SC Administrative Law Court Decisions

This matter came before me pursuant to the South Carolina Revenue Procedures Act, S.C. Code Ann. §§ 12-60-2510 et seq. (Supp. 1996), and the Administrative Procedures Act, S.C. Code Ann. §§ 1-23-310 et seq. (Rev. 1986 & Supp. 1996), upon the request of Robert Holley (Taxpayer) contesting the Aiken County Assessor Office's (Assessor) appraised fair market value of real property, identified as Map No. 00-250-0-01-020 (subject property) in Aiken County, for the tax year 1995.

Taxpayer exhausted his prehearing remedies with the Aiken County Assessor's Office and the Aiken County Board of Assessment Appeals. He thereafter sought a contested case hearing before the Administrative Law Judge Division. After notice to the parties, a hearing was conducted on September 10, 1997.

Any issues raised in the proceedings or hearing of this case but not addressed in this Order are deemed denied. ALJD Rule 29(B). I conclude that the valuation of the subject property at $6,120 is improper and remand this case to the Aiken County Board of Assessment Appeals for a hearing to determine the appropriate fair market value for the tax year 1995.

Based upon the evidence presented, I make the following findings of fact, taking into consideration the burden on the parties to establish their respective cases by a preponderance of the evidence and taking into account the credibility of the witnesses:

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 is the owner of real property bearing TMS No. 00-250-0-01-020, located nine miles northeast of Aiken, South Carolina. The parcel is approximately 2.3 acres.
4. The subject property is a triangular lot adjacent to a larger tract of land also owned by the Taxpayer. The subject property had not been joined or added to the adjacent tract and therefore was a separate and distinct property subject to its own taxation and valuation.
5. The subject property is unimproved real estate and has been given an agricultural use classification.
6. The Assessor admitted in his Prehearing Statement that the highest and best use of the property is agricultural.
7. The location of the subject property in relation to other properties subjects it to large amounts of waterflow and flooding. In addition, the subject property is bordered by a watershed drainage area.
8. Although the property is not specifically delineated on the National Flood Insurance Program map for Aiken County, the property is subject to periodic flooding because the watershed or drainage area above the subject property is 100 to 125 acres of erosive type soils, which allows runoff through the subject property.
9. Approximately 1.6 acres of the subject property is of Ochlockonee soil type. Approximately 0.7 acres of the subject property is of Vaucluse soil type.
10. These two soil types are highly erodible and poorly suited for development because of the inability to provide sanitary facilities.
11. The 1.6 acres of Ochlockonee soil is enrolled in a 10 year Conservation Reserve Program of the U.S. Department of Agriculture. To be eligible for the long term Conservation Reserve Program, the property must be subject to severe erosion.
12. During a county-wide mass appraisal in 1995, the Assessor's Office set the fair market value of the property at $6,120.
13. The Assessor did not offer any evidence supporting the fair-market valuation of the subject property, except the assertion that the value was reached during the county-wide reappraisal.
14. The assessor presented no evidence to demonstrate whether the property was valued according to its highest and best use as agricultural property as opposed to residential. Further, there was no evidence of how the value was determined during the mass appraisal process.
15. The Assessor did classify the property for agricultural use, and the agricultural use value was $310. This value is determined pursuant to S.C. Code Regs. 117-126 and based upon the soil types of the property.
16. The taxpayer, a licensed general real estate appraiser, claims that the property should only be valued at $600, yet he also failed to offer any evidence to support his conclusion.

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

1. S.C. Code Ann. § 12-60-2540 (Supp. 1996) authorizes the South Carolina Administrative Law Judge Division to hear contested cases pursuant to Chapter 23 of Title 1 of the 1976 Code, as amended.
2. "The General Assembly of this State under the Equal Protection Clause of both the State and Federal Constitutions has the right to classify both persons and property for taxation." Holzwasser v. Brady, 262 S.C. 481, 487, 205 S.E.2d 701, 703 (1974). See S.C. Code Ann. § 12-43-220 (Supp. 1996).
3. S.C. Code Ann. § 12-37-930 (Supp. 1996) provides how real property must be valued. It states in part:

All property shall 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 buyer are willing, are not acting under compulsion, and are reasonably well informed of the uses and purposes for which it is adapted and for which it is capable of being used.

1. The assessor's decision as to the situs of property, its taxability and valuation, generally is presumed correct until the contrary appears, and the person complaining has the burden of proving his grievance. 84 C.J.S. Taxation § 537 (1954); Cloyd v. Mabry, 295 S.C. 86, 367 S.E.2d 171 (Ct. App. 1988). However, the assessor must first establish a basis for the valuation using comparable sales or another equally recognized and established means of assessing the valuation of the proper before the presumption of correctness attaches. Once the Assessor demonstrates the basis for the value of the property, then the burden of persuading the fact finder that the value is incorrect shifts to the taxpayer. See Reliance Ins. Co. v. Smith, ___ S.C. ___, 489 S.E.2d 674 (Ct. App. 1997).
2. A taxpayer contesting an assessment has the burden of showing that the valuation of the taxing authority is incorrect. Ordinarily this is done by proving the actual value of the property but the taxpayer may show the Assessor's valuation is incorrect by other evidence. If he does so, the presumption of correctness is removed and the taxpayer is entitled to relief. Cloyd v. Mabry, supra.
3. The taxpayer demonstrated that the property was not capable of development and that it was located in an area subject to flooding. Taxpayer also demonstrated that the property was best suited for agricultural purposes.
4. The Assessor failed to establish a basis for their fair market valuation of the subject property at $6,120 and failed to demonstrate what factors were considered in determining the value of the property. No evidence was presented about the mass appraisal and how the value of the subject property was determined.
5. The taxpayer has demonstrated that the fair market value of $6,120 is questionable, but he has failed to produce evidence as to the true value of the property. The Taxpayer's value of $600 has not been established.
6. There is not sufficient evidence in the record for this tribunal to determine the correct value of the property. Based upon the evidence presented, the Assessor has not established that the fair market value of the property should be $6120, nor has the taxpayer established that the property should be valued at $600.
7. Taxpayer also argues that the subject property should have been combined with his adjacent agricultural property for valuation. The Assessor states that the taxpayer must make a request to combine the adjoining tracts. The Assessor has no authority, on his own, to combine tracts of land without a request from the property owner. Taxpayer made such a request for the 1996 tax year.
8. The subject property was properly assessed as an independent lot. The subject property had not been joined or added to the adjacent tract and therefore was a separate and distinct property subject to its own taxation and valuation. There was no error by the Assessor in failing to combine the property for the 1995 tax year.

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

ORDERED, that this case is remanded to the Aiken County Board of Assessment Appeals for the purpose of determining the fair market value of the property, identified as Map No. 00-250-0-01-020 in Aiken, South Carolina, for tax year 1995.

AND IT IS SO ORDERED.

_______________________________

ALISON RENEE LEE

Administrative Law Judge

February 20, 1998

Columbia, South Carolina.