BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
:
Petitioner : ORDER
:
v. : Appeal No. 86-0203
: 87-2021
PROPERTY TAX
DIVISION OF THE : 89-0900
UTAH STATE TAX COMMISSION, :
:
Respondent, :
:
XXXXX, )
:
Intervenor. )
_____________________________________
The
Tax Commission hereby approves settlement on the terms contained in the accompanying
Stipulation between XXXXX, the Property Tax Division of the Utah State Tax
Commission and XXXXX.
1. The fair market value for the respective tax
years is set forth as follows:
TAX YEAR FAIR
MARKET VALUE
XXXXX XXXXX
XXXXX XXXXX
XXXXX XXXXX
2. The XXXXX shall correct the tax rolls for
XXXXX for tax years XXXXX, XXXXX, and XXXXX by entering thereon the correct
value set forth in Paragraph 1, above.
3. Pursuant to Utah Code Ann. §59-2-1328 (Supp.
1990), the XXXXX XXXXX Treasurer shall refund to XXXXX the taxes erroneously
collected together with interest thereon as provided by law.
4. The parties are ordered to dismiss any state
District Court actions for tax years XXXXX which are associated with or related
to these tax years.
Upon
compliance with the terms of the Stipulation, the above-captioned appeals are
dismissed.
SO
ORDERED this 6th day of October, 1995.
W. VAL OVESON, Chairman JOE
B. PACHECO, Commissioner
ROGER O. TEW, Commissioner ALICE
SHEARER, Commissioner
86-0002 page 2
BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
:
Petitioner : ORDER
:
v. : Appeal No. 86-0203
: 87-2021
PROPERTY TAX
DIVISION OF THE : 89-0900
UTAH STATE TAX COMMISSION, :
:
Respondent, :
:
XXXXX, )
:
Intervenor. )
_____________________________________
The
Property Tax Division of the Utah State Tax Commission ("Division"),
XXXXX, and XXXXX ("County") hereby move the Commission to approve
this settlement. This pleading recited
the background that led to the settlement and sets forth its terms.
BACKGROUND
1. For tax years XXXXX, XXXXX, XXXXX, XXXXX has
objected to its annual property tax assessments by the Division or the County
with the assistance of the Division, and filed timely appeals with the Utah
State Tax Commission.
2. The table below summarizes the three
appeals, indicating the tax year, the original assessment amount, and the
settlement value:
TAX YEAR ORIGINAL ASSESSMENT SETTLEMENT FMV
XXXXX XXXXX XXXXX
XXXXX XXXXX XXXXX
XXXXX XXXXX XXXXX
3. XXXXX previously paid the assessments for
all years.
_________________
1Pursuant to Division Conferences
between XXXXX and the Division regarding personal property values, the original
assessment was revised to XXXXX prior to the Formal Hearing.
2Based upon a 20% reduction in the
assessed value for Petitioner's real property.
4. XXXXX, the Division, and the County have
engaged in numerous settlement discussions to resolve their differences for tax
years XXXXX. The parties have reached a
comprehensive settlement that arrives at a fair market value in accordance with
applicable constitutional and statutory provisions, without recourse to costly
and time consuming litigation and thus eliminate uncertainties to allow the
parties to more productively use their finite resources. Accordingly, the parties submit this
pleading as a complete settlement of all outstanding issues for the property
tax years XXXXX.
SETTLEMENT AGREEMENT
1. XXXXX, the Division and the County have
agreed to resolve the pending appeals.
A settlement value for the respective tax years is set forth as follows:
TAX YEAR ORIGINAL ASSESSMENT SETTLEMENT FMV
XXXXX XXXXX XXXXX
XXXXX XXXXX XXXXX
XXXXX XXXXX XXXXX
2. The Division, XXXXX and the County believe
that this settlement reasonably resolves the outstanding appeals.
3. The Commission should approve this
settlement, thus alleviating costly and time consuming litigation.
4. The Division, XXXXX and the County agree
that these settlement values have been arrived at in accordance with duly
accepted appraisal principles and in accordance with the cases styled XXXXX
v. Utah State Tax Comm'n, 796 P.2d 1256 (Utah 1990) (XXXXX I), and XXXXX,
874 P.2d 840 (Utah 1994) (XXXXX II).
5. The XXXXX County Auditor shall correct the
tax rolls for XXXXX County for tax years XXXXX by entering thereon the correct
value set forth in Paragraph 1, above.
6. Pursuant to Utah Code Ann. §59-2-1328 (Supp. 1990), the XXXXX County
Treasurer shall refund to XXXXX the taxes erroneously collected together with
interest thereon as provided by law.
7. The parties further agree to dismiss any
state District Court actions for tax years XXXXX, XXXXX, and XXXXX which are
associated with or related to these tax years.
8. The individual provisions of this settlement
are not severable, and the Division, XXXXX and the County reserve the right to
withdraw this offer if the Commission does not approve this settlement in its
entirety or approves conditions that are unacceptable to any party.
Based
upon the foregoing, the parties ask that the Commission approve this
settlement.
DATED
this 26 day of September, 1995.
XXXXX
Attorney for XXXXX.
DATED this 26 day of
September, 1995.
XXXXX
Assistant Attorney
General
Attorney for
Respondent
DATED this 26 day of
September, 1995
XXXXX
Attorney for XXXXX
County
86-0203 - Centrally Assessed
BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX,
: FINDINGS
OF FACT,
Petitioner : CONCLUSIONS OF LAW,
: AND FINAL
DECISION
v. :
: Appeal No.
86-0203
PROPERTY TAX
DIVISION OF THE :
UTAH STATE TAX COMMISSION, :
:
Respondent. :
_____________________________________
STATEMENT OF CASE
The
above-captioned matter involves the XXXXX appeal by XXXXX
("Commission"), in connection with the valuation and assessment of taxpayer's real and personal property
located within XXXXX County, Utah.
With
respect to the XXXXX appeal, XXXXX county is the County whose tax revenues will
be affected by a final decision of this Appeal within the meaning of Utah Code
Annotated §59-2-602(XXXXX).
FINDINGS OF FACT
1. In XXXXX, Taxpayer appealed the property
valuation and assessment set by the Property Tax Division of the Utah State Tax
Commission on the subject property for the year XXXXX.
2. After an informal hearing and a subsequent
formal hearing, the Utah State Tax Commission issued its Findings of Fact,
Conclusions of Law and Final Decision, on the 21st day of December, XXXXX.
3. Taxpayer appealed the Commission's decision
to the Utah Supreme Court.
4. On XXXXX, the Utah Supreme Court reversed the
Commission's decision and remanded the case back to the Tax Commission,
ordering the Tax Commission to calculate the reasonable, fair cash value of
Taxpayers real and personal property, pursuant the formula set forth in Utah
Code Annotated §59-5-4.5(1986). XXXXX.
v. Utah State Tax Commission, #XXXXX (Utah XXXXX) The XXXXX Case. In its decision, the Supreme Court made the
following statement:
Two principles govern
the law of taxation:
(1) That property be assessed at its just value;
and (2) that the owners of property bear an equal portion of the tax burden
in proportion to the amount of property owned.
If both just value and equal proportionally cannot be obtained because
some assessments are made at a fixed percentage of true value, the equality must
prevail so that the fixed percentage of true value must be uniformly applied. (Emphases supplied.)
5. At the formal hearing, the Property Tax
Division submitted a XXXXX corrected assessment which further adjusted the
Property Tax Division's assertion of the fair market value of the Taxpayer's
property for XXXXX. The original XXXXX
assessment was as follows:
LAND IMPROVE- PERSONAL TOTAL
MENTS PROPERTY
86 Assessment
Year XXXXX
Less: Adjustments to
Personal Property
Deletions XXXXX XXXXX
Salvage Value (XXXXX) (XXXXX)
Mat'ls & Supplies ________ ___________ (XXXXX) (XXXXX)
TOTAL ADJUSTMENTS -0- -0- (XXXXX) (XXXXX)
XXXXX CORRECTED XXXXX XXXXX XXXXX XXXXX
6. In its final decision of XXXXX, The Utah State
Tax Commission ordered a reduction of approximately $$$$$$, based upon its
finding that the XXXXX maintenance should have been expensed rather than
included as a capital investment. The
$$$$$$ adjustment should be reduced from the value of the improvements, thereby
reflecting a value allocation based upon the Tax commission's final decision
of: Land $$$$$$, Improvements $$$$$$
less $$$$$$ or $$$$$, Personal Property $$$$$, Total Assessment $$$$$.
CONCLUSIONS OF LAW
1. The reduction set forth in §59-5-4.5, should
be applied to that portion of the XXXXX taxable property which was valued using
the same methodology as was used on the same type of property by the XXXXX
County Assessor in XXXXX.
2. to implement the decision of the Utah
Supreme court and the principles of equality and uniformity set forth in XXXXX.
v. Utah State Tax Commission, #XXXXX (Utah XXXXX), It will be necessary for
the Commission to ascertain through a further proceeding which class of
property located within XXXXX county and assessed by the XXXXX County Assessor
received the application of Utah Code Annotated §59-5-4.5.
DECISION AND ORDER
Based
upon the foregoing Findings of Fact and Conclusions of Law, it is the Decision
and Order of the Utah State Tax Commission that the total assessment of the
subject property for the period in question is $$$$$$, and the further
proceedings be held before the Utah State Tax Commission to ascertain which
properties located within XXXXX County received the application of Utah Code
Annotate §59-5-4.5 in XXXXX and to apply said statute to the same class of
property owned by taxpayer as of XXXXX.
It is so ordered.
DATED
this 25 day of February, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner
86-0203 - Centrally Assessed
BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX XXXXX,
: DECISION
AND ORDER ON
Petitioner, : REVIEW OF PETITIONS AND
v. : RESPONSES OF PETITIONS FOR
: RECONSIDERATIONS
PROPERTY TAX
DIVISION OF THE :
UTAH STATE TAX COMMISSION : APPEAL
NO. 86 0203
:
Respondent. :
_____________________________________
ORDER
On
XXXXX, the Petitioner submitted a petition for reconsideration requesting the
Utah State Tax Commission to reconsider the second conclusion of law in its
informal decisions which found that "the plant is appurtenant to the mine;
i.e., the Great Salt, ponds from which the minerals were extracted."
On
XXXXX, in response to the Petition for Reconsideration, the Respondent filed an
answer to Petitioners petition and its Petition for Reconsideration requesting
a review of the third conclusion of law whereby the Tax Commission found that
expenditures for dike maintenance should be expensed rather than capitalized.
Both
parties submitted documentation and legal argument in relation to the
respective petitions for reconsideration.
DECISION AND ORDER
The
decision and order of the Tax Commission after reviewing the petitions and
responses by both parties hereby denies both Petitions for Reconsideration.
DATED
this 31 day of May of 1988.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner
86-0203 - Centrally Assessed
BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
:
Petitioner, : FINDINGS OF FACT
: CONCLUSIONS
OF LAW
v. : AND FINAL DECISION
:
PROPERTY TAX
DIVISION OF THE : Appeal No. 86 0203
UTAH STATE TAX COMMISSION, :
:
Respondent. :
_____________________________________
This
matter came before the Utah State Tax Commission (Tax Commission) for a Formal
Hearing on XXXXX. Blaine Davis, and Joe
Pacheco, Commissioners, heard the matter the Tax Commission, and XXXXX
represented the Petitioner. XXXXX,
Assistant Attorney General, represented the Respondent.
Originally
the Property Tax Division valued Petitioner for the XXXXX tax year at
$$$$$. That value was lowered toXXXXX
based upon a revision of the personal property values. At the informal hearing, the Tax Commission
issued a decision sustaining the division's taxable value of XXXXX.
The
Petitioner argued that further adjustments should be made based upon economic and
functional obsolescence. In addition,
the Petitioner argues that the property should be valued by the local
authorities, i.e., XXXXX County instead of the Centrally Assessed Section of
the Property Tax Division and that the value should be reduced by 20%.
The
Respondent argues that $$$$$ is the appropriate market value of the subject
property as of the lien date. The
Respondent further supports it’s
assessment on the grounds that is appurtenant to a mine, i.e., the Great
Salt Lake , and therefore, is properly assessed by the Property Tax Division of
the Utah State Tax Commission instead of by the local assessor of XXXXX County
and not eligible for the 20% reduction in value for tax purposes.
The
parties submitted evidence with regard to their respective arguments. Based upon the evidence submitted a the
hearing the Tax Commission makes these Findings of Facts, Conclusions of Law
and Final Decision.
FINDINGS OF FACTS
1. The tax year in question is XXXXX.
2. The lien date for the determination of market
value for the subject property is January 1, XXXXX.
3. The subject property was assessed by the
Property Tax Division of the Utah State Tax Commission pursuant to Utah Code
Ann. §59-5-3 (59-20201).
4. The subject property consists of (a) facility
for processing XXXXX which consists of personal property, improvements, and
real property (the Plant) (b) a series of evaporative ponds consisting of
improvements and various and equipment located on leased land owned by the
state of Utah and various federal agencies (the Ponds).
5. Only four XXXXX production plants exist in
the entire world.
6. XXXXX is extracted through various chemical
and electrical processes from brine containing XXXXX chloride.
7. Production from the facility depends on the
existence of a large supply of brine for processing.
8. The ponds are a series of earth dikes with
improvements and equipment in which, through a seven year process of
evaporation, salt water is converted to brine.
9. since 1983, the ponds have not produced
sufficient brine to supply the needs of the plant. Therefore, the Petitioner has purchased a portion of the brine
from outside suppliers.
10. The equipment used in the harvesting and
extraction process is subject to the corrosive nature of the salt. However, the equipment is made resistant by
using special metals and paints.
Therefore, the equipment does not necessarily have a shorter life than
normal mining equipment.
11. Petitioner, by its processes, is obtaining
metal products from the brine and, therefore, is effectively "mining"
brine from the Great Salt Lake and then extracting the mineral XXXXX from the
salt brine.
12. The plant is located approximately 15 miles
from the XXXXX and the brine is transported from the XXXXX to the Plant for processing.
13. The dikes were raised and strengthened prior
to the lien date to preclude them from being breached by the rising Great Salt
Lake. These expenditures for raising
and strengthening are expenses and capital improvements, and should not to be
added to the Plant value.
14. The argument of the Petitioner that the
breach of the dike was a foreseeable inevitability that should result in
economic obsolescence being given on the lien date is not supported by
competent evidence. The Tax Commission
acknowledges that post-lien date events that are foreseeable may affect
value. However, the issue of
foreseeability goes only to the discount a willing buyer would ask because of
that foreseeable event talking place.
It does not mean that on the lien date an assumption is made that the
event has already taken place and the value is reduced accordingly. In this particular case, the Petitioner has
failed to present sufficient evidence as to what this foreseeability discount
might be. Therefore, no reduction is
granted.
CONCLUSIONS OF LAW
1. Section 59-5-4.5 allows a 20% reduction in
market value to property which is locally assessed. The language of the section does not apply to property which is
centrally assessed such as the subject property. Such non- application of the exemption to the centrally assessed
property is not unconstitutional. XXXXX
v. San Juan County, 681 P.2d 184.
2. For XXXXX, the subject plant is appurtenant
to the mine, i.e., the Great Salt Lake, ponds from which the minerals were
extracted. It is, therefore, subject to
central assessment under Utah Code Ann. §59-5-3. If the plant were used exclusively to produce XXXXX from brine
purchased from outside suppliers it would not be appurtenant to the mine from
which the minerals were extracted, and it would be subject to assessment by
local authorities.
3. The raising of the dike and the maintenance
of the dike is an expense and not a capital improvement. Therefore, those costs are to be expensed
and not added to the value of the plant.
4. Unpersuasive legal authority has been
presented to the Commission to support an argument for a reduction in value due
to the foreseeability of impacts from the rising lake after the lien date.
DECISION AND ORDER
Based
upon the foregoing findings of facts and conclusions of law, it is the Decision
and Order of the Utah State Tax Commission that the Respondent adjust its
records to reflect that the expense of dike maintenance should not be included
as a capital investment. The balance of
the assessment is affirmed.
DATED
this 21 day of December, 1987.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner
NOTICE: It is hereby given that
you have 30 days from the date of mailing of this decision to appeal to the Tax
Court or the Supreme Court of the State of Utah.