92-2006

Centrally Assessed

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX XXXXX, )

: FINDINGS OF FACT,

Petitioner, ) CONCLUSIONS OF LAW,

: AND FINAL DECISION

v. )

:

XXXXX XXXXX, ) Appeal No. 92-2006

:

Respondent. )

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a hearing on a Motion for Partial Summary Judgement on XXXXX. Commissioner Joe B. Pacheco, Presiding Officer, heard the matter on behalf of the Commission. XXXXX represented Emery County, XXXXX represented XXXXX XXXXX, and XXXXX represented the Property Tax Division of the Utah State Tax Commission.

FINDINGS OF FACT

1. The tax in question is property tax.

2. The years in question are XXXXX through XXXXX.

3. The property is centrally assessed.

4. Respondent did not provide a complete list of all its property to the Property Tax Division.

5. The assessment nevertheless was made with full knowledge and awareness of an access road and well site, with casing and piping to depth.

6. But for some extra tanks, fences, and meter sheds, all of Respondent's property (as identified by the County) was included in the valuation by the Property Tax Division.

APPLICABLE LAW

Utah Code Ann. '59-2-217 refers to property escaping assessment. Subsection 1 of Utah Code Ann. '59-2-217 provides:

Any escaped property may be assessed by the original assessing authority at any time as far back as five years prior to the time of discovery, in which case the assessing authority shall enter the assessment on the tax rolls and follow the procedures established under Part 13 of this chapter.

Utah Code Ann. '59-2-102(6) defines escaped property:

(a) "Escaped property" means any property, whether personal, land, or any improvements to the property, subject to taxation and is:

(i) inadvertently omitted from the tax rolls, assigned to the incorrect parcel, or assessed to the wrong taxpayer by the assessing authority;

(ii) undervalued or omitted from the tax rolls because of the failure of the taxpayer to comply with the reporting requirements of this chapter; or

(iii) undervalued because of errors made by the assessing authority based upon incomplete or erroneous information furnished by the taxpayer.

(b) Property which is undervalued because of the use of a different valuation methodology or because of a different application of the same valuation methodology is not "escaped Property."

ANALYSIS

Emery County filed a petition for administrative action on XXXXX, pursuant to Utah Code Ann. '59-2-217(1), asserting that portions of the property owned by XXXXX XXXXX were not reported to the Property Tax Division for the taxable years XXXXX, XXXXX, XXXXX, XXXXX, XXXXX, and XXXXX, and, as a result of such failure to report, escaped assessment by the Property Tax Division. In the Petition for Administrative Action, Emery County requests that the Commission order the Property Tax Division of the Utah State Tax Commission to determine the value of such escaped property for assessment purposes.

Emery County asserts that XXXXX XXXXX XXXXX did not disclose all its assets, namely, down hole costs, site preparations, and access roads. Emery County asserts that to the extent that these items were not disclosed and not accounted for in the assessment, they constitute escaped property.

In order for property to constitute "escaped property," the property must be undervalued because of failure of the taxpayer to comply with the appropriate reporting requirements or incomplete or erroneous information furnished by the taxpayer.

The sworn statement of XXXXX, Assistant Director or the Property Tax Division, in his affidavit dated XXXXX, and submitted in support of XXXXX XXXXX's Motion for Partial Summary Judgement establishes the Division's awareness that an access road and well site with casing pipe to depth existed and were not overlooked in the assessment process. The affidavit further provides that the items were assessed at a zero value since the reclamation costs were deemed to exceed the value.

Although Emery County further asserts that an under valuation has occurred by awarding zero value to these assets, the record establishes that the valuation did not result from incomplete or erroneous information furnished by XXXXX XXXXX. Therefore, the matter is not one of escaped property but of differences of opinion in valuation, which is not properly before the Commission in a petition for administrative action on escaped property.

As for escaped property, the record does reveal that certain fences, meter sheds and extra tanks were not included in the Division's valuations for the years in issue.

CONCLUSION OF LAW AND FINAL ORDER

The failure of XXXXX XXXXX to include down hole costs, site preparation, and access roads on its property statement for the respective years did not result in these assets being overlooked in the final assessment and, therefore, do not constitute escaped property. However, to the extent that there is property which escaped assessment as a result of XXXXX XXXXX's failure to fully disclose, i.e., certain fences, meter sheds and extra tanks, which were not part of the Division's valuations under the "DCF" or "400%" valuation method, the Property Tax Division of the Utah State Tax Commission is hereby ordered to determine the value of such escaped property pursuant to Utah Code Ann. '59-2-217 for the five years prior to the time of discovery of XXXXX.

DATED this _____ day of ____________, 1994.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

NOTICE: You have twenty (20) days after the date of a final order to file a Request for Reconsideration with the Commission. If you do not file a Request for Reconsideration with the Commission, you have thirty (30) days after the date of a final order to file a) a Petition for Judicial Review in the Supreme Court, or b) beginning July 1, 1994, a Petition for Judicial Review by trial de novo in district court. (Utah Administrative Rule R861-1-5A(P) and Utah Code Ann. ''59-1-601(1), 63-46b-13(1), 63-46-14(3)(a).)