Taxpayer failed to show assessments were erroneous

Where a taxpayer fails to show that county assessments were not arrived at in accordance with generally accepted appraisal practices, the county’s assessments stand and the taxpayer’s request for relief is denied.

Background

Petitioner alleged Fairfax County erroneously assessed land in Kingstowne Town Center for tax years 2012-15. The property in question is the last undeveloped tract of 4.6 acres in the Kingstowne Center, a mixed-use development of 43.37 acres in Alexandria.

The petitioner contends that the county’s mass appraisal of the property, while uniform, exceeds fair market value of the property, entitling petitioner to a refund. Both parties agree that the appropriate method of valuing undeveloped land is the sales comparison approach.

Analysis

There is a statutory presumption that the valuation determined by the assessor or Board of Equalization is correct. The taxpayer may rebut the presumption by showing by a preponderance of the evidence: (1) that the property in question was valued at more than its fair market value, and (2) that its fair market value was not arrived in accordance with generally accepted appraisal practices, procedures, rules and standards as prescribed by nationally recognized professional appraisal organizations such as the IAAO and applicable Virginia law relating to valuation of property.

Petitioner contends that the law under West Creek Assocs. LLC v. County of Goochland, 276 Va. 393 (2008) still stands and that a taxpayer “may carry its burden of establishing manifest error in an assessment by [the county by] showing only that it is substantially higher than the fair market value of that property.” Petitioner states that the additional language added to Code §58.13984(B) is merely instructional by the General Assembly “on the various ways in which a taxpayer could meet its burden of proof.”

The court rejects those arguments and adopts the reasoning of the court in Staunton Mall Realty Mgmt. LLC v. Bd. of Supervisors 92 Va. Cir. 96 (2015) that the “amendment makes it clear that it is no longer an option for the taxpayer to prove manifest error solely by showing a sufficient disparity between fair market value and assessed value without also showing that the taxing authority employed an improper methodology.”

Petitioner also contends the Virginia Constitution mandates only that assessments be at fair market value. However, Article X §2 of the Virginia Constitution states “all assessments of real estate and tangible personal property shall be at their fair market value, to be ascertained as prescribed by law.” This phrase does not limit the General Assembly from enacting legislation surrounding the appeal by a taxpayer of a county’s assessment. Accordingly Code §58.1-3984(B) does not permit the county to make non-fair market value assessments; it is merely legislation which provides for what a taxpayer must establish to overcome the presumption that the county has made a fair market value assessment.

Here, petitioner’s evidence fails to establish that these assessments were not arrived at in accordance with generally accepted appraisal practices, procedures, rules and standards as prescribed by any nationally recognized professional appraisal organizations. Even assuming that taxpayer met his burden of proof that the county assessment was not arrived at in accordance with generally accepted appraisal practices, or that the taxpayer need only prove that the property in question is valued at more than its fair market value, the court found that the presumption of the correctness of the county’s assessment was not overcome.

The county’s expert was more credible than the taxpayer’s expert as to the fair market value of the property in question. In comparing his fair market values with the mass appraisal assessments performed by the Board of Equalization, and in rejecting the fair market values opined by the taxpayer’s expert, the court declines to conclude that they are so stark as to warrant an inference of manifest error or to overcome the presumption of correctness.

For those reasons, the court denies petitioners requested relief and enters judgment in favor of Fairfax County.

Kingstowne M&N LP v. Fairfax County, Case No. CL-2017-12241, Nov. 13, 2018. Fairfax Cir. Ct. (Kassabian). VLW No. 018-8-099, 5 pp.