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Property Tax Resources

Jan
01

Florida Property Tax Updates

UPDATED march 2020

Effects of COVID-19 on Property Taxes in South Florida

COVID-19, with social distancing, stay at home orders, and remote working, have affected ad valorem property tax administration in South Florida just like every other aspect of life.

The deadline to pay 2019 ad valorem property taxes was extended in all Florida counties from March 31st to April 15th. Payments must be submitted electronically or postmarked by April 15th.

Both the Miami-Dade and Broward County Property Appraiser’s offices continue to operate, but are closed to the public.  They are available via phone and email.

Value Adjustment Board hearings concerning 2019 property taxes continue but are being conducted exclusively by phone.  The majority of hearings for 2019 property taxes were completed before the crisis and the remainder should be finished by the end of April.

Homestead and other exemption applications for the 2020 tax year were due March 2, 2020. If that deadline was missed, late applications may be filed through mid-September with a showing of extenuating circumstances for filing late. The Property Appraiser’s offices have indicated that they will be accepting late applications due to the COVID-19 emergency.

Miami-Dade and Broward Counties are treating personal property tax returns as late if an extension request was not submitted by April 1st.  However penalties for late filing increase monthly, so if a return has not already been filed, it should be submitted by April 30th to avoid further penalties.

Lastly, in Florida, valuations are based on a January 1st lien date. We are concerned that County Property Appraisers may take the position that 2020 values pre-dated the COVID-19 crisis and there will not be sufficient relief granted.  It will be particularly important to review and contest 2020 property tax assessments, to demonstrate that all types of commercial real estate have been affected by the economic impacts of the pandemic.


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

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Jan
01

Georgia Property Tax Updates

UPDATED March 2020

Taxpayer Wins Freeport Exemption Case

In Fayette County Board of Tax Assessors v. Walmart Stores, Inc. (A19A2238), (March 13, 2020), the Georgia Court of Appeals affirmed the trial court’s decision granting summary judgment for the taxpayer. The trial court held that the personal property at issue, self-checkout component parts held for fewer than 12 months and destined for shipment outside the state of Georgia, was not subject to ad valorem taxation because the freeport exemption under O.C.G.A. § 48-5-48.2(c)(3) applied to the property. The Court of Appeals held that the property fit into the category of finished goods as defined as “goods, wares, and merchandise of every character and kind.” and the property qualified as inventory as a list or quantity “of goods or materials on hand.”


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

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Jan
01

Idaho Property Tax Updates

Updated March 2020

Legislature Adjourns Without Repealing the Property Tax – What’s That About?

Early in the now adjourned 2020 session of the Idaho Legislature, Representative Jason Monks of Nampa introduced an audacious bill to repeal the property tax entirely.  Representative Monks also contemplated an amendment to the state constitution that would prevent future legislatures from reenacting the property tax.  The lost revenue was to be made up by a dramatic increase in the sales tax rate.  The bill (HB 359) did not advance, but it is a useful reminder that in some quarters there is a remarkable depth of feeling against the property tax.  The Statement of Purpose accompanying Representative Monks’ bill goes so far as to suggest that the property tax is “a leftover vestige of a feudal system of governing from the Middle Ages wherein lords of manors were required to pay tribute to a king or queen or they risked losing their lands.”  Assessors would do well to consider what bad experiences drive such feelings and how the taxpayer experience can be improved.    

Norman J. Bruns
Foster Garvey
American Property Tax Counsel (APTC)

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Jan
01

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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Jan
01

Indiana Property Tax Updates

UPDATED december 2019

Indiana Tax Court: Under The Income Approach, Fee Simple Interest Must Be Valued Based On Market Rents

Name:  Southlake Indiana LLC v. Lake County Assessor (the decision can be viewed here -- https://www.in.gov/judiciary/opinions/pdf/11251901mbw.pdf)

Date Issued:  November 25, 2019

Property Type:  Retail store

Assessment Years:  2007-2014  

Synopsis:  Taxpayer owns a 90,000 SF two-story, freestanding retail building in Northwestern Indiana, which it leased to a retailer doing business nationwide.  The property was encumbered by a build-to-suit lease, originally executed in 1992 and renewed in 2012. At the administrative hearing before the Indiana Board of Tax Review, the parties’ appraisals developed all three approaches to value but relied primarily on the income approach.  The Indiana Board’s final determination assigned no weight to the appraisers’ sales comparison and cost approaches.  The Tax Court explained, “To determine which appraiser’s estimate of market rent [under the income approach] was best supported, the Indiana Board used its own unique evaluation method.”  The Indiana Board examined 16 leases from the parties’ appraisers, made certain adjustments, and ultimately concluded that the market rents and income approach values offered by the Assessor’s appraiser were more credible.

Observing that Indiana assesses the value of real property – not business value, investment value, or the value of contractual rights – the Tax Court observed: “when valuing a property under the income approach, the fee simple interest in property must be valued based on an estimate of market rent, not contract rent.”  Comparable rental data, the Court further noted, must “represent freely negotiated, arm’s length transactions.” 

Assessor’s appraiser failed to adjust the rental data from the build-to-suit leases upon which his income approach relied.  Accordingly, those leases were not probative evidence of the market value of the subject property’s real property alone.  In contrast, the record evidence showed that Taxpayer’s appraiser exercised caution in using any build-to-suit rental data.  That the build-to-suit rental data “relied heavily on” by Assessor’s appraiser and the Indiana Board  “was neither adjusted nor explained as reflecting market rent” was contrary to law, the Court held. 

Finally, the Court explained that “no reasonable person reviewing the administrative record would find enough relevant evidence to support the Indiana Board’s reconstruction of [the Taxpayer’s Appraiser’s] percentage of gross sales analysis or its resulting conclusions.”  Therefore, the Indiana Board’s final determination also was unsupported by substantial or reliable evidence. 

The Tax Court reversed the final determination and ordered the Indiana Board to determine assessed values based, in part, on market rents derived by the analysis offered by the Appraiser for the Taxpayer. 

- The above facts and summary of the holding are based solely on the information presented in the published opinion issued by the Indiana Tax Court. 

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Faegre Baker Daniels LLP
American Property Tax Counsel (APTC)

Declining To Reweigh The Evidence, Indiana Tax Court Affirms Assessments Of CVS Store Based On Cost Approach

Name: CVS Corporation v. Elkhart County Assessor (can be accessed at
https://www.in.gov/judiciary/opinions/pdf/12091901mbw.pdf)

Date Issued: December 9, 2019

Property Type: Retail pharmacy

Assessment Years: 2012 – 2015

Point of Interest: Indiana Tax Court would not reweigh the record evidence, which supported the Indiana Board of Tax Review’s conclusion of value based solely on the cost approach without adjustment for external obsolescence.

Synopsis: CVS challenged the assessments of its nearly 11,000 SF retail pharmacy, built in 2004 and situated on 1.26 acres of land. The County Assessor had valued the property at a range of approximately $1 Million to $1.1 Million for the four contested assessment dates. At the consolidated administrative hearing before the Indiana Board of Tax Review, both parties presented USPAP-compliant appraisals; both appraisers applied all three approaches to value but assigned weight to them differently. For CVS, its appraiser gave most weight to the sales and income approaches, concluding to a range of $800,000 to $890,000. For the Assessor, her appraiser assigned equal weight to each of the three approaches, opining on a value for each year of about $1.8 Million.

The Indiana Board applied the cost approach, without obsolescence. The Indiana Board concluded that the cost approach – absent any adjustment for economic obsolescence – was the most persuasive indication of value for this eight- to eleven-year-old store. The Indiana Board disregarded both appraisers’ sales and income approaches completely, finding them too flawed, and concluded to values of more than $1.2 Million for each year.

The Court will not reweigh the evidence. The Tax Court noted that the Indiana Board is “required to adopt a value based exclusively on evidence in the administrative record,” but it is not obligated to “adopt the same weight afforded to the evidence” that the appraisers applied in their respective reports. The Court further explained that the record evidence supported the Indiana Board’s rejection of external obsolescence. The appraiser for CVS had testified in “vague generalities” about the subject property’s “softer market.” The Assessor’s appraiser, however, presented evidence regarding growth in population, employment and gross domestic product in the local area during the years at issue. CVS was asking the Court to reweigh the record evidence in its favor, something the Court cannot do “absent a showing that the Indiana Board has abused its discretion.” Concluding that the Indiana Board had acted within its statutory authority, the Court affirmed the final determination.

This email address is being protected from spambots. You need JavaScript enabled to view it., Esq.
Faegre Baker Daniels LLP
American Property Tax Counsel (APTC)

Indiana Tax Court Affirms Assessment of Vacant Lot Based on Appraisal and Testimony of the Appraiser

Name:  Sheerin v. LaPorte County Assessor (which can be viewed at https://www.in.gov/judiciary/opinions/pdf/12111901tgf.pdf)

Date Issued:  December 11, 2019

Property Type:   Vacant lot

Assessment Year:  2015

Point of Interest:  Appraisal offered by Assessor had minor flaws but sufficiently established a prima facie case supporting the assessed value of a vacant lot. Relying on the appraisal and the appraiser’s testimony, the Indiana Board of Tax review did not abuse its discretion in affirming the assessed value.

Synopsis:  A 6,000 SF rectangular vacant lot, which was zoned residential, was “buildable,” but several issues would make any construction more costly than normal, i.e. it had a “severe slope,” a lack of rear access, the need for septic installation, and a proximity to overhead power lines. Though the County Board had reduced the assessment from $220,000 to $132,000, Owner appealed to the Indiana Board of Tax Review.

Before the Indiana Board, Assessor had the burden of proof. Assessor engaged an appraiser who, relying on sales of three vacant lots, estimated the property’s vale at $160,000 as of January 1, 2015. Owner challenged the comparability of the three sales and claimed the appraiser made other errors. The Indiana Board affirmed the $132,000 assessment despite “minor flaws” in the appraisal, ruling the Assessor had made a prima facie case supporting the property’s assessment, which Owner failed to rebut with probative, market evidence. Assessor had not asked for an increase in the lot’s value.

Before the Tax Court, Owner repeated his arguments from the administrative appeal and asserted that the Indiana Board improperly deferred to the “perfidious” appraisal offered by the Assessor. The Tax Court observed, “When, as here, the Indiana Board determines the evidence presented at the administrative level has probative value, the Court will not reverse its determination that a litigant made a prima facie case absent an abuse of discretion.” Here, the Indiana Board concluded that the appraisal, despite its problems, and the appraiser’s testimony “provided a sufficient explanation of the methods and information used to derive the estimate of value.” Owner did not establish that the Indiana Board had abused its discretion because its final determination “comports with the law and is supported by substantial evidence.” The Tax Court affirmed the Indiana Board’s ruling.

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Faegre Baker Daniels LLP
American Property Tax Counsel (APTC)

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Jan
01

Iowa Property Tax Updates

UPDATED March 2019

The Time to Negotiate Iowa Property Tax Assessments is Now

On April 1, 2019, assessors around the state of Iowa will release their property tax assessment values.  This starts the clock for negotiations.

Pursuant to Iowa Code § 441.30, from April 2 until April 25, aggrieved taxpayers may contact local assessors and make an informal request that the assessment be changed.  This can result in a written agreement with the assessor to correct or modify the assessment, or an agreement by the assessor to file a recommendation with the local board of review that the assessment be changed.  Assessors around Iowa take this period seriously.  The time to consider negotiations is now.

Here is a brief overview of the Iowa appeal deadlines:

  • January 1 – Assessment date (Iowa Code § 441.46)
  • April 1 – Assessor’s release assessment values (Iowa Code § 441.23)
  • April 2-25 – Time to negotiate with assessors (Iowa Code § 441.30)
  • April 30 – Iowa Board of Review protests due (Iowa Code § 441.37)
  • Later date of May 31 or 20 days after board of review opinion – Deadline to file appeal with PAAB or district court (Iowa Code §§ 441.37A, 441.37B, 441.38)

This email address is being protected from spambots. You need JavaScript enabled to view it. and Elizabeth Carter
Faegre Baker Daniels LLP
American Property Tax Counsel (APTC)

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Jan
01

Kansas Property Tax Updates

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. 

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Property Tax Law Group, LLC
American Property Tax Counsel (APTC)

 

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Jan
01

Kentucky Property Tax Updates

UPDATED march 2020

Kentucky Extends Property Tax Calendar

In light of the ongoing COVID-19 State of Emergency declared by Governor Beshear, and the effect of the State of Emergency on the operations of state and local government offices, the Kentucky Department of Revenue has taken a number of steps to extend the 2020 property tax calendar.

Personal property tax returns, originally due by May 15th, are now due by July 15th.

For real property, the tax roll inspection period (appeal period), originally scheduled to run from May 4 - 20, will now run from July 6 - 20.  Property valuation administrators are allowed to start their inspection periods before July 6th, but the inspection period cannot close before July 20th.  While the real property tax appeal period will be compressed, the counties plan to send out tax bills on the regular schedule (November and December).

Kentucky law does not provide any type of relief on property valuations for catastrophes or disasters.  Given the January 1st lien date, current policy is that a taxpayer will not be granted valuation relief for 2020 due to COVID-19, but that any diminution in value will be considered for 2021.  This policy is subject to change, although that is unlikely unless Kentucky's legislature provides some emergency relief.

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Morgan Pottinger McGarvey
American Property Tax Counsel (APTC)

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Jan
01

Louisiana Property Tax Updates

Updated september 2019

But It's A Nice Round Number...

For the 2017 Tax Year, the Taxpayer protested a gross over-valuation of its casino/hotel property by the Assessor for Bossier Parish (the “Assessor”). The dispute concerns both the casino/hotel property and the land valuations (land underlying the casino/hotel, the RV parking lot and the employee parking lot). After a full trial on the merits, the five-member state commission charged with overseeing the correctness of property tax assessments – the Louisiana Tax Commission (“LTC”) – rendered a decision that in large part corrected the injustice and numerous errors contained in the Assessor’s overvaluation and consequent unfair assessment regarding both the casino/hotel property and the land valuation.

The Commission determined that both the Taxpayer’s appraisal and its Staff appraisal were flawed for different reasons, but also determined that sufficient information was submitted enabling the Commission to reconcile the issues in each of the appraisals and calculate a new, correct income approach to value.  In its decision, the Commission actually offered values of the casino/hotel property using both the cost approach and the income approach, ultimately concluding that the income approach was the more reliable method for valuing the casino/hotel income-producing property.  

The Commission’s Decision also determined that both the Assessor’s and Staff appraiser’s land valuations were unreliable, and further determined that “The Taxpayer’s land appraisal is the most reliable information and evidence provided regarding the land value.” Accordingly, the Commission determined the total land value to be the same as the Taxpayer’s local land appraisal expert.

The Assessor appealed the LTC decision to the District Court which affirmed the LTC’s finding of 65% obsolescence (using the cost approach method) based upon the record evidence of obsolescence – none of which was refuted by the Assessor.  The District Court was however silent on the land valuation issue. The Assessor appealed the District Court decision to the Second Circuit Court of Appeal.

The Second Circuit Court of Appeal ordered that the LTC adopt the appraisal report of the LTC staff appraiser in which the cost approach was used to value the subject property. Interestingly, both parties (Taxpayer and Assessor) and the LTC refuted the staff appraisal report during the LTC hearing on the matter, and neither the parties, nor the LTC requested that the appraisal report be adopted on appeal to the District Court or the Second Circuit Court.

The Second Circuit found that the Assessor “arbitrarily refused to consider additional obsolescence in his 2017 assessment, which was an abuse of the Assessor's discretion,” and as a result, his 2017 assessment was incorrect.  However, the Court also determined that the LTC “arbitrarily and capriciously assigned an obsolescence factor [65%], which was in error.” The Court then fashioned a remedy that requires the LTC to adopt the appraisal of a staff employee that uses a 30% obsolescence factor that is not supported by anything other than that employee’s belief that it would yield a “nice round number.”  Additionally, the staff appraisal report referenced by the Second Circuit included the casino/hotel property, but included only part of the land – the land on which the casino/hotel sits –and did not include the other two parcels of land.  Thus, the Second Circuit was silent on the valuation of two of the land parcels.

The Court’s decision fails to address the record presented by the taxpayer – most importantly the opinion of the taxpayer’s expert, and the factual back-up he provides for those opinions.  The expert opinions of the only qualified expert appraiser to testify were not even mentioned in the decision, indicating that evaluation of the record in its entirety did not occur. The decision mentions the expert appraiser once, but does not discuss his analysis or the substance of his opinions at all. The decision also does not recite his qualifications, credentials, or professional associations and experience. The decision is also devoid of any discussion or any of the evidence presented by the taxpayer’s other witnesses – including the General Manager of the casino/hotel - on which the LTC’s decision was clearly based.

Both the Assessor and the Taxpayer have filed applications for re-hearing to the Second Circuit.  Bobby Edmiston, Assessor v. Louisiana Riverboat Gaming Partnership d/b/a Diamond Jacks Casino and Resort, No. 52, 948 (La. App. 2 Cir. 9/9/2019

Angela W. Adolph
Kean Miller LLP
American Property Tax Counsel (APTC)

 

Property Tax Exemption

The operator of lease-to-own stores claimed an exemption from Orleans Parish ad valorem taxes on the grounds that the leased personal property was being used in the homes of its customers. However, the Fourth Circuit found that the applicable ad valorem tax exemption applies to owners using their property in their own homes as opposed to a commercial owner leasing out personal property to customers for use in their homes. Aaron's, Inc. v. Foster, No. 2019-CA-0443 (La. App. 4 Cir. 09/25/2019).

Angela. W. Adolph
Kean Miller LLP
American Property Tax Counsel (APTC)

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Jan
01

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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American Property Tax Counsel

Recent Published Property Tax Articles

Navigating D.C.’s Tax Rate Maze

An evolving and imperfect system has increased property taxes for many commercial real estate owners.

If you own or manage real property in the District of Columbia and are wondering why your real estate tax bill has gone up in recent years, you are...

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Texas' Taxing Times

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Higher Property Tax Values in Ohio

The Buckeye State's questionable methods deliver alarmingly high values.

A recent decision from an Ohio appeals court highlights a developing and troubling pattern in the state's property tax valuation appeals. In a number of cases, an appraiser's misuse of the highest and best use concept has led to extreme overvaluations. Given...

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