SC Administrative Law Court Decisions

This matter comes before the Administrative Law Judge Division ("ALJD") pursuant to S.C. Code Ann. §12-60-2540 (A) (2000) and S. C. Code Ann. §§1-23-310 et seq. (1986 and Supp. 2000) for a contested case hearing. The Petitioner, Jay S. Ulrich ("Petitioner"), contests the Horry County Assessor ("Assessor")'s valuation of certain real property, identified as Tax Map No. 174-06-16-435 ("the property"), for the 2002 tax year. After notice to the parties, a hearing was conducted on January 13, 2003. Based on the evidence, I find that the proper valuation of the property is $62,800 for the 2002 tax year.

Based on the evidence presented and taking into account the credibility of the witnesses, I make the following findings of fact:

1. Notice of the date, time, place and nature of the hearing was timely given to all parties.

2. The property owned by Petitioner is a condominium, Unit 1701 of Ocean Forest Plaza, located at City of Myrtle Beach, Horry County, South Carolina, identified as Tax Map No. 174-06-16-435. The property is a one-bedroom, one-bathroom unit located on the 17^th floor of Ocean Forest Plaza, which contains 23 levels in height and 206 residential units. The property consists of 618 square feet of land and has an unobstructed side view of the Atlantic Ocean from its balcony.

3. The Petitioner bought the property on December 11, 2000 for the purchase price of $61,000.

4. In 1999 Elaine Huggins ("Appraiser"), a certified real estate appraiser employed by the Assessor, appraised the property at $69,000. Some time after he bought the property, Petitioner protested the assessment. Although Petitioner acknowledges that his protest came too late to affect the assessed value of the property for the 2001 tax year, the property was reassessed for the 2002 tax year.

5. On January 1, 2002 the Appraiser inspected the property for purposes of re-appraising the property. On June 11, 2002, the Appraiser issued a notice decreasing the appraised value of the property to $62,800. Petitioner appealed that decision to the Board.

6. On October 31, 2002, the Board issued a final decision valuing the property at $63,000. It is from that decision that Petitioner appeals to the ALJD.

7. At the hearing before the undersigned, the Appraiser testified that, in determining the value of the property for the 2002 tax year, she performed a direct sales comparison, which is based on locating similar properties in the area which sold recently and comparing those to the value of the subject property. She looked at eight sales that had occurred in Ocean Forest Plaza in 2000 and 2001. She grouped the sales according to location, floor height, and distance from the ocean. The three sales most similar to the Petitioner's property due to their location sold for a mean price of $64,300. The Appraiser deducted $1,300 from the mean price for discounts to personal property and reached a market value of $63,000. The Appraiser also used a mass appraisal technique, considering all eight of the Ocean Forest Plaza sales with the exception of the highest and the lowest sales. The mid-range of sales was from $61,000 to $65,0000. Considering all of the data she collected, the Appraiser testified that she finally determined the market value of Petitioner's property to be $62,800.

8. The Petitioner argued that the appraised value of his property should be further discounted to take into consideration the fact that his unit is farther away from the ocean than some of the other units sold in Ocean Forest Plaza in 2000 and 2001 which were analyzed by the Appraiser. Petitioner testified that the units farther from the ocean sold for less than the units closer to the ocean, and that difference in price should be considered by the Appraiser in formulating her valuation of his property. However, in reviewing the Appraiser's report and testimony, I find that the Appraiser did analyze the units with the most similar distance from the ocean as Petitioner's property in formulating her appraisal, and that she weighed the sales prices of those units more heavily in her analysis than the sales prices of the units closer to the ocean. The Appraiser calculated a mean sales price of the three units sold in 2000 and 2001 with the same distance from the ocean as Petitioner's unit, which was $64,300 less $1,300 for personal property, and she considered that data in making her final appraisal.

9. Petitioner also argued that the appraised value of his property erroneously includes the value of his personal property, which has been taxed separately. Petitioner testified that his personal property is worth approximately $6,000, and Petitioner requested that the appraised value of his property be discounted by $2,500 to account for personal property. However, the Appraiser testified that she already excluded personal property in her valuation of the property, and her report indicates that she included a deduction for a discount to personal property in the amount of $1,300 in her final appraisal of the property.

1. The ALJD has subject matter jurisdiction over this action pursuant to S.C. Code Ann. § 12-60-460 (Supp. 2000) and S.C. Code Ann. § 1-23-600 (Supp. 2000).

2. S.C. Code Ann. § 12-37-210 (2000) defines property subject to taxation in South Carolina as "all real and personal property in this State." All such property must be assessed uniformly and equitably throughout the State pursuant to regulations promulgated by the S.C. Department of Revenue. S.C. Code Ann. § 12-43-210(A) (2000). "All taxes upon property, real and personal, shall be laid upon the actual value of the property taxed." S.C. Const. Art. III § 29.

3. "While our constitution requires equality and uniformity in tax assessments, '[a]bsolute accuracy with respect to valuation and complete equality and uniformity are not practically attainable.'" Reliance Ins. Co. v. Smith, 327 S.C. 528, 537, 489 S.E.2d 674, 679 (Ct. App. 1997) (quoting Wasson v. Mayes, 252 S.C. 497, 502, 167 S.E.2d 304, 306-07 (1969).

4. The taxable status of real property for a given year is to be determined as of December 31 of the preceding tax year. S.C. Code Ann. § 12-37-900 (2000).

5. A taxpayer may appeal a property tax assessment made by a county board of assessment by requesting a contested case hearing before the ALJD. S.C. Code Ann. § 12-60-2540(A) (2000). As the party contesting the assessing authority's valuation, the taxpayer has the burden of proving the actual value of the properties. See Reliance, 327 S.C. at 534-35, 489 S.E.2d at 677; Cloyd v. Mabry, 295 S.C. 86, 88, 367 S.E.2d 171, 173 (Ct. App. 1988). Thus, in this case, the Petitioner has the burden of proving the correctness of the valuation he is seeking. Because this proceeding is in the nature of a de novo hearing, the Administrative Law Judge is not sitting in an appellate capacity and therefore is not restricted to a review of the decision below. Reliance, 327 S.C. at 534, 489 S.E.2d at 677. Findings of fact shall be based exclusively on the evidence and on matters officially noticed. S.C. Code Ann. § 1-23-320(i) (Supp. 2000).

6. S.C. Code Ann. Sec. 12-37-90 (2000) provides that all counties shall have an assessor, whose responsibility is appraising and listing all real property.

7. In S.C. Code Ann. Sec. 12-37-930 (Supp. 2001) the legislature set forth how property must be valued as follows:

All property must be valued for taxation at its true value in money which in all cases is the price which the property would bring following reasonable exposure to the market, where both the seller and the buyer are willing, are not acting under compulsion, and are reasonably well informed as to the uses and purposes for which it is adapted and for which it is capable of being used.

Therefore, fair market value is the measure of true value for taxation purposes. Lindsay v. S.C. Tax Comm'n, 302 S.C. 504, 397 S.E.2d 95 (1990).

8. The purchase price of property, while not conclusive, is some evidence of its value. Belk Dep't Stores v. Taylor, 259 S.C. 174, 191 S.E.2d 144 (1972).

9. While not conclusive, market sales of comparable properties present persuasive evidence of fair market value of similar property. 84 C.J.S. Taxation § 512 (2001). Furthermore, in estimating the value of property, all of the factors which affect market value or would influence the mind of a purchaser should be considered, such as location, quality, condition and use. See 84 C.J.S. Taxation § 511 (2001).

10. The evidence here supports the valuation method used by the Appraiser in obtaining a valuation of $62,800. The value of $62,800 is well within the range of comparable units in the same condominium building.

Based on the above findings of fact and conclusions of law,

IT IS HEREBY ORDERED that the Assessor value Petitioner's property, Unit 1701 of Ocean Forest Plaza, Myrtle Beach, Horry County, South Carolina, for the 2002 tax year at $62,800;

AND IT IS SO ORDERED.

________________________________________

C. DUKES SCOTT

ADMINISTRATIVE LAW JUDGE

January 31, 2003

Columbia, South Carolina