86-0203 & 87-2021, 89-0900 - XXXXX - Centrally Assessed

 

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 its 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.