International Property Tax Institute

IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or anyh opinions expressed in the articles.

UNITED STATES - June 2016

THE NEVER-ENDING REVAL SAGA: WHAT DOES IT MEAN FOR HOMEOWNERS? .................................................... 1

FORMER GOVERNOR WEIGHS IN ON PROPERTY TAX EXEMPTIONS FOR HOSPITALS AND ALL NON-PROFITS......... 2

PLAN TO SHIFT TAX ASSESSMENTS FOR BIG BOX STORES PLODS AHEAD ............................................................... 3

TEXANS MAY NEED MORE PROPERTY TAX RELIEF .................................................................................................. 3

WILL ASKS STATE SUPREME COURT TO ASSESS GOVERNMENT’S PROPERTY VALUATION POWERS ....................... 4

DARK STORE TAX TRIBUNAL LEGISLATION PASSES IN MI HOUSE ........................................................................... 5

MAKING HONEY OUT OF LEGISLATION: LEGISLATURE CONSIDERS TAX BREAK FOR BEEKEEPERS ........................... 6

WHICH N.J. TOWNS PAY THE HIGHEST SCHOOL TAX BILLS? ................................................................................. 10

THE NEW PROPERTY TAX VALUATION NOTICES SENT TO ABOUT 100,000 DOUGLAS COUNTY HOMEOWNERS REFLECT THE INCREASES AND REDUCTIONS ORDERED BY THE STATE .................................................................. 10

VOTERS WILL BE ASKED TO BACK MASS TRANSIT TAX ......................................................................................... 10

GIANTS LOOKING FOR PROPERTY TAX DECREASE ................................................................................................ 11

AS PETROLEUM ROYALTIES DWINDLE, QUESTIONS TARGET PROPERTY ASSESSMENTS ....................................... 12

THESE FIVE NYC RENTAL BUILDINGS HAD THE HIGHEST 2016 TAX ASSESSMENTS ................................................ 13

'BIG-BOX' TAX RULING PLEASES LOCAL GOVERNMENTS IN MICHIGAN ................................................................ 15

MORE THAN $550 MILLION RECOVERED FROM PROPERTY TAX FRAUD ............................................................... 17

The Never-ending Reval Saga: What Does It Mean for Homeowners? Jersey City’s ongoing revaluation drama seems to have taxpayers either excited about relief or nervous about the consequences, emotions driven by uncertainty because New Jersey’s second largest city has not assessed its properties since 1989. Because of this long gap, the city has properties with average assessed values only about 27% of their actual value. The story of Jersey City’s latest reval was supposed to start in 2013, but newly elected Mayor Steve Fulop cancelled it, citing concerns about the way the contract for the work was awarded. He then publicly argued that the reval would hurt home values and force long-time residents in pricier areas to sell their properties due to tax increases. Canceling the reval also led to a breach of contract lawsuit that the city recently lost, which some fear could cost taxpayers upwards of $8 million. Adding insult to injury, the state issued an order in April compelling Jersey City to revaluate their

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International Property Tax Institute

IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

properties by 2017, which they’ve said they will comply with. Assuming they do, new tax assessments would go into effect for 2018. Civic JC recently created a map that shows areas in Jersey City where, based on assessed value versus sale price, recently sold properties may be underpaying on their tax bills. Realty Appraisal Company argued in a lawsuit against Jersey City that Fulop cancelled the reval to benefit downtown homeowners and the map shows that they may have a point. Almost all of the recently sold properties downtown are under-assessed according to Civic JC, with many homes in The Heights also possibly underpaying on their tax bills. However, it is worth noting that the map suggests a significant number of recently sold properties near the Journal Square PATH station are also under-assessed, demonstrating that the uneven values might be more spread throughout the city than some had thought. But how much taxpayers might be underpaying, who might be overpaying and how big a potential tax increase or decrease might be is somewhat hard to say. However, Hoboken’s relative similarities to Jersey City could provide some insight into a post-reval world. That city performed a full revaluation in 2013 and Hoboken’s pricier areas did average higher tax bills post-reval, although not universally. As an example, an analysis of condominiums currently for sale in Maxwell Place shows that one unit saw its taxes go up as little as 1% post-reval, while a different condo for sale saw an increase of over 20%. Additionally, more accurate assessments post-reval certainly hasn’t led to a flood of older homes hitting the market due to higher taxes, as most realtors agree that Hoboken, much like Jersey City, has an inventory shortage. Hoboken’s property values since the reval have also continued to steadily climb. In the end, uncertainty regarding tax increases due to revaluations can hurt a real estate market, so getting the long-overdue reval out of the way may see positive results for the city. Some property owners will inevitably be unhappy about their new assessments (and the city should prepare for an increase in tax appeals), but performing a revaluation should create consistency and stability in the marketplace, in addition to leveling the playing field. Jersey City can also take solace knowing that they are in good company. The Tax Court of New Jersey ordered Weehawken to perform a revaluation last July and Bayonne was also ordered to undergo a reval in April. East Newark and Harrison also received notices to revaluate from the state in May, so while it’s been decades since most of Hudson county has re-assessed their properties, revals are going to get a lot of press over the next few years.

Former Governor weighs in on property tax exemptions for hospitals and all non-profits. In a recent opinion piece, former New Jersey Governor Tom Kean criticized the decision of the New Jersey Tax Court that found Morristown Memorial Hospital is a for-profit enterprise and upheld the denial of a local property tax exemption on all but a few areas of the hospital’s facilities. Governor Kean referred to the decision as one by “a relatively obscure body” that will “have a great and unexpected impact.” The former governor expressed his concern not only for the impact of the decision on other hospitals, but all non-profit organizations that benefit from property tax exemptions as they provide their services to the public. Governor Kean is calling for a legislative response to the decision, which is already underway. At the close of last year’s legislative session, Governor Christie pocket vetoed one measure citing insufficient time to vet all of the issues associated with this critical policy change. The debate continues as a new bill was introduced at the beginning of the current legislative session and is working its way through the process. But the proposed legislation addresses exemptions for hospitals only and Governor Kean is urging a broader review of the State’s property tax exemption laws. He is urging the formation of bipartisan legislative committee to review the issue and impose a moratorium on tax exemption lawsuits to protect charities and the taxpayers. While the legislature certainly could form a committee, it may not impose a moratorium on such lawsuits brought by municipalities or private citizens challenging exemptions. Moreover, unless I misunderstood the separation of powers doctrine, the Legislature may not tell the Tax Court to refrain from hearing and deciding such cases. It will, however, be interesting to see how the Tax Court responds to the appeals filed in the wake of the Morristown Memorial decision.

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International Property Tax Institute

IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

Plan to shift tax assessments for big box stores plods ahead A plan to prevent big box stores from paying less in property taxes may be gaining steam in the Legislature after the House approved the measure, which supporters say will lead to fairer tax evaluations. Supporters say the measure is supposed to ensure property taxes are assessed more equitably for large retail stores like Lowe’s or Target. It passed the House by a wide margin despite opposition from big business interests such as the Michigan Chamber of Commerce and the Michigan Retailers Association. Opponents say the legislation would complicate the tax appeal process, increase the cost of appeals and violate a state constitutional requirement that property be valued uniformly. But Republican bill sponsor Rep. David Maturen and local government groups say that many Michigan big box stores are allowed to deflate their property taxes by arguing their store’s taxable values should be based on the sales prices of other big box stores that haven’t been used for years and have deed restrictions precluding most commercial uses of the property. Opponents of the tactic refer to it as the “dark stores” method. It’s a big issue in Ottawa County where Treasurer Bradley Slagh said local governments have lost more than $200 million because of the current criteria for tax determinations, according to a survey the county conducted of 55 Michigan counties. Ottawa County’s 14 big box stores paid a combined $28.4 million in taxes after appeals to the state’s Tax Tribunal. Slagh said those businesses had a combined taxable value of about $43.2 million. “Without a major change to the way the Tax Tribunal works, these loss amounts will only be exacerbated as the process moves to smaller box stores like Best Buy, Marshalls, Walgreens, and to Industrial facilities, etc.,” Slagh said. Amy Drumm, director of government affairs for the Michigan Retailers Association, opposes the legislation. She said it’s an attempt to discourage companies from appealing property assessments. “The legislation’s changes to the Michigan Tax Tribunal Act are nothing less than an attempt to increase taxes by discouraging taxpayers from challenging the value placed on their property by local government,” Drumm said in a statement. According to the Michigan Municipal League, the appraisal method allows Lowe’s stores to be assessed at $22.10 per foot in Michigan. In North Carolina Lowes stores are worth $79.08 per square foot for tax purposes. The league says big box stores before about 2013 were assessed an average of $55 per square foot for taxes. Now Menards and Target are valued at $24.97 per square foot, while Menards goes for $61.23 in Wisconsin. It’s a similar story with Wal-Mart and Sam’s Clubs, according to the Michigan Municipal League. “If you had to boil it down to that, I think those that have used this so called ‘dark store’ method … are paying less than what they should be paying,” Maturen said. “It’s just troubling I guess,” Maturen added. Maturen, who said he’s the only licensed real estate appraiser in the Legislature, sponsored the bill. He said he was surprised it received broad support from fellow House lawmakers, who approved the legislation 97-11 Wednesday. He said he hopes that support indicates a good shot in the Senate, which likely won’t take it up until fall. Maturen’s bill would require appeals decisions by the tax tribunal to be “better reasoned” and sets up specific criteria the Tax Tribunal must take into account when considering property tax assessment appeals. He said it’s supposed to make sure it uses “truly comparable” properties in the appeal process, but does not forbid businesses from using vacant stores’ sale prices for comparison.

Texans may need more property tax relief The weather, it seems, is making headlines around the world. From flooding in Paris to southeastern Texas, property owners are in desperate need of rain relief and tax relief. On June 1, Governor Greg Abbott declared a state of disaster for 31 Texas counties affected by “severe weather and flooding that began on May 26, 2016.” News reports of human casualties, emergency evacuations, and properties only accessible by boat suggest that disruption to the community and regional economy caused by flooding can be widespread and long lasting. According to FloodSmart.gov, floods can happen anywhere, and they are the most frequent and costly natural disasters in the United States. “Flash floods, inland flooding, and seasonal storms affect every region of the country, severely damaging homes and businesses.” Even after determining that a property is in a flood zone and taking the necessary precautions like purchasing flood insurance, little prepares a property owner for the aftermath of devastation floods leave behind. Many property owners are left questioning how property values will change after flood damage. Dr. Clifford A. Lipscomb, Vice Chairman and Co-Managing Director at the economic and real estate research firmGreenfield Advisors, told Bloomberg BNA via email that: [F]looding situations, and how they translate into property value diminution, are complex. There’s the issue of whether any damages are temporary or permanent; there’s the issue of whether flood waters introduce a contaminant from one area into another area; and there’s the issue of whether the flood event creates a stigma about the area. In addition, if a contaminant is introduced to an area by flood waters, there’s the issue of how to remediate the situation and the associated costs.

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International Property Tax Institute

IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

Dr. Lipscomb’s analysis suggests that property owners confront several difficult post-flood property valuation issues and that there is not always a clear answer to those issues. Tax Relief Thus far, the Internal Revenue Service has stepped in to grant tax relief for Texas flood victims in the form of relaxed income tax filing and payment deadlines. Texas law already provides tax breaks or deferrals to help reduce the property tax obligations of property owners who qualify. Texas Property Tax Code § 31.032 allows taxpayers who sustain property damage as a result of a declared natural disaster to split their property tax payments into four equal interest-free installments, to be paid in full by July 31. The residence must be real property that is: (1) the residence homestead of the owner or consists of property that is used for residential purposes; (2) owned or leased by a business entity whose gross receipts are within limits prescribed by the statute in the entity's most recent federal tax year or state franchise tax annual period, according to the applicable federal income tax return or state franchise tax report of the entity; (3) located in a declared disaster area; and (4) has been damaged as a direct result of the disaster. Texans can use all the breaks they can get. According to a 2015 report by the Tax Foundation, Texas has the sixth highest property taxes in the nation. Also adding to the cost of property ownership in the state, the Dallas Morning News reported last year that Texas ranked third in the U.S. for having the highest rates for homeowner’s insurance. As the rains slow and conditions improve, Texans must begin the recovery process and face what comes next. Maybe additional property tax relief will keep Texas property owners from feeling they’ve been hung out to dry.

WILL asks state Supreme Court to assess government’s property valuation powers A liberty-based, public-interest law firm is asking the Wisconsin Supreme Court to review a law that critics say allows local governments to retaliate against property owners for exercising their constitutional rights. The Wisconsin Institute for Law & Liberty, WILL, is representing Vincent and Morganne Milewski, and several other plaintiffs, who claim that local government violated their rights to privacy and due process. In 2013, The Town of Dover decided to reassess the values of all the property in the Racine County community of about 4,000 residents. Government officials hired Gardiner Appraisal Service, LLC, to do the assessment. When an employee from Gardiner asked to enter the Milewski residence, the couple refused to allow the assessor in, saying that they did not want a stranger in their “private and secure residence.” They did permit the assessor to examine the exterior of the property, something that the contracted employee never chose to do, according to court documents. Gardiner Appraisal later assigned a value to the Milewski property without examining the exterior or the interior, according to a court document by the petitioner. The firm valued the property at $307,100, a 10.5 percent increase over the previous year’s assessment. Most of the other homes in the development decreased in value, by an average of 5.8 percent. Including the Milewski home, four parcels increased in value. The owners of all four homes refused to allow Gardiner in their homes. Vincent Milewski attempted to challenge the town’s property value. However, Dover’s Board of Review ruled that Milewski did not have standing to challenge under Wisconsin law. Tom Kamenick, WILL’s deputy counsel, said the law means that, “if the inspector is not allowed inside, you lose your right to appeal the tax assessment at the Board of Review.” “There is another state law that says to go to court, you must go to the Board of Review first,” Kamenick added. The result of these two laws is that for someone who chooses to contest a decision, “there is literally no way to challenge your taxes,” the attorney said. WILL argues that the Milewskis have had their constitutional right to privacy violated in two ways.

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International Property Tax Institute

IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

The couple suffered a financial penalty for exercising their Fourth Amendment rights. Because they received a higher valuation on their home, the Milewskis were forced to pay increased property taxes. The Milewskis claim that this increased valuation was intentional and done to coerce them into giving up their right to privacy. And because the Milewskis chose to exercise their right to privacy, they lost their right to appeal. “Punishing people who exercise their Fourth Amendment right to refuse to consent to a search – by stripping them of their appeal rights – violates the Fourth Amendment,” Kamenick said. The ultimate problem, as Kamenick sees it, is that the conflicted law forces property owners to choose between their right to privacy or due process. Both the Wisconsin Circuit Court and the Wisconsin Court of Appeals ruled against the Milewskis. Those courts decided that the Milewskis had a choice, and that there were consequences to that choice. The judges ruled that it is reasonable the Milewskis either submit to inspection or give up their right to appeal. WILL takes particular issue with the appeals court decision. “We got a shallow opinion that didn’t deal with the issues we were raising,” he said. Kamenick also disputes the court’s reasoning that the Milewskis had a choice. “That isn’t the way constitutional rights work,” the attorney said. He compared the situation to a criminal proceeding where a suspect is told to submit to an unwarranted search or be thrown in prison. “That is what is happening. Our clients were punished without the ability to challenge,” Kamenick said. There is federal precedent to support the Milewskis’ case, according to WILL. In Camara v. Municipal Court of San Francisco (387 U.S. 523) before the U.S. Supreme Court, a renter refused to allow government inspectors into his apartment to check for building code violations. The San Francisco city government then prosecuted the renter. The Supreme Court struck down San Francisco’s actions because punishing the renter for his refusal to submit to an unwarranted administrative search constituted a violation of his constitutional rights. As WILL argued before the Court of Appeals, “The rule of Camara – warrantless administrative searches are not permitted – is applicable to the government’s desire to inspect the interior of a home for assessment purposes.” The Milewski case has generated interest from other organizations. The Wisconsin Department of Revenue and the Institute for Justice, a non-profit public interest law firm, have requested that they be allowed to file amicus briefs in favor of the plaintiffs.

Dark store tax tribunal legislation passes in MI House LANSING — State Representative John Kivela (D-Marquette) said that approval of Republican state Rep. David Maturen’s (R-Vicksburg) bill, House Bill 5578, is good for his Upper Peninsula communities because the bill closes a loophole created by recent court decisions dealing with dark stores. HB 5578 would require the Michigan Tax Tribunal to make its own independent determination when issuing a decision in a commercial property dispute case. “I want to thank Rep. Maturen and the House for moving HB 5578 to the Senate, because this bill creates a level playing field for local governments when arguing cases at the Michigan Tax Tribunal,” said Kivela. “Dark store decisions that created a property tax loophole have taken millions of dollars out of communities in my district and across the state. Losing that tax money has hurt services that residents depend on. I hope that when this bill wins Senate approval that we can see a change in these dark store decisions and relief for our communities.” Big-box stores have successfully argued to the Michigan Tax Tribunal that their taxes should be drastically reduced by using what’s known as the “dark store” argument. The stores argue that the value of their store should be compared to the value of older closed and vacant stores worth far less than what it cost to build a newer store and they should pay less in taxes on the

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International Property Tax Institute

IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

newer store. This argument allows them to win huge tax refunds that decrease the property tax base in Michigan and is devastating to state and local government budgets. Kivela was the only U.P. member of the legislative workgroup led by Rep. Maturen aimed at addressing these dark store rulings. The legislative workgroup meetings were the catalyst behind HB 5578. “Fixing the dark store problem has been my goal ever since I came to Lansing, and this bill is step in that direction,” said Kivela. “I look forward to winning quick passage of the bill in the Senate.” LANSING — State Representative Scott Dianda (D-Calumet) said today that House approval of House Bill 5578, sponsored by Rep. Dave Maturen (R-Vicksburg), aims to bring fairness to the process used when the Michigan Tax Tribunal determines the true cash value of a commercial property in a property tax dispute. HB 5578 would require the Michigan Tax Tribunal to make its own independent determination when issuing a decision in a property tax dispute based on sound property appraisal principals. “House Bill 5578 is important for my Upper Peninsula communities because big-box stores have been winning arguments to reduce their property taxes, and when my local governments have to refund that money, it makes it nearly impossible to fund services such as law enforcement, libraries and local road maintenance,” said Dianda. “By requiring the tax tribunal to look more closely at the issue, as this bill does, I hope that we can get fairer decisions that will make these stores pay their fair share for the local services that they use and rely on.” Local property assessors are charged with valuing a property based on its “highest and best” use. If it was built for $10 million in one year, then an assessor would value it at close to $10 million the next year. The practice of lowering assessments based on comparing the value to closed, vacant stores — known as the dark store method — has been exceptionally hard on Upper Peninsula communities where lower tax collections hit police, fire, ambulance and library services. Corporations also often add deed restrictions against selling that property to another retailer. Because of this, corporations have argued successfully to the Michigan Tax Tribunal that the “highest and best use” of a comparable property is for something far less valuable than the thriving retail property being assessed. If the tax tribunal agrees, and it has been agreeing, then the big-box store ends up paying less in property tax to the local unit of government. “We’ve been working on this dark store issue for years now, and I’m glad to see some movement toward protecting local communities and local government services,” said Dianda. “My communities need these stores and the jobs they create, but we also need them to pay their fair share of taxes for the services they use just like the rest of us. We won’t get the money back that has been lost in previous unfair tax decisions. But at least we can stop the hemorrhaging of the money locals need to protect residents and businesses, and can look forward to reasonable decisions in the future.” Dianda is the sponsor of House Bill 4681, which would create a user fee for corporations that use the dark store tactic to cut their property taxes. House Resolution 133, which Dianda also sponsored, calls for a statewide impact study that would look at communities that have already lowered large retail property tax assessments and study the impact on local services. Ottawa County has lowered these assessments by $14.8 million. Marquette Township recently had to refund overpaid property tax assessments of $756,000, due to dark store tax assessments

Making honey out of legislation: Legislature considers tax break for beekeepers Looking for ways to help the state’s struggling beekeepers, Wyoming lawmakers are considering offering them a tax break that farmers and ranchers currently get. The Joint Agriculture, State and Public Lands, and Water Resources Interim Committee has asked legislative staff to prepare a bill for consideration at its next meeting in September that would allow beekeepers to designate their land as agricultural land under the state’s revenue codes. That is no small incentive. On a five-acre parcel of land that is designated residential and has a fair market value of $5,000 per acre, property owners will pay an average of $163 in property taxes per year. (This does not include the taxes they pay for any house or other structures on the property.) If the property is used for irrigated cropland, however, the tax bill would be $60. For dry cropland, the owner would pay just $10, provided that land had average productivity and an average growing season.

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International Property Tax Institute

IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

But securing those savings isn’t designed to be easy. For land to qualify as agricultural land in Wyoming, it has to meet certain criteria. For instance, landowners must prove they sell at least $500 a year of agricultural goods produced on their land. If they lease their land, the lessee must show $1,000 or more of sales. They also must produce according to the land’s capacity. “I can’t just put one cow on six sections of ground,” and qualify for the ag designation, said Brenda Arnold, administrator of the Property Tax Division at the Wyoming Department of Revenue. That complicates the potential benefits to beekeepers. So, too, does the fact that many beekeepers place their hives on a neighbor’s farmland to pollinate their crops. So for them, a property tax break wouldn’t make a difference. But Bonnie Gregory, a beekeeper and local food advocate, said she thinks every bit of help counts. She said a new land designation for beekeepers has been in the works for a while and she’s glad to see it moving forward. “Even if it only helps a small sliver of people, as long as we keep drawing attention to our pollinators and our honeybees, I think it’s good,” Gregory said. “It’s progress.” A documentary called “Vanishing of the Bees” that discusses colony collapse disorder and other problems facing the species helped spur Gregory to take action. Dispute over value, property tax bill of Seneca’s Eugene energy plant drags on for years Rising 100 feet tall, burning truck-load after truck-load of wood waste, and, in cold weather, belching plumes of white steam high into the air, the Seneca Sustainable Energy LLC power plant north of Eugene cuts an eye-catching profile. But how much is the innovative 38-acre facility worth? Seneca and government tax authorities have fought quietly in Oregon Tax Court over that question ever since the local Jones family built the wood-burning electricity plant and opened it in April 2011. Given what’s at stake — potentially many millions of dollars in property taxes over the plant’s life — the sides are digging in and the disagreement may drag on for more years. Count it as one more dispute at a plant beset by controversy ever since it was proposed. Under valuation formulas advocated by the state and Lane County, Seneca should now be paying roughly $500,000 or more a year in property taxes on the plant. But Seneca, using a valuation method it will not disclose to the public, would drastically lower that to $190,000 a year or even less. The disagreement revolves around arcane property-tax rules and value-setting procedures for industrial facilities. Plenty of people — from homeowners to business executives — challenge their tax bills. But the Seneca dispute stands out for the unusually large sums involved. Seneca says it spent $65 million to build the plant. To help the company, federal and state governments awarded it $28 million in subsidies, government records show. The state and Lane County, in Tax Court filings and other records, estimate the plant was worth $57 million to $60 million at the outset, and, using standard industrial depreciation would be worth about $48 million by 2014, with more yearly declines after that. But Seneca, in court filings, argues the plant even at opening was worth only $30 million at tops, and now is worth just $17.5 million or less.

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International Property Tax Institute

IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

Seneca declined to comment on the litigation. The lower the demonstrated value, the lower the tax bill. “The facility was a good investment in green, renewable power, strongly supported by state and federal governments and a true benefit to our local community,” said Seneca spokeswoman Casey Roscoe. The plant has drawn attention for years. Clean-air advocates label the plant a big polluter — although the facility by and large has complied with its federal air-pollution permit, which lets it discharge particulates and other contaminants. The company sells all its power to the Eugene Water & Electric Board under a binding contract running to 2026. EWEB has tried and failed to get out of the contract. The utility doesn’t need the Seneca power, but is obligated to buy it at rates far above current market prices. The utility then sells the power at a big loss on the regional power market. In a separate dispute, Seneca claims the Oregon Department of Energy owes it a $1 million green-energy subsidy for the plant, and is suing the state in Lane County Circuit Court. That lawsuit is pending. The Tax Court dispute has simmered since 2011, when Seneca filed the first in a string of property tax appeals claiming the county and the state vastly over-valued the facility. The state Department of Revenue assesses complex industrial facilities such as the Seneca plant; Oregon Department of Justice lawyers are leading the state’s defense against Seneca’s appeals. The case is veiled in secrecy. Key documents have been filed under seal. To determine the value of the plant, the state reviewed in secret Seneca’s financial and operating records. The state hired a private New Jersey-based appraiser, at a cost of more than $45,000, to craft an appraisal, said state attorney Marilyn Harbur. The 1,600-page appraisal is secret, although the state has disclosed some highlights. The sides are now filing briefs in the dispute, but are negotiating over what to disclose in the public docket, Harbur said. Partly at issue: how much of the Seneca/EWEB power-sales contract can be publicly disclosed, she said. A confidentiality agreement between Seneca and the state said some of Seneca’s information is “sufficiently competitively sensitive to warrant confidential treatment.” The state uses various methods to set value, including how much a facility cost to build, or how much revenue, cash flow and profit it generates. In the revenue/cash flow/profit analysis, the state assigns an annual rate of return to an investment, which generally is the profit an investment is supposed to yield. Using that rate and the revenue and profits the business shows, the state can calculate the plant’s worth. The state appraiser evaluated Seneca revenues including power sales to EWEB, steam sales to the adjacent Seneca Sawmill lumber mill — a separate Jones family business — renting the power plant’s dry kiln to the lumber mill, plus the federal and state subsidies, according to the state’s court filings. The appraiser also considered the plant’s expenses, including staffing and the purchase of lumber-mill chips and other wood waste to burn. The wood waste is burned to heat steam-producing boilers that drive electricity-producing turbines. The appraisal put the plant’s value at $55.5 million to $56.7 million in 2011. The state said the value would depreciate annually, to about $48 million in 2014, the most recent year for which the state gave an estimate. In its public filings, Seneca doesn’t explain why it thinks the plant is worth much less. Seneca argues that the state shouldn’t consider the plant’s revenues from selling power to EWEB, Harbur said. She said she disagrees with that. Seneca, EWEB and the state have kept secret those portions of the Seneca/EWEB contract that explain how much EWEB pays Seneca. However, public records indicate EWEB pays Seneca three or four times the current Pacific Northwest open market electricity price for the plant’s power. The property tax dispute is complex in part due to a three-year enterprise zone property tax waiver the city and Lane County granted Seneca before it opened the plant. Authorities agreed to waive all the property taxes for those years because Seneca said it was creating 10 jobs to run the plant.

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International Property Tax Institute

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Under the tax-waiver program, however, in return for the waiver, Seneca is supposed to make a “public benefit” payment to local governments. That payment is calculated under a formula that weighs the amount of the waiver against the number of jobs Seneca creates. If the tax waiver is big and the jobs tally is small, Seneca must make a “public benefit” payment. The state argues Seneca should have made “public benefit” payments of about $200,000 a year in the first three years. Seneca disputes that, saying it should pay nothing in the first three years — no property taxes and no “public benefit” contribution. Seneca asserts the plant was already worth so little at opening — less than $30 million — that it thus, under the payment formula, owes no “public benefit” contribution. The “public benefit” money is supposed to go to the city of Eugene, Lane County government, and the Eugene and Bethel school districts and Lane Community College. Seneca has made only a single “public benefit” payment, in 2013, for $217,000. In his letter to government officials, then-Seneca General Manager Rick Re said he made the payment “under protest.” Until the dispute is revolved, the city is holding that money in an account, said city spokeswoman Laura Hammond. For 2015, the first full year after the tax waiver expired and for which property taxes were due, the company paid — and appealed — its tax bill of $560,000, which was based on a plant valuation of about $50 million. The county tax office returned half the amount to Seneca. The county said it did that so it would not be on the hook to pay Seneca interest if Seneca won in Tax Court and the county had to return some of the tax payment. At a $17.5 million value, the plant’s property tax bill would be about $190,000 a year. Harbur said that in its appraisal, Seneca used an “economic obsolescence adjustment” to drop the plant’s value. “We don’t believe that a state-of-the art facility, especially in the first year, should have an economic obsolescence adjustment,” she said.

SENECA ENERGY PLANT TAX DISPUTE AT A GLANCE POSITION OF STATE/COUNTY TAX AUTHORITIES Value in 2012, first full year it is open: $57 million — $60 million. Value declines annually, to about $48 million by 2014 and less after that. Property taxes: Plant is in West Eugene Enterprise Zone, so Seneca is waived from paying annual property tax bill of $650,000 in first year, about the same in the second year, and about $600,000 in the third year. But under the waiver system, Seneca must make a “public benefit” payment of about $200,000 a year to local taxing districts for those three years. In 2015, the first year after the waiver expires, its property tax bill is $560,000. POSITION OF SENECA Value at opening: $30 million or less. Value declines annually, to $17.5 million or less by 2015. Property taxes: Because the plant is in the West Eugene Enterprise Zone, property taxes — about $330,000 a year — are waived in first three years. Seneca owes no “public benefit” payments because the amount of the waived taxes is so low. In 2015, the first year after the waiver expires, the plant has a $17.5 million or less value. At that amount, Seneca would pay about $190,000 in property taxes for 2015. Sources: Oregon Tax Court filings; Lane County Assessor’s Office records

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Which N.J. towns pay the highest school tax bills? The average New Jersey homeowner paid $4,372 in school taxes in 2015, but residents of many towns saw significantly higher bills, according to data from the New Jersey Department of Community Affairs. Across the state, 15 municipalities had an average residential school tax bill higher than $10,000, according to the state data. There were 49 townships, boroughs, cities or villages where the average amount paid by residential property owners was higher than $8,000. The average amount paid in school taxes is typically highest in the state's affluent communities where property values are the highest. A higher-than-average bill for school taxes does not necessarily mean that the municipality has a high rate for school taxes. The size of a municipality can also play a factor in the average tax bill. Small towns with few residential properties can have their average swayed by a few homes that are valued much higher or lower than the rest of the municipality's properties. Some towns have their own K-12 school districts, while others have a K-8 district and send older students to a regional high school. Other places, like Loch Arbour, a small village in Monmouth County, send all of their students to a school district in another municipality.

The new property tax valuation notices sent to about 100,000 Douglas County homeowners reflect the increases and reductions ordered by the state The new property tax valuation notices sent to about 100,000 Douglas County homeowners reflect the increases and reductions ordered by the state. Assessor/register of deeds Diane Battiato told the Omaha World-Herald that her office mailed the valuations out Tuesday to meet the June 1 deadline. The county plans to appeal the commission's order to the Nebraska Supreme Court. If the county prevails, it will adjust the valuations accordingly, said Battiato, noting she had to follow the state order in order to meet the deadline. The Nebraska Tax Equalization and Review Commission had said valuations were too low for more than 75,000 homes in central and west Omaha and ordered Battiato to raise the valuations by 7 percent. The commission also said valuations were too high on about 25,000 properties in northeast Omaha and ordered Battiato to lower them by 8 percent. State law requires residential property to be assessed at a value that falls between 92 percent and 100 percent of its market value. The valuation notices tell the owners what their homes are considered to be worth for calculation of 2016 taxes, which will be due in 2017. The actual taxes owed won't be determined until local governments — the city, the county, school districts and the like — set their tax rates this fall.

Voters will be asked to back mass transit tax Detroit-area homeowners will be asked to pay an average of $95 a year in property taxes to finance a regional mass transit system that would include a commuter rail line, a network of rapid buses and express service to Detroit Metropolitan Airport. A master plan unveiled Tuesday by the Regional Transit Authority of Southeast Michigan calls for assessing a tax of 1.2 mills in Wayne, Oakland, Macomb and Washtenaw counties for 20 years. That equates to nearly $8 a month for a house with a taxable value of roughly $79,000 — or an assessed value of more than $158,000. The proposed tax will appear on the November ballot. The proposal requires a majority of the combined votes in the four-

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county region to pass. The majority of the transit system would be implemented within five years. A key component would be a rail line connecting downtown Ann Arbor and downtown Detroit, with stops in Ypsilanti, Wayne and Dearborn. There also would be bus rapid transit — including dedicated lanes, permanent stations, traffic signal preference and pre-board ticketing — from downtown Detroit to Pontiac, M-59 and Detroit Metro Airport and between downtown Ann Arbor and downtown Ypsilanti. Other elements include seamless commuter bus routes across county lines, a universal fare card, new local services connecting communities no public transportation into the regional network and improved services for the disabled and seniors. RTA Chairman Paul Hillegonds said southeastern Michigan is the only major urban area in the U.S. without a viable, coordinated transit system. The plan would "connect people with jobs, connect communities with one another and encourage economic development as well as providing greater independence for seniors and people with disabilities." Wayne County Executive Warren Evans said in a statement the region "needs a better regional transit system." He added that "significant economic development is occurring around transit like this" in other parts of the country. The RTA was created under a 2012 state law.

Giants looking for property tax decrease The San Francisco Giants are looking to have their property tax re-assessed, as is their legal right. This comes as the San Francisco 49ers are working to decrease their rent. Good times for Bay Area sports! Bay Area sports teams have had a notable recent history of stadium issues, and we can add the San Francisco Giants into the mix! The team is attempting to get a break on property taxes for AT&T Park, claiming the stadium has depreciated in value. They believe the value has dropped to $158 million, and they should receive a refund of $8 million covering property tax payments from 2011 to 2014. The two sides addressed an appeals board this past Tuesday. I bring this up on a 49ers site because of the contentious relationship that has developed between the Giants and the city of San Francisco on this topic. The San Francisco 49ers have had a contentious relationship of their own with Santa Clara city hall for some time now. Recently the 49ers filed for arbitration in their dispute with the city over Levi's Stadium rent. The team pays rent on the stadium, and the lease allows for a one-time decrease in the annual rent due. The stadium debt servicing is ahead of schedule, and the expenses are less than expected. The 49ers and city hall have had auditors sorting through the numbers. The 49ers presented a number, and some members of city hall questioned the supporting data. The lease includes an arbitration clause, and so it will be heard before an independent arbitrator. The Giants issues are primarily with San Francisco Assessor-Recorder Carmen Chu. In 2014, she retroactively raised the team's property taxes for 2011, by what the team claims was 97 percent, and carried those raises forward. The Giants believed the increases are excessive, and are having the numbers assessed by "by a neutral panel of experts as provided by law." Chu set the value of the stadium at $407 million, and the Giants have set the value of the stadium at $158 million. San Francisco real estate prices have exploded over the last 15 years since the Giants built their stadium. However, way back when, Giants senior VP and general counsel Jack Bair said the stadium was more like a car than a home, depreciating in value, rather than potentially appreciating. The Giants also argued they hold a 66-year lease, where a home-owner holds the home in perpetuity (assuming they pay their mortgage). They were attempting to get back property tax money from 2001 to 2003, and a judge awarded the team $3.6 million in property taxes. The Giants have gotten a lot of praise over the years for their stadium process. They are lauded as one of the few "privately financed" stadiums in American sports. While they are paying the mortgage on their own, to say they received no public help is a bit of a misnomer. One number that is fairly well known is that they received $15 million to relocate a public transit facility. However, beyond that, they got the land (value estimated at $33 million) for free, they received a full property tax exemption early on that has been valued at around $83 million, and they have received a variety of fire, police, and garbage services, valued at $33 million.

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Given the difficulty of building stadiums in California, they do deserve a certain measure of credit for what they accomplished. But we don't need to get too crazy with the praise. I have no problem with them pushing for property tax refunds based on a neutral valuation, just like I have no problem with the 49ers trying to decrease their rent. The 49ers lease allows for a potentially significant decrease in rent, just like the Giants have the legal right to challenge a property tax assessment. But given the 49ers recent issues at Levi's Stadium, I have a hunch we'll continue hearing more about that than we do the Giants squabble with the city of San Francisco.

As Petroleum Royalties Dwindle, Questions Target Property Assessments An epic oilfield slowdown has done more than trigger layoffs and budget cuts in petroleum-dependent communities. It’s also eating into the “mailbox money” of royalty owners — monthly checks to account for oil and gas production on their property. If there’s any silver lining for those folks in these cloudy times, it’s this: Their property tax bills should also plummet. After all, lower oil prices make for less-valuable minerals. But some advocates for royalty owners are wondering whether many local governments are assigning values that are too high. In particular, they are raising questions about the methodology of a private firm — Fort Worth-based Pritchard and Abbott — that roughly half of Texas counties contract with to appraise property, which includes land and minerals. “If it’s not properly addressed, we have the potential to hurt a lot of elderly people and people on fixed incomes that are just trying to, you know, add support to their retirement,” said Tricia Davis, president of the Texas Royalty Council, which advocates for Texans with mineral interests. The group flagged the issue on its website this month, encouraging royalty owners in certain counties to contact Pritchard and Abbott and potentially protest their appraisals. The 90-year-old firm stands by its methods, and its representatives suggest that critics are circulating incomplete information about its practices. “They are misinformed. They do not have the complete story,” said Rodney Kret, who oversees mineral valuation at Pritchard and Abbott. In some cases, the firm's forecasts could result in lower bills than taxpayers might otherwise receive, he added. It's not clear who is correct. The Texas Comptroller of Public Accounts, which advises local governments on tax issues, would not comment on the firm's methods. Texas law allows concerned property owners to appeal to independent appraisal review boards if they can’t first sort out issues with their assessors. Kret said he's seen only a couple of letters in recent days from property owners concerned about royalty appraisals on their land. The dispute involves one piece of the complicated and sometimes inexact method of appraising a property owner's oil and gas wealth: estimating future income from the oil and gas waiting to be tapped. The Texas Property Code says the appraisal method “must use the average price of the oil or gas from the interest for the preceding calendar year.” That's calculated by "dividing the sum of the monthly average prices for which oil and gas from the interest was selling during each month of the preceding calendar year by 12.” The key question in this dispute is whether assessors must use actual prices at which oil and gas from a particular lease was sold — a task easier said than done. Or can they do their best to approximate those prices? Pritchard and Abbott has chosen the second option, typically starting by plugging in the price of West Texas Intermediate crude, which it then adjusts for other factors. “If the text of the law appears to clearly say, ‘This is how you do it,’ and you choose not to use that approach, under what authority are you doing it?”— Charles Williams, president of Wardlaw Appraisal Group

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Damien Larson, a partner with the Richmond-based tax consulting firm Myska and Vandervoort, wrote last week on the Texas Royalty Council’s website that West Texas prices can range $2 to $12 per barrel higher than what a royalty owner actually received, potentially leading to higher-than-proper valuations. “For those royalty owners who have an interest in a county that is represented by Pritchard & Abbott, there is a direct concern that you are getting over-appraised, at times significantly,” wrote Larson, who did not respond to requests to comment for this article. But Kret said the critique relies on incomplete information, and he chalks up the sudden interest in his firm’s decades-old practice to the fact that operators and royalty owners are “really scratching for every dime right now.” While Pritchard and Abbott assessors typically start with the West Texas reference price, they also adjust for a host of factors that would apply to specific conditions. That includes the general location of a lease, the quality and gravity of the crude (a measure related to density) produced and who’s buying it. The results, Kret said, are fair and uniform forecasts across the state. “It could be a dollar less, or a dollar more. In our business, we never hear about the ones that are a dollar more than what we use,” he said. The letter of the law? Regardless of whether the forecasts benefit property owners, some tax experts say Pritchard and Abbott is failing to follow the letter of the law. “If the text of the law appears to clearly say, ‘This is how you do it,’ and you choose not to use that approach, under what authority are you doing it?” said Charles Williams, president of Wardlaw Appraisal Group, a San Antonio firm that provides services to 12 Texas counties. “Does the Legislature not know what it’s talking about?” Williams said his firm subscribes to a service that pulls sales data on each lease from the Texas comptroller’s website, translating it to a friendlier format. His number crunchers then recalculate the prices to account for production. But Pritchard and Abbott handles things differently. Relying on state data can prove troublesome, Kret says. Sometimes revenue data from the comptroller's office doesn't match production data kept by the Texas Railroad Commission. “So you have to, we think, try to understand the market in each state, and not just rely blindly on data that could be faulty.” Kret said.

These five NYC rental buildings had the highest 2016 tax assessments Even New York’s top multifamily landlords have to reckon with the taxman, and some more than others. With April 15 safely in the rear view, The Real Deal dug through the city tax assessment data in search of the rental properties whose owners face the largest per-unit tax bills in 2016. All five of the highest-taxed properties are found in Upper Manhattan, with all but one directly abutting Central Park. All have average rents around at least $10,000 per month, according to StreetEasy. They’re also largely newer properties, built in the last 20 years. For this analysis, TRD only considered buildings with 100 or more units, to reduce the impact of commercial incomes on the properties’ overall assessments. “The main factors that go into assessments are geographic area, the age and condition of the building and its expense ratio,” said real estate tax attorney Joel Marcus of Marcus & Pollack LLP. Buildings with very high expenses generally receive lower assessments, as do buildings with significant vacancies. Assessors must defend their assessments, Marcus said, and are, by nature, averse to extremes, which can sometimes benefit the owners

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of the highest-end properties. 800 Fifth Avenue, Upper East Side Total Units: 229 Estimated 2016 tax owed: $38,889 per unit It’s odd serendipity that the former home of a 19th Century oil baron would one day become one of the highest-taxed properties in the city. The mansion at 800 Fifth Avenue – once owned by Standard Oil treasurer Jabez Bostwick, and later, by a Rockefeller – sat vacant for more than 50 years until Bernard Spitzer demolished it and built a luxury rental tower at the address in the late 1970s. The building’s 208 apartments lease for an average of $10,500 a month, according to StreetEasy, with some renters paying as much as $34,500 a month. The 33-story, 354,000-square-foot tower, still owned by Spitzer Enterprises, also contains several medical suites that bring in additional revenue. The Grand Tier, 1930 Broadway, Lincoln Square Total Units: 232 Estimated 2016 tax owed: $33,184 per unit White-glove developer Glenwood Management built and still owns this 30-story, 460,000-square-foot West Side luxury tower, located a block from Lincoln Center, completed in 2002. Rents at the Costas Kondylis-designed building’s 229 residential average about $9,100 per month and hit highs of $17,000 a month, according to StreetEasy. The building’s six ground floor commercial units are occupied by big-name retail brands, such as Brooks Brothers, Lululemon and Bed Bath & Beyond. Residential brokerage Brown Harris Stevens maintains an office there as well. The property benefited from an $11.4 million tax abatement in 2016. The Lucerne, 350 East 79th Street, Upper East Side Total units: 236 Estimated 2016 tax owed: $29,914 per unit The second property on the list developed and owned by Leonard Litwin’s Glenwood Management, the 44-story, 365,000-square-foot Lucerne in Yorkville offers units copious 4- and 5-bedroom apartments for rent as for as much as $30,000 a month, though the average rental rate sits at $9,300 per month according to StreetEasy. The tower, finished in 1989, also has four retail spaces, just one of which is currently occupied, according to CoStar, by grocer Agata & Valentina. The Montana, 247 West 87th Street, Upper West Side Total units: 162 Estimated 2016 tax owed: $29,090 per unit Real estate investor Irving Goldman bought the property that would become the 26-story, 252,000-square-foot Montana back in 1981, according to public records. The building, completed in 1984 and converted in 2002 is now owned by his son Lloyd Goldman’s firm, BLDG Management. The property’s 156 residential units rent for an average of about 6,300 per month. A 2,000-square-foot 4-bedroom there rented for $16,000 per month back in May, according to StreetEasy. The building also has six commercial units, leased to tenants including Bank of America, CityMD and Starbucks. 945 Fifth Avenue, Upper East Side Total units: 110 Estimated 2016 tax owed: $23,125 per unit This Emery Roth & Sons-designed 19-story, 189,000-square-foot luxury rental building, described by its creators as a “straightforward composition rendered in beige brick above a two-story limestone base,” was completed back in 1949. Rudin Management purchased it in 1999, according to public records.

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The Central Park-facing property has 107 residential units which rent for about $10,300 on average, according to StreetEasy. It also has 3 office units which together comprise about 5,000 feet of space.

'Big-box' tax ruling pleases local governments in Michigan Local government officials are happy with a recent ruling that pitted tax authorities against big-box stores over a tax loophole. "It's a step in the right direction," said Steve Currie, deputy director of the Michigan Association of Counties. The Michigan Court of Appeals ruled in favor of the Upper Peninsula city of Escanaba in a case against Menard Inc., over tax assessments critics say favor big-box stores. The decision relates to the Michigan Tax Tribunal's practice referred to as "dark store assessing" to compare big-box stores to closed businesses from different regions of the state, to justify tax assessments. Escanaba made true-cash valuations of the property ranging from $7.8 million in 2012 to $8.2 million in 2014, based in part on cost-less depreciation model of assessment. Menard contended the true-cash value for the three years was $3.3 million, presenting sales of other big box stores around the state as evidence. Escanaba argued there was no functional obsolescence because another purchaser would use the building in a similar format, while Menard disagreed and said there was obsolescence and it must be considered. Following a tax tribunal hearing hearing, the tribunal assigned true cash value for the three years averaging to $3.49 million, and concluded that Escanaba's cost-less-depreciation approach should be given no weight because it did not account for obsolescence. The Court of Appeals ruled Thursday, May 26, in favor of Escanaba, sending the case back the Michigan Tax Tribunal for further consideration, instructing the tribunal to take additional evidence before issuing a tax assessment decision. The Court noted that freestanding retail buildings are rarely bought and sold on the market for use as such due in part to "self-imposed deed restrictions that prohibit competition." Across Michigan, communities – mostly small cities, townships, counties and schools – are losing costly legal battles with large retail stores. In remanding the case, the court instructs the Tribunal to consider additional evidence on the market effect of the deed restrictions, and to consider other methods of assessment, including the cost-less-depreciation method that the city of Escanaba argued for. The ruling makes an impact in the Escanaba case, in which assessments were based on sales figures of other big-box stores in areas throughout Michigan's Lower Peninsula. Advocates of local governments want to level the playing field in cases like this throughout the state, urging lawmakers to make changes to Michigan's tax assessment law by approving a bill before the legislature. House Bill 5578, introduced April 2016 by Rep. David Maturen, R-Brady Township, would force future tax assessments on big-box stores to be based on all three accepted assessment measures, Currie said. The bill is meant to get more accurate rulings at the tax tribunal, Currie said, on properties like big-box stores. "It could potentially lead to fair and equatable taxes," Currie said, noting that the bill would allow the tribunal to ask for more information if needed. The bill comes after a Costco store moving to a community near Maturen's district argued for an assessment that was less than what the community was prepared for, Oshtemo Township Attorney Jim Porter said.

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Porter said Costco spent about $12 million on the building and more than $5 million on the land to build a new store in the growing retail area just outside of Kalamazoo. Oshtemo Township gave a "conservative" assessment of about $8.5 million true-cash value, he said. Costco later appealed for a true-cash value of $4 million on appeal with the tax tribunal, Porter said. "We thought that was a tad bit ridiculous," he said. The township contacted Maturen about the issue. "We thought, my gosh, you want a value less than the dirt? That's crazy," he said. "We have to buy firetrucks capable of fighting a fire on 150,000-square-foot facility, and if we're not receiving the taxes to do that, how do we do that? How do we send police?" Porter said Costco later withdrew its $4 million appeal to the tax tribunal on the assessment value after township officials published letters in the media about the issue. We recognize Senate Bill 524 as Michigan's first attempt at addressing dark store assessing and support the Michigan State Legislature's efforts. Maturen, a certified general real estate appraiser and former township trustee and county commissioner, wrote a column about the issue on his web site May 24, noting an overwhelming concern about older, vacant stores with no lights on being used to determine the value of new, mint-condition stores. "These maneuvers result in large reductions in taxes for the big box stores," Maturen wrote. "This creates an inequitable distribution of the tax burden for the rest of the local property taxpayers, including residents, and also the many small businesses that still have to compete against these big box retailers." The Michigan Association of Counties is monitoring the bill, Currie said, which was referred for second reading in the House on May 18. Currie was in Lansing Tuesday, May 31, to speak with House legislators and answer questions about the bill, which he said has some momentum. The "dark stores" bill would not apply retroactively, Currie said, and tax raises are capped tied to inflation for existing stores. But the change could lead to more fair tax assessments for future stores. The practice of "let's get taxes as low as possible" doesn't work for communities, Porter said. "There's a cost of living in society," he said. "There's no big-box theory for a homeowner. He doesn't get a break." The sales used in the assessments, like in the Escanaba case, he said, are not apples to apples, and based on sales in "old secondary markets." However, he noted, the new stores are usually built in primary markets, or more desirable areas than the markets where the sales comparisons were found. Currie said smaller stores, in some cases, are paying nearly double the taxes that big-box stores pay per square foot under the current law. "To us, it's not a fair-market tax structure," Currie said. With less tax funds coming in, Currie said, local governments would have to choose to cut services or increase taxes through millages that would impact residents and businesses. The tax issue had an impact in Marquette Township, where Lowe's also won a $755,000 tax refund for its store, Bridge Magazine reports, leading to the elimination of Sunday hours at Marquette's library so the township could pay its share of the refund.

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The proposed bill would require the tribunal to base the valuation of the property under appeal on its own, independent determination of true cash value and the "highest and best use" of both the property under appeal and of the comparables used for comparison purposes, Maturen wrote. "In its recent rulings, the tribunal has been comparing apples to onions," Maturen wrote. "We need to get back to comparing apples to apples."

More than $550 Million Recovered from Property Tax Fraud Hundreds of millions of dollars returned to the taxpayers due to property owners improperly filing for tax exemptions More than $550 million has been recovered from property tax fraud in Orange County, Florida. The money comes from property owners who wrongfully applied for property tax exemptions when they did not qualify, primarily Florida's Homestead Tax exemption. The recovered money has been returned to the taxpayers. Orange County Property Appraiser Rick Singh hired three former law enforcement professionals to investigate property owners trying to beat the system. He introduced a tax fraud hotline for citizens to report suspicious properties, resulting in the recovery of the hundreds of millions of dollars. "Counties everywhere should invest in diligent investigative work and make it a top priority to catch those that cheat the system," said Rick Singh, the Orange County Property Appraiser. "That way our communities receive the funding they need to provide vital services to their citizens, like law enforcement, fire, EMS, and schools, and honest tax payers don't pick up the burden left by individuals or businesses that break the rules." The Orange County Property Appraiser is responsible for identifying locating and fairly valuing all property — both real and personal — within the county for tax purposes. Orange County, Florida is home to seven theme parks, more than 60 million visitors per year and 120,000 hotel rooms. Currently, $6.3 million worth of construction is happening every day in Orange County and 14,000 time shares are sold weekly.