Updated september 2019
Kansas Board of Tax Appeals rejects Korpacz /IAAO methodology for Big-Box Retail Properties
The Kansas Board of Tax Appeals recently issued a decision in various tax appeals for Walmart stores located in Johnson County, Kansas.
The County hired Peter Korpacz, MAI, and Bliss & Associates to appraise the properties. The County also hired Dr. Tom Hamilton, MAI, to join Korpacz in advocating for the new IAAO method of valuing the illegitimate “fee simple subject to a lease”.
The properties were owner-occupied but Korpacz valued the property ‘as if leased to Walmart with 20 years left on a lease’. He utilized the sales comparison and income approaches to value the properties and relied on sale leaseback and build-to-suit comparables for both approaches. The taxpayer’s expert, Gerald Maier, MAI, excluded build-to-suit and sale leaseback comparables to value the property in fee simple.
The Board ruled that the County’s methodology was contrary to Kansas law, which prohibits the use of build-to-suit comparables without proper appraisal adjustments to limit the value attributable to the leased fee interest. The Board reaffirmed Kansas is a fee simple state and not a leased fee state.
Property Tax Law Group, LLC
American Property Tax Counsel (APTC)
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)
Updated December 2010
First Half 2010 Tax Due: On Or Before December 20, 2010
Kansas provides three opportunities each tax year to appeal the valuation of taxable real & personal property. While there are three opportunities, taxpayers can only have one appeal per year. If a taxpayer wants to file an appeal for 2010 and did not file an appeal in March of 2010, then the second of the three chances is in December. On or before December 20, 2010, any taxpayer wanting to challenge the valuation of property can complete a Payment Under Protest form and transmit it to the office of the County Treasurer of the county where the property is located. At least ½ of the taxes MUST be paid to perfect this appeal; however, the form can be filed separately from the payment.
The forms can be requested from the County Treasurer’s office or some counties, such as Johnson County, Kansas, have the forms on their web site (treasurer.jocogov.org/tre/doc/PRApp.pdf) and some can be completed on line. They can be mailed or faxed. Few counties accept them electronically.
The last chance to perfect an appeal of the 2010 valuation is when the second half tax payment is due in March of 2011. The method then is different. It is suggested that tax counsel be consulted to ensure a lawful, compliant appeal is filed.
After the appeal is filed, the taxpayer will be notified of the date and time for an informal meeting with a representative of the county appraiser’s office. This is the time for the taxpayer or their tax counsel to present the county appraiser with relevant information concerning the correct valuation. A “Results Notification” will be sent out after the meeting. If the results are not satisfactory, the next appeal is to the State Court of Tax Appeals. Statutory deadlines will be included on the notice.
Neill, Terrill & Embree, L.C.
American Property Tax Counsel
Updated December 2009
Season for Tax Appeals
The 2009 appeal season is upon us. Most, if not all, of the new 2009 real property values are mailed in the month of March to property owners across Kansas. If you did not receive a 2009 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 2009 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 20th; or (3) pay the second half tax under protest on or before May 10th 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.
Updated December 2008
Rules a Taxpayer Needs to Know
The date to pay taxes under protest this year is December 22, 2008. Any taxpayer that does not already have a 2008 valuation appeal can pay one-half of the taxes due under protest. It is necessary to complete and file a payment under protest (PUP) form. The form needs to arrive prior to or with the payment. A corporate officer or employee is generally allowed to sing the PUP and to appear and testify on behalf of the corporation. However, duly authorized representatives not licensed to practice law in Kansas may not practice law on behalf of the artificial entity. PUP forms can be obtained from the offices of any county treasurer. Kansas law changed the name of the administrative tax court to the Kansas Court of Tax Appeals. You can visit their new web site at www.kansas.gov/cota.
Updated December 2007
2007 Payment Under Protest Date Soon
Levies are being set and 2007 tax bills will be sent out around November 1, 2007. For those taxpayers that did not file a 2007 appeal in the Spring, a tax protest may be filed on or before December 20th. The requirements to file include completion of a protest form and payment of at least one-half of the taxes due. Forms can be obtained from the offices of the county treasurer where the property is located or by visiting the web site for the Kansas Board of Tax Appeals: www.Kansas.gov/bota. As always, it is recommended that one consult local tax counsel because strict compliance with the statutes is a jurisdictional requirement.
Big Box Case Victory for Taxpayers
The Kansas Board of Tax Appeals in Docket No. 2004-3806-EQ, Prieb Properties, LLC, Shawnee County, Kansas, held that "build to suit" rent rates and "sale-leaseback" rent rates are not market rents.