April 2016 Newsletter

April 1, 2016 | Newsletter
  • MARYLAND – Tax Court rejects coal-fired electrical generating plant’s claim that highest and best use of its property is a natural gas plant.
  • NEW YORK – Appellate Division holds that Town may be third-party beneficiary of a provision limiting the generator’s right to appeal property tax assessments in a supply agreement between an energy generating company and a power authority.
  • UNITED STATES DISTRICT COURT – District Court for the District of Rhode Island holds that challenge to state statute limiting interest awards to power company prevailing in tax appeal is not ripe for review.
  • OHIO – Supreme Court holds that Board of Tax Appeals lacks the authority to consider whether the county auditor has issued property tax assessment frivolously and in bad faith, such as to warrant sanctions.
  • INDIANA – Tax Court holds that assessed value of business tangible personal property reported on taxpayer’s return prevailed where County Tax Assessment Board of Appeals failed to issue timely determination.

July 2015 Newsletter

July 5, 2015 | Newsletter
  • TEXAS – Natural gas production and processing equipment is taxable by a county if located in the county on January 1 for more than a temporary period, even if county is not the equipment owner’s principal place of business.
  • MARYLAND – Tax Court rejects taxpayer’s cost approach valuation based on assumption that efficient, environmentally compliant coal-fired electric generating plant would be replaced with natural gas facility.
  • HAWAII – Intermediate Court of Appeals holds that wind turbines are not taxable real property under Maui County Code.
  • VERMONT – Supreme Court holds that value of utility easements and rights of way not taxable to easement holder.
  • GEORGIA – Supreme Court allows Southern LNG to seek declaratory judgment compelling State Revenue Commissioner to recognize it as a “public utility” and to accept its property tax returns rather than requiring filing with the County.
  • NEW HAMPSHIRE – Department of Revenue Administration could use utility tax appraisal of renewable energy windpark in determining the equalized value for property tax purposes.
  • MINNESOTA – Tax court not bound to use Minn. R. 8100, Commissioner of Revenue’s framework for valuation of utility property for assessment purposes, in determining fair market value of gas distribution pipeline system.
  • NEBRASKA – Payment in lieu of tax exempted public power and irrigation district from liability for property taxes on leased parcels, regardless of whether the parcels were used for an authorized public purpose.

December 2014 Newsletter

December 8, 2014 | Newsletter
  • ALASKA – Municipalities awarded attorneys fees and costs as prevailing parties in Trans-Alaska Pipeline Tax Appeal.
  • CALIFORNIA – Court of Appeal holds that the drilling and deepening of oil and gas wells constitutes new construction, and that assessor's use of the cost method was not unreasonable.
  • VERMONT – Value of utility easements and rights of way held by electrical utility is not properly included in property tax assessment.
  • TEXAS – Court of Appeals reverses order requiring refinery owner to provide sensitive financial information, because not necessary to produce accurate appraisal.
  • OHIO – Auction sale of foreclosed property could be considered voluntary and arm's length such that auction price is evidence of value of property for tax purposes.

September 2014 Newsletter

September 29, 2014 | Newsletter
  • KENTUCKY – Franchise of a public service company is not subject to statutory property tax exemptions and its valuation not entitled to be spread over other types of assets when assessing property taxes.
  • MARYLAND – Ground leases by which taxpayer leased income producing commercial real property from city could be considered in valuing the property for property tax purposes only if they contained restrictions diminishing the value of the property.
  • GEORGIA – Gas company seeks to compel State Revenue Commissioner to recognize it as “public utility” and to accept its property tax return.
  • NEBRASKA – Mailing of personal property tax return could constitute filing of return, even if not received by the county assessor.
  • KANSAS – Out-of-state natural gas marketing companies and out-of-state municipalities are not “public utilities” under Kansas law and therefore entitled to the merchants’ and manufacturers’ inventory exemption for their natural gas held for resale.

July 2014 Newsletter

July 1, 2014 | Newsletter
  • CALIFORNIA – Intangible assets have a quantifiable fair market value which must be deducted from an income stream analysis prior to taxation.
  • MASSACHUSETTS – Leasehold improvements made by tenant of tax-exempt property not subject to property tax.
  • CONNECTICUT – Prior owner lacks standing to challenge property tax assessment of office building.
  • MICHIGAN – Owner-occupied big box stores properly valued for property tax purposes as vacant and available, rather than occupied.
  • COLORADO – Supreme Court affirms Appellate Court, holds that assessing cable service providers differently than public utilities does not violate state constitution.

May 2014 Newsletter

May 1, 2014 | Newsletter
  • CALIFORNIA – Petroleum refinery property, unlike most other industrial property where fixtures and land are separately assessed, may be taxed as a unit.
  • CALIFORNIA – Underutilization adjustment based on economic obsolescence requires proof of causation by external factors, as opposed to taxpayer’s own actions.
  • COLORADO – Country club memberships are not the equivalent of “rental income” and should not be used in an income-approach valuation of club property.
  • NEW JERSEY – Tax Court rejects municipality’s argument that impact of environmental contamination and the cost of remediation on true market value is limited to contaminated portions of an industrial site.
  • MONTANA – Telecommunications service company which provides cable, voice and internet services should be centrally assessed; cannot report voice and internet services locally.

June 2013 Newsletter

June 1, 2013 | Newsletter
  • WEST VIRGINIA – Steel company’s cutting of steel coils into smaller sizes does not render them a “product of different utility” and thus ineligible for the Freeport Exemption.
  • COLORADO – Airport concessionaires’ possessory interests in City property is taxable despite extensive operational controls imposed on the concessions by the City and the shared seating and other customer areas.
  • NORTH CAROLINA – Court of Appeals rejects use of standard depreciation schedules of leased computer equipment for failure to adequately account for functional and economic obsolescence.
  • OHIO – Tax Commissioner cannot mandate taxpayer’s use of “first in, first out” method of valuing inventory for tax purposes absent administrative rule or showing that taxpayer’s accounting method was arbitrary.
  • OKLAHOMA – Failure to comply with statute requiring notice to county assessor of filing of tax appeal and payment under protest deprives reviewing court of jurisdiction.
  • OREGON – County representatives under no obligation to advise taxpayer of its rights to appeal tax assessment and failure to do so does not excuse untimely appeal.
  • MASSACHUSETTS – Appellate Tax Board may consider evidence of the regulatory features of rate regulated utility property in deciding to use actual property taxes as an expense, rather than a tax factor, in its income capitalization approach as market reference to estimate economic obsolescence.

October 2012 Newsletter

October 1, 2012 | Newsletter
  • TEXAS – Misapplication of statutory allocation formula costs Southwest Airlines $25 million.
  • CONNECTICUT – Charitable exemption claim may not be raised in defense of action to foreclose municipal tax lien.
  • ARKANSAS – Supreme Court rejects claim that the ad valorem tax on oil and gas royalties is an illegal exaction prohibited by the Arkansas Constitution.
  • TEXAS – Taxpayer who forgot to deduct depreciation in valuation rendered to appraisal district was not entitled to correction as “clerical error” under Tex. Tax Code Ann. § 1.04 (18).
  • CALIFORNIA – Court of Appeals rules that State Board of Equalization regulation combining petroleum refineries’ fixtures with their land and improvements as a single appraisal unit (Rule 474) violates statute requiring separate appraisals (Cal. Rev. and Tax. Code Section 51 (d)).
  • UTAH – “Non-exclusive possession” exemption to Utah privilege tax (U.C.A. § 59–4–101) applies unless possession is exclusive against all parties, including the property owner.
  • NEBRASKA – Placing personal property tax return in office “outgoing mail” box not sufficient to avoid late penalty if return does not arrive on time.
  • OREGON – Tax court finds equipment retailer’s efforts to establish real market value of his equipment using Craigslist and eBay unconvincing.
  • GEORGIA – Change in valuation pending final determination of appeal is not correction of “clerical error” authorized by OCGA § 48-5-299 (a).

January 2012 Newsletter

January 1, 2012 | Newsletter
  • WISCONSIN – Wisconsin Supreme Court holds 2007 Wis. Act 86 unconstitutional – all Wisconsin taxpayers entitled to de novo review.
  • NORTH CAROLINA – Property Tax Commission acted reasonably in making downward adjustment to capitalization rate in mall valuation.
  • CALIFORNIA – For purposes of capitalization of income approach determination of taxable value, originally negotiated term of each local cable franchise, rather than the stated term, was the “reasonably anticipated term of possession.”
  • CONNECTICUT – Failure to follow USPAP does not require exclusion of appraiser’s testimony.
  • KANSAS – Court of Appeals rejects Court of Tax Appeals valuation of oil and gas leaseholds in flush production.
  • WEST VIRGINIA – Poultry manufacturer contracting with independent farmers to provide facilities and labor to raise its chickens is not producer of agricultural products” entitled to exemption.
  • INDIANA – County Assessor improperly relied on sale-leaseback transaction in establishing “market value in use” of movie theater.
  • SOUTH DAKOTA – Use tax imposed on railcar repair company’s tangible personal property does not violate Railroad Revitalization and Regulatory Reform Act.

September 2011 Newsletter

September 1, 2011 | Newsletter
  • CALIFORNIA – Emission reduction credits properly included in income approach valuation of electric power plant.
  • WISCONSIN – Evidence of actual sales not necessary to satisfy “marketable” requirement of “highest and best use” determination.
  • DELAWARE – Chancery Court rejects use of Ibbotson Historical Equity Risk Premium in Capital Asset Pricing Model, using instead lower supply side ERP in statutory appraisal action.
  • CONNECTICUT – Stipulated judgment settling tax appeal with one store does not require city assessor to equalize assessments of other stores in shopping mall.
  • COLORADO – Appellate Court rejects claim that assessing cable service providers differently than public utilities violates state constitution.
  • ILLINOIS – Sales comparison approach need not be utilized where it would yield an unreliable estimate of value.
  • UTAH – Tax court correctly excluded accounting goodwill from T-Mobile’s taxable property.