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SC Administrative Law Court Decisions

CAPTION:
Joe W. Hiller, Architect, Inc. vs. Colleton County Assessor

AGENCY:
Colleton County Assessor

PARTIES:
Petitioners:
Joe W. Hiller, Architect, Inc.

Respondents:
Colleton County Assessor
 
DOCKET NUMBER:
95-ALJ-17-0231-CC

APPEARANCES:
For the Petitioner: Joe W. Hiller (Pro-Se)

For the Respondent: George McCormick (Pro-Se)
 

ORDERS:

ORDER AND DECISION

STATEMENT OF THE CASE

This matter is a contested case brought by Joe W. Hiller, Architect, Inc. (Petitioner or Taxpayer), against the Colleton County Assessor (Respondent or Assessor) concerning the assessed value of $40,000.00 accorded each of taxpayer's four lots located at Scott Creek, Colleton County, South Carolina (TM #'s 358-00-00-026 thru 358-00-00-029) by the Colleton County Tax Appeals Board (Board) for the tax years 1992, 1993 and 1994. The Taxpayer is now seeking a contested case hearing before the Administrative Law Judge Division (Division) for an Order determining the assessed value of the lots for the tax years 1988 through 1994. Jurisdiction is granted to the Division by S.C. Code Ann. § 12-60-2540(A)(Supp. 1995). The matter was heard at the Division Offices, Columbia, South Carolina, on November 20, 1995. Taxpayer made an appearance as did the Colleton County Assessor. After considering all the evidence and testimony, I conclude that each lot must be valued at $40,000.00 for each of the tax years 1992, 1993 and 1994.

ISSUE

Are the Taxpayer's properties equitably assessed for the tax years 1988 through 1994?



POSITIONS OF THE PARTIES

The Taxpayer's position is that the four lots in dispute are not equitably valued for the tax years 1988 through 1994 in relation to other properties in the locale. The Taxpayer seeks a property value reduction to reflect the values of those similar properties. The Assessor asserts all properties were valued fairly and that Taxpayer did not timely comply with the provisions of S.C. Code Ann. §12-43-300 (Supp. 1995) for appealing the appraised value of the subject lots for the tax years 1988, 1989, 1990 and 1991.

FINDINGS OF FACT

After consideration and review of all the evidence and testimony, by a preponderance of the evidence, I make the following findings.

1. This Division has personal and subject matter jurisdiction.

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

3. The Taxpayer was the owner of or held an interest in the following four parcels or lots of land for the tax years 1988 through 1994:

A. TM # 358-00-00-026 (lot 11, containing 0.5 acres,

Seaside Plantation Subdivision)

B. TM # 358-00-00-027 (lot 12, containing 0.5 acres,

Seaside Plantation Subdivision)

C. TM # 358-00-00-028 (lot 23, containing 0.7 acres,

Seaside Plantation Subdivision)

D. TM # 358-00-00-029 (lot 24, containing 0.7 acres,

Seaside Plantation Subdivision)

4. Each of these lots were annexed from Charleston County in 1987 and transferred to Colleton County's tax rolls in the year 1988.





5. The subject lots are shown on a plat entitled "Plat of 30 Lots In Seaside Plantation, Edisto Island, County of Colleton, South Carolina," prepared by Robert R. Spearman, Registered Land Surveyor. The plat is recorded in Colleton County in plat cabinet D at page 241.(1)

6. Each lot is bordered on the Southeast by Scott Creek which separates it from property owned by the State of South Carolina. A view of the Atlantic Ocean across marshlands is available from each lot.(2)

7. On February 28, 1992 the Taxpayer appealed the appraised value of $50,000 placed on each of the four lots by the Assessor and sought review with the Assessor.

8. On September 1, 1993, the Assessor received an Application for Review of his appraisal on each of the Taxpayer's four lots, requesting the value on each lot be reduced to $3,000.00

9. Taxpayer's reasons for objecting to the Assessor's value were in part that:

(A) no electrical service is available to either lot;

(B) there is no substantial vehicular access to the lots; and

(C) each lot is in a high risk flood zone and due to its size, configuration, exposure and elevation is not suitable for agricultural use.

10. After conducting a field inspection and a thorough review of the value of other properties in the general area, the Assessor reduced the value of each lot from $50,000 to $40,000 for the tax years 1992, 1993 and 1994 and advised Taxpayer of that determination on August 25, 1994.

11. The Assessor failed to reduce the valuation on the four lots for the years 1988, 1989, 1990 and 1991, taking the position that Taxpayer did not timely seek review as authorized by law.

12. By letter dated September 5, 1994, Taxpayer notified the Assessor's office of its wish and intent to appeal the Assessor's valuations applicable to the subject lots for the tax years 1988, 1989, 1990, 1991, 1992 and 1993 to the Colleton County Tax Appeals Board.

13. The Board held a hearing on March 30, 1995 wherein both parties presented their positions concerning the value of the lots.

14. By letter dated April 4, 1995, the Board affirmed the Assessor's valuation of $40,000 for each lot for the tax years 1992, 1993 and 1994.

15. On April 24, 1995, the Division received Taxpayer's Notice of Appeal dated April 20, 1995 of the decision of the Board, wherein Taxpayer alleges his lots are "un-fairly assessed relative to comparable adjacent property."

16. All the property shown as TM #358-00-00-004 on Taxpayer's Document H, included as a part of his Exchange of Evidence, was valued during the tax years at issue at $4,500.00 per acre.

17. The 1.4 acre tract bordering Scott Creek and designated as TM # 358-00-00-006 was valued at $65,000.00 for assessment purposes during this period.

18. Each lot in the Seaside Plantation Subdivision, as shown on the plat which was recorded in the Clerk's office in Colleton County, South Carolina, was to be used solely for residential purposes.(3)

19. The lots in Seaside Plantation were made subject to Covenants and Restrictions which were filed with the Clerk's office for Colleton County in Deed Book 381 at page 1, on June 8, 1987. Subsequently, the restrictions were revoked; however, they remain applicable to Taxpayer's lots.

20. The three lots designated as TM #358-00-00-026, #358-00-00-027 and #358-00-00-028 meet the minimum soil and site criteria for a modified septic tank system for an average size home. Tax Map Sheet #358-00-00-029 has much less available space, and a poorer soil condition which prevented it from meeting the minimum criteria for an "on-site" waste system. It must be combined with parcel 28 or have an off-site drainfield location.(4)

21. The Assessor and the Board considered the valuation of other lots/tracts of land bordering Scott Creek, shown on Tax Map Sheet # 358, which are in close proximity to and similar to Taxpayer's. The valuation of these lots and acreage amounts are shown on Taxpayer's Document H.

22. All four of Taxpayer's subject lots consisted of both highland and marshland.

23. The property adjoining Taxpayer's lots, although not presently subdivided into lots, is susceptible and capable of being so subdivided and developed into creek front lots..

24. Electricity is presently available to the lots and could have been obtained on the assessed valuation dates.

DISCUSSION

The Taxpayer is seeking a reduction in value based on principles of equity. The allegation is that some neighbors own similar property which is valued less than the Taxpayer's properties. From this position, the Taxpayer asserts the properties should be equalized by either raising the neighbors' values or reducing the Taxpayer's value.

The Taxpayer's argument is based upon the Equal Protection Clauses of the Federal and State Constitutions, as well as the uniformity provision found in the South Carolina Constitution at Article X, Section 1. These provisions do not afford the Taxpayer relief.

None of the above constitutional provisions require absolute accuracy in property tax matters. Allied Stores of Ohio v. Bowers, 358 U.S. 522 (1959); Owen Steel Co., Inc. v. South Carolina Tax Comm'n, 287 S.C. 274, 337 S.E.2d 880 (1985). Complete equity and uniformity are not practically attainable when valuing property. Wasson v. Mayes, 252 S.C. 497, 167 S.E.2d 304 (1967). Rather, what is proscribed is the intentional and systematic undervaluation of certain properties while other properties in the same class are valued at fair market value. Sunday Lake Sun Co. v. Wakefield Taxpayer, 247 U.S. 350 (1918).

The burden of proving an intentional and systematic undervaluation rests with the complaining party. Sunday Lake Sun Co., supra. This burden is not met by a mere showing that some properties are undervalued. Owen Steel Co., Inc., supra. Rather, where a county assessor deliberately established a county-wide procedure whereby all property values were based upon their most recent

purchase price, an intentional and systematic undervaluation of property was found. Allegheny Pittsburgh Coal Co. v. County Commission, 488 U.S. 336 (1989).

Unlike Allegheny Pittsburgh Coal Co., supra., there has been no showing in the instant case that the county assessor has intentionally and systematically undervalued property in the county. Further, there is no showing the Taxpayer's property has in fact been valued higher than other similar properties in the immediate locale.

The comparables in the record indicate the assessor attempted to value all properties at fair market value. The value applied to Taxpayer's lots is reasonably in line with the values placed on comparable properties bordering Scott Creek.

CONCLUSIONS OF LAW

Based upon the foregoing Findings of Fact, applicable law, and Summary of the Evidence, I conclude, as a matter of law, the following:

1. S.C. Code Ann. § 12-60-2540 (Supp. 1995) authorizes the South Carolina Administrative Law Judge Division to hear this contested case pursuant to Chapter 23 of Title I of the 1976 Code, as amended.

2. S.C. Code Ann. § 12-37-90 (Supp. 1995) grants authority to the South Carolina Tax Commission to alter values set by the assessor on real property.

3. S.C. Code Ann. § 12-4-30(D) (Supp. 1995) provides that an administrative law judge, after February 1, 1995, shall hear all contested cases as defined by S.C. Code Ann. § 1-23-310 (Supp. 1995) previously heard by the South Carolina Tax Commission.

4. S.C. Code Ann. § 12-37-90 (Supp. 1995) states that all counties shall have a full-time assessor, whose responsibility is appraising and listing property. Further, the assessor shall:

a) Maintain a continuous record of recorded deed sales transactions, building permits, tax maps and other records necessary for a continuing reassessment program;

b) Diligently search for and discover all real property not previously returned by the owners or agents thereof or not listed for taxation by the county auditor

and list such property for taxation, in the name of the owner or person to whom it is taxable;

c) When values change, reappraise and reassess any or all real property so as to reflect its proper valuation in light of changed conditions, except for exempt

property and real property required by law to be appraised and assessed by the commission, and furnish a list of these assessments to the county auditor;

d) Determine assessments and reassessments of real property in such a manner that the ratio of assessed value to fair market value shall be uniform throughout the county.. . .

5. S.C. Code Ann. §§ 12-43-300 and 12-60-2510 through 12-60-2530 (Supp. 1995) provide the procedure whereby a taxpayer, upon receipt of a notice from the Assessor of the valuation and assessment placed on his property, may file written notice of objection to the valuation and assessment within certain time frames. Failure to serve the written notice of objection within the statutory time limitations is a waiver of the owner's right to appeal. If the objection is timely filed, the owner may have a conference with the assessor and, if still aggrieved, may appeal that decision to the Board of Assessment Appeals.

6. An assessor's valuation is presumed correct and that it was made in conformity with the law. The burden is on the property owner to disprove the assessor's determination. 84 C.J.S. Taxation § 410 (1954).

7. Taxpayer has met this burden if he proves the actual value of the property is a value other than that determined by the taxing authority. Newberry Mills v. Dawkins, 259 S.C. 7, 190 S.E.2d 503 (1972).

8. Even if the taxpayer fails to prove the actual value of the property, the taxpayer still meets its burden of proof when the taxpayer "show(s) by other evidence that the assessing authority's valuation is incorrect." Cloyd v. Mabry, 295 S.C. 86, 367 S.E.2d 171 (S.C. App. 1988).

9. The Legislature, in S.C. Code Ann. § 12-37-930 (Supp. 1995), has decided how real property must be valued:

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

10. Fair market value is the measure of true value for taxation purposes. Lindsey v. S.C. Tax Comm'n, 302 S.C. 274, 395 S.E.2d 184 (1990).

11. The taxable status of real property for a given year is to be determined as of December 31st of the preceding tax year. S.C. Code Ann. § 12-37-900 (1976). Atkinson Dredging Co. v. Thomas, 266 S.C. 361, 232 S.E.2d 592 (1976).

12. While not conclusive, market sales of comparable properties present probative evidence of the fair market value of similar property. 84 C.J.S. Taxation § 411 (1954); see Cloyd v. Mabry, 295 S.C. 86, 367 S.E.2d 171 (Ct. App. 1988).

13. Fair market value can be determined by adding to the land value the replacement cost of the improvements, reduced for depreciation. 84 C.J.S. Taxation § 411 (1954). This method is acceptable in South Carolina for valuing property. Belk Department Stores v. Taylor, 259 S.C. 174, 191 S.E.2d 144 (1972).

14. Complete equity and uniformity are not practically attainable when valuing property. Wasson v. Mayes, 252 S.C. 497, 167 S.E.2d 304 (1967).

15. Taxpayer's property is valued equitably in relation to similar property.

16. There is no systematic or intentional undervaluation of property in the county.

17. There is no violation of the equal protection clauses of the Federal or South Carolina Constitutions.

18. There is no violation of the uniformity provision of the South Carolina Constitution as set out at Article X, Section 1.

19. The Taxpayer is not entitled to have the disputed lot values lowered due to inequities in assessment.

20. In this case, there has been no showing by the Taxpayer to refute the value assigned to its four lots by the Assessor nor has there been any testimony to indicate the Assessor's valuation of $40,000.00 per lot exceeds the fair market value. Since the burden of proof rests on the Taxpayer, the valuations of the Assessor, as affirmed by the Board, are upheld by this Order.











ORDER

Based upon the above Findings of Fact, Discussion and Conclusions of Law, it is hereby

ORDERED that the Assessor's value of $40,000.00 on each of taxpayer's four subject properties identified as TM#'s 358-00-00-026, 358-00-00-027, 358-00-00-028 and 358-00-00-029, for the tax years 1992, 1993 and 1994, as affirmed by the Board, are hereby upheld, and it is further

ORDERED that Taxpayer's request to have the valuations on the four lots for the tax years 1988, 1989, 1990 and 1991 is denied due to his failure to timely seek review.

AND IT IS SO ORDERED.

______________________________________

Marvin F. Kittrell

Chief Judge

Columbia, South Carolina

February 16, 1996

1. See location of lots on Petitioner's Exhibit B which is a copy of the Assessor's Office Tax Map Sheet # 358.

2. See Petitioner's Exhibit C.

3. In 1993, Associated Investments of Edisto Island, South Carolina, Inc., the purchaser of all lots excepting five, at a foreclosure sale, through its attorney, H. Wayne Unger, informed the Assessor's office by letter dated May 3, 1993, that it had no plans to develop the remaining lots within the subdivision and was abandoning the subdivision. The Assessor acted on the request, cancelled the subdivision on its record on May 20, 1993 and combined the remainder of the subdivision lots with the remainder of the property contained within TM # 358-00-00-022 into TM # 358-00-00-0004. See Petitioner's Document H in his Exchange of Evidence and Foundation for Documents.

4. See letter dated May 21, 1992, from the Low Country Health District of the South Carolina Department of Health and Environmental Control addressed to Joe W. Hiller, Jr., included in evidence as Taxpayer's Exhibit E in the Exchange of Evidence.


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