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Property Tax Resources

Jan
01

Pennsylvania Property Tax Updates

UPDATED JUNE 2019

PENNSYLVANIA SUPREME COURT ISSUES ANOTHER DECISION IN A SERIES OF UNIFORMITY RULINGS PROTECTING TAXPAYERS

In an April 2019 decision, the Pennsylvania Supreme Court issued yet another ruling in a series of decisions over the last decade consistently upholding the constitutional requirement of uniformity in taxation in favor of taxpayers.  In Sands Bethwork Gaming, LLC v. Pennsylvania Department of Revenue, 216 MM 2017 (Pa. Apr. 26, 2019), the Supreme Court ruled that a statute that taxed gaming revenue at different thresholds and then re-distributed the proceeds violated the Uniformity Clause.

The Pennsylvania Constitution provides “All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax. . . .”  In Sands, all seven Justices agreed in the result, declaring the statutory section to be unconstitutional; five Justices made up the majority and two Justices concurred.  The concurrence, authored by Justice Wecht (who was the author of the Court’s 2016 Mount Airy decision) is particularly strong.  Justice Wecht begins with a refresher that Pennsylvania’s Uniformity Clause was adopted in the late 1800’s in a “populist backlash against the preferential tax treatment that the legislature often had extended to favored industries and individuals.”  He noted that as a result of those preferential laws “[t]he burden of maintaining the state had been, in repeated instances, lifted from the shoulders of favored classes, and thrown upon the remainder of the community.”  The  Uniformity Clause was the specific remedy fashioned by the delegates to the constitutional convention to prevent “certain groups from having to shoulder the benefits of progress from which all would benefit.”

Unfortunately, in Pennsylvania, most local school districts, some local assessors and some trial courts seem to have lost sight of the requirement of constitutional uniformity in taxation.  Pennsylvania’s Supreme Court, refreshingly, has not.

The Sands decision follows the Court’s recent decisions in:

  • 2017, Nextel v. Commonwealth, 171 A.3d 682 (Pa. 2017)(declaring that a corporate income tax statute that required corporations that met an income threshold to pay an income tax, whereas corporations that did not meet the threshold wholly escaped taxation, violates the Uniformity Clause);
  • 2017, Valley Forge Towers v. Upper Merion School District, 124 A.3d 962 (Pa. 2017)(declaring that a school district policy targeting only commercial property owners for increase assessment appeals violates the Uniformity Clause);
  • 2016, Mount Airy #1 v. Pennsylvania Department of Revenue, 154 A.3d 268 (Pa. 2016)(declaring that a gaming statute setting a graduated-rate income tax violates the Uniformity Clause)
  • 2012, Tech One v. Allegheny County, 53 A.3d 685 (Pa. 2012) (acknowledging the “logic and force” of the trial court’s finding that treating some real estate as exempt from taxation solely because it is owned as a leasehold interest rather than in fee simple would violate the Uniformity Clause, but deferring a ruling on those grounds because it had already ruled that real estate cannot be classified differently for purposes of taxation based on the manner in which it is owned)
  • 2009, Clifton v. Allegheny County (Pa. 600 Pa. 662 (Pa. 2009)(ruling that “base year” system of assessment was unconstitutional as applied in Allegheny County because it did not consider real estate valuation changes; and ordering county to re-assess);
  • 2006, Downingtown Area School District v. Chester County Board of Assessment, 913 A.2d 194 (Pa. 2006)(ruling that a taxpayer may bring evidence of assessment-to-value ratio of similar shopping centers in challenging uniformity of taxpayer’s assessment);

We have called the Uniformity Clause the “fourth approach to value”.  The Uniformity Clause is the underpinning of all taxation and should inform the strategy of every assessment appeal.

To discuss the specifics of your property, please contact Siegel Jennings at:

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

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Jan
01

Rhode Island Property Tax Updates

Updated december 2018

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 2019 by filing an Account with the local assessor. In most jurisdictions the Tax Year 2019 tax bill will be sent out during the summer of 2019. The Tax Year 2019 tax bill has an assessing date of December 31, 2018. In most cases the filing of a Valid Account by January 31, 2019 is a prerequisite to a valid appeal. The Account must describe the property, both personal and real, 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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Jan
01

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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Jan
01

Tennessee Property Tax Updates

UPDATED JUNE 2019

Paying Taxes on Properties Under Appeal in Tennessee

Taxpayers in Tennessee are often faced with tax payment deadlines prior to the conclusion of appeals filed to the Board of Equalization.  Are taxpayers in Tennessee required to pay the taxes by the delinquency date even if the appeal is not concluded?

In Tennessee, taxes based on assessments under appeal at the County and State Boards of Equalization are not deemed delinquent while the appeal is pending, so long as the undisputed portion of tax has been paid by the delinquency date.  The taxpayer may pay the amount of taxes that would be owed if the appeal is successful.  Even if the taxpayer loses the appeal, the payment of the undisputed portion allows taxpayer to pay the balance due at a favorable interest rate (two points below the composite prime rate) instead of the punitive statutory rate (18% per annum).

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Evans Petree PC
American Property Tax Counsel (APTC)

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Jan
01

Texas Property Tax Updates

Updated JUNE 2019

The 86th Texas Legislature Has Adjourned Providing Long-Awaited Property Tax and School Finance Reform

In the words of Governor Greg Abbott, “This was an extremely successful session.”  The Texas Legislature’s primary focus, as widely reported in the press, was on property tax and school finance. These same issues were debated in the 2017 legislative session, but were left unresolved, much to the frustration of school districts and taxpayers. Lawmakers had a clear mandate this session – deliver reform. They succeeded by passing SB 2 and HB 3.

HB 3 (Huberty) addresses school finance. The new law provides $4.5 billion in additional state funding, $2 billion in additional teacher pay, and $5 billion in property tax relief.  This tax relief reduces school district tax rates by 7 cents in 2019 and 13 cents in 2020, which essentially limits the increase in local school district revenue to 2.5% per year.

SB 2 (Bettencourt) is the omnibus property tax bill designed to provide reform at several levels of our ad valorem tax system. As dollars go, the new law limits revenue increases for cities and counties to 3.5% per year. Any increase above that must be approved by voters. Other provisions apply for small taxing units.

SB 2 also:

  • Increases transparency for taxpayers by requiring taxing units and appraisal districts to create and maintain websites concerning tax information
  • Creates a Comptroller Property Tax Administration Advisory Board
  • Requires appraisal districts to appraise property in compliance with appraisal manuals to be issued by the Texas Comptroller; manuals must comply with generally accepted appraisal techniques
  • Provides for special Appraisal Review Board panels, comprised of highly qualified individuals, to hear protests concerning properties with appraised values over $50 million located in counties with populations over 1 million
  • Codifies that the following publications are considered generally accepted appraisal methods and techniques as a matter of law: The Appraisal of Real Estate, The Dictionary of Real Estate Appraisal, USPAP, and publications including information related to mass appraisal
  • Eliminates taxing unit power to challenge the level of appraisal of a category of property
  • Prohibits Appraisal Review Boards from increasing appraised values above the values certified by appraisal districts

There were other important property tax bills. For instance:

HB 380 (Geren) allows a taxpayer to correct procedural flaws in a protest or lawsuit.

HB 1743 (King) reduces the rollback on ag use from 5 to 3 years and the interest rate from 7 to 5 percent.

HB 3143 (Murphy) extends the tax abatement program featured in Chapter 312 of the Texas Tax Code to September 1, 2029.

The session was successful not only for passing helpful legislation, but also for quashing dangerous proposals. Two are most notable: a bill seeking to eliminate the equal and uniform remedy did not receive a public hearing and a sales disclosure bill was not reported from committee. Passage of these bills would have caused serious turmoil for taxpayers, as key protections for confidentiality and against unfair taxation would vanish. 

Many thanks to our hardworking legislative affairs team who fought tirelessly this session on behalf of taxpayers. Jim Popp along with Vilma Luna and Clint Smith of Hillco Partners are to be commended for their watchful eyes, keen observations, and effective legislative strategies. Additionally, special thanks goes to Daniel Gonzalez and the Texas Association of Realtors for their continued support and ongoing efforts to defend our property tax system. Experience has shown me that, in representing taxpayers from start to finish, the start is always at the Texas Capitol.

For a more detailed analysis of legislation please click here: https://www.property-tax.com/wp-content/uploads/2019/05/1.-2019-Summary-Passed-Legislation.pdf


 Danny Smith
 Popp Hutcheson
American Property Tax Counsel (APTC)

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Jan
01

Utah Property Tax Updates

Updated June 2018

Tax Commission Holds that Debt Rate Must Match Capital Structure

The concluding step in deriving a weighted average cost of capital cost is to determine the proper capital structure.  In Appeal No. 15-958 (May 2018), the Tax Commission stated that the capital structure is related to a company’s credit rating and held that “[c]ombining a debt rate from “A” rated companies with a capital structure from mostly “B” rated guidelines companies . . . [was] a mismatch.”  The Commission corrected this error by utilizing an “A” credit rating and a capital structure of “A” rated debt.  Thus, it is important to understand the relationship between a company’s debt rating and its capital structure when determining a weighted average cost of capital.


David J. Crapo, John T. Deeds
Crapo Deeds PLLC
American Property Tax Counsel (APTC)

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Jan
01

Virginia Property Tax Updates

UPDATED March 2019

2019 Appeal Deadlines Approaching

The 2019 assessments have been released in all Northern Virginia jurisdictions, and now is the time for property owners to focus on potential appeals.  In Arlington County, the assessed values of commercial office properties are up 4.3%.  In the City of Alexandria, commercial assessments are up approximately 2.70%.  Fairfax County has increased non-residential assessments by 5.19%, and Loudoun County commercial assessments are up 7.66%.  Arlington County has proposed an increase in the real estate tax rate for the current tax year, while Fairfax County and the City of Alexandria are expected to remain flat.  Those rates will be reviewed and potentially adopted over the next several weeks.

Because market conditions have not drastically changed, the changes in assessed value may not adequately reflect the current value of a particular property.  Assessment appeal deadlines are coming up in Arlington County (April 15), and in Fairfax County, Alexandria and Loudoun County (June 3).  To discuss the merits of an appeal of your assessment, please contact us at the numbers listed below.

Mark Rogers
202-457-7804

Ilene Boorman
202-457-7806

Wilkes Artis, Chtd.
American Property Tax Counsel (APTC)

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Jan
01

Washington Property Tax Updates

Updated JUNE 2019

Washington Legislature Raises New Revenue

The 2019 Washington Legislature raised substantial new revenue for the next biennium. Two notable changes: school levy limits were relaxed and the real estate excise tax was practically doubled.

The real estate excise tax applies to sales of Washington real estate and sales of a controlling interest in an entity that own Washington real estate. The tax is 1.78 percent of the sale price in most parts of the state. A new graduated rate structure goes into effect on January 1, 2020, with rates starting at 1.6 percent and quickly rising to 3.5 percent. Several other changes were made, as well.

School finance litigation resulted in the 2017 Legislature limiting local school levies in exchange for increased funding from the state. This session the Seattle school district and others persuaded the Legislature to relax those limits. The effect will vary from district to district, making property tax projections more complicated and uncertain for taxes payable in 2020.
 
Norm Bruns and Michelle DeLappe
Garvey Schubert Barer, P.C.
American Property Tax Counsel (APTC)

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Jan
01

Washington DC. Property Tax Updates

Updated JUNE 2019

Tax Rate Rollercoaster Lands

The DC Tax Rate Rollercoaster has finally landed. Following a year of uncertainty, increases, and decreases in the commercial property tax rate the D.C. Council has finally provided clarity regarding the rate. In June 2019 the Council passed the Fiscal Year 2020 Budget Support Act. This Act officially increased the top commercial tax rate back to 1.89% from the 1.85% rate the Council set just six months prior. The Council also approved an increase in transfer and recordation taxes (payable upon, e.g., the sale of a property) from 2.90% to 5.00% for commercial properties. These taxes are set to sunset in 2023.

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

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Jan
01

Wisconsin Property Tax Updates

Updated March 2018

Wisconsin Court Of Appeals Holds That Agricultural Land Classification Does Not Require That Crops Be Grown For A Business Purpose

In a decision issued on March 7, 2018, State of Wisconsin ex rel. The Peter Ogden Family Trust v. Board of Review, the Wisconsin Court of Appeals rejected the assessor’s position that crops must be grown for a business purpose for land to qualify for agricultural classification, which requires assessment at significantly below market value.

Beginning in 2012, the land at issue was classified as agricultural and agricultural forest based upon pine trees, apple trees, and hay the landowners planted on the property. In 2016, the assessor concluded that the property failed to meet the agricultural and agricultural forest classifications and reclassified the property as residential.  This resulted in an increase in the assessed property value from $17,100 as agricultural land to $886,000 as residential land.

The landowners objected to the 2016 assessment, and the board of review upheld the residential classification. The landowners filed an action for certiorari review, arguing that the change was erroneous because it was based upon the mistaken belief that for land to qualify as agricultural land, crops grown on the property must be grown for a business purpose. The circuit court upheld the assessment, and the landowners appealed.

The Court of Appeals examined Wisconsin statutes defining “agricultural land” and “agricultural use,” as well as the relevant Department of Revenue rule, and concluded that the plain language of the statutes and rule refers to “growing” the relevant crops, not marketing, selling, or profiting from them. The Court found that the board of review’s position that the land could not be “devoted primarily to agricultural use” without “minimal sales,” “valid economic activity,” and crops being “marketed for sale” was unsupported and contrary to law. The Court further rejected the board’s argument that the assessor did not impose a “business standard” when evaluating the use of the property, concluding that a review of the transcript of the board hearing demonstrated that the assessor and the board clearly—and erroneously—equated “agricultural use” with growing crops for a business purpose.

The Court thus held that to qualify for agricultural classification, it is sufficient that the land be devoted primarily to growing qualifying crops, whether or not those crops are grown for a business purpose.

Marie Bahoora
Michael Best & Friedrich LLP
American Property Tax Counsel (APTC)

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American Property Tax Counsel

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