ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This property tax valuation matter comes before me pursuant to S.C. Code Ann. §§ 1-23-310
et seq. (1986 & Supp. 1997) and § 12-60-2540(A) (Supp. 1997) upon the filing of a request for a
contested case hearing by Leonard O. Henry ("Taxpayer"). At issue is the fair market value of a
condominium for tax year 1997. The Horry County Board of Assessment Appeals ("Board") valued
the subject property at $68,500. The Taxpayer challenges the Board's valuation, claiming the
appraisal value incorrectly includes the value of personal property already taxed and results in
"duplicate taxation." Taxpayer asserts that the fair market value of the real property is $63,800.
A hearing was held at the Horry County Courthouse on January 23, 1998. Upon review of the
relevant and probative evidence and applicable law, I find and conclude that the fair market value
of the subject property for tax year 1997 is $68,500.
DISCUSSION
The sole issue is the fair market value for tax year 1997 of real property known as Q-304
Shipwatch Point II, Myrtle Beach, South Carolina, and delineated as Horry County TMS #166-06-36-093. Taxpayer purchased the subject property, a fully furnished condominium unit, in 1996 for
$68,500. He claims that the sales price included personal property which is valued at $4,700.
Taxpayer's 1997 business personal property tax return filed with the Horry County Auditor's Office
reflects that value. Consequently, Taxpayer asserts that the sale price for the real property in
question was actually $63,800 ($68,500 less $4,700). As the sale price attributed to real property
in an arm's length transaction, Taxpayer argues that the fair market value of the subject real
property is $63,800, and the assessed value should be adjusted accordingly.
While obviously of relevance and importance to the Taxpayer, the valuation of any personal
property in the condominium unit by the auditor is not an issue properly before this tribunal. This
matter involves the Horry County Assessor and the valuation of real property only. The valuation
of personal property for tax purposes lies beyond the authority of the Assessor's Office. To
challenge the auditor's valuation of personal property, Taxpayer must commence a separate
administrative action directly seeking adjustment of that valuation.
Evidence of the purchase price of the assessed property, while not conclusive, is to be
accorded substantial weight on the issue of fair market value. Belk Dep't. Stores v. Taylor, 259
S.C. 174, 191 S.E.2d 144 (1972). Assessor established the value of the subject property through
comparison with sales of other properties, and considering the purchase price of the subject unit.
Taxpayer did not establish that the Assessor's determination was incorrect. Taxpayer's assertion
that the Assessor's valuation of the subject included furniture lacks evidentiary support as Taxpayer
failed to present any relevant evidence to establish that personal property was wrongly included in
the appraisal of the subject property. The appraisal submitted by Taxpayer did not prove that
furniture or other personal property was included in the assessment. Taxpayer did not submit
evidence to establish that the refrigerator, range/oven, disposal, dishwasher or fan listed on the
appraisal were personal property and not fixtures (real property).
The fair market valuation of the condominium at $68,500 for tax year 1997 is reasonable
and proper, given sales of similar properties. Taxpayer is not precluded by this decision from
challenging the personal property valuation for personalty located in the subject unit. Based upon
the real property valuation, he may want to consider adjusting that figure so that it does not include
real property fixtures.
FINDINGS OF FACT
By a preponderance of the evidence, I find:
Leonard O. Henry owns real property known as Q-304 Shipwatch Point II, Myrtle
Beach, South Carolina, and delineated as Horry County TMS #166-06-36-093.
The subject property is a condominium unit.
Prior to 1997, the subject property was assessed at $74,800 by the Horry County
Assessor.
Taxpayer purchased the property, fully furnished, for $68,500 in 1996.
By letter dated February 15, 1997, Taxpayer filed a written protest to the Assessor's
valuation and requested review of the assessment for tax year 1997.
Upon review of the protest, the Assessor adjusted the value of the subject property
to $68,500 by his letter of March 13, 1997.
By letter dated June 9, 1997, Taxpayer protested the Assessor's adjusted valuation
and requested a conference before the Horry County Tax Review Board.
The Board conducted a conference on August 21, 1997, after which the Board issued
its decision sustaining the fair market value of the subject property as $68,500 for tax year 1997.
Following the Board's decision, Taxpayer filed a formal request for a contested case
hearing before the Administrative Law Judge Division on September 26, 1997.
Notice of the time, date, place, and subject matter of the contested case hearing was
given to all parties.
The Preliminary Tax Appeal Statements, with attachments, filed by the parties prior
to the hearing were incorporated into the record of the hearing without objection.
An April 17, 1996 appraisal by H.B. Thompson, submitted by Taxpayer, estimates
the fair market value of the subject property as $69,000.
The Thompson appraisal clearly states on its face that the "[e]stimated value pertains
to Real Estate only."
On March 7, 1997, Taxpayer filed a business personal property tax return with the
Horry County Auditor's Office giving the taxable value of the personal property in the
condominium as $4,700.
The subject property contains a refrigerator, range/oven, disposal, dishwasher, fan,
and furnishings which were purchased with the unit and included in the purchase price of $68,500.
No evidence was presented to allow the court to determine which, if any, of the
above items are personalty, as opposed to fixtures. Taxpayer failed to present any evidence
concerning the mode of attachment of any of the items, the character of the structure or articles, the
intent of the parties making the annexation, the relationship of the parties, or the probability that
damage would occur if the articles were removed.
In 1996, sales of comparable properties within the Shipwatch Point complex ranged
from $68,500 to $86,500, for a mean of $76,617.
In 1996 and 1997 combined, ten comparable Shipwatch Point units of the same
square footage as the subject unit sold at prices ranging from $71,000 to $86,500, for a mean of
$77,355.
Based upon the purchase price of the subject property and the sales of several
comparable condominiums in the same complex of the same square footage, the fair market value
of the subject property for tax year 1997, not including any personal property located within, is
$68,500.
CONCLUSIONS OF LAW
Based upon the above Findings of Fact, I conclude as a matter of law, the following:
The South Carolina Administrative Law Judge Division has subject matter
jurisdiction in this matter pursuant to Chapter 23 of Title I of the 1976 Code, as amended.
S.C. Code Ann. §12-60-2540 (Supp. 1997) authorizes the South Carolina
Administrative Law Judge Division to hear contested cases in property tax assessment matters
pursuant to Chapter 23 of Title I, as amended.
Real property refers to "buildings and items of property devoted primarily to the
general use of the land and buildings, and all other property which according to custom has been
considered to be real property. . . ." 27 S.C. Code Ann. Regs. 117-105 (1976).
Personal property includes all items not defined as "real property." 27 S.C. Code
Ann. Regs. 117-105 (1976).
The county auditor has the responsibility of ascertaining that taxable personal
property is properly listed and assessed. S.C. Code Ann. § 12-39-340 (1976). The method of
valuation of any personal property by the auditor is not properly at issue before this tribunal as the
valuation of chattels (personal property) for tax purposes lies beyond the authority of the Assessor's
Office: "All counties shall have a full-time assessor, whose responsibility is appraising and listing
all real property. . . ." S.C. Code Ann. § 12-37-90 (Supp. 1997).
In Carson v. Living Word Outreach Ministries, Inc., 315 S.C. 64, 431 S.E.2d 615,
618 (Ct. App. 1993), the Court of Appeals restated the test for determining whether a chattel
(personal property) has become a fixture (real property):
A fixture is generally defined as an article which was a chattel, but by being
physically annexed to the realty by one having an interest in the soil becomes a part
and parcel of it. By mere affixation the chattel does not become a fixture. The test
for determining whether an item remains personalty or becomes a fixture include the
following criteria: (1) mode of attachment, (2) character of the structure or article,
(3) the intent of the parties making the annexation, and (4) the relationship of the
parties. Creative Displays, Inc. v. South Carolina Highway Department, 272 S.C.
68, 248 S.E.2d 916 (1978). See also South Carolina Department of Highways and
Public Transportation v. Najma Records, Inc., 288 S.C. 169, 341 S.E.2d 649 (Ct.
App.1986).
. . . .
A fixture involves a mixed question of law and fact. It is incumbent on the
court to define a fixture; but whether it is such in a particular instance depends upon
the facts of that case, unless the facts are susceptible of but one inference. Rawls
v. American Central Insurance Company, 97 S.C. 189, 81 S.E. 505 (1914).
An important factor in determining if a chattel has become a fixture is whether the
item or the premises where it is located would be damaged by removal. In South Carolina Dep't
of Highways and Public Transp. v. Najma Records, Inc., 288 S.C. 169, 170-71, 341 S.E.2d 649, 651
(Ct. App. 1986), the court held that recording-studio equipment did not constitute fixtures:
The landowner's recording equipment in the case before us was attached by bolts,
screws and wooden encasements, which were also attached by bolts and screws.
The equipment was detachable from its wiring and was reusable when electronically
balanced and tuned again. The equipment in fact was removed, and there is no
evidence of record of physical damage to the equipment because of its removal.
Likewise, an air-conditioning system was determined to be a fixture because its removal damaged
the premises. Carson v. Living Word Outreach Ministries, Inc., 315 S.C. 64, 431 S.E.2d 615 (Ct.
App. 1993).
"Ordinary ranges and stoves have been considered as not fixtures. However, some
courts have held that gas ranges uniformly installed in an apartment building will pass with the
realty as fixtures, in the absence of an agreement to the contrary." 35 Am. Jur. 2d Fixtures § 120
(1967) (internal citations omitted).
Refrigeration equipment used for the comfort of occupants is real property. 27 S.C.
Code Ann. Regs. 117-105 (1976).
The proper measure of value for taxation purposes is the fair market value. Lindsey
v. South Carolina Tax Comm'n, 397 S.E.2d 95 (1990), 84 C.J.S. Taxation § 411.
Fair market value is defined in S.C. Code § 12-37-930 as:
the price which the property would bring following reasonable
exposure to the market, where both the seller and the buyer are
willing, are not 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.
To determine a fair market price for the subject property, comparisons of the sale
price of other properties of the same character may be utilized. See Cloyd v. Mabry, 295 S.C. 86,
367 S.E.2d 172 (Ct. App. 1988); 84 C.J.S. Taxation §§ 410-411 at 785, 797 (1954).
In estimating the value of land, all of its elements or incidents which affect market
value or would influence the mind of a purchaser should be considered, such as location, quality,
condition, and use. 1969-70 Op. S.C. Att'y Gen., No. 3045 at 337; See also 84 C.J.S. Taxation
§ 410 at 784; § 411 at 794 (1954).
Evidence of the purchase price of the assessed property, while not conclusive, is
to be accorded substantial weight on the issue of fair market value. Belk Dep't. Stores v. Taylor,
259 S.C. 174, 191 S.E.2d 144 (1972).
"Appraisal is, of course, not an exact science and the precise weight to be given to
any factor is necessarily a matter of judgment, for the court, in the light of the circumstances
reflected by the evidence in the individual case." Santee Oil Co., Inc. v. Cox, 265 S.C. 270, 217
S.E.2d 789 (1975).
This proceeding before the ALJD is in the nature of a de novo hearing. Thus, the
Petitioner is required to prove the correctness of the valuation he is seeking. Reliance Ins. Co. v.
Smith, ___ S.C. ___, 489 S.E.2d 674, 677 (Ct. App. 1997).
Once the assessor establishes the basis for the valuation, his decision as to the situs
of property, its taxability, and the valuation put on it generally is presumed correct until the contrary
appears, and the person complaining has the burden of proving his grievance. Newberry Mills v.
Dawkins, 259 S.C. 7, 190 S.E.2d 503 (1972); 84 C.J.S. Taxation § 537 (1954). 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. Cloyd v. Mabry, 295 S.C. 86, 367 S.E.2d 171 (Ct. App. 1988).
Using the market sales approach, the Assessor's valuation of $68,500 is a reasonable
calculation of the fair market value of the subject property for tax year 1997.
The Assessor presented ample evidence supporting the propriety of his valuation of
the subject property. The evidence presented by the Assessor standing alone was sufficient to carry
the burden of proof, and Taxpayer failed to present any contrary evidence as to the proper value of
the Property. See Reliance Ins. Co. v. Smith, supra.
Any issues raised or presented in the proceedings or hearing of this case not
specifically addressed in this Order are deemed denied. ALJD Rule 29(B).
ORDER
IT IS THEREFORE ORDERED that the subject property, Q-304 Shipwatch Point II,
Horry County TMS #166-06-36-093, be valued for taxation purposes at $68,500 for tax year 1997.
AND IT IS SO ORDERED.
__________________________________
STEPHEN P. BATES
ADMINISTRATIVE LAW JUDGE
March 9, 1998
Columbia, South Carolina |