May
8, 1991 Response from Tax
Commission
March
21, 1991 Letter from XXXXX of
XXXXX
XXXXX
Dear
XXXXX:
This
letter is in response to your March 21, 1991 request for a tax commission
opinion regarding the distinction between over and under assessments and
erroneous assessments for commercial and industrial personal property.
The
Tax Commission policy is to refer such requests to the division most qualified
to analyze the request and make recommendations concerning it. As such, your
request was referred to the Tax Commission's Property Tax Division for their
analysis and recommendation. The Division's recommendation is as follows:
-
Pursuant to Utah Code annotated, Section 59-2-1321, the county governing body,
upon sufficient evidence being produced that property has been either
erroneously or illegally assessed, may order the county treasurer to allow the
taxes on that part of the property erroneously or illegally assessed to be
deducted before the payment of taxes.
-
Erroneously or illegally assessed as stated in Section 59-2-1321 refers to an
assessment that deviates from the law and is, therefore, invalid, and a defect
that is jurisdictional in its nature, and does not refer to the judgement in
fixing the amount of the valuation of the property. Therefore, a taxpayer
misclassifying tangible personal property on a personal property affidavit and
thereby using the wrong percentage good factor, is not an erroneous or illegal
assessment within the meaning of the Utah Code Annotated, Section 59-2-1321.
Based
on the facts presented in your letter, we are in agreement with the Property
Tax Division's recommendations. Obviously, if there are deviations from these
facts, this opinion may be negated.
If
you do not agree with this determination, you may appeal to the Tax Commission
for a formal hearing. The results of that hearing would constitute a
declaratory judgement and be appealable to the Utah State Supreme Court. A
Notice of Appeal Rights is attached.
For
the Commission,
Joe
B. Pacheco, Commissioner
Joe
Pacheco, Commissioner
Utah
State Tax Commission
160
East 300 South
Salt
Lake City, Utah 84134
Dear
Commissioner Pacheco:
Request
for Advisory Opinion
It
is my understanding, according to Utah law, that overvaluations or
undervaluations of property for property tax purposes may not be remedied after
the taxes have been paid without protest.
With
the exception of motor vehicles, vessels, and aircraft, locally-assessed
personal property is generally assessed through a self assessment affidavit.
The cost of property is reported on an affidavit and classified according to
the nature and characteristics of the tangible property.
I
am writing to request an advisory opinion regarding commercial and industrial
personal property assessments and the distinction between an over or
underassessment and an erroneous assessment.
Statement
of Relevant Facts
The
personal property assessment model for commercial and industrial property is a
cost approach model. The model attempts to estimate fair market value of
tangible personal property through the use of percent good factors. The factors
are derived from the XXXXX's equipment cost indices and are prepared by the
Property Tax Division. The percent good factors are published annually by the
Property Tax Division, and the county assessors generally adopt the factors for
local assessment without modification.
County
assessors mail personal property affidavits with instructions and percent good
tables to all accounts.
The
taxpayer completes the affidavit (ideally, according to instruction) and
returns it with payment of tax to the county assessor.
Completing
the affidavit requires applying the correct percent good factor from the table
of factors provided by the county. Selection of the correct factor is
accomplished by using the correct classification on the table and the factor
that applies to the year the property was acquired.
The
personal property tax assessment is a direct result of the cost reported and
the percent good factor used.
Request
If
a taxpayer misclassifies tangible personal property on the personal property
affidavit using the wrong percent good factor, is an erroneous assessment
within the meaning of UCA § 59-2-1321 effected?
Thank
you.
Sincerely,
XXXXX