valuation review period has begun. The deadline to contest your 2017 tax assessment is March 31, 2018.   Early analysis with a professional familiar with local assessors, opposing counsel, and procedures will optimize your chances of obtaining appropriate relief. 

Cecilia J. Hyun
Siegel Jennings Co., L.P.A.
American Property Tax Counsel (APTC)

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Oklahoma Property Tax Updates

UPDATED July 2017

Filing Deadlines are Critical and Can Also Be Confusing

Under the Oklahoma Ad Valorem Tax Code a taxpayer has thirty (30) calendar days from the date of mailing of a notice of increase in value to file an informal appeal with the county assessor.  If no notice of increase in value has been issued, a taxpayer can still file an informal appeal by the first Monday in May.  The taxpayer has ten (10) working days from the date of the assessor’s informal hearing decision to file a formal appeal with the county board of equalization.  A taxpayer has ten (10) calendar days from the board’s final adjournment date to continue the appeal by filing a petition in district court. By statute, boards are to adjourn by May 31st, but they have the authority to extend their sessions so it is critical to confirm each board’s final adjournment date.  The lack of consistency in the computation of filing deadlines under Oklahoma law can create confusion, but it is essential that deadlines be met because failure to comply will bar an appeal.

William K. Elias
Elias, Books, Brown & Nelson, P.C.
American Property Tax Counsel (APTC)

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Oregon Property Tax Updates

UPDATED September 2017

Oregon’s Only Tax Court Judge Retires

The Honorable Henry C. Breithaupt will retire from the Oregon Tax Court on December 31, 2017 after nearly 16 years on the bench. Judge Breithaupt came to the bench after practicing state and federal taxation and business transactions at a prominent Portland law firm. Oregon is one of three states in the nation that has a dedicated tax court and the loss of its sole Tax Court Judge could potentially have significant impact on tax cases in Oregon. His experience and dedication to fairness in the courtroom has made him a respected adjudicator of the law.

The Oregon Tax Court is made up two divisions: the Regular Division and the Magistrate’s Division. The Magistrate Division began its proceedings in September 1997 and is intended to be a more informal appeals process with three Magistrates overseeing the appeals. The Magistrate has primary jurisdiction over tax appeals, it handles County appeals from the Board of Equalization, and is the first formal appeal step for industrial property and centrally assessed property tax appeals. The Regular Division is presided over by the Tax Court Judge and adheres to the Oregon Rules of Evidence and hears all cases de novo. Jurisdiction in the Regular Division arises from an appeal of a judgment in the Magistrate’s Division or by “special request” that a case be transferred into the Regular Division and forge the Magistrate hearing. Because Judge Breithaupt retired midway through his elected term, Governor Kate Brown will make an appointment to fill his remaining term. With just one Tax Court Judge presiding over all tax cases in Oregon, this next new appointment by the Governor will impact the Tax Court for years to come.

Cynthia M. Fraser
Garvey Schubert Barer
American Property Tax Counsel (APTC)

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Pennsylvania Property Tax Updates

UPDATED December 2017

Pennsylvania Voters Pass Constitutional Amendment Allowing Legislature to Exempt Homes from Property Taxation

On November 7, 2017, Pennsylvania voters approved a constitutional amendment which would allow the Pennsylvania legislature to entirely exempt primary residents from property taxes.  In recent years, there has been a grassroots effort in Pennsylvania to eliminate property taxes, although there has been no credible source of funding proposed to replace property taxes.  If this constitutional amendment were to move forward to legislation, it would mean a transfer of the property tax burden from homeowners (who vote) to commercial property owners (who cannot vote).  But additional steps would be needed for the tax shift to become a reality.

Voters were asked:  “Shall the Pennsylvania Constitution be amended to permit the General Assembly to enact legislation authorizing local taxing authorities to exclude from taxation up to 100 percent of the assessed value of each homestead property within a local taxing jurisdiction, rather than limit the exclusion to one-half of the median assessed value of all homestead property, which is the existing law?” 

But for a tax shift to occur, two things would need to happen:  Pennsylvania’s legislature would have to enact a statute enabling local taxing districts to exempt residential owners.  And, then, local taxing districts would have to enact ordinances or resolutions exemption residential owners from tax.  As a practical matter, the local taxing districts would have to replace the lost revenue.

Sharon F. DiPaolo
Siegel Jennings Co., L.PA.
American Property Tax Counsel (APTC)

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Rhode Island Property Tax Updates

Updated December 2017

File an account to protect your right of appeal

Now is the time for Rhode Island taxpayers to preserve their right of appeal for Tax Year 2018 by filing an account with the local assessor.  In most jurisdictions the Tax Year 2018 tax bill will be sent out during the summer of 2018. The Tax Year 2018 tax bill has a valuation or assessing date of December 31, 2017. In most cases the filing of a valid account by January 31, 2018 is a prerequisite to a valid appeal. The account must describe the property, claim a value of the property, and be signed under oath and notarized. Occasionally the assessors do not send out account forms. It is incumbent upon the taxpayer to seek out a form and properly complete and file it. It is possible for a taxpayer to construct his own account form, but it must include all the required information and be signed under oath, notarized and filed timely.

David G. Saliba
Saliba & Saliba
American Property Tax Counsel (APTC)

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South Carolina Property Tax Updates

Updated June 2011

South Carolina Enacts New Point of Sale Law

On June 14, 2011, Governor Nikki Haley signed a new law significantly amending South Carolina's controversial "point of sale" law requiring tax reassessment of properties whenever a sale has occurred. The prior law adopted in 2006, commonly known as "Act 388," placed a fifteen (15%) percent cap on reassessed values as part of the five (5) year countywide reassessment programs but sought to make up for the loss of revenue by requiring that properties be reassessed whenever there is a change of ownership.

Many in the commercial real estate market had expressed that Act 388 placed buyers of commercial properties at a significant competitive disadvantage with competitive properties whose property taxes had not increased. The new law, which does not apply to owner occupied residential properties, creates an exemption equal to twenty-five (25%) percent of any increase in valuation resulting from a change in ownership. The exemption does not permit a reduction in market value below the prior assessed value.

The new legislation leaves several important legal arguments unresolved, most notably the date of valuation for property owners whose properties have decreased in value during the middle of the countywide reassessment cycle. Although the current law calculates property taxes based on the state of the property as of December 31st of the prior year, the South Carolina Attorney General's Office issued an advisory opinion in June 2010 stating that the valuation for any mid-cycle appeal was to refer back to date of the last countywide reassessment. Many South Carolina counties are not adhering to this advisory opinion. The new legislation does not address this issue.

Morris A. Ellison
William T. Dawson
Womble Carlyle
American Property Tax Counsel (APTC)

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Tennessee Property Tax Updates

UPDATED September 2017

Correction of Error

Taxpayers must file a timely appeal to the local board of equalization or lose the right to contest their property tax assessment.

An exception to the requirement of filing to the local board is that the taxpayer may seek relief from the assessor under the “correction of error” statute.  If the assessor refuses to correct the error, the taxpayer may file an appeal directly to the Tennessee State Board of Equalization. 

Assessors may correct “errors” which are defined as “obvious clerical mistakes, involving no judgment of or discretion by the assessor” which are “apparent from the face of the official tax and assessment records.”  For example, the Tennessee State Board of Equalization has held that the Assessor’s erroneous classification and valuation of a department store as a strip shopping center was a correctable error.

The deadline for the taxpayer to request a correction of error is March 1st of the second year following the tax year in question.

Andy Raines
Evans Petree PC
American Property Tax Counsel (APTC)

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Texas Property Tax Updates

Updated December 2017

Tax Payment & Late Challenge Deadlines

Taxing entities throughout Texas have been adopting tax rates and sending out tax bills. Taxpayers should be conscious of the deadline to pay taxes and to file late protests if possible. 

It is the taxpayer’s responsibility to pay all of the uncontested taxes by January 31, 2018. The taxpayer is required to pay by this date regardless of whether a tax bill was sent or received. The taxes, if delinquent, will incur penalties and interest. Failure to pay in a timely manner may result in the court losing jurisdiction in any pending property tax litigation for that year. January 31, 2018 might also be your last chance to protest 2017 values. 

A taxpayer who has not previously had a 2017 protest heard for their property and who has not reached an agreement with the Appraisal District regarding the same, may still file a late protest. A taxpayer in this circumstance may protest that the District’s assessment exceeds the correct value by more than one third. If the taxpayer is successful in seeking a reduction, a late-correction penalty of 10% must be paid on top of the remaining tax liability for filing late. 


Greg Hart
Pop Hutcheson PLLCPop Hutcheson PLLC
American Property Tax Counsel (APTC)

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Utah Property Tax Updates

Updated July 2017

Utah Legislature Declines Cost Approach & Contract Rents for Special Purpose Properties

During Utah’s 2017 General Legislative Session, Senate Bill 43 was drafted to value special purposes properties using a replacement cost approach and relying on contract rents. Specifically, the bill stated that in assessing such properties, the assessor was to “consider, as a primary factor, the cost of constructing improvements that are equivalent to the improvements currently on the property” and also “shall consider the terms of the agreement that provides for the rental or lease of the special purpose property.” This would have essentially asked for a “value in use” and a “leased fee” valuation rather than the constitutionally mandated “value in exchange” and “fee simple” standard of valuation. Industry offered its opposition to this bill and the bill ultimately did not pass.

John T. Deeds
Holland & Hart LLP
American Property Tax Counsel (APTC)

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Virginia Property Tax Updates

UPDATED September 2017

Virginia Year-End Deadlines Approaching

In Virginia, taxpayers typically have three years from the last day of the tax year for which an assessment is made to appeal the assessment to the appropriate Circuit Court.  In most of the large jurisdictions in Virginia, the tax year corresponds with the calendar year.  As a result, most taxpayers have until December 31, 2017 to appeal their 2014 assessments to Circuit Court.  The majority of Virginia locales do not require an administrative appeal before filing to court (the City of Alexandria being a notable exception); however, if you believe your 2014 assessments overstated the value of your properties or otherwise did not fully account for the impact of market conditions, please contact us to review the case and determine whether an appeal can or should be filed before the end of the year.

Ilene Baxt Boorman
Mark F. Rogers
Wilkes Artis, Chartered
American Property Tax Counsel (APTC)

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Washington Property Tax Updates

Updated December 2017

Opportunity for a Property Tax Break on Value-Add Properties

A shopping center with nearly 40% vacancy obtained a significant property tax reduction based on what a buyer would pay for property suffering substantial vacancy. The state board of tax appeals based the reduction on a stabilized value less lease-up costs (e.g., rent lost, tenant improvements, and leasing commissions). The board rejected one element of the deductions from value, however: the margin for entrepreneurial profit required for the effort and risk value-add investors assume. Both parties had quantified an entrepreneurial profit margin as a percentage of lease-up costs. (The assessor argued against this and all other vacancy-related costs due to above-market rents on some units, but the board rejected that offset, and the assessor did not appeal.) A court recently reversed the board’s decision on this point and ordered the board to treat entrepreneurial profit as a valid additional deduction from the property’s value.
 
Michelle DeLappe
Garvey Schubert Barer
American Property Tax Counsel (APTC)

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Washington DC. Property Tax Updates

Updated July 2017

Significant Appellate Actions by D.C. Office of the Attorney General

In September, 2016 the Tax Division of D.C. Superior Court issued a decision in Union Investment Real Estate GMBH v. District of Columbia, Tax Docket No. 2010 CVT 10219 (D.C. Super. Ct. Sept., 27 2016) completely rejecting the District’s assessment of a large commercial office building and adopting the taxpayer’s expert’s value. In January, 2017 the Tax Division of D.C. Superior Court issued a decision in Harrington Hotel Co., Inc. v. District of Columbia, Tax Docket No. 2010 CVT 9849 (D.C. Super. Ct. January 31, 2017) holding that the District’s unilateral decision to change the manner in which it calculated public space rental charges was arbitrary and capricious. As a result, the Court ordered the District to refund to the taxpayer that portion of the rental charge resulting from the arbitrary change. The Office of the Attorney General subsequently appealed both decisions to the D.C. Court of Appeals. However, before briefing even commenced the District withdrew its appeals in both cases, preserving these significant victories for the taxpayers. Both cases were litigated by Wilkes Artis, Chartered. 

Scott B. Cryder, Esq.
Wilkes Artis, Chtd.
American Property Tax Counsel (APTC)

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Wisconsin Property Tax Updates

Updated June 2016

Wisconsin Tax Appeals Commission Issues Major Decision Rejecting the Department of Revenue's Method for Assessing Manufacturing Property

In a major decision issued on April 12, 2016, Thermo Electron v. Wisconsin Department of Revenue, the Wisconsin Tax Appeals Commission rejected the method the Wisconsin Department of Revenue has used for decades to value manufacturing property, concluding that it was insupportable under either Wisconsin law or professionally acceptable appraisal practices.

Under that unorthodox method, which the Department called the “building residual” method, sales which the Department determined to be valid were placed into the Department’s database, after first being “fielded” by a Department assessor. The “fielding” assessor would allocate the overall sale price into land and improvements components, but with no indication of how the allocation was made or how either component of the overall sale price was derived.

Department assessors would then assess manufacturing properties based on comparable sales in the Department’s database; however, instead of making adjustments to the comparable properties in the traditional manner, based on the overall sale price, the Department’s assessors would consider only the amount allocated to improvements by the fielding assessor; would make adjustments to that amount to determine an indicated value for the assessed property’s improvements; and would then add in a land value for the property being assessed to determine an overall assessment. The assessor valuing a given property (and testifying to that value as the Department’s expert at trial) would thus have no idea how the fielding assessor had determined the land (or improvements) value for any of the comparables the testifying assessor claimed to have relied on.

The Tax Appeals Commission soundly rejected that method as unsupported under either Wisconsin law or professionally acceptable appraisal practices. The Commission held that the fielding assessor’s separate allocation of sales prices into land and improvements components could not be used in a valid comparable sales analysis, since the parties to the sale had not separately negotiated prices for the land and improvements, and thus the fielding assessor’s allocation was based on factors wholly unrelated to the sale transaction itself.

Since the Commission decision invalidated the assessment method the Department has used for decades, the Department has, not surprisingly, appealed.  

Robert L. Gordon, Esq.
Michael Best & Friedrich LLP
American Property Tax Counsel (APTC)

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