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April 30, 2020
 

COVID-19 Property Tax Impacts and Valuation Headlines

COVID-19 Property Tax Impacts

As government officials continue to deal with the COVID-19 outbreak, property taxes and the systems that support them are in a constant state of flux. Vorys is monitoring the situation carefully and has created the following list detailing the state and local efforts as they impact on property taxation, assessments and dispute resolution.

Access our COVID-19 Property Tax Impacts Document

Valuation Headlines

CALIFORNIA APPELLATE COURT REVERSES LOWER COURT AND FINDS THAT TENANT IS RESPONSIBLE FOR ADDITIONAL TAXES DUE TO REASSESSMENT

In reversing a judgment from the Superior Court of Los Angeles, the 2nd Appellate District determined that a tenant subject to a long-term lease was responsible for paying the increase in property taxes that resulted from a property’s reassessment, which was triggered by the death of the landlord and subsequent transfer of the property into trusts of the landlord’s beneficiaries. Read more.

GEORGIA APPEALS COURT REVERSES DENIAL OF TAXPAYER’S MOTION FOR SUMMARY JUDGMENT AND HOLDS THAT COUNTY DID NOT HAVE AUTHORITY TO INCREASE APARTMENT COMPLEX’S VALUATION

A Georgia appeals court granted a property owner’s motion for summary judgment in a valuation appeal, holding that the county did not have the authority to reassess and increase the value of the subject apartment complex for the tax year at issue.  Because the property’s value had just been adjusted by the county Board of Equalization the year before, the county was prohibited from increasing the value for the next two successive years. Read more.

OHIO SUPREME COURT FINDS ENTITY SALE BEST EVIDENCE OF VALUE FOR APARTMENT COMPLEX

The Ohio Supreme Court affirmed the Ohio Board of Tax Appeals (“BTA”) decision increasing the valuation of an apartment complex from $16 million to $34.5 million based upon the sale of a limited liability company that owned the real estate.  The court found in substance that the sale in corporate entity “constituted a contrivance for the sale of commercial real estate”, and thus found that the BTA could rely upon the sale price as the best evidence of the property’s value. Read more.

OHIO APPELLATE COURTS AND OHIO BOARD OF TAX APPEALS RULE AGAINST LOWE’S IN FOUR RECENT DECISIONS

The 10th District Court of Appeals affirmed the BTA decision finding that the special purpose doctrine applied.  Furthermore, the court found that the requirement to value property for tax purposes as if unencumbered, does not mean that the appraiser is to assume that the property was vacant or distressed, but instead meant that an adjustment in value based upon market rent and occupancy was appropriate. Read more.

PENNSYLVANIA APPELLATE COURT CONFIRMS INCOME APPROACH IS PROPER METHOD FOR DETERMINING VALUE OF PERSONAL CARE FACILITY SUBJECT TO LEASE

A Pennsylvania appellate court held that the trial court did not commit any error when it accepted the school district’s appraisal report utilizing the income approach for a 69-room personal care facility.  The property was subject to a lease which was held by a large real estate investment trust.  The lease defined “leased property” to include “personal and intangible property.” Read more.

VIRGINIA CIRCUIT COURT FINDS TAXPAYER FAILED TO ESTABLISH ERROR IN ORIGINAL ASSESSMENT 

This matter relates to the valuation of a former meatpacking plant that ceased operations in 2012 for tax years 2013, 2014 and 2015.  The property was marketed for sale for $1.9 million and was purchased by the Portsmouth 2175 Elmhurst, LLC (“taxpayer”) for $875,000 in 2013.  The property remained vacant for the tax years at issue.  After purchase, the taxpayer removed equipment and fixtures from the building and then marketed the property for resale at $1.1 million.  The property was sold for $575,000 in September 2015, and the new owner tore the building down to construct a distribution center. Read more.

Other Valuation Headlines From Across the Country (Click Here to Read More)

Delaware Court Finds That Local Board of Assessment Review Failed to Consider the Impact of Property’s High Vacancy Rate When Valuing Multi-tenant Office Building

Iowa Board Grants Slight Reduction for Nestle Manufacturing Facility

Kansas Introduces Bill Intended to Stop So Called “dark Store” Property Tax Assessments

Maine Introduces Legislation Aimed at Creating Special Valuation Method for Large Retail Properties

Michigan Tax Tribunal Finds City Unlawfully Uncapped Value When Transfer Was Between Commonly Controlled Entities

Minnesota Supreme Court Finds Minnesota Tax Court Erred in Relying on Section 1031 Tax Exchange Sale as Only Indicia of Market Value

Missouri Court Upholds Valuation for Two Low-income Housing Projects Based on Actual Income and Expenses

New Hampshire Supreme Court Upholds Income Approach Based Upon Hybrid of Actual and Market Expenses to Value Skilled Nursing Facility

New Jersey Tax Court Rejects Assessor’s “Spot Assessment” Based Only on Sale

Ohio Board of Tax Appeals Clarifies Guiding Principles of Valuing Low-income Housing Properties in Number of Recent Decisions

Ohio Appeals Court Remands Case to Determine if Factors Impacting Sale Indicate Sale Should Be Disregarded for Build-to-suit Industrial Property

Ohio Appellate Court Finds Ohio Board of Tax Appeals Improperly Failed to Consider Property Owner’s Evidence Rebutting the Presumption That a Recent Leased Fee Sale Price Reflected the Value of the Property

Oregon Tax Court Grants Reductions for Two Macy’s Stores

Washington Board of Tax Appeals Rejects Use of Assessor’s Income Approach, Where Income Rates Used Were Not Reflective of Market

Deadlines Looming in 11 States


 

Contacts

Nicholas M.J. Ray
614.464.5640
nmray@vorys.com

Andrew E. DeBord
513.723.4024
aedebord@vorys.com

Lauren M. Johnson
614.464.5418
lmjohnson@vorys.com

John R. Conley
330.208.1172
jrconley@vorys.com

Lindsay Doss Spillman
216.479.6199
ldspillman@vorys.com

Hilary J. Houston
614.464.4968
hjhouston@vorys.com

Steven L. Smiseck
614.464.5438
slsmiseck@vorys.com

Megan Savage Knox
614.464.6380
msknox@vorys.com

Anthony L. Ehler
614.464.8282
tlehler@vorys.com

David A. Froling
614.464.3022
dafroling@vorys.com

Scott J. Ziance
614.464.8287
sjziance@vorys.com

Steven R. Rech
713.588.7017
srech@vorys.com


 

 

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This alert is for general information purposes and should not be regarded as legal advice. As always, please let us know if you want more information or have questions about how these developments apply to your situation.