ORDERS:
ORDER
I. Statement of the Case
This matter is a contested case brought by Emmie Owen and Linda Hay Mizell as the Petitioners (taxpayer) against the
Dorchester County Assessor (assessor) concerning property valuation and roll-back taxes for property tax year 1995. The
taxpayer exhausted the prehearing remedies with the assessor and the Dorchester County Board of Assessment Appeals
and now seeks a contested case hearing before the Administrative Law Judge Division (ALJD). Jurisdiction vests in the ALJD
under S.C. Code Ann. 12-60-2540 (Supp. 1995) with this matter having been heard on November 15, 1996. After
considering the evidence and arguments, the riverfront property must be valued at $20,000 per acre and a roll-back tax
is due for the 1995 tax year.
II. Issues
1. What is the value of the taxpayer's riverfront real property for tax year 1995?
2. Is a roll-back tax due for tax year 1995?
III. Analysis
A. Valuation of Property
1. Positions of Parties:
The taxpayer does not dispute the value on 11.18 acres of her property but does argue that her 1.96 acres of riverfront
property are inferior to the comparables used by the assessor and thus not worth the $20,000 per acre asserted by the
assessor. She asserts the 1.96 acres of riverfront should be valued at $10,000 to $12,000 per acre. The assessor argues
the $20,000 value is correct based upon sales of comparable residential properties fronting on the Edisto River.
2. Findings of Fact:
I find, by a preponderance of the evidence, the following facts:
a. General
1. The taxpayer is the owner of 13.14 acres of property including 1.96 acres of riverfront property with a mobile
home situated on one acre of the riverfront parcel.
2. The property is located in Dorchester County, South Carolina and is identified on the Dorchester County Tax Map
as Tax Map #117-00-00-015.
3. The 1.96 acres of riverfront property were appraised by the assessor for $20,000 per acre for tax year 1995.
4. For tax year 1995, the taxpayer received agricultural use value and agricultural use classification for all of the
acreage except one acre of the riverfront property.
5. After a conference with the Dorchester County Board of Assessment Appeals, the Board upheld the $20,000 per
acre value for the riverfront acres.
6. The taxpayer asserts the riverfront property must be valued at $10,000 to $12,000 per acre for the tax year 1995.
b. Valuation Method
7. An appraisal by the assessor valued the property under a market sales method.
8. Six sales, when adjusted for dissimilarity to the taxpayer's property, support the $20,000 value per acre for
riverfront lots.
9. Sale one is 0.6 acres and sold for $55,167 per acre on March 9, 1995.
10. Sale two is 0.2869 acres and sold for $34,855 per acre on April 27, 1994.
11. Sale three is 0.9 acres and sold for $31,111 per acre on March 15, 1994.
12. Sale four is 0.99 acres and sold for $42,424 per acre on May 8, 1995.
13. Sale five is 1 acre and sold for $33,000 per acre on March 26, 1996.
14. Sale six is 1.42 acres and sold for $21,127 per acre on March 24, 1995.
15. The taxpayer presented no sales of comparable properties.
16. The market sales approach demonstrates an average value of approximately $36,000 per acre for riverfront
property.
17. The taxpayer's riverfront property presents a steep slope to the water which provides protection from flooding
but also diminishes ready access to the river.
18. A reduction in value to the taxpayer's property of $16,000 for poor river access is appropriate.
19. The six properties relied upon by the assessor are riverfront properties similar in size and location to the
taxpayer's property and, with an adjustment of $16,000 to the taxpayer's property due to poor river access,
present valid sales upon which to determine a value for the taxpayer's property.
20. The two acres of riverfront property, including the one acre upon which the mobile home sits, are valued at
$20,000 per acre for the tax year 1995.
3. Discussion
The issue in dispute is the value of the taxpayer's riverfront property. That value is found by determining the price a
willing buyer would pay to a willing seller for the taxpayer's property. S.C. Code Ann. 12-37-930 (Supp. 1995).
The evidence here supports a $20,000 value based upon a market sales approach. The taxpayer presented no sales of
property in the area. The assessor, however, presented six comparables. The comparable sales present an average value
per acre of approximately $36,000 per acre. The assessor's value of $20,000 for the taxpayer's property considers the poor
river access and thus provides a reasonable reduction in value. Thus, the $20,000 per acre value, as reduced for poor river
access, is within the selling price of other similar property and is the fair market value of the taxpayer's one acre for
tax year 1995.
4. Conclusions of Law
Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of law:
1. All property shall be valued for taxation purposes 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 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. S.C. Code Ann. 12-37-930 (Supp.
1995).
2. Fair market value is the measure of true value for taxation purposes. Lindsey v. S.C. Tax Comm'n, 302 S.C.
504, 397 S.E.2d 95 (1990).
3. 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).
4. Appraising is not an exact science and the precise weight to be given to any valuation factor is necessarily a
matter for the court's judgment to be exercised in light of the evidence in the individual case. Santee Oil Co.,
Inc. v. Cox, 265 S.C. 270, 217 S.E.2d 789 (1975)
5. The two acres of riverfront property identified as a part of TMS #117-00-00-015 are valued at $20,000 per acre
for tax year 1995.
B. Roll-back Tax Liability
1. Positions of Parties:
The taxpayer argues no roll-back tax is due since none of her neighbors paid a roll-back tax based on the use of a
residence on their property. The assessor counters that to the extent possible all taxpayers are denied agricultural use
on their residence.
2. Findings of Fact:
I find, by a preponderance of the evidence, the following facts:
1. The taxpayer is the owner of 13.14 acres of contiguous property which includes Tract G with 11.18 acres and Tract
C with 1.96 acres of riverfront property.
2. The plat is recorded in the Dorchester County records with a filing date of August 17, 1981.
3. A mobile home became situated on Tract C during 1992.
4. The mobile home is the residence of Linda Hay.
5. No concomitant multiple uses are in effect on the property since identifiable portions of the property are used
for separate functions (residence one acre and farming 12.14 acres).
6. During December of 1994 the assessor changed the agricultural use on one acre of Tract C with the reason for
the change being that the one acre was being used for residential use and not agricultural use.
7. The assessor notified the auditor in May of 1995 that a roll-back tax was due on the one acre being used for
residential purposes.
8. The taxpayer received agricultural use on the 13.14 acres for 1990, 1991, 1992, 1993, and 1994 but received
agricultural use on only 12.14 acres for 1995.
9. Many taxpayers reside in mobile homes located on real property owned by another taxpayer.
10. Mobile homes present difficulties in determining when the agricultural use of a property has changed to
residential use.
11. The assessor overlooked some taxpayers' properties having residences located on agricultural use property and
did not investigate the facts pertaining to those taxpayers.
12. When brought to his attention the assessor investigates taxpayers who are potentially subject to roll-back taxes.
13. The assessor did not intentionally fail to impose roll-back taxes on property owners who have residences on
agricultural use classification property.
3. Discussion
Here, the roll-back tax is due only if there has been a change in use of the property from agricultural to non-agricultural. Whether a change in use has occurred may depend upon the type and degree of the uses of the remaining
portion of the property. Further, even if a change in use occurs a roll-back tax must not violate equal protection.
a. Change in Use
A roll-back tax is due when real property that carries agricultural use is applied to a use other than agricultural. S.C.
Code Ann. 12-43-220(d)(4)(Supp. 1995). Generally, the tax due is that amount which is the difference between the tax
paid as agricultural use and the tax that would have been paid under a non-agricultural classification. Id. The tax is
triggered by a change in use. A change in use occurs when property that once was used for agricultural use subsequently
is used for another purpose.
Here, the property subject to tax is Tax Map No. 117-00-00-015 consisting of 13.14 acres divided into two platted tracts
known as Tract G with 11.18 acres and Tract C with 1.96 acres. The 1.96 acre Tract C of riverfront property was used by
the taxpayer for agricultural purposes until 1992. In 1992, one acre of the property became the residence of Linda Hay.
Property used as a residence "of the owner or of others" is not property used for agricultural purposes. S.C. Code Regs.
117-114 (1976). Thus, one acre of Tract C changed from agricultural use to non-agricultural use. However, no change
occurred in Tract G. Therefore, the issue is whether a roll-back tax is triggered by a change in use of one acre in a 13.14
acre combined tract where the remaining acreage continues to be used for agricultural use.
b. Multiple Uses of Agricultural Property
The use of the 13.14 acres for agricultural and non-agricultural purposes creates a mixed use property and consequently
a classification issue. Under the general rule "if a particular piece of property is used for more than one purpose, then
the value of the total piece of property must be allocated on some equitable basis." S.C. Code Regs. 117-124.8 (1976).
For example in a duplex with one side rented and the other occupied by the landlord, the rented portion would carry a
6% "other use" and 4% residential use would apply to the landlord's residence with the square footage used to decide how
much of the property is allocated to 6% and 4% classifications.
However, exceptions to the general allocation rule apply to agricultural use property such that, under certain
circumstances, the entire tract may receive 100% agricultural use even if different uses are occurring on the property.
Two exceptions potentially give 100% agricultural use for multiple use property. The first (the concomitant exception)
applies only where the entire property is used to carry on two or more concomitant uses occupying the entire property
(e.g. raising timber and operating a hunting preserve). In such a circumstance, the entire property will receive
agricultural use classification so long as the agricultural use is the most significant use. S.C. Code Regs 117-114.
The second exception (the fifty percent exception) provides that the entire tract will be classified as agricultural property
if, subject to two conditions, at least fifty percent of the tract qualifies as agricultural real property. The two conditions
limiting the 100% agricultural classification are that 1) no other business for profit can be operated on the property and
2) the portion of the property that is used as a residence will always be excluded from agricultural use. See S.C. Code
Ann. 12-43-230(a), S.C. Code Regs 117-114, 117-124.11 and Jasper County Tax Assessor v. Westvaco Corp., 305
S.C. 346, 409 S.E.2d 333 (1991). If either of the two conditions are present, the general allocation rule applies rather than
the 100% agricultural use rule. See Jasper County Tax Assessor v. Westvaco Corp., supra.
Here, no concomitant multiple uses are in effect since identifiable portions of the property are used for separate functions
(residence one acre and farming 12.14 acres). Thus, the concomitant uses exception cannot grant agricultural use to 100%
of the property. Further, the fifty percent exception does not apply since the non-agricultural use is that of a
residence. Accordingly, the rule of allocation applies. See S.C. Code Ann. 12-43-230(a), S.C. Code Regs 117-114, 117-124.11 and Jasper County Tax Assessor v. Westvaco Corp., 305 S.C. 346, 409 S.E.2d 333 (1991). Thus, a roll-back
tax is due with the roll-back imposed on only one acre of property and the remaining property retaining its agricultural
use classification.
c. Equal Protection
The taxpayer asserts other similarly situated taxpayers have mobile homes on their property, and they have not been
subjected to roll-back taxes. Thus, she asserts the roll-back tax is being applied in a discriminatory manner such that
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 require that she not be assessed the tax. The taxpayer's argument does not
afford the relief sought.
The above constitutional provisions do not mandate absolute accuracy in property tax matters. Allied Stores of Ohio
v. Bowers, 358 U.S. 522 (1959); Owen Steel Co., Inc. v. S.C. Tax Comm'n, 287 S.C. 274, 337 S.E.2d 880 (1985). In fact,
complete equity and uniformity are not practically attainable when valuing property. Wasson v. Mayes, 252 S.C. 497,
167 S.E.2d 304 (1967). Given the significant difficulty in creating a precise uniformity, the mere demonstration that the
assessor made omissions, mistakes, errors, or oversights is not by itself sufficient to establish an illegal discrimination
against a taxpayer. Owen Steel Co., Inc., supra.; 84 C.J.S. Taxation 30 (1954). Rather, proof is required that the
assessor adopted an intentional and systematic practice of discrimination. See Sunday Lake Sun Co. v. Wakefield
Taxpayer, 247 U.S. 350 (1918); 84 C.J.S. Taxation 30 (1954). The burden of proving an intentional and systematic
discrimination rests with the complaining party. Sunday Lake Sun Co., supra. For example, a taxpayer met its burden
by establishing the county assessor deliberately established an improper county-wide procedure in which all property
values were based solely upon their most recent purchase price. Allegheny Pittsburgh Coal Co. v. County Comm'n,
488 U.S. 336 (1989).
In this case, no showing establishes that the assessor intentionally and systematically avoided imposing a roll-back tax
when a residence became established on property previously receiving agricultural use classification. At best the evidence
demonstrates the assessor overlooked several taxpayers who may also be liable for a roll-back tax. The oversight is
somewhat understandable since many taxpayers reside in mobile homes located on real property owned by another
taxpayer. Since the assessor values only the real property (S.C. Code Ann. 12-37-90 (Supp. 1995)) and the auditor
values the mobile home (S.C. Code Ann. 12-37-900 (1976)), the assessor will not necessarily learn that a residence has
been placed on the agricultural property. In fact, rather than the assessor having the duty to investigate to determine
if a change in use has occurred, the duty is upon the owner of the real property to notify the assessor of a change in
use. S.C. Code Ann. 12-43-220(d)(3) (Supp. 1995). In short, mobile homes present difficulties for the assessor in learning
when the agricultural use of a property has changed to residential use.
In this case, while the assessor may have in error overlooked some taxpayers' properties having residences located on
agricultural use property, the evidence demonstrates that, when such circumstances are brought to his attention, the
assessor investigates taxpayers who are potentially subject to roll-back taxes. Here, the assessor stated that he will
investigate the circumstances surrounding the taxpayer's neighbors to determine if they are liable for roll-back taxes.
In summary, the assessor did not intentionally fail to impose roll-back taxes on property owners who have residences on
agricultural use classification property. Rather, mere oversight and omission is insufficient to establish an intentional and
systematic discriminatory practice.
4. Conclusions of Law
Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of law:
1. A roll-back tax is due when real property that carries agricultural use is applied to a use other than
agricultural. S.C. Code Ann. 12-43-220(d)(4)(Supp. 1995).
2. Property used as a residence "of the owner or of others" is a change in use since residential property is not
property used for agricultural purposes. S.C. Code Regs. 117-114 (1976).
3. Generally, the roll-back tax due is that amount which is the difference between the tax paid as agricultural use
and the tax that would have been paid under a non-agricultural classification. S.C. Code Ann. 12-43-220(d)(4)(Supp. 1995).
4. Under the general rule, if a property is used for more than one purpose, the value of the total piece of property
must be allocated on some equitable basis. S.C. Code Regs. 117-124.8 (1976).
5. Exceptions to the general allocation rule apply to agricultural use property such that, under certain
circumstances, the entire tract may receive 100% agricultural use even if different uses are occurring on the
property.
6. The "concomitant exception" applies only where the entire property is used to carry on two or more concomitant
uses occupying the entire property such as raising timber and operating a hunting preserve with the result being
that the entire property will receive agricultural use classification so long as the agricultural use is the most
significant use. S.C. Code Regs 117-114 (1976).
7. The fifty percent exception provides that the entire tract will be classified as agricultural property if, subject
to two conditions, at least fifty percent of the tract qualifies as agricultural real property. The two limiting
conditions that will deny the 100% agricultural classification are the operation of a business for profit on the
property and the use of a residence on the property. See S.C. Code Ann. 12-43-230(a), S.C. Code Regs 117-114,
117-124.11 and Jasper County Tax Assessor v. Westvaco Corp., 305 S.C. 346, 409 S.E.2d 333 (1991).
8. Under the fifty percent exception, if either of the two conditions are present, the general allocation rule applies
rather than the 100% agricultural use rule. See Jasper County Tax Assessor v. Westvaco Corp., supra.
9. The general rule of allocation applies in the instant case since a residence is present on the property. See S.C.
Code Ann. 12-43-230(a), S.C. Code Regs 117-114, 117-124.11 and Jasper County Tax Assessor v. Westvaco
Corp., 305 S.C. 346, 409 S.E.2d 333 (1991).
10. A roll-back tax is due with the roll-back imposed on only one acre of property with the remaining property
retaining its agricultural use classification.
11. The taxpayer's property is taxed equitably in relation to similar property.
12. There is no systematic or intentional imposition of roll-back taxes so as to discriminate against the taxpayer.
13. There is no violation of the equal protection clauses of the Federal or South Carolina Constitutions.
14. There is no violation of the uniformity provision of the South Carolina Constitution as set out at Article X, Section
1.
15. 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 do not mandate absolute accuracy in property tax
matters. Allied Stores of Ohio v. Bowers, 358 U.S. 522 (1959); Owen Steel Co., Inc. v. S.C. Tax Comm'n,
287 S.C. 274, 337 S.E.2d 880 (1985).
16. Complete equity and uniformity are not practically attainable when valuing property. Wasson v. Mayes, 252
S.C. 497, 167 S.E.2d 304 (1967).
17. Given the significant difficulty in creating a precise uniformity, the mere demonstration that the assessor made
omissions, mistakes, errors, or oversights is not by itself sufficient to establish an illegal discrimination against
a taxpayer. Owen Steel Co., Inc., supra; 84 C.J.S. Taxation 30 (1954).
18. Proof is required that the assessor adopted an intentional and systematic practice of discrimination. See Sunday
Lake Sun Co. v. Wakefield Taxpayer, 247 U.S. 350 (1918); 84 C.J.S. Taxation 30 (1954).
19. The burden of proving an intentional and systematic discrimination rests with the complaining party. Sunday
Lake Sun Co., supra.
20. Since the assessor values only the real property and the auditor values the mobile home, the assessor does not
necessarily learn that a residence has been placed on the agricultural property. S.C. Code Ann. 12-37-90 (Supp.
1995); 12-37-900 (1976).
21. Rather than a duty on the assessor to investigate to determine if a change in use has occurred, the duty is upon
the owner of the real property to notify the assessor of a change in use. S.C. Code Ann. 12-43-220(d)(3) (Supp.
1995).
22. The assessor did not intentionally fail to impose roll-back taxes on property owners who have residences on
agricultural use classification property since mere oversight and omission is insufficient to establish an
intentional and systematic discriminatory practice. 84 C.J.S. Taxation 30 (1954).
23. The taxpayer is not entitled to have the roll-back tax dismissed due to inequities in assessment of roll-back taxes
to other taxpayers.
IV. ORDER
Based upon the foregoing Discussion, Findings of Fact, and Conclusions of Law, the following ORDER is issued:
The assessor is ordered to value the riverfront property of the taxpayer's property identified as Dorchester County Tax
Map #117-00-00-015C at a value of $20,000 per acre for assessment year 1995 and to impose a roll-back tax on one acre
of the riverfront property.
IT IS SO ORDERED.
____________________________
RAY N. STEVENS
Administrative Law Judge
This 21st day of November, 1996. |
