ORDERS:
CONCLUSIONS OF LAWBased upon the foregoing Findings of Fact, applicable law, and the evidence, this court
concludes, as a matter of law, the following:
General
1.S.C. Code Ann. § 12-60-2540 (Supp. 2002) authorizes the Division to hear this contested
case pursuant to Chapter 13 of Title I of the 1976 Code, as amended.
2.S.C. Code Ann. § 12-4-30(D) (Supp. 2002) 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. 2002) previously heard by the Commission. The Administrative Law Judge Division
assigns each case as filed to an Administrative Law Judge who hears the case in accordance with
the rules of procedure of the Division. S. C. Code Ann. § 1-23-650 (1976)(as amended).
3.This contested case proceeding before an Administrative Law Judge is in the nature of a
de novo hearing. Sea Pines Plantation Co., Inc. v. Beaufort County Assessor, 2002 WL
1486969, Docket No. 01-ALJ-17-0018-CC (June 20, 2002).
4.After conducting a hearing, the assigned Administrative Law Judge issues a final
decision in a written order containing separate findings of fact and conclusions of law. S.C. Code
Ann. § 1-23-350 (1976) and ALJD Rule 29(c).
5.The standard of proof in weighing the evidence and making a decision on the merits of a
contested case hearing is by a preponderance of the evidence. Anonymous v. State Board of
Medical Examiners, 329 S.C. 371, 796 S.E.2d 17 (1998); National Health Corp. v. South
Carolina Department of Health and Environmental Control, 298 S.C. 373, 380 S.E.2d 841 (Ct.
App. 1989).
6.An agency decision must be reached utilizing reasoned judgment and must be based upon
adequate determining principles and a rational basis. City of Columbia v. Board of Health and
Environmental Control, 292 S.C. 199, 355 S.E.2d 536 (1987).
7.The trier of fact must weigh and pass upon the credibility of the evidence presented. S.C.
Cable Television Association v. Southern Bell Tel. and Tel. Co., 308 S.C. 216, 417 S.E.2d 586
(1992). The trial judge who observes a witness is in the best position to judge the witness’
demeanor and veracity and evaluate his testimony. McAlister v. Patterson, 278 S.C. 481, 299
S.E.2d 322 (1982).
8.A court construing a statute must first seek to ascertain and effectuate legislative intent.
Koenig v. South Carolina Dep’t of Public Safety, 325 S.C. 400, 480 S.E.2d 98, 99 (Ct. App.
1996). The cardinal rule of statutory construction is to give words used in a statute their plain
and ordinary meaning without resort to subtle or forced construction. Id. The language must be
read to harmonize its subject matter with its general purpose. Id. “In construing statutory
language, the statute must be read as a whole, and sections which are part of the same general
statutory law must be construed together and each one given effect, if it can be done by any
reasonable construction.” Higgins v. State, 307 S.C. 446, 449, 415 S.E.2d 799, 801 (1992).
However, our courts have also held that statutes, as a whole, must receive practical, reasonable,
and fair interpretation, consonant with the purpose, design, and policy of lawmakers. TNS Mills,
Inc., v. South Carolina Department of Revenue, 331 S.C. 611, 503 S.E.2d 471 (1998); Gildstrap
v. South Carolina Budget and Control Board, 310 S.C. 210, 423 S.E.2d 101 (1992).
Assessment of Real Property
9.Prior to its amendment in 2000 by the General Assembly, S.C. Code Ann. § 12-37-610
read: “Every person is liable to pay taxes and assessments on the real estate which he owns or
may have the care of as guardian, executor, trustee, or committee.” This statute was amended by
Act 399 of 2000, effective January 1, 2001, to read:
Each person is liable to pay taxes and assessments on the real property that, as of
December thirty-first of the year preceding the tax year, he owns in fee, for life,
or as trustee, as recorded in the public records for deeds of the county in which
the property is located, or on the real property that, as of December thirty-first of
the year preceding the tax year, he has care of as guardian, executor or committee
or may have the care of as guardian, executor, trustee, or committee.
10.S.C. Code Ann. § 12-43-210(A) requires that South Carolina counties shall assess
properties “uniformly and equitably throughout the State.” It further directs the South Carolina
Department of Revenue to promulgate regulations to ensure equalization which must be adhered
to by all assessing officials in the State. S.C. Code Ann. § 12-43-210(B) provides that no
reassessment program may be implemented “unless all real property in the county...is reassessed
in the same year.”
In addition to other powers and duties required by law, the department, in order to
administer effectively the equitable assessment of property for taxation “shall order reassessment
of real and personal property...or when, in the judgment of the department, the reassessment is
advisable or necessary to the end that all classes of property in the assessment district are
assessed in compliance with the law.” S.C. Code Ann. § 12-4-510 (3) (Supp. 2002).
11.Charleston County implemented a county-wide reassessment program for its real
property in the year 1993, using values as of December 31, 1992. Glover v. Charleston County
Assessor, 1997 WL 816206, Docket No. 97-ALJ-17-0296-CC, at *1-2 ( Dec 19, 1997); Crocker
v. Lindsey, 1995 WL 929863, Docket No. 95-ALJ-17-0367-CC, at *1,3 ( Aug 31, 1995).
12.In 1995, the South Carolina General Assembly enacted quadrennial reassessment, which
required all counties to equalize and appraise properties under their jurisdiction. The statute did
not state whether it was to be applied retroactively or prospectively. S.C. Code Ann. § 12-43-217 (A) (Supp. 2002). The amendment mandated that:
Property valuation must be completed at the end of December of the fourth year
and the county or State shall notify each taxpayer of any change in value or
classification if the change is one thousand dollars or more. In the fifth year, the
county or State shall implement the program and assess all property on the newly
appraised values.
As a practical matter, counties applied the 1995 statute retroactively as evidenced by the
many reassessment programs held in successive years prior to its passage. If the counties had
treated the statute as being operable prospectively, they would have all implemented a county-wide reassessment program throughout our State during the same year. It was obvious to the
county officials that the General Assembly meant that this statutory provision should be applied
prospectively; to apply it prospectively would have been created an impossible situation for the
Department of Revenue since it is charged by statute to oversee each of the 46 counties as they
prepare for and conduct their reassessments.
13.On February 3, 1997, the Director of the South Carolina Department of Revenue,
pursuant to general authority contained in S.C. Code Ann. § 12-4-510 (3), issued an Order to
Charleston County which postponed the implementation of the 1999 annual reassessment in
Charleston County and directed the county to complete its county-wide reassessment program
by December 31, 1999. Further, the Order directed the county to implement the program in tax
year 2000 and directed the Assessor to mail assessment notices to all taxpayers by February 1,
2000.
14.The South Carolina General Assembly passed Act No. 93 in 1999, which became
effective on July 1, 1999. This Act amended S.C. Code Ann. § 12-43-217 by adding paragraph
(B), authorizing a county by ordinance to postpone for not more than one property tax year the
implementation of revised values resulting from its equalization program (which § 12-43-217
required to be implemented every five years).
15.On December 14, 1999, pursuant to authority contained in Act 93, Charleston County
adopted Ordinance No.1125 (“Ordinance”) which postponed the implementation of the revised
assessed values resulting from the 1999 county-wide appraisal and equalization program from
implementation in the tax year 2000 (as ordered by the Department) to tax year 2001.
Responsibility of the Assessor and Credibility of his Assessment16.S.C. Code Ann. § 12-37-90 (Supp. 2002) provides that each county shall have a full-time
assessor, whose responsibility is to appraise and list 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.
17.An assessor’s valuation is presumed correct and made in conformity with the law. Joe
W. Hiller, Architect, Inc. v. Colleton County Assessor, 1996 WL 909131, Docket No. 95-ALJ-17-231-CC (Feb. 16, 1996). The burden is on the property owner to disprove the Assessor's
valuation. See Cloyd v. Mabry, 295 S.C. 86, 367 S.E.2d 171 (Ct. App. 1988). “A taxpayer
contesting an assessment has the burden of showing that the valuation of the taxing authority is
incorrect. [Citations omitted] Ordinarily, this will be done by proving the actual value of the
property.”Id. “The taxpayer may, however, show by other evidence that the assessing authority's
valuation is incorrect. If he does so, the presumption of correctness is then removed and the
taxpayer is entitled to appropriate relief.” Id.
18.[A] taxing statute must be construed most favorably to the taxpayer, and any doubt
should be resolved against the taxing authority. Ryder Truck Lines, Inc. v. S.C. Tax Comm’n,
248 S.C. 148, 149 S.E.2d 435, 437 (1966); Richland County Assessor v. Walker, 1997 WL
725106, Docket No. 97-ALJ-17-0206-CC (Nov. 6, 1997).
Challenge to Assessment by a Taxpayer
19.S.C. Code Ann. §§ 12-43-300 and 12-60-2510 through 12-60-2530 (Supp. 2002) provide
the procedure whereby a taxpayer, upon receipt of a notice from the Assessor of the valuation
which places a valuation and assessment 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 county’s Board of Assessment Appeals. The correct
procedure was followed in this case.
Burden of Taxpayer
Intentional and Systematic Undervaluation Claim
20.Complete equity and uniformity are not practically attainable when valuing property.
Wasson v. Mayes, 252 S.C. 497, 167 S.E.2d 304 (1967). The standard for a claim based on the
inequitable valuation of property is the intentional and systematic undervaluation of certain
properties while other properties in the same class are valued at fair market value. Joe W. Hiller,
Architect, Inc. v. Colleton County Assessor, supra; citing 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. v. Wakefield Taxpayer,
supra.
The burden is not met by a mere showing that some properties are undervalued; there
must be shown some intentional and systematic undervaluation of property in the county.
Allegheny Pittsburgh Coal Co. v. County Commission, 488 U.S. 336 (1989). For instance,
where it was shown to the court by the taxpayer that the county assessor deliberately established
a county-wide procedure whereby all property values were based upon their most recent
purchase price, the court held that such a procedure amounted to an intentional and systematic
undervaluation of real property. Id.
21.This court agrees with the Assessor that the Property was valued on appeal the same way
other properties in the area were evaluated. Even without the benefit of specific income or
expense data for the Property, the Assessor made adjustments to the value of the Property which
were consistent with the changes made to other properties on appeal in Charleston County.
Further, in an effort to ensure that the Property was equitably appraised, the Assessor performed
an equity analysis to determine whether the Property was not over-appraised when compared
with similar limited service hotels in the competing area. To do so, the Assessor used the actual
gross room revenues, as provided to the BLUF by the Taxpayer for the year 1999, to determine
if the CAMA room revenue figures the staff used were accurate. The CAMA room revenues for
the Property were $2,861,892, or 98.20 % of the reported room revenue of the Taxpayer. That
percentage was within the range of the CAMA estimates, which ranged from 91.1 % to 105 %.
Also, the revenue per available room for the Property was $ 23,652 for the taxable year.
The room multiplier for the Property was 2.98. That figure falls within the range of multipliers,
which is from 2.56 to 3.46. The range of expenses as a percentage of the total revenue of the
Property was 67%, which falls within the range of expenses of the limited service hotels, ranging
from 63% to 72%. The capitalization rate range of the Property was 11%, which falls within the
range of capitalization rates of the comparables, which range from 10.9 % to 11.5 %.
In short, the evidence indicates that the Property was valued in a manner consistent with
the manner in which other hotel properties in the area were valued. Accordingly, there was no
intentional and systematic undervaluation of properties in the area which would support an
argument that the Property was inequitably valued.
22.“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. v. Cox, 265 S.C. 270, 217
S.E.2d 789 (1975). South Carolina courts, as well as other jurisdictions, have relied on the
Appraisal Institute's standards for valuation as published and updated in several editions of The
Appraisal of Real Estate. See, e.g., South Carolina Tax Comm’n v. South Carolina Tax Board of
Review, 287 S.C. 415, 339 S.E.2d 131 (Ct. App. 1985); Badische Corporation (BASF) v. Town
of Kearny, 288 N.J. Super. 171, 672 A.2d 186, 189 (1996). Even if the Assessor had not
substantially complied with The Appraisal of Real Estate, South Carolina law does not require
complete accuracy in property tax assessment. I conclude as a matter of law that the Assessor's
application of the income approach was properly done in accordance with the standards of the
Appraisal Institute set forth in The Appraisal of Real Estate. See The Appraisal of Real Estate
12th Edition.
Absolute accuracy with respect to valuation and complete equality and uniformity are not
practicably attainable. Wasson v. Mayes, 252 S.C. 497, 167 S.E.2d 304 (1969). Moreover, the
Taxpayer asserts that the Hampton Inn at Patriots Point, the Comfort Suites, and the Holiday Inn
were undervalued and therefore the Taxpayer’s property was overvalued by comparison. That
argument is flawed for several reasons. That the Hampton Inn at Patriots Point is undervalued
is clearly inaccurate since the actual room revenue for that property is less than the room revenue
estimated by CAMA. Furthermore, the Holiday Inn is a full service hotel and the Taxpayer’s
Property is a limited service hotel. Taxpayer’s Property outperforms the Holiday Inn based on
room revenue alone, and the Holiday Inn has a higher expense ratio as a full service hotel, since
food and beverage operations are not as profitable as room operations. The Taxpayer also failed
to present any evidence to invalidate the Assessor’s income and expense data for the Holiday
Inn, the Hampton Inn at Patriots Point, and the Comfort Suites, as well as the Taxpayer’s
Property. South Carolina law is clear that equity is not a basis for reducing a property’s value when
the property is otherwise valued at fair market value. Where a property is correctly valued but
other properties in the area are valued too low, the owner is not entitled to a reduced value solely
on the grounds that properties of other taxpayers are undervalued. It is necessary to show an
intentional violation of the essential principle of practical uniformity. C.J.S. Taxation, § 557;
S.C. Tax Commission Decision No. 92-89 (finding concerning valuation of property owned by a
medical society). The mere fact that an inequity exists at one point in time, is not the
determinative factor. Rather, the effort to provide uniformity over a period of time is all that can
be required. Thus, even if the taxpayer could show inequities, the inequities are not dispositive
of the issue. Rather, the inequities must be intentional and must be ones that will not be cured
within a reasonable period. No such violation has been shown here; the Taxpayer’s equitable
arguments are unsubstantiated.In this case, the Taxpayer has not met its burden. Taxpayer did not provide any empirical
data showing that the Property was inequitably valued as compared to the other limited service
hotels in the general area as a result of any intentional or systematic act by the Assessor. It only
suggested that since the “per key” room assignment of revenue for the Property was greater that
the other comparables, it was too high and should be reduced. Taxpayer’s arguments are
unsubstantiated by the evidence. The testimony and the evidence clearly indicate to this court
that the assessment in the amount of $8,530,000 as determined by the Assessor and affirmed by
the Board, is the fair market value of the Property.
ORDERBased on the above Findings of Fact, Discussion and Conclusions of Law, it is hereby:
ORDERED that the value of $8,530,000, as assigned by the Assessor and confirmed by
the Board for the subject Property (TMS # 558-00-00-388) for assessment purposes for the tax
year 2001, is the fair market value of the Property;
AND IT IS SO ORDERED.
____________________________
Marvin F. Kittrell
Chief Administrative Law Judge
Columbia, South Carolina
March 30, 2004 CONCLUSIONS OF LAWBased upon the foregoing Findings of Fact, applicable law, and the evidence, this court
concludes, as a matter of law, the following:
General
1. S.C. Code Ann. § 12-60-2540 (Supp. 2002) authorizes the Division to hear this contested
case pursuant to Chapter 13 of Title I of the 1976 Code, as amended.
2. S.C. Code Ann. § 12-4-30(D) (Supp. 2002) 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. 2002) previously heard by the Commission. The Administrative Law Judge Division
assigns each case as filed to an Administrative Law Judge who hears the case in accordance with
the rules of procedure of the Division. S. C. Code Ann. § 1-23-650 (1976)(as amended).
3. This contested case proceeding before an Administrative Law Judge is in the nature of a
de novo hearing. Sea Pines Plantation Co., Inc. v. Beaufort County Assessor, 2002 WL
1486969, Docket No. 01-ALJ-17-0018-CC (June 20, 2002).
4. After conducting a hearing, the assigned Administrative Law Judge issues a final
decision in a written order containing separate findings of fact and conclusions of law. S.C. Code
Ann. § 1-23-350 (1976) and ALJD Rule 29(c).
5. The standard of proof in weighing the evidence and making a decision on the merits of a
contested case hearing is by a preponderance of the evidence. Anonymous v. State Board of
Medical Examiners, 329 S.C. 371, 796 S.E.2d 17 (1998); National Health Corp. v. South
Carolina Department of Health and Environmental Control, 298 S.C. 373, 380 S.E.2d 841 (Ct.
App. 1989).
6. An agency decision must be reached utilizing reasoned judgment and must be based upon
adequate determining principles and a rational basis. City of Columbia v. Board of Health and
Environmental Control, 292 S.C. 199, 355 S.E.2d 536 (1987).
7. The trier of fact must weigh and pass upon the credibility of the evidence presented. S.C.
Cable Television Association v. Southern Bell Tel. and Tel. Co., 308 S.C. 216, 417 S.E.2d 586
(1992). The trial judge who observes a witness is in the best position to judge the witness’
demeanor and veracity and evaluate his testimony. McAlister v. Patterson, 278 S.C. 481, 299
S.E.2d 322 (1982).
8. A court construing a statute must first seek to ascertain and effectuate legislative intent.
Koenig v. South Carolina Dep’t of Public Safety, 325 S.C. 400, 480 S.E.2d 98, 99 (Ct. App.
1996). The cardinal rule of statutory construction is to give words used in a statute their plain
and ordinary meaning without resort to subtle or forced construction. Id. The language must be
read to harmonize its subject matter with its general purpose. Id. “In construing statutory
language, the statute must be read as a whole, and sections which are part of the same general
statutory law must be construed together and each one given effect, if it can be done by any
reasonable construction.” Higgins v. State, 307 S.C. 446, 449, 415 S.E.2d 799, 801 (1992).
However, our courts have also held that statutes, as a whole, must receive practical, reasonable,
and fair interpretation, consonant with the purpose, design, and policy of lawmakers. TNS Mills,
Inc., v. South Carolina Department of Revenue, 331 S.C. 611, 503 S.E.2d 471 (1998); Gildstrap
v. South Carolina Budget and Control Board, 310 S.C. 210, 423 S.E.2d 101 (1992).
Assessment of Real Property
9. Prior to its amendment in 2000 by the General Assembly, S.C. Code Ann. § 12-37-610
read: “Every person is liable to pay taxes and assessments on the real estate which he owns or
may have the care of as guardian, executor, trustee, or committee.” This statute was amended by
Act 399 of 2000, effective January 1, 2001, to read:
Each person is liable to pay taxes and assessments on the real property that, as of
December thirty-first of the year preceding the tax year, he owns in fee, for life,
or as trustee, as recorded in the public records for deeds of the county in which
the property is located, or on the real property that, as of December thirty-first of
the year preceding the tax year, he has care of as guardian, executor or committee
or may have the care of as guardian, executor, trustee, or committee.
10. S.C. Code Ann. § 12-43-210(A) requires that South Carolina counties shall assess
properties “uniformly and equitably throughout the State.” It further directs the South Carolina
Department of Revenue to promulgate regulations to ensure equalization which must be adhered
to by all assessing officials in the State. S.C. Code Ann. § 12-43-210(B) provides that no
reassessment program may be implemented “unless all real property in the county...is reassessed
in the same year.”
In addition to other powers and duties required by law, the department, in order to
administer effectively the equitable assessment of property for taxation “shall order reassessment
of real and personal property...or when, in the judgment of the department, the reassessment is
advisable or necessary to the end that all classes of property in the assessment district are
assessed in compliance with the law.” S.C. Code Ann. § 12-4-510 (3) (Supp. 2002).
11. Charleston County implemented a county-wide reassessment program for its real
property in the year 1993, using values as of December 31, 1992. Glover v. Charleston County
Assessor, 1997 WL 816206, Docket No. 97-ALJ-17-0296-CC, at *1-2 ( Dec 19, 1997); Crocker
v. Lindsey, 1995 WL 929863, Docket No. 95-ALJ-17-0367-CC, at *1,3 ( Aug 31, 1995).
12. In 1995, the South Carolina General Assembly enacted quadrennial reassessment, which
required all counties to equalize and appraise properties under their jurisdiction. The statute did
not state whether it was to be applied retroactively or prospectively. S.C. Code Ann. § 12-43-217 (A) (Supp. 2002). The amendment mandated that:
Property valuation must be completed at the end of December of the fourth year
and the county or State shall notify each taxpayer of any change in value or
classification if the change is one thousand dollars or more. In the fifth year, the
county or State shall implement the program and assess all property on the newly
appraised values.
As a practical matter, counties applied the 1995 statute retroactively as evidenced by the
many reassessment programs held in successive years prior to its passage. If the counties had
treated the statute as being operable prospectively, they would have all implemented a county-wide reassessment program throughout our State during the same year. It was obvious to the
county officials that the General Assembly meant that this statutory provision should be applied
prospectively; to apply it prospectively would have been created an impossible situation for the
Department of Revenue since it is charged by statute to oversee each of the 46 counties as they
prepare for and conduct their reassessments.
13. On February 3, 1997, the Director of the South Carolina Department of Revenue,
pursuant to general authority contained in S.C. Code Ann. § 12-4-510 (3), issued an Order to
Charleston County which postponed the implementation of the 1999 annual reassessment in
Charleston County and directed the county to complete its county-wide reassessment program
by December 31, 1999. Further, the Order directed the county to implement the program in tax
year 2000 and directed the Assessor to mail assessment notices to all taxpayers by February 1,
2000.
14. The South Carolina General Assembly passed Act No. 93 in 1999, which became
effective on July 1, 1999. This Act amended S.C. Code Ann. § 12-43-217 by adding paragraph
(B), authorizing a county by ordinance to postpone for not more than one property tax year the
implementation of revised values resulting from its equalization program (which § 12-43-217
required to be implemented every five years).
15. On December 14, 1999, pursuant to authority contained in Act 93, Charleston County
adopted Ordinance No.1125 (“Ordinance”) which postponed the implementation of the revised
assessed values resulting from the 1999 county-wide appraisal and equalization program from
implementation in the tax year 2000 (as ordered by the Department) to tax year 2001.
Responsibility of the Assessor and Credibility of his Assessment16.S.C. Code Ann. § 12-37-90 (Supp. 2002) provides that each county shall have a full-time
assessor, whose responsibility is to appraise and list 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.
17. An assessor’s valuation is presumed correct and made in conformity with the law. Joe
W. Hiller, Architect, Inc. v. Colleton County Assessor, 1996 WL 909131, Docket No. 95-ALJ-17-231-CC (Feb. 16, 1996). The burden is on the property owner to disprove the Assessor's
valuation. See Cloyd v. Mabry, 295 S.C. 86, 367 S.E.2d 171 (Ct. App. 1988). “A taxpayer
contesting an assessment has the burden of showing that the valuation of the taxing authority is
incorrect. [Citations omitted] Ordinarily, this will be done by proving the actual value of the
property.”Id. “The taxpayer may, however, show by other evidence that the assessing authority's
valuation is incorrect. If he does so, the presumption of correctness is then removed and the
taxpayer is entitled to appropriate relief.” Id.
18. [A] taxing statute must be construed most favorably to the taxpayer, and any doubt
should be resolved against the taxing authority. Ryder Truck Lines, Inc. v. S.C. Tax Comm’n,
248 S.C. 148, 149 S.E.2d 435, 437 (1966); Richland County Assessor v. Walker, 1997 WL
725106, Docket No. 97-ALJ-17-0206-CC (Nov. 6, 1997).
Challenge to Assessment by a Taxpayer
19. S.C. Code Ann. §§ 12-43-300 and 12-60-2510 through 12-60-2530 (Supp. 2002) provide
the procedure whereby a taxpayer, upon receipt of a notice from the Assessor of the valuation
which places a valuation and assessment 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 county’s Board of Assessment Appeals. The correct
procedure was followed in this case.
Burden of Taxpayer
Intentional and Systematic Undervaluation Claim
20. Complete equity and uniformity are not practically attainable when valuing property.
Wasson v. Mayes, 252 S.C. 497, 167 S.E.2d 304 (1967). The standard for a claim based on the
inequitable valuation of property is the intentional and systematic undervaluation of certain
properties while other properties in the same class are valued at fair market value. Joe W. Hiller,
Architect, Inc. v. Colleton County Assessor, supra; citing 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. v. Wakefield Taxpayer,
supra.
The burden is not met by a mere showing that some properties are undervalued; there
must be shown some intentional and systematic undervaluation of property in the county.
Allegheny Pittsburgh Coal Co. v. County Commission, 488 U.S. 336 (1989). For instance,
where it was shown to the court by the taxpayer that the county assessor deliberately established
a county-wide procedure whereby all property values were based upon their most recent
purchase price, the court held that such a procedure amounted to an intentional and systematic
undervaluation of real property. Id.
21. This court agrees with the Assessor that the Property was valued on appeal the same way
other properties in the area were evaluated. Even without the benefit of specific income or
expense data for the Property, the Assessor made adjustments to the value of the Property which
were consistent with the changes made to other properties on appeal in Charleston County.
Further, in an effort to ensure that the Property was equitably appraised, the Assessor performed
an equity analysis to determine whether the Property was not over-appraised when compared
with similar limited service hotels in the competing area. To do so, the Assessor used the actual
gross room revenues, as provided to the BLUF by the Taxpayer for the year 1999, to determine
if the CAMA room revenue figures the staff used were accurate. The CAMA room revenues for
the Property were $2,861,892, or 98.20 % of the reported room revenue of the Taxpayer. That
percentage was within the range of the CAMA estimates, which ranged from 91.1 % to 105 %.
Also, the revenue per available room for the Property was $ 23,652 for the taxable year.
The room multiplier for the Property was 2.98. That figure falls within the range of multipliers,
which is from 2.56 to 3.46. The range of expenses as a percentage of the total revenue of the
Property was 67%, which falls within the range of expenses of the limited service hotels, ranging
from 63% to 72%. The capitalization rate range of the Property was 11%, which falls within the
range of capitalization rates of the comparables, which range from 10.9 % to 11.5 %.
In short, the evidence indicates that the Property was valued in a manner consistent with
the manner in which other hotel properties in the area were valued. Accordingly, there was no
intentional and systematic undervaluation of properties in the area which would support an
argument that the Property was inequitably valued.
22. “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. v. Cox, 265 S.C. 270, 217
S.E.2d 789 (1975). South Carolina courts, as well as other jurisdictions, have relied on the
Appraisal Institute's standards for valuation as published and updated in several editions of The
Appraisal of Real Estate. See, e.g., South Carolina Tax Comm’n v. South Carolina Tax Board of
Review, 287 S.C. 415, 339 S.E.2d 131 (Ct. App. 1985); Badische Corporation (BASF) v. Town
of Kearny, 288 N.J. Super. 171, 672 A.2d 186, 189 (1996). Even if the Assessor had not
substantially complied with The Appraisal of Real Estate, South Carolina law does not require
complete accuracy in property tax assessment. I conclude as a matter of law that the Assessor's
application of the income approach was properly done in accordance with the standards of the
Appraisal Institute set forth in The Appraisal of Real Estate. See The Appraisal of Real Estate
12th Edition.
Absolute accuracy with respect to valuation and complete equality and uniformity are not
practicably attainable. Wasson v. Mayes, 252 S.C. 497, 167 S.E.2d 304 (1969). Moreover, the
Taxpayer asserts that the Hampton Inn at Patriots Point, the Comfort Suites, and the Holiday Inn
were undervalued and therefore the Taxpayer’s property was overvalued by comparison. That
argument is flawed for several reasons. That the Hampton Inn at Patriots Point is undervalued
is clearly inaccurate since the actual room revenue for that property is less than the room revenue
estimated by CAMA. Furthermore, the Holiday Inn is a full service hotel and the Taxpayer’s
Property is a limited service hotel. Taxpayer’s Property outperforms the Holiday Inn based on
room revenue alone, and the Holiday Inn has a higher expense ratio as a full service hotel, since
food and beverage operations are not as profitable as room operations. The Taxpayer also failed
to present any evidence to invalidate the Assessor’s income and expense data for the Holiday
Inn, the Hampton Inn at Patriots Point, and the Comfort Suites, as well as the Taxpayer’s
Property. South Carolina law is clear that equity is not a basis for reducing a property’s value when
the property is otherwise valued at fair market value. Where a property is correctly valued but
other properties in the area are valued too low, the owner is not entitled to a reduced value solely
on the grounds that properties of other taxpayers are undervalued. It is necessary to show an
intentional violation of the essential principle of practical uniformity. C.J.S. Taxation, § 557;
S.C. Tax Commission Decision No. 92-89 (finding concerning valuation of property owned by a
medical society). The mere fact that an inequity exists at one point in time, is not the
determinative factor. Rather, the effort to provide uniformity over a period of time is all that can
be required. Thus, even if the taxpayer could show inequities, the inequities are not dispositive
of the issue. Rather, the inequities must be intentional and must be ones that will not be cured
within a reasonable period. No such violation has been shown here; the Taxpayer’s equitable
arguments are unsubstantiated. In this case, the Taxpayer has not met its burden. Taxpayer did not provide any empirical
data showing that the Property was inequitably valued as compared to the other limited service
hotels in the general area as a result of any intentional or systematic act by the Assessor. It only
suggested that since the “per key” room assignment of revenue for the Property was greater that
the other comparables, it was too high and should be reduced. Taxpayer’s arguments are
unsubstantiated by the evidence. The testimony and the evidence clearly indicate to this court
that the assessment in the amount of $8,530,000 as determined by the Assessor and affirmed by
the Board, is the fair market value of the Property.
ORDERBased on the above Findings of Fact, Discussion and Conclusions of Law, it is hereby:
ORDERED that the value of $8,530,000, as assigned by the Assessor and confirmed by
the Board for the subject Property (TMS # 558-00-00-388) for assessment purposes for the tax
year 2001, is the fair market value of the Property;
AND IT IS SO ORDERED.
____________________________
Marvin F. Kittrell
Chief Administrative Law Judge
Columbia, South Carolina
March 30, 2004 |