SC Administrative Law Court Decisions

This is a contested case brought by the Petitioner, Gail Kelley ("Taxpayer") against the Pickens County Tax Assessor ("Assessor") concerning property valuation for the 2001 tax year. The Petitioner exhausted all pre-hearing remedies with the Assessor and the Pickens County Board of Assessment Appeals ("Board"). Jurisdiction is granted to the Administrative Law Judge Division ("ALJD") by S.C. Code Ann. § 12-60-2540 (2001) and S.C. Code Ann. § 1-23-600 (Supp. 2001). After notice to all parties, a hearing was conducted on March 20, 2002, at the ALJD in Columbia, South Carolina. POSITIONS OF THE PARTIES

The parties agree that the year 2001 was a non-assessment year in the County of Pickens. Taxpayer argues, in part, that an increase in the assessed value of the property is not permitted since 2001 is a non-assessment year and there have been no improvements made to the property since the 1999 reassessment. Assessor argues that he was unaware that site improvements in the form of water lines and septic tanks existed on the property in the year of the assessment and that, upon discovering that such improvements existed, it properly corrected the property's classification by changing it from "unimproved, vacant" to "mobile home site," resulting in a higher assessed value and an increased ad valorem tax.

In addition, Taxpayer argues that she is being treated unfairly and inequitably by Assessor because Assessor continues to classify similar parcels (those with mobile home sites) owned by others as "unimproved, vacant," resulting in lower ad valorem taxes owed by others similarly situated. Assessor argues that it is continuously correcting oversights and errors and that it will, upon discovering that properties previously designated as "unimproved" actually have mobile home sites on them, reappraise and reassess them accordingly.

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

• This Division has personal and subject matter jurisdiction.
• Notice of the date, time, and place was timely given to all parties.
• Taxpayer is the owner of certain real property that bears the tax ID number of 5007-00-94-0368, a 1.24 acre parcel located on South McAlister Road in Easley, South Carolina ('subject property"). Taxpayer purchased the subject property in June 1998 for $8000.00. On the subject property are two mobile home sites, each site with its own septic tank and water line, which were installed that same year. Taxpayer leases or rents the sites to mobile home owners.
• The Pickens County Assessor engaged in a county-wide reassessment program for the 1999 tax year beginning in 1997. At the time it was reassessed, Assessor was unaware that septic tanks were on the subject property. Consequently, the Assessor appraised the subject property as "unimproved" and determined its taxable market value estimate to be $7700.00, which equates to an valorem tax of $79.18.
• In the year 2000, one of Taxpayer's current lessees registered her mobile home with Assessor in accordance with state law. At that time, Assessor became aware that the subject property was a mobile home site upon which a septic tank had been installed. As a result, Assessor reclassified and reappraised the subject property so that its taxable market value estimate increased to $10,500.00 ⁽¹⁾, which equates to an valorem tax of $114.65.
• By Notice of Classification, Appraisal and Assessed Value of Real Estate dated April 4, 2001, Assessor notified Taxpayer that the taxable market value estimate of the subject property increased to $10,500.00. The Notice contained the notation "land site improvement."
• Prior to 2001, Assessor had no real method for determining whether a parcel of property contained improvements necessary for use as a mobile home lot unless a mobile home were present at the time the property was inspected by an appraiser in the Assessor's office. Consequently, many such parcels were classified as "unimproved" for the 1999 reassessment, including Taxpayer's.
• In 2001, Assessor created a new division within itself called the Mobile Home Office. The Mobile Home Office makes it possible for Assessor to collect information from the permitting and registering of mobile homes so that he can properly assess the county's mobile home sites. As mobile home owners file permits and registrations with the Office, Assessor can determine which parcels of land previously designated as "unimproved" should be reclassified as a mobile home lot. In addition to identifying improved mobile home lots, Assessor has also identified many mobile homes as a result of creating the Mobile Home Office. Because the Office has been in existence only since 2001, Assessor concedes there are likely hundreds of septic tanks on what is classified as "unimproved" land of which Assessor is unaware.
• Appraiser Tommy Gravely has prepared several Land Appraisal Reports for the subject property. In at least one of his Reports, Gravely incorrectly stated that Taxpayer purchased the subject property for $8500.00. In addition, in other documents, Assessor had described incorrectly the subject property as consisting of 1.4 acres. However, in his Report dated January 31, 2002, Gravely correctly stated the sales price as $8000.00 and the lot size as 1.24 acres. In that Report, Gravely estimated the market value as of January 31, 2002, as $13,000.00.

CONCLUSIONS OF LAW

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

• The ALJD has subject matter jurisdiction over this action pursuant to S.C. Code Ann. § 12-60-460 (2001) and S.C. Code Ann. § 1-23-600 (Supp. 2001).
• S.C. Code Ann. § 12-37-210 defines property subject to South Carolina's ad valorem tax 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) (1976).
• S.C. Code Ann. § 12-37-90 states that all counties shall have a full-time assessor, whose responsibility is appraising and listing property. Further, the assessor shall, in part:

• when values change, reappraise and reassess real property so as to reflect its proper valuation in light of changed conditions, except exempt property and real property required by law to be appraised and assessed by the department, and furnish a list of these assessments to the county auditor;

• 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.

S.C. Code Ann. § 12-37-90 (c),(d) (Supp. 2001).

• S.C. Code Ann. § 12-37-930 provides, in part:

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 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.

S.C. Code Ann. § 12-37-930 (Supp.2001).

5. In addition, S.C. Code Ann. § 12-43-217 provides, in part, that "once every fifth year each county or the State shall appraise and equalize those properties under its jurisdiction." S.C. Code Ann. § 12-43-217 (Supp. 2001). A county assessor may not conduct a reassessment of certain property in a non-reassessment year, where all other properties were not also reassessed, unless a change in the condition of the certain property has occurred. See Long Cove Home Owners' Ass'n, Inc. v. Beaufort County Tax Equalization Bd., 327 S.C. 135, 488 S.E.2d 857 (1997).

• Further, S.C. Code Ann § 12-39-250 provides, in part, "[a]t any time prior to payment of the tax the auditor shall also correct upon the duplicate for any tax year any errors that may be discovered that were made by county or state officers. S.C. Code Ann § 12-39-250(a) (Supp. 2001).
• As the party contesting the assessing authority's valuation, Taxpayer had the burden of proving the actual value of the properties. See Reliance Insurance Co. v. Smith, 327 S.C. 528, 489 S.E.2d 674 (Ct. App. 1997); Cloyd v. Mabry, 295 S.C. 86, 367 S.E.2d 171, 173 (Ct. App. 1988).
• In addition, with regard to her assertion that Assessor is treating her inequitably, Taxpayer has the burden of proving that Assessor intentionally and systematically undervalued other properties with mobile home sites while hers is valued at fair market value. See Sunday Lake Iron Co. v. Wakefield Tp, 247 U.S. 350 (1918). The burden of proving an intentional and systematic undervaluation rests with the complaining party. Id.
• To meet the taxpayer's burden, more than a mere showing that other properties are undervalued must be shown. Owen Steel Co. v. South Carolina Tax Comm'n, 287 S.C. 274, 278-79, 337 S.E.2d 880, 882-3 (1985). The evidence must establish that the undervaluation is not the result of a mere judgment call but rather that the undervaluation is the result of an intentional and systematic undervaluation. Taxpayer has failed to produce any evidence that other properties with septic tanks are undervalued (i.e., valued as "unimproved" land) due to Assessor's intentional and systematic undervaluation of them. On the other hand, Assessor's evidence establishes that he corrects such undervalues as they become apparent to him.
• Moreover, because Taxpayer failed to present any contrary evidence as to the proper value of the subject properties, the assessing authority's value is presumed correct. See Reliance Insurance Co., 327 S.C. at 534.
• I conclude that Assessor properly corrected an error in accordance with S.C. Code Ann. § 12-39-250 when it reassessed the subject property to include value for site improvements after it discovered in 2001 that such site improvements existed on the subject property. Assessor acknowledges that such site improvements existed at the time of the reassessment; however, Assessor was unaware of their existence. Once he discovered that the subject property was incorrectly classified as "unimproved," Assessor was bound by state law to correct the error. See S.C. Code Ann. § 12-39-250(a) (Supp. 2001). As such, Assessor's assessed value of the subject property for the 2001 tax year, $10, 500.00, is upheld.

ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law,

IT IS HEREBY ORDERED that the Pickens County Assessor shall assess Taxpayer's property identified as PID #5007-00-94-0368 at $10,500.00 for the tax year 2001.

AND IT IS SO ORDERED.

_____________________________ C. DUKES SCOTT

ADMINISTRATIVE LAW JUDGE

March 26, 2002

Columbia, South Carolina

1. In his January 31, 2002 Land Appraisal Report for the subject property, Appraiser Tommy Gravely determined the actual market value as of that date to be $13,000.00. The Assessor then adjusted that value to reflect the subject property's market value in 1999, the year of the reassessment, resulting in a $10,500.00 taxable market value estimate.