93-0955

Centrally Assessed

Signed 9/21/94

 

 

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

:

Petitioner, : ORDER

:

v. : Appeal No. 93-0955

:

PROPERTY TAX DIVISION OF THE :

UTAH STATE TAX COMMISSION, :

:

Respondent. : Tax Type: Centrally Assessed

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a Settlement Conference pursuant to the provisions of Utah Code Ann. 59-1-502.5, on XXXXX. Gail S. Reich, Administrative Law Judge, heard the matter for and on behalf of the Commission. Commissioner Alice Shearer was present at the hearing. Present and representing Petitioner by telephone was XXXXX. Present and representing Respondent were XXXXX and XXXXX.

ANALYSIS

This matter involves the assessment for centrally assessed property owned by Petitioner as of XXXXX which consists of XXXXX oil wells. Petitioner purchased the property from XXXXX on XXXXX for $$$$$.

Although Respondent had originally assessed the property at $$$$$, it came forward with an increased value of $$$$$.

Respondent's representatives at the hearing indicated that, although the Property Tax Division had used flat tax rates in the past, they found they were not indicative of fair market value of the property. Therefore additional staff and computer programs were brought in to determine a more accurate assessment of fair market value. The sale which occurred in XXXXX was considered in the analysis, but was not found to be indicative of fair market value.

The original assessment that has been made occurred without appraisal being done on the actual wells. However, an actual appraisal was done to arrive at the XXXXX figure. A discounted cash flow analysis was used in conjunction with the physical appraisal.

Although Petitioner contended that XXXXX and XXXXX perceived the sale price as fair market value of the oil well equipment, Property Tax Division did not find the sales price in this case to be indicative of fair market value.

Petitioner argued that the larger the property and the more wells contained therein, proportionally less value should be attributed to the property. Property Tax Division responded by stating that, as a matter of law, the value of each individual parcel or item is to be valued regardless of the number of parcels or items owned by any particular Petitioner.

DECISION AND ORDER

Petitioner's position that fair market value is affected when property is sold "as a whole," is contrary to case law in this state.

Based upon the information presented at the conference, and the records of the Tax Commission, the Commission finds that Petitioner has not met its burden of establishing that the $$$$$ assessment made by the Property Tax Division is not indicative of fair market value of the property. The record establishes that the $$$$$ assessment is an appropriate reflection of fair market value. This decision does not limit a party's right to a formal hearing. However, this Decision and Order will become the Final Decision and Order of the Commission unless any party to this case files a written request within thirty (30) days of the date of this decision to proceed to a Formal Hearing. Such a request shall be mailed to the address listed below and must include the Petitioner's name, address, and appeal number:

Utah State Tax Commission

Appeals Division

210 North 1950 West

Salt Lake City, Utah 84134

Failure to request a Formal Hearing will preclude any further administrative action or appeal rights in this matter.

DATED this 21st day of September, 1994.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

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