IN THE SUPREME COURT OF OHIO
Board of Education of the Canal Winchester City School District, Case No. 07-0478
Appellant,
v. Appeal from the Ohio Board of Tax Appeals AP Hotels of Illinois, Inc., Franklin County Auditor, and the Franklin County Board of Revision, Board of Tax Appeals Case No. 2004-K-349 Appellees
MERIT BRIEF OF APPELLANT THE BOARD OF EDUCATION OF THE CANAL WINCHESTER CITY SCHOOL DISTRICT
Martin J. Hughes, III, Esq. (0008284) Jackie Lynn Hager, Esq. (0072400) Martin Hughes & Associates 150 E. Wilson Bridge Rd, Ste. 300 Worthington, Ohio 43085 (614) 410-1700 (614) 455-0480 (f) fF^ ^ Counsel for Appellant, The Board of Education ^ of the Canal Winchester School District F AN 0 3 N01 Wayne E. Petkovic, Esq. 840 Brittany Drive CLERK OF COUFdT Delaware, Ohio 43015 SUPREiU1E COUR`{"_OF nH10 (740) 362-7729 (740) 362-4136 (f) Counsel for Appellee, AP Hotels of Illinois, LLC
Paul Stickel, Esq. 373 S. High Street, 20'h Floor Columbus, Ohio 43215 (614) 462- 7519 (614) 462-6252 (f) Counsel for County Appellee, Franklin County Board of Revision & Franklin County Auditor TABLE OF CONTENTS
TABLE OF CONTENTS ...... ii
TABLE OF AUTHORITIES ...... iv
STATEMENT OF FACTS ...... I
ARGUMENT ...... 4
Proposition of Law No. I ...... 4
The BTA erred in determining that the report and opinion testimony of the property. owner's appraiser with respect to value of the subject property as of January 1, 2003 were competent and probative as to the value of the subject property on the tax lien date of January 1, 2002.
A. Finding an appraisal report with an affective date twelve months .. 4 after the relevant tax lien date to be probative evidence constitrrtes an abuse of discretion by the Ohio Board of Tax Appeals.
B. Sam Koon's appraisal report was incompetent and each of ...... 8 his aporoaches to value were flaw.
C. The Board of Tax Appeals decision to overrule Appellant's ...... 11 Motion to Exclnde Sam Koon's appraisal report and thereby assign it probative weight was an abuse of discretion in that Apoellee AP Hotels of Blinois. Inc. failed to comply with the Ohio Board of Tax Appeals Rules 5717-1-11 and 5717-1-15.
CONCLUSION ...... 13
PROOF OF SERVICE ...... 14
APPENDIX Appendix Paee
Appellant The Board of Education of the Canal Winchester City School ...... 1 District, Notice of Appeal to the Supreme Court of Ohio, dated March 16, 2007.
Ohio Board of Tax Appeals Decision, dated Feb. 16, 2007 ...... 6
Cambridge Commons LP v. Guernsey Ciy. Bd. of Revision ...... 19 (2005), 106 Ohio St.3d 27, 830 N. E.2d 1147
ii Elyria City School District Board of Education v. Lorain Cty. Bd of Revision ...... 24 (August 4, 2004), B.T.A. Case No. 2003-J-1372, unreported 2004 Ohio Tax LEXIS 1234
Freshwater v. Belniont Cty. Bd of Revision ...... 30 (1997), 80 Ohio St.3d 26, 684 N.E.2d 304
Oln:sted Falls Village Association v. Cuyahoga Cty. Bd of Revision ...... 36 (1996), 75 Ohio St.3d 552, 664 N.E.2d 922
SFZ 7'ransportation, btc. v. Limbach, Tax Commissioner ...... 42 (1993), 66 Ohio St.3d 602, 613 N.E.2d 1037
Western Industries, Iric. v. Hantilton Cty. Bd of Revision ...... 47 (1960), 170 Ohio St. 340; 164 N.E.2d 741
Westhaven, Inc. v. Wood Cty. Bd. of Revision ...... 49 (1998), 81 Ohio St3d 67; 689 N.E.2d 38
Witt Conipany v. Hanailton Cty. Bd. of Revision, et al ...... 55 (1990), 61 Ohio St. 3d 155; 573 N.E.2d 661
Ohio Board of Tax Appeals Rule 5717-1-11 ...... 59
Ohio Board of Tax Appeals Rule 5717-1-15 ...... 61
Ohio Evidence Rule 201 ...... 63
Ohio Revised Code §323.11 ...... 64
Ohio Revised Code §5715.19 ...... 65
Ohio Revised Code §5717.04 ...... 70
iii TABLE OF AUTHORITIES
Cases:
Canibridge Commons LP v. Guernsey Cty. Bd ofRevision ...... 7 (2005), 106 Ohio St.3d 27, 830 N. E.2d 1147
Elyria City School District Board of Education v. Lorain Cty. Bd of Revision ..... (August 4, 2004), B.T.A. Case No. 2003-J-1372, unreported 2004 Ohio Tax LEXIS 1234
Freshwater v. Belmont Cty. Bd. ofRevision ...... 5-6 (1997), 80 Ohio St.3d 26, 684 N.E.2d 304
Olmsted Falls Village Association v. Cuyahoga Cty. Bd of Revision ...... 4-5 (1996), 75 Ohio St.3d 552, 664 N.E.2d 922
SFZ Transportation, Inc. v. Limbach, Tax Conmiissioner ...... 8 (1993), 66 Ohio St.3d 602, 613 N.E.2d 1.037
Western Industries, Inc. v. Hamilton Cty. Bd of Revision ...... 7-8 (1960), 170 Ohio St. 340; 164 N.E.2d 741
Westhaven, Inc. v. Wood Cty. Bd of Revision ...... 8 (1998), 81 Ohio St.3d 67; 689 N.E.2d 38
Witt Con:patzy v. Hamilton County Board o, f 'Revision, et al ...... 7 (1990), 61 Ohio St. 3d 155
CONSTITUTIONAL PROVISIONS: STATUTES:
Ohio Board of Tax Appeals Rule 5717-1-11 ...... 11
Ohio Board of Tax Appeals Rule 5717-1-15 ...... 11
Ohio Evidence Rule 201 ...... 3
Ohio Revised Code §323.11 ...... 4-5
Ohio Revised Code §5715.19 ...... 5
Ohio Revised Code §5717.04 ...... 4
iv STATEMENT OF FACTS
The Property is a sixty room hotel, constructed in 1997, commonly referred to as
the Amerihost Inn & Suites located at 6323 Prentiss School Road in Canal Winchester,
Ohio. [See Supplement to Merit Brief of Appellant The Board of Education of the Canal
Winchester City School District, pg. 19]. The Franklin County Auditor has the Property
listed as permanent parcel number 184-002076-00. The Property consists of one building
containing a total of 28,484 square feet with 60 guest rooms, a 460 square foot meeting
room, a heated indoor pool and exercise room. [See Supplement to Merit Brief of
Appellant The Board of Education of the Canal Winchester City School District, pg. 54-
55]. The Property sits on 1.79 acres of land. [See Supplement to Merit Brief of
Appellant The Board of Education of the Canal Winchester City School District, pg. 53].
Specifically, the Property consists of a mixture of double and king rooms with 3 handicap
accessible single rooms. [See Supplement to Merit Brief of Appellant The Board of
Education of the Canal Winchester City School District, pg. 55].
Appellee AP Hotels of Illinois, Inc. filed a complaint with the Franklin County
Board of Revision seeking a reduction in value to $1,500,000 for tax year 2002. [See
Supplement to Merit Brief of Appellant The Board of Education of the Canal Winchester
City School District, pg. 119]. The Franklin County Board of Revision ordered the fair market value of the Property unchanged at $2,300,800 for tax year 2002 and carried forward. [See Supplement to Merit Brief of Appellant The Board of Education of the
Canal Winchester City School District, pg. 120]. Appellee AP Hotels of Illinois, Inc. then filed an appeal with the Ohio Board of Tax Appeals, seeking a reduction in value to
$1,629,100. [See Supplement to Merit Brief of Appellant The Board of Education of the Canal Winchester City School District, pg. 121]. At the Ohio Board of Tax Appeals, the
Appellee AP Hotels of Illinois, Inc. relied solely upon the testimony and written report of
Mr. Sam Koon, appraiser, According to Mr. Koon's written report and testimony before the Ohio Board of Tax Appeals, Mr. Koon's opinion of value of the Property, was
$1,600,000 as of January 1, 2003. [See Supplement to Merit Brief of Appellant The
Board of Education of the Canal Winchester City School District, pg. 39]. The relevant tax lien date 'in this case, however is January 1, 2002, thus Mr. Koon's opinion of value was twelve months after the relevant tax lien date.
Appellant The Board of Education of the Canal Winchester City School District filed a Motion to Exclude the testimony and written appraisal report introduced by
Appellee AP Hotels of Illinois, Inc. as Mr. Koon's report does not express an opinion of true value for the subject property as of January 1, 2002, the relevant tax lien date. [See
Supplement to Merit Brief of Appellant The Board of Education of the Canal Winchester
City School District, pg. 122]. The Ohio Board of Tax Appeals over-ruled Appellant The
Board of Education of the Canal Winchester City School District's Motion and in its
February 16, 2007 Decision and Order ruled in favor of the Appellee AP Hotels of
Illinois, Inc., assigning a value of $1,600,000 to the Property as of January 1, 2002. [See
Supplement to Merit Brief of Appellant The Board of Education of the Canal Winchester
City School District, pg. 1]. Appellant The Board of Education of the Canal Winchester
City School District filed an appeal to this Honorable Supreme Court of Ohio on March
16, 2007 on the basis that the Ohio Board of Tax Appeals abused its discretion in finding that Mr. Sam Koon's appraisal report was competent and probative evidence for tax lien date January 1, 2002. [See Merit Brief of Appellant The Board of Education of the Canal
Winchester City School District, Appendix pg. 1].
Although not part of the statutory transcript or record before this Supreme Court of Ohio, pursuant to Ohio Evidence Rule 201, Appellant The Board of Education of the
Canal Winchester City School District requests that this Supreme Court take Judicial
Notice of a sale of the Property which took place on May 24, 2006, with a sale price of
$2,375,000. [See Supplement to Merit Brief of Appellant The Board of Education of the
Canal Winchester City School District, pg. 37 - Conveyance Fee Statement].
3 ARGUMENT
Proposition of Law No. L
The BTA erred in determining that the report and opinion testimony of the property owner's appraiser with respect to value of the subject property as of January 1, 2003 were competent and probative as to the value of the subject property on the tax lien date of January 1, 2002.
Attributing significant weight to Mr. Koon's appraisal report when it fails to
assign a value to the relevant tax lien date and fails to contain competent and probative
data in support of its valuation, represents the exact type of unlawfulness and
unreasonableness behind the legislature's intent of Ohio Revised Code §5717.04, which
states that if the Ohio Board of Tax Appeals's decision is unreasonable and unlawful, this
Supreme Court of Ohio shall reverse and vacate the Ohio Board of Tax Appeals's
decision.
A. Findine an appraisal report with an affective date twelve months after the relevant tax lien date to be probative evidence constitutes an abuse of discretion by the Ohio Board of Tax Appeals.
A fatally flawed appraisal report prepared by Sam Koon, of Samuel D. Koon and
Associates, and his testimony were the only evidence that Appellee AP Hotels of Illinois,
Inc. relied upon to demonstrate the value of the Property at the Ohio Board of Tax
Appeals hearing. Although, Mr. Koon utilized all three approaches to determine a value for the Property, his report had a valuation date of January 1, 2003, and the relevant tax lien date in this case of January 1, 2002. Ohio Revised Code §323.11 states that the effective date is the tax lien date which is the first day of January for each tax year. This
Supreme Court has held on many occasions that a decision from the Ohio Board of Tax
Appeals is an abuse of discretion where the appraisal did not value the property as of the tax lien date, specifically holding that the first of January of the tax year in question is the
4 crucial valuation date for tax assessment purposes. [See Olmsted Falls Village
Association v. Cuyahoga Coznzty Board of Revision, (1996) 75 Ohio St.3d 552; 664
N.E.2d 922]. Specifically, this Supreme Court of Ohio held that although the Ohio Board of Tax Appeals may consider pre- and post-tax lien date factors that affect the true value of the taxpayer's property on the tax lien date, the Ohio Board of Tax Appeals must base its decision on an opinion of true value that expresses a value for the property as of the tax lien date of the year in question. [See Olmsted Falls Village Association v.
Cuyahoga County Board of Revision, (1996) 75 Ohio St.3d 552; 664 N.E.2d 922; Elyria
City School District Board of Education v. Lorain County Board of Revision, (August 4,
2004), B.T.A. Case No. 2003-J-1372, unreported. 2004 Ohio Tax LEXIS 1234]. The effective date of Mr. Koon's report is January 1, 2003, twelve months after the relevant tax lien date of January 1, 2002, in this case. [See Supplement to Merit Brief of
Appellant The Board of Education of the Canal Winchester City School District, pg. 39].
Furthermore, Ohio Revised Code §5715.19(D) states that the determination of a complaint filed for a particular tax year shall relate back to the date when the lien for taxes for the current year attached. In this case, Appellee AP Hotels of Illinois, Inc. filed its original complaint with the Franklin County Board of Revision on March 31, 2003, in which it sought a decrease in value for tax year 2002. [See Supplement to Merit Brief of
Appellant The Board of Education of the Canal Winchester City School District, pg.
119]. Under definitions set forth in both Ohio Revised Code §5715.19 and §323.11, the lien date for real estate taxes for tax year 2002 would be January 1, 2002. This Supreme
Court of Ohio has previously held that the essence of an assessment is that it fixes the value based upon facts as they exist at a certain point in time, namely the relevant tax lien
5 date. [See Freshwater et aL, v. Belntont Cozrnty Board of Revision et al., (1997), 80 Ohio
St.3d 26; 684 N.E.2d 304], (Two appraisal reports one with an "as of' date of December
30, 1991 and another with an "as of' date of April 5, 1996, with a relevant tax lien date of
January 1, 1994). Id There this Supreme Court of Ohio held that evidence of valuation as of December 30, 1991 and April 5, 1996, was not evidence of valuation as of the relevant tax lien date of January 1, 1994. Id,. Similarly, Mr. Koon's appraisal report valuation for'January 1, 2003 does not provide competent or probative evidence of the valuation of the Property as of January 1, 2002. In fact, a single glance at Mr. Koon's adjustments in his sale comparison approach demonstrates the lack of evidence present for January 1, 2002. [See Supplement to Merit Brief of Appellant The Board of
Education of the Canal Winchester City School District, pg. 86-100]. Thus, in malcing a determination in this case, the Ohio Board of Tax Appeals should have looked to the value of the Property as of the relevant tax lien date, which is January 1 . 2002, not relying upon Mr. Koon's opinion of value as of January 1, 2003, which was the only evidence presented on behalf of Appellee AP Hotels of Illinois, Inc.
The Ohio Board of Tax Appeals decided to accept Mr. Koon's attempt to provide on-the-spot testimony regarding a valuation for the January 1, 2002 tax lien date, which was an abuse of discretion by the Ohio Board of Tax Appeals. Mr. Koon testified that his opinion of value was a valuation estimate that would be "typically good for a period of time." [See Supplement to Merit Brief of Appellant The Board of Education of the Canal
Winchester City School District, pg. 20]. In fact, Mr. Koon never actually gave an expert opinion of value for January 1, 2002. When specifically asked by counsel for Appellee
AP Hotels of Illinois, Inc. what Mr. Koon's opinion of value for the Property as of
6 January 1, 2002 was, Mr. Koon responded that he thought the $1,600,000 value was a
"good estimate of value." [See BOE's Supplement to Merit Brief of Appellant The
Board of Education of the Canal Winchester City School District, pg. 23]. Mr. Koon hedged the question and did not give a definitive expert opinion of value for the actual relevant tax lien date. The case law is very clear in that January 1, 2002 is the crucial valuation date for purposes of tax assessment in this matter, and thus, Mr. Koon's report is without weight and the Ohio Board of Tax Appeals committed an abuse of its discretion in find Mr. Koon's report to be competent and probative evidence.
Finally, although the Ohio Board of Tax Appeals has wide discretion relating to admissibility and weight given to the evidence, the Ohio Board of Tax Appeals abused that discretion in finding that Appellee AP Hotels of Illinois, Inc.'s only evidence, which was fatally flawed, was enough to meet Appellee AP Hotels of Illinois, Inc. (the
Appellant before the Ohio Board of Tax Appeals) burden of proof. This Supreme Court of Ohio has held that the Ohio Board of Tax Appeals need not adopt an expert's valuation and in fact, has wide discretion to accept all, part, or none of an expert's report and
(1990), 61 testimony. [See Witt Con:pany v. Hamilton County Board of Revision, et al.
Ohio St. 3d 155]. As the appellant before the Ohio Board of Tax Appeals, Appellee AP
Hotels of Illinois, Inc. carried the burden of proof to establish it warranted a decrease in valuation of the Property for the January 1, 2002 tax lien date. [See Cambridge
Commons Limited Partnership v. Guernsey County Board of Revision (2005), 106 Ohio
St.3d 27; 830 N.E.2d 1147]. This Supreme Court of Ohio has held when the burden is on a taxpayer to prove his right to a deduction, he is not entitled to a deduction simply because no evidence is introduced counter to his claim. [See Western Industries, Inc. v.
7 Hamilton Cozinty Board of Revision (1960); 170 Ohio St. 340; 164 N.E.2d 741;
Westhaven, Inc. v. WoodCountyBoard of Revision (1998), 81 Ohio St.3d 67; 689 N.E.2d
38]. Appellee AP Hotels of Illinois, Inc. relied solely on Mr. Koon's appraisal report and
testimony, which did not assign a value to the tax lien date. As a result, the Ohio Board
of Tax Appeals's reliance on this incompetent and non-probative evidence is an abuse of
discretion.
B. Sam Koon's appraisal report was incompetent and each of his approaches to value were flaw.
Mr. Koon's appraisal report was not competent probative evidence and the Ohio
Board of Tax Appeals unreasonably and unlawfully relied upon the report as evidence of
value for January 1, 2002. This Supreme Court of Ohio has held that the Ohio Board of
Tax Appeals was unreasonable when it relied upon evidence that was weak and not
credible. [See SFZ Transportation, Inc. v. Limbach, Tax Commissioner (1993), 66 Ohio
St.3d 602; 613 N.E.2d 1037]. Looking first at his income approach to value, Mr. Koon
admitted that he utilized market rents for January 1, 2003, not as of January 1, 2002.
[See BOE's Supplement to Merit Brief of Appellant The Board of Education of the Canal
Winchester City School District, pg. 23]. Mr. Koon also deducted $112,500 for
Furniture, Fixtures and Equipment. [See BOE's Supplement to Merit Brief of Appellant
The Board of Education of the Canal Winchester City School District, pg. 86]. However,
W. Koon admitted that he did not review the owner's personal property tax returns in
order to confirm the amount deducted for FF&E. [See BOE's Supplement to Merit Brief of Appellant The Board of Education of the Canal Winchester City School District, pg.
24].
8 Mr. Koon's sale comparison approach lacks credibility and thus, the Ohio Board
of Tax Appeals unreasonably relied upon it as evidence for tax year 2002. Under Mr.
Koon's sales comparison approach, the sale comparables utilized demonstrate a range of
$29,180 to $45,000 per unit. [See BOE's Supplement to Merit Brief of Appellant The
Board of Education of the Canal Winchester City School District, pg.97]. Mr. Koon
assigned a value of $30,000 per unit to the Property. [See BOE's Supplement to Merit
Brief of Appellant The Board of Education of the Canal Winchester City School District,
pg.. 98]. Mr. Koon obviously used the very lowest end of his range per unit in his
analysis of the Property. Mr. Koon's sale comparables are not credible or comparable to
the Property. Although the sale comparables that Mr. Koon utilizes in his sales
comparison approach are very similar in design to the Property, as all are other
Amerihost Inns like the Property, they are not in the same market as the Property and Mr.
Koon does not make sufficient adjustments for this difference. Specifically, sale
comparables numbei• 4 and 5 are both located in the state of Michigan and both sold
almost 1^h years after the relevant tax lien date, and thus the Ohio Board of Tax Appeals
should have given them little or no weight. [See BOE's Supplement to Merit Brief of
Appellant The Board of Education of the Canal Winchester City School District, pgs. 93-
96]. Further, none of the other sale comparables are located in Franklin County. [See
BOE's Supplement to Merit Brief of Appellant The Board of Education of the Canal
Winchester City School District, pg. 87-92]. Finally, any adjustments that Mr. Koon did
make in his sale comparison approach are based on January 1, 2003, rather than the
relevant tax lien date of January 1, 2002.
9 Finally, the Ohio Board of Tax Appeals should have given little or no weight to
Mr. Koon's cost approach to value for the Property. The Property was originally
constructed in 1997. [See BOE's Supplement to Merit Brief of Appellant The Board of
Education of the Canal Winchester City School District, pg. 54]. Although the Property was only four years old as of the tax lien date, Mr. Koon's appraisal report made no reference as to the actual cost of construction. Mr. Koon did not even look at the actual
construction costs when determining value under the cost approach. [See BOE's
Supplement to Merit Brief of Appellant The Board of Education of the Canal Winchester
City School District, pg. 23]. Instead of obtaining documentation for the actual costs of construction for the Property, Mr. Koon relied upon Marshall and Swift Valuation
Services and its national cost index. [See BOE's Supplement to Merit Brief of Appellant
The Board of Education of the Canal Winchester City School District, pg. 23]. In addition, Mr. Koon stated that in order to reproduce the Property now, the reproduction costs new would be approximately $2,295,000. [See BOE's Supplement to Merit Brief of Appellant The Board of Education of the Canal Winchester City School District, pg.
21]. In order to make his cost approach match his income and sales comparison approach, Mr. Koon recognized a difference of approximately $700,000 in value and arbitrarily decided to subtract out the $700,000 as Economic Obsolescence. [See BOE's
Supplement to Merit Brief of Appellant The Board of Education of the Canal Winchester
City School District, pg. 21 and pg. 75]. In affect, Mr. Koon applied over a 30% reduction due to economic obsolescence for the Property which was only four years old.
Making such a reduction is not reasonable where there is a lacking of significant evidence to support such a reduction.
10 C. The Board of Tax Appeals decision to overrule Appellant's Motion to Exclude Sam Koon's appraisal renort and thereby assign it probative weiEht was an abnse of discretion in that Anoellee AP Hotels of Blinois Inc . failed to comnlv with the Ohio Board of Tax Appeals Rules 5717-1-11 and 5717-1-15.
Mr. Koon's on-the-spot testimony regarding a possible valuation as of January 1, 2002, was not disclosed prior to the hearing before the Ohio Board of Tax Appeals, and thus should not have been relied upon by the Ohio Board of Tax Appeals in its decision of this case. Ohio Board of Tax Appeals Rule 5717-1-11(A)(5) specifically states that an expert may not be permitted to testify if he was not identified prior to the hearing in a timely manner, [See BOE's Merit Brief of Appellant The Board of Education of the Canal Winchester City School District, Appendix pg. 591. Ohio Board of Tax Appeals Rule 5717-1-15(I) states that each party shall identify and provide copies to all other parties a list of all witnesses and exhibits which are to be offered into evidence at the hearing before the Ohio Board of Tax Appeals. [See BOE's Merit Brief of
Appellant The Roard of Education of the Canal Winchester City School District, Appendix pg.
61 ]. Although counsel for Appellee AP Hotels of Illinois, Inc. provided Appellant The Board of
Education of the Canal Winchester City School District with a copy of Mr. Sam Koon's report
prior to the hearing before the Ohio Board of Tax Appeals, counsel never disclosed that Mr.
Koon would be providing testimony relating to a tax lien date aside from the one contained
within Mr. Koon's appraisal report. Specifically, Mr. Koon's appraisal report provided an
opinion of value as of January 1, 2003. [See BOE's Supplement to Merit Brief of Appellant The
Board of Education of the Canal Winchester City School District, pg.39]. However, during the
hearing before the Ohio Board of Tax Appeals, Mr. Koon also attempted to give an opinion of
value as of January 1, 2002. Counsel for the Appellee AP Hotels of Illinois, Inc. never disclosed
11 that Mr. Koon would be offering testimony to any tax year, other than the one stated in Mr.
Koon's appraisal report, which was January 1, 2003 only.
The Ohio Board of Tax Appeals decision to allow Mr. Koon to testify to an opinion of value for a tax year not contained in his report or supported by evidence in his report, is an abuse of discretion. Even more so, however, is the Ohio Board of Tax Appeals's reliance upon and credibility given to evidence that was not disclosed prior to the hearing as required by its own administrative rules. [See BOE's Merit Brief of Appellant The Board of Education of the Canal
Winchester City School District, Appendix pgs. 59-62]. It is this abuse of discretion whicla led the Ohio Board of Tax Appeals to rule in an unreasonable and unlawful manner.
12 CONCLUSION
For the reasons stated above, Appellants The Board of Education of the Canal
Winchester City School District respectfully requests that this Supreme Court of Ohio reverse the decision of the Ohio Board of Tax Appeals and remanded the decision to be
consistent with the Franklin County Board of Revision's decision, which assigned a value to the Property of $2,300,800 for tax year 2002 and carried forward.
Respectfully submitted,
1,
Ja ie Lynn Hager (0 400) M rtin Hughes & A ciates 150 E. Wilson Bridge Road Suite 300 Worthington, Ohio 43085 (614) 410-1700/(614) 410-1790 (f) Counsel for Appellant, the Board of Education of the Canal Winchester City School District
13 PROOF OF SERVICE
The undersigned hereby certifies that on August 3, 2007, a true and accurate copy of the foregoing Merit Brief of Appellant The Board of Education of the Canal
Winchester City School District was sent via ordinary U.S. Mail, postage prepaid, to those parties listed below.
Wayne E. Petkovic, Esq. 840 Brittany Drive Delaware, Ohio 43015 Counsel for Appellee, AP Hotels
Paul Stickel, Esq. 373 S. High Street 20`h Floor Columbus, Ohio 43215 Counsel for County Appellee
14 APPENDIX
15 AX _ . t .
IN TIIE SUPREME COL'RT OF OHIO 2V7 M^l? 16 pN 2. 16
Board of Education of the Canal O ^^ O^ ^^i Winchester City School District, Case No.
Appellant, Appeal from the Ohio Board of Tax V. Appeals Franklin Board of Tax Appeals Case No. AP Hotels of Illinois, Inc., County Auditor, and the Franklin County 2004-ZK-349 Board ofRevision,
Appellees
NOTICE OF APPEAL OF APPELLANT BOARD OF EDUCATION OF THE CANAL WINCHESTER CITY SCHOOL DISTRICT
Franklin County Prosecuting Attorney Martin J. Hughes, III, Esq. (0008284) Paul M. Stickel, Esq. Martin Hughes & Associates Assistant Prosecuting Attorney Jackie L. Hager (0072400) 150 East Wilson Bridge Road, Suite 300 20th floor Worthington Ohio 43085-2386 373 S. High St. 614.410.1700; 614.455.0480 (f) Columbus, Ohio 43215 614. 462.7519; 614.462.6252 (f) [email protected] Appellees Counsel for appellant Board of Education of Counsel for County the Canal Winchester City School District
Wayne E. Petkovic, Esq. Wayne E. Petkovic Law Offices 840 Brittany Drive Delaware, Ohio 43015 740.362.7729; 740.362.4136 (f) [email protected]
Counsel for appellee AP Hotels of Illinois, Inc.
^ IN THE SUPREME COURT OF OHIO
Board of Education of the Canal Winchester City School District, Case No.
Appellant, Appeal from the Ohio Board of Tax v. Appeals
AP Hotels of Illinois, Inc., Franklin : Board of Tax Appeals Case No. County Auditor, and.the Franklin County 2004-K-349 Board of Revision,
Appellees
NOTICE OF APPEAL OF APPELLANT BOARD OF EDUCATION OF THE CANAL WINCHESTEIt CITY SCI:IOOLDISTRICT
The appellant, Board of Education of the Canal Winchester City School District, hereby
gives notice of appeal to the Supreme Court of Ohio from the Decision and Order of the Ohio
Board of Tax Appeals, pursuant to R.C. 5717.04 in the case of AP Hotels of lllinois, Inc. v.
Franklin County Board of Revision, et al., BTA Case No. 2004-K-349 that was rendered on
February 16, 2007. A true copy of the decision is attached as Exhibit A.
ASSIGNMENTS OF ERRORS
The appellant, Board of Education of the Canal Winchester City School District, complains of the following errors in the Decision and Order of the Board of Tax Appeals
("BTA"):
2 2 ASSIGNMENT OF ERROR NO. 1:
The decision and order of the BTA is unreasonable and unlawful and constitutes an abuse of discretion where it determined that the report and opinion testimony of the property owner's appraiser with respect to value of the subject property as of January 1, 2003 were competent and probative as to the value of the subject property on the tax lien date of January 1, 2002.
Respectfully submitted,
ar Martin, II , 8284) Jackie L. Hager (0072400) Martin Hughes & Associates 150 East Wilson Bridge Road, Suite 300 Worthington Ohio 43085-2386 614.410.1700; 614.455.0480 (f) mhuohes martinhugheslaw.com
Counsel for appellant Board of Bducation of the Canal Winchester City School District
3 PROOF OF SERVICE UPON BOARD OF TAX APPEALS
This is to certify that a Notice of Appeal was filed with the Board of Tax Appeals, State
Office Tower, 24'" floor, 30 East Broad Street, Columbus, Ohio as evidenced by its date stamp as set forth hereon.
^^^^^ 27 • Martin J. Hughes, , q. (0 284) Jackie Lynn Hager, Esq. (0072400)
4 CERTIFICATE OF SERVICE
This is to certify that on this 16'" day of March, 2007, a copy of the Notice of Appeal of
the Board of Education of the Canal Winchester City School District and a copy of the demand
for transcript were mailed by certified mail to those listed below:
^Z•^/ /-3 G., Martin J. Hughes, It , Esq. (0 8284) Jackie Lynn Hager, Esq. (0072400)
Wayne E. Petkovic, Esq. Wayne E. Petkovic Law Offices 840 Brittany Drive Delaware, Ohio 43015
Franklin County Prosecutinp Attorney Paul M. Stickel, Esq. Assistant Prosecuting Attorney 373 S. High Street, 20th floor Columbus, Ohio 43215
Richard Levin Ohio State Tax Commissioner 30 E. Broad Street, 22"d Floor Columbus, Ohio 43215
5 OHIO BOARD OF TAX APPEALS
AP Hotels of Illinois, Inc., CASE NO. 2004-K-349
Appellant, (REAL PROPERTY TAX)
vs. DECISION AND ORDER
Franklin County Board of Revision, Frattklin County Auditor, and the Board of Education of the Canal Winchester City.School District,
Appellees.
APPEARANCES:
For the Appellant - Wayne E, Petkovic Law Offices Wayne E. Petkovic 840 Brittany Drive Delaware, Ohio 43015
For the County - Ron O'Brien Appellees Franklin County Prosecuting Attomey Scott Gaugler Assistant Prosecuting Attorney 373 South liigh Street, 13tn Floor Columbus, Ohio 43215
For the Appellee - Martin Hughes & Associates Board of Education Jackie Lynn Hager of the Canal Winchester 150 E. Wilson Bridge Road, Suite 300 City School District Worthington, Ohio 43085
Entered FEB 16 2007
Ms. Margulies, Mr. Eberhart, and Mr. Dunlap concur.
On April 15, 2004, appellant, AP Hotels of Illinois, Inc., filed the present appeal with this board challenging a decision of the Franklin County Board of Revision
("BOR"). The subject property, identified as parcel no. 184-2076 by the Franklin County
Auditor ("auditor"), consists of approximately 1.8 acres of land and is improved with a two-story hotel; containing 60 guest rooms, and is operated as the Amerihost Inn-
Columbus Southeast, a limited-service hotel facility. In its determination, the BOR left unchanged the values originally assessed by the auditor for tax year 2002, i.e., total true value of $2,300,800 with a corresponding taxable value of $805,290.' Through its notice of appeal, appellant claimed that the true and taxable values of the property should be reduced to $1,629,100 and $570,180, respectively. At hearing, however, appellant sought a reduction in true value to $1,600,000 based upon appraisal evidence.
This matter is now considered by this board based upon appellant's notice of appeal, the statutory transcript certified by the auditor pursuant to R.C._ 5717.01, and the record of the hearing convened before this board. The only individual to testify at this board's hearing was appellant's witness, Samuel D. Koon, a member of the Appraisal
Institute. Although the parties were accorded an opportunity to file post-hearing briefs, the only party to do so was the appellee Board of Education of the Canal Winchester City
School District ("BOE").
Before we can consider the merits of this appeal, we must first address an issue raised initially at hearing jointly by the appellees and overruled by the presiding attorney examiner. Subsequent to the hearing, the BOE renewed its motion in writing, requesting that we exclude the test9mony and appraisal evidence offered on behalf of
' In addition to some documentary materials reflecting actual income stream data for the subject property, testifying before the BOR on appellant's behalf was Jerry Egleton (sp.?), vice president of operations of SJD Management, the management company for the property and William McVeigh, Midwest Property Tax Associates. McVeigh testified with regard to several sales of other Amerihost facilities and also provided competitive information obtained from Egleton. Although Mr. McVeigh's experience and qualifications were not discussed during the BOR hearing, he is not unfamiliar to this board. See, e.g., Bd of Edn. of Westerville City Schools v. Franklin Cty. Bd of Revision (May 12, 2006), BTA No. 2004-A-
2 ^ appellant at hearing because the written appraisal expressed an opinion of value as of
January 1, 2003, when the tax lien date in issue in this appeal is January 1, 2002.
Appellant has not responded to the BOE's written motion, but its counscl and witness spoke to the issues raised at the time of hearing.
The BOE is correct regarding the requirement imposed by both statute and case law that this board must premise its decision of value on evidence relevant to the tax lien date in question. This point was made clear by the Supreme Court of Ohio in its decisions in Olmsted Falls Village Assn. v. Cuyahoga Cty. Bd. of Revision (1996), 75 Ohio
St.3d 552, and Freshwater v. Belmont Cty. Bd. ofRevision ( 1997), 80 Ohio St.3d 26. In
Olmsted Falls, the court found this board's reliance upon appraisal evidence which did not opine value for the pertinent tax lien date to be improper:
"We reverse the BTA's decision and remand this matter to _ M the BTA because the BTA based its decision on evidence that did not vahie the property as of the tax lien date.
"R.C. 5715.19(A)(1)(d) authorizes a property owner to file complaints with a board of revision against determinations made by the county auditor concerning the true value of the owner's property. According to R.C. 5715.19(D), `the determination of any such complaint shall relate back to the date when the lien for taxes *** for the current year attached ***.' The lien for taxes for each year attaches on the first day of January. R.C. 323.11.
"To emphasize the importance of this date, R.C. 5715.01, which authorizes the Tax Commissioner to direct and supervise the assessment of real property for taxation, including adopting rules to that end, states:
Pootnote contd. 1343, ttnreported; Polaris Conimerce Center, LLC v. Delatvare Cty. Bd. ofRevision (Dec. 9, 2005), BTA No. 2004-B-1100, unreported.
3 "`The commissioner shall neither adopt nor enforce any rule that requires true value for any tax year to be any value other than the true value in money on the tax lien date of such tax year *** ,
"The BTA valued the property according to Canitia's opinion of value. However, Canitia did not value the property as of any certain date. According to his testimony, he valued the property as of the entire year. To him, the tax lien date was a reflective date, not the valuation date. Thus, the evidence on which the BTA relied for its ultimate decision is unlawful. SFZ Transp., Tnc_ v. Limbach (1993), 66 Ohio St. 3d 602, ***
"We emphasize that the BTA '*** may consider pre- and post-tax lien date factors that affect the true value of the taxpayer's property on the tax lien date.' Youngstown Sheet & Tube Co. v. Mahoning Cly. Bd. of Revision (1981), 66 Ohio St. 2d 398, ***, paragraph two of the syllabus. However, the BTA must base its decision on an opinion of true value that expresses a value for the property as of the tax lien date of the year in question." Id. at 554-555. (Parallel citations omitted.)
Thereafter, in Freshwater, the court approved of our reliance upon Olrnsted
Falls in rejecting appraisal evidence under similar circumstances, commenting as follows:
"The BTA rejected Becker's procedure and refused to assign any weight to his opinion of true value. The BTA stated that "[t]he mere fact that the tax lien date is approximately midway between the two appraisal dates does not mean that the 1994 value must also be midway between the two appraisals.
"In rejecting Becker's opinion of trae value, the BTA cited a passage from The Appraisal of Real Estate (10 Pd.1992) 75, which states that because market forces are constantly changing, `an estimate of value is considered valid only for the exact date specified.'
"R.C. 5715.19(D) requires that the determination of a complaint filed for a particular tax year `shall relate back to 4 9 the date when the lien for taxes *** for the current year attached.' R.C. 323.11 provides that the lien for real estate taxes is the first day of January. Likewise, R.C. 5715.01, which authorizes the Tax Commissioner to direct and supervise the assessment for taxation of all real propeity, provides that `[t]he conunissioner shall neither adopt nor enforce any rule that requires true value for any tax year to be any value other than the true value in money on the tax lien date of such tax year ***.' Thus, the first day of January of the tax year in question is the crucial va],uati,ou da^te. for Yat^ tl assessment purposes. Olmsted FalC '^llage Assn v. Cuyahoga Cty. Bd. of Revision (1996), 75 Ohio St.3d 552, *** .
"The essence of an assessment is that it fixes the value based upon facts as they exist at a certain point in time. Becker's approach to valuation was not based upon the facts as they existed as of January 1, 1994, the tax lien date. Becker's appraisals were based upon facts as they existed- on December 30, 1991 and April 5, 1996, the dates of his appraisals. Evidence of the valuation as of these two dates is not evidence of the valuation as of January 1, 1994. The real estate-market may rise, fall, or stay constant between any two dates, and the assumption that a change in valuation between two given dates is constant and uniform, without proof, may properly be rejected by the finder of fact. The BTA may accept all, part, or none of the testimony presented to it by an expert. Witt Co. v. Hamilton Cty. Bd. of Revision (1991), 61 Ohio St.3d 155 ***. In this oase, the BTA chose not to accept Becker's valuation, and we agree." Id. at 29-30. (Parallel citations omitted.)
We have previously acknowledged the continued validity of the preceding
authority and have applied such rationale repeatedly. See, e.g., East Cleveland Bd. of Edn.
v. Cuyahoga Cty. Bd of Revision (July 21, 2006), BTA Nos. 2004-V-1342, et al., unreported; Karres v. Erie Cty. Bd of Revision (May 5, 2006), BTA No. 2004-13-854, unreported; Elyria City School Dist. Bd. of Edn. v. Lorain Cty. Bd of Revision (Aug. 6,
2004), BTA No. 2003-1-1372, unreported; Sirrimons v. Franklin Cty. Bd of Revision (Apr.
/0 26, 2002), BTA No. 2000-K-987, unreported; Pierce-Ruhland v. Ashtabula Cty. Bd. of
Revision (Sept. 4, 1998), BTA No. 1997-K-787, unreported. However, we do not find that these cases necessitate per se exclusion of appellant's appraisal evidence.
At this board's hearing, appellant's witness was asked about the discrepancy between the date for which he expressed his opinion in his written report, i.e., January 1,
2003, and the tax lien date, i.e., January 1, 2002. In this regard, Koon testified:
"An appraisal is very similar to a balance sheet, uh, in that we are required to put a date on it and call an effective date of valuation. In reality, the real estate market is not perfect. It does not move quickly as the stock market does. Our valuation estimates typically are good for a period of time. Things which might change that, uh, could be September 11a', 2001. I think the hotel industry probably suffered a tremendous loss as of that day. Or a change in tax law possibly could have a very big change in real estate value or cause a big change either upward or downward. So absent some type of event like that, yes, our value estimates are typically good for period of time." H.R. at 19.
Continuing, he indicated:
"I would say typically in the hotel industry between 1-1-02 and 1-1-03 we would have seen an increase in property value of niost hotels.
"The September 11'h, 2001 event was historic in terms of impact on hotels. This property probably is an aberration of that. It had already been hurt by the increase in occupancy. I don't see anything in the property's operating history which shows a rebound. So I doubt that there was a downward spike as a result of 9-11.
"This property has been very steady since January of 2001. I would think that the value has remained relatively stagnant. We have seen a decrease in capitalization rates over the period, but this property's performance probably would have required a greater return by the typical investor. I think you
6 ^^ could take this $1,600,000 value from 1-1-02 and probably take it on out to 1-1-05 and not miss the mark." H.R. at 27- 28.
The following reflects his ultimatc opinion regarding the utility of his written appraisal in this appeal:
"Q. If you were asked, would your opinion be higher or lower with regard to January 1, 2002 or January 1, 2003? What would be the answer?
"A. I think the number would be the same." H.R. at 40.
Although we conclude that exclusion of such evidence is unncccssary, we must nevertheless review the information contained within Koon's appraisal and
determine whether there exists sufficient corroborating information to support his testimony offered at hearing that his written opinion for tax lien date 2003 is equally
applicable to a tax lien date_nne year earlier. Cf. David W. Swetland Bldg. Co., Ltd. v. M
Cuyahoga Cty. Bd. of Revision (June 30, 2005), BTA Nos. 2003-A-1183, et al., unreported; Worthington City School Dist. Bd of Edn. v. Franklin Cty. Bd. of Revision
(Jan. 7, 2005), BTA No. 2003-A-1494, unreported; Timbercreek L.P. v. Warren Cty. Bd
of Revision (May 14, 2004), BTA No. 2002-B-1856, unreported. Compare Jefferson Area
Local School Dist. Bd. of Edn. v. Ashtabula Cty. Bd. of Revision (May 12, 2006), BTA No.
2004-R-506, unreported.
As has been pointed out by the Ohio Supreme Court, "[w]hile a determination of the true value of real property by a board of revision is entitled to consideration by the BTA, such determination is not presumptively valid." Amsdell v.
Cuyahoga Cty. Bd. of Revision (1994), 69 Ohio St. 3d 572, 574. See, also, Sprtngfeld
7 l.Z Local Bd. of Edn. v, Summit Cty. Bd of Revision (1994), 68 Ohio St.3d 493, 495;
Cambridge Arms, Ltd. v. Hamilton Cty. Bd. of Revision (1994), 69 Ohio St. 3d 337, 338.
Nevertheless, it is incumbent upon an appellant challenging the decision of a board of revision to support its claim. As the court held in Columbus City School Dist. Bd of Edn.
v. Franklin Cty. Bd, ofRevision (2001), 90 Ohio St.3d 564:
"When cases are appealed from a board of revision to the BTA, the burden of proof is on the appellant, whether it be a taxpayer or a board of education, to prove its right to an increase or decrease from the value determined by the board of revision. Cincinnati School Bd. of Edn. v. Hamilton Cty. Bd of Revision (1997), 78 Ohio St. 3d 325, 328, ***. The appellant before the BTA must present competent and probative evidence to make its case; it is not entitled to a reduction or an increase in valuation merely because no evidence is presented against its claim. Hibsclunan v. Bd. of Tax Appeals (1943), 142 Ohio St. 47, ***." Id. at 566. (Parallel citations omitted.)
As previously noted, appellant seeks to meet its affirmative burden in this appeal by offering appraisal evidence. In developing his opinion, appellant's witness considered the three approaches conunonly employed in estimating the value of real property: (1) the cost approach, which derives value by estimating the cost of replacing or reproducing the improvements, deducting from that cost the estimated physical depreciation and all forms of obsolescence, if any, and then adding the market value for land; (2) the sales-comparison approach, through which value is estintated by comparing the subject property to similar properties subject to recent transfers with adjustments having been made to account for any differences; and (3) the income approach, which estimates value by focusing on a property's capacity to generate income for the owner.
8 13 In reviewing Koon's cost approach, we find it fails to provide a sufficiently reliable basis upon which to determine the subject's value as of tax lien date. Within his rcport, Koon rccognizcd the inhcrcnt difficulty in calculating entreprcneurial profit for the subject property, an item appropriate for inclusion under this approach. See, e.g., Polaris
Amphitheater Concerts, Inc. v. Delaware Cry. Bd of Revision (Jan. 12, 2001), BTA No.
1999-K-1605, unreported; New Richmond Exempted Village School Dist. Bd of Edn. v.
Clermont Cty. 'Bd. of . Revision (Dec. 10, 1999), BTA Nos. 1998-M-623, et seq., unreported; Strongsville Bd of Edn. and City of Strongsville v. Cuyahoga Cty. Bd of
Revision (July 30, 1999), BTA Nos. 1996-N-595, et seq., unreported; Hampton Knolls
Partnership v. Summit Cty. Bd of Revision (July 19, 1996), BTA No. 1994-T-1269, unreported. Ultimately, he concluded that the cost approach had linuted usefulness in determining value for the subject property:
"This approach to value is most reliable when a project is near new or proposed. Typically, this approach does not consider the economic attributes of the property, as does the Income Capitalization and Sales Comparison Approaches due to the fact that the entrepreneurial profit is estimated. As this value indication approach relied on estimated profit expectations, its reliability is somewhat diminished. Thus, the value indication provided by the cost-depreciation analysis is not heavily weighted in the final reconciliation of value." Ex. 1 at 56.
We agree with the foregoing expression. The subject's site improvements were consthucted in 1997, making them more than four years old as of tax lien date. While estimating reproduction costs new for existing improvements at $2,295,000, despite the fact that they were well maintained and in very good condition, Koon proceeded to reduce
9 /v this amount by $350,000 and $700,000, or approximately 46%, due to physical depreciation and economic obsolescence. The significant adjustments which were made, coupled with Koon's own reservations, necessarily call into question the overall utility of the cost approach.
Koon also developed a sales comparison approach which he ulrimately found supportive of his overall value estimate. He relied primarily upon the sale of five properties considered most similar to the subject. These properties transferred in
November 2002, June and October 2003, and June and August 2004, and are located in
Delaware, Zanesville, and Kenton, Ohio, and Hudsonville and Port Huron, Michigan, respectively. All properties transferred involved Amerihost properties, conceded by the
BOE, as being substantially similar to the subject in terms of design. After making adjustments to account for perceived differences, Koon concluded to a value of $30,000 per room, or $1,800,000.
He also employed an "effective room revenue multiplier" of 2.5%, "a factor derived by dividing the sales price of the comparable sale by the rooms revenue (number of guest rooms available annually multiplied by the average daily room rate times the occupancy factor)." Ex. 1, at 54. Applying this factor to the $748,980 in room revenue reflected in the income approach, a value of $1,875,000 resulted. Between these two methodologies, an overall value estimate of $1,825,000 was opined. Koon then deducted
$112,500 in an effort to account for depreciated costs considered attributable to furniture, fixtures, and equipment that would be included in a sale. Accordingly, Koon concluded to a rounded value estimate through his sales comparison approach of $1,700,000.
10 While the BOE questions, via argument alone, the comparability of the markets in which the subject property and sale properties are located, adjustments were made by Koon to account for locational differences with no rebuttal evidence being offered. Similarly, no evidence was offered to call into doubt the efficacy of Koon's testimony that the market remained stable between tax lien date and the date for which his written opinion was expressed. The BOE also argues that the deducrions Koon made for
FF&E are unsupported since he did not review or rely upon appellant's personal property tax returns. Although such information constitutes one basis upon which such values may be ascertained, we do riot believe it to be necessarily the only means: In the absence of evidence to the contrary, we fmd Koon adequately supported the adjustments made, as explained below:
"In addifion tA. valuing the subject property real estate, business value, and FF&E value, we have also estimated the value of just the subject's FF&E. Based on a report published by Hospitality Valuation Services, Inc., the cost of new FF&E in a limited-service hotel such as the subject property us typically in the range of $5,600. to $9,900 per available room. This represents approximately 18% of the total hotel room's reproduction cost new (including allocated conunon area costs). In judging the mix and quality of the subject's FF&E, and based on conversation with the hotel manager, the vast majority of the subject's FF&E is original.
"Overall, the subject's FF&E is considered to be in average condition. We have estimated the subject's FF&E cost new to be approximately $7,500. per room. This results in a total FF&E replacement cost for the subject property of approximately $450,000. We have estimated the average effective age of the subject's FF&E to be approximately six years old. Based on an expected life of approximately eight years, our estimatation of the physical depreciation ratio is approximately 75%. Applying this figure to the replacement
11 l6 cost new of $450,000. indicates a depreciation in value of approximately $337,500., or a residual FF&E of approximately $112,500." Ex. 1, at 40-41, 54-55.
Finally, we consider the income approach, the method upon which Koon
placed greatest reliance. In developing this approach, Koon estimated potential gross
income and expenses by reviewing the subject's historical income and expense statements
for 2001 through 2004 and comparing it to information obtained from the market. Koon
indicated the importance of considering the impact market competition would have upon
the subject's ability to generate income, taking into account the increased number of hotel
rooms from 1998 througli 2002. Relying upon all of this data, Koon attributed a $60
average daily rate, with estimated occupancy at 57%, to the subject property on a stabilized
basis, reflecting room revenue at $748,980. Additional revenue from other sources such as
telephone sales, meeting room rentals, and miscellaneous items, increased total income to
$782,730, from which expenses totaling $540,084 were deducted, with a resulting net
operating income of $242,646. A capitalization rate of 12%, with a 2.09% tax additur,
was derived from a consideration of sales of comparable properties and the Korpacz Real
Estate Investor Survey, First Quarter 2003. Applying a rate of 14.09 to stabilized NOI,
Koon opined a rounded value, less FF&E, of $1,600,000. Given the income-producing
nature of the subject property, it was ultiinately this value upon which Koon placed
emphasis.
The BOE again criticizes Koon's income approach, asserting that his opinion
is unreliable because he utilized 2003 data. However, it is clear that Koon considered factors and both historical and market data occurring before, during, and after the tax lien date. As indicated previously, Koon testified that his written opinion of value would not have changed had it been expressed for January 1, 2002. Although accorded an opportunity to substantiate its assertion that Koon's analysis was unreliable, the BOE chose to do nothing more than make general assertions. As we find appellant has met its burden, we find value accordingly.
Accordingly, it is the decision of the Board of Tax Appeals that the true and taxable values of the subject property,2 as of January 1, 2002, are as follows:
TRUE VALUE TAXABLE VALUE Land $ 288,000 Land $100,800 Building $1,312,000 Building 459 200 Total $1,600,000 Total $560,000
It is the order of this board that the Franklin County Auditor list and assess the subject property in conformity with our decision as announced herein.
I hereby certify the foregoing to be a true and complete copy of the action taken by the Board of Tax Appeals of the State of Ohio and entered upon its jourttal this day, with respect to the captioned matter.
7uli Snow, Board ^^^Secretary
Z Since separate values attributable to land and building were not expressed in the appraisal, we have utilized percentages of value as reflected by the auditor's initial valuation of the subject property, i.c., 18% and 82%, respectively, in issuing our order.
13 !,^ Get a Document - by Citation - 106 Ohio St. 3d 27 Page 1 of 5
Service: GetbyLEXSEE® Citation: 2005 Ohio LEXIS 1605
106 Ohio St. 3d 27, *; 2005 Ohio 3558, **; 830 N.E.2d 1147, ***; 2005 Ohio LEXIS 1605
CAMBRIDGE COMMONS LIMITED PARTNERSHIP, APPELLANT, v. GUERNSEY COUNTY BOARD OF REVISION ET AL., APPELLEES.
No. 2003-1710
SUPREME COURT OF OHIO
106 Ohio St. 3d 27; 2005 Ohio 3558; 830 N.E.2d 1147; 2005 Ohio LEXIS 1605
May 11, 2005, Submitted July 27, 2005, Decided
PRIOR HISTORY: APPEAL from the Board of Tax Appeals, No. 2002-V-1272.
DISPOSITION: Decision affirmed.
CASE SUMMARY PROCEDURAL POSTURE: Appellant owner challenged the value assigned to its real property by appellee revision board. The Board of Tax Appeals (Ohio) determined that the svalue of the property should remain unchanged as assessed by the auditor. The owner appealed.
OVERVIEW: The auditor fixed the true value of the property at $ 1,909,770, but the "owner argued that its property was worth only $ 870,000 for the year in question. The appellate court found that while the board of tax appeals (BTA) erred in criticizing some of the calculations of the owner's appraiser, the error did not change the outcome. The BTA's apparent misstatement about one part of appraiser's income-capitalization analysis did not provide the sole basis for the BTA's conclusion that the appraisal was unreliable. The BTA criticized the appraiser's choice of comparable properties and his failure to make a larger adjustment for the age of those properties. The appraiser's sales-comparison approach was flawed, according to the BTA, because he made "inappropriate" downward adjustments in his report when he listed recent sale prices of comparable properties. The BTA's finding that the appraiser failed to present a reliable estimate of the true value of the property was reasonable. The BTA's conclusion that the value of the property should remain unchanged from the value set by the auditor was reasonable and supported by the evidence, and the BTA did not abuse its discretion.
OUTCOME: The decision was affirmed.
CORE TERMS; revision, income-capitalization, auditor, real estate, appraiser, county board, county auditor's, comparable properties, burden of proof, apartment complex, witness's testimony, comparable, valuation, appraisal, property's value, calculations, taxable value, remain unchanged, appraisal reports, probative evidence, credibility, apartment, assigned, inspect, tax year, expense item, sales-comparison, misstatement, estimate, flawed
^ ..: _„„,/rPcP,roh/.•Prr;ava? m=r475a47f7.haf45a9t1'ihf57fR7r.1h5d7ck.csvc=le R/2/2007 Get a Document - by Citation - 106 Ohio St. 3d 27 Page 2 of 5
LEXISNEXIS® HEADNOTES,. Witl.e. E.vidense > P.r.o.cedural_Gonsit^er.akio.os > ^ur.dens..vf.Pr.o.ok > Gen.er.al.Qver.vie .w ^ !+i . Iaxl.aw > State-a-LocaLlaxes > AdminlsecakiQn.FaPraceedin,qs > lu.diciaLR.evLevr f^!y Iax.Law > SSake-&-LO.cai 2axas > lieal PrQRer.Ly-Iax > Assessment..a_Valuatian > G.ener.aLOvenriew "j±When cases are appealed from a board of revision to the Ohio Board of Tax Appeals (BTA), the burden of proof is on the appellant, whether it be a taxpayer or a board of education, to prove its right to an increase or decrease from the value determined by the board of revision. And when the BTA is considering testimony and appraisal reports about the value of property, the BTA possesses wide discretion in evaluating the weight of the evidence and the credibility of the witnesses that come before it. r1org1ikP-Tbis Headnoce
Oixll.Pracesiuce > lusLiGlal.Officars > Hear[ng-0ificers '°u: T_ax.LaLw > StaSe.Ei Local iaxes > Adnwiistr.atisn. _$;.PloceedJnQs > >udiciel.Revie.^ ^l _ T,ax..Law. > ^kake..ft_Local..I^vse,s > Real_Pr.opeity.Tax > Ass.essmenk.A.Val.uati.vn > Gener.al..Qver.ulesv ^!!^^ HH2+The Ohio Board of Tax Appeals (BTA) has no obligation to inspect property or to disprove a witness's testimony by gathering contrary information. To be sure, the BTA may make such investigation concerning the appeal as it deems proper, Ohio 5.7_.1.7_..4_]., but BTA hearings shall proceed in similar manner to a civil action, Oh.i9..Adrrlit]..._Cpde,.§_57.7,.Z-with the BTA or its hearing officer serving in a quasi-judicial role. In reaching its decisions, the BTA may properly rely on the sworn testimony of the witnesses who appear before it, any exhibits admitted at BTA hearings, and the record certified to it by the county board of revision or the Tax Commissioner. No provision of Ohio law requires the BTA to inspect real or personal property when the value of that property is at issue before the BTA, and the same is true of any similar property alleged to be comparable to the property in question. Mcre_Lke This }teadn9ke ^ 517 epar.dike:._fte^krlct Bx^eadoQLe
Iax Lara > 5tat.e ^l ocal_Iaxes > Admin str.atl4n..t4 .Pr.o.csad nqs > GeneraL4ver^levr Q TaX.La1K > atake.$sL.O.caLIAXeS > [iea_LP_C4R.ertY- .Cax > ^SSeSBment^ Valu.akien > General.QYerYieH'. N`^3_+The Ohio Board of Tax Appeals may accept all, part, or none of a witness's testimony. More i,.ike 7his_tNeadnote
Adnllnls.tr.atiye..La.w > 1tLd..i_ciaLReyie.vt > standarsJS.nf Aavie K. > Ab.use.of_l2iscr.e.tian f^ '1'1` TaLLtw > State B,-LocaLlaxes > Btlminiskr.aiisZn_Fa.PrnceeciiRgs. > SzecteraL^vervier^ a^-+!. Iax.Law > ^tate f^LOCaI..Taxea > AQ.a1PrQRer.tySax > 2^sessment.&_VaLuatLon > generaLQvervie!m "^u; HN4^+An appellate court will not reverse the Ohio Board of Tax Appeals' (BTA) determination on credibility of witnesses and weight given to their testimony unless it finds an abuse of discretion, The BTA's decision in a valuation case will be undone by an appellate court only when it affirmatively appears from the record that such decision is unreasonable or unlawful. riore ^Jke_7,is Headnote
So-yemme.nts > 1:os.aL^r^vernotenti > inan^:e, t4I Tax Lavr > sta[e &Locals axes > B€?I PrsRgrkY_Iax > essessment_& 1CatuattQn > Ggaer.aLQveryier^ 4 Hn5$In the absence of probative evidence of a lower value, a county board of revision and the Ohio Board of Tax Appeals are justified in fixing the value at the amount assessed by the county auditor. LHore LJke?^is t+e3..clsr ote
HEADNOTES On Hide
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HEADNOTES
Real estate taxation -- Burden of proof on appellant before the Board of Tax Appeals -- Valuation of income-producing property.
CO1lRSEL:. James E. Rook, for appellant.
Rich, Crites & Wesp and Jeffrey A. Rich, for appellee Cambridge Local School District Board of Education.
IUDGES: MOYER, C,J., RESNICK, PFEIFER, LUNDBERG STRATTON, O'CONNOR, O'DONNELL and LANZINGER, JJ., concur.
OPINION
[*27] [***1148] Per Curiam.
[**P1] The appellant, Cambridge Commons Limited Partnership, challenges the value assigned to its real property by the Guernsey County Auditor and the Guernsey County Board of Revision for tax year 2001. The property -- identified in the county auditor's records as parcel number 06-00094.001 -- is known as Laughlin Woods Apartments. A 40-unit apartment complex constructed in 1999 is on the property, which covers 4.092 acres of land.
[**P2] For tax year 2001, the auditor fixed the true value of the property -- including both the land and the improvements on it -- at $ 1,909,770. Cambridge Commons argues that its property was worth only $ 870,000 that year.
[**P3] Cambridge Commons presented its arguments first to the Guernsey County Board of Revision, which left unchanged the taxable value assigned to the property by the auditor. Cambridge Commons then appealed that decision under R_,C._57_17,01 to the Board of Tax Appeals ("BTA"). The BTA found that Cambridge Commons had not presented sufficient evidence to support its claim that the auditor had overvalued the property, and the BTA therefore determined that the taxable value of the property should remain unchanged from the value set by the auditor.
[**P4] Cambridge Commons has now appealed to this court. For the reasons that follow, we affirm the BTA's decision,
[**P5] HNI*"When cases are appealed from a board.of revision to the BTA, the burden of proof is on the appellant, whether it be a taxpayer or a board of education, to prove its right to an increase or decrease from the value determined by the [***1149] board of revision." CoLumbus_City._S^ttooL(2is..t^B^1^af_^dn_.y Frs^n.Lcli^GtY Jgd...v^B^vi^iQa^^041)s_.94 Ohio St.3d_5_64,_566^2001Ohio 16,_.74QJV_E,2d276, And when the BTA is considering testimony and appraisal reports about the value of property, "the BTA possesses wide discretion in evaluating the weight of the [*28] evidence and the credibility of the witnesses that come before it." Fawn_^ake Apts,__v,_Cuyah^ga Cty__Bd.___g7qev_i^n 19991. 85 S?Jll2S_t 3d 60^,.^^^9920^LiQ.323,.J.^,0N_E.2dS$.1.•
[**P6] In this case, a state-certified real estate appraiser prepared a written appraisal report and testified before the BTA on behalf of Cambridge Commons. That appraiser -- Thomas Kaliker -- calculated a value for the property under three different methods: (1) the iricome-capitalization approach, which focuses on a property's capacity to generate income
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for the owner, (2) the sales-comparison approach, which focuses on the prices of comparable properties that have changed hands recently, and (3) the cost approach, which focuses on the cost of replacing the improvements on the property. Kaliker believed that the income- capitalization approach provided the most accurate measure of this particular property's value, and under that approach, he appraised the property's value at $ 870,000.
[**P7] The BTA found Kaliker's opinion unconvincing. The comparable properties that Kaliker examined in appraising the property were 19 to 28 years older than the Cambridge Commons apartment project, and, according to the BTA, Kaliker "ignored the significant differences in the comparables' expenses" when calculating the income-generating value of the property at issue. The BTA concluded that Kaliker's appraisal did not offer "probative evidence" on the question of the property's value, and therefore the BTA found that Cambridge Commons had not met its burden of demonstrating a value different from the one determined by the county auditor and the board of revision.
[**P8] We agree with Cambridge Commons that the BTA erred in criticizing some of appraiser Kaliker's calculations, but in the end, we conclude that the error did not change the outcome. The BTA found fault with Kaliker's report because it listed real estate taxes as an expense item for all of the other apartment complexes that he examined but listed no real estate taxes as an expense item for the Cambridge Commons property. Yet Kaliker's report explained that he first estimated the annuai cash flow that the property in question would generate "before real estate taxes" and then factored in the relevant property tax rate when converting that cash-flow figure into an estimate of the property's market value under the income-capitalization approach. That approach was not a flawed one and did not "double the tax liabilities in his income approach" as the BTA claimed.
[* *P9] Even so, we are convinced that the BTA's apparent misstatement about this one part of Kaliker's income-capitalization analysis did not provide the sole basis for the BTA's conclusion that Kaliker's appraisal was unreliable. When discussing Kaliker's income- capitalization calculations, the BTA criticized his choice of comparable properties and his failure to make a larger adjustment for [*29] the age of those properties. And Kaliker's sales-comparison approach was flawed, according to the BTA, because he made "inappropriate" downward adjustments in his report when he listed recent sale prices of comparable properties.
[**P10] Even if we overlook the BTA's misstatement about the appraiser's treatment of real estate taxes in his income-capitalization calculations, the various other concerns identified by the BTA could [***1150] reasonably have led it to conclude that the appraiser had failed to present a reliable estimate of the true value of the property at issue. In light of the discretion that we accord the BTA to decide the weight, if any, to be given to a witness's testimony, and in light of the fact that the burden of proof rested on Cambridge Commons to show that the value set by the board of revision was wrong, we cannot say that the BTA's refusal to adopt Kaliker's appraisal was unreasonable.
[**P11] Cambridge Commons argues as well that the BTA abused its discretion by rejecting Kaliker's adjustments for the age of the comparable apartment complexes without actually inspecting them. That argument is not well taken, however, because NNZTthe BTA has no obligation to inspect property or to disprove a witness's testimony by gathering contrary information. To be sure, the BTA "may make such investigation concerning the appeal as it deems proper," but BTA hearings "shall proceed in similar manner to a civil action," 41io.Ad.n^_ MQ.de S.ZLZ3_^5(^.) (now (G)) , with the BTA or its hearing officer serving in a quasi-judicial role. In reaching its decisions, the BTA may properly rely on the sworn testimony of the witnesses who appear before it, any exhibits admitted at BTA hearings, and the record certified to it by the county board of revision or the Tax Commissioner, No provision of Ohio law requires the BTA to inspect real or personal property when the value of that property is at issue before the BTA, and the same is true of any
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similar property alleged to be comparable to the property in question.
[**P12] As we have said, "3^*the BTA "may accept all, part, or none" of a witness's testimony. Simrrlons y_Quyalzoga Cty. Bd. mP Revi^Los ^^998)_,^1 Ohjo $t 3d 7 998 H'ya^"We will not reverse the BTA's determination on credibility of witnesses and weight given to their testimony unless we find an abuse of * * * discretion." 11s2t1 CLtyrElLqe&idenc€y.sicking_CW--Bd,-ofRerisLOn:(125L73QLio-SL3c1-197,398,1995 Ob•i_o.327,-a3 --- N.E_Z.d.240. The BTA's decision in a valuation case such as this will be undone by this court "only when it affirmatively appears from the record that such decision is unreasonable or unlawful." D-roskrnoCt9_n ^mrlLVn ^^ -Bd.,9f ReJSiorL.(t6-Z5 Otti. St.,3iL.1ZZ,--Z29,-]94^Q.hi2.-26 ^6]..N l Zd10^5; ^._^7^7Q4.
[**P13] In this case, the BTA's conclusion that the value of the property should remain unchanged from the value set by the auditor is reasonable and is [*30] supported by the evidence, and the BTA did not abuse its discretion in reaching that conclusion. N'VS^+"In the absence of probative evidence of a lower value," a county board of revision and the BTA "are justified in fixing the value at the amount assessed by the county auditor." Salern.Med__Arts ^..P.ex.CorP-._ v^otumki^aa Cty.-B-- d,--QfR-arisrse..(19.9$)^$2._Qh o_SS 3tL1.43,_]9-5.._142a^hi.4 2-4_8«-(A4-N.,E,.2d1.324• Because appellant Cambridge Commons failed to carry its burden of proof on the issue of valuation, and because the BTA's decision is supported by the evidence in the record, we affirm the BTA's decision.
Decision affirmed.
MOYER, C.J., RESNICK, PFEIFER, LUNDBERG STRATTON, O'CONNOR, O'DONNELL and LANZINGER, ]J., concur.
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Service: Get by LEXSEE® Citation: 2004 Ohio tax LEXIS 1234
2004 Ohio Tax LEXIS 1234, *
Elyria City School District Board of Education, Appellant, vs. Lorain County Board of Revision, Lorain County Auditor, and TSJ Realty LLC, Appellees,
CASE NO. 2003-J-1372 (REAL PROPERTY TAX)
STATE OF OHIO -- BOARD OF TAX APPEALS
2004 Ohio Tax LEXIS 1234
August 6, 2004, Entered
L*1^
APPEARANCES:
For the Appellant -- Armstrong, Mitchell, Damiani & Zaccagnini, Timothy J. Armstrong, 1725 The Midland Building, 101 Prospect Avenue, West, Cleveland, Ohio 44115-1091
For the County Appellees -- Gary C. Bennett, Lorain County Prosecuting Attorney, 226 Middle Avenue, 4
Forthe Appellee Property Owner -- TS] Realty LLC, 3459 W. Pleasant Valley Road, Parma, Ohio 44134
OPINION: DECISION AND ORDER
Ms. Jackson, Ms. Margulies, and Mr. Eberhart concur.
The Board of Tax Appeals is considering this matter pursuant to a notice of appeal filed by the Elyria City School District Board of Education ("Appellant"). Appellant has appealed from a decision of the Lorain County Board of Revision ("BOR") that determined the value of the subject real property for tax year 2002. The property is located in the Elyria City School District and is identified on the auditor's records as parcels 06-25-022-101-059, 06-25-022- 101-061, 06-25-022-101-063, 06-25-022-101-064 and 06-25-022-101-065.
The value determined by the Lorain County Auditor and the BOR is as foliows:
Parce106-25-022-101-059 TRUE TAXABLE VALUE VALUE Land $ 38,020 $ 13,310 Building 0 0 Total $ 38,020 $ 13,310
L*Z] Parcel 06-25-022-101-061 TRUE TAXABLE VALUE VALUE Land $ 1,580 $ 550
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Building 0 0 Total $ 1,580 $ 550
Parce106-25-022-101-063 TRUE TAXABLE VALUE VALUE Land $ 95,040 $ 33,260 Building $ 359,090 $ 125,680 Total $ 454,130 $ 158,940
Parce106-25-022-101-064 TRUE TAXABLE VALUE VALUE Land $ 92,930 $ 32,530 Building $ 427,070 $ 149,470 Total $ 520,000 $ 182,000
Parcel 06-25-022-101-065 TRUE TAXABLE VALUE VALUE Land $ 49,280 $ 17,250 Building 0 0 Total $ 49,280 $ 17,250
The total auditor and BOR value is as follows: TRUE TAXABLE VALUE VALUE Land $ 276,850 $ 45,960 Building $ 786,160 $ 203,940 Total $ 1,063,010 $ 372,050
In the notice of appeal appellant has alleged that the correct value is as follows:
Parcel 06-25-022-101-059 TRUE TAXABLE VALUE VALUE Land $ 38,030 $ 13,310 Building 0 0 Total $ 38,030 $ 13,310
Parce106-25-022-101-061 TRUE TAXABLE VALUE VALUE
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Land $ 1,570 $ 550 Building 0 0 Total $ 1,570 $ 550
Parcel 06-25-022-101-063 TRUE TAXABLE VALUE VALUE Land $ 95,030 $ 33,260 Building $ 436,570 $ 152,800 Total $ 531,600 $ 186,060
Parcel 06-25-022i101-064 [*3] TRUE TAXABLE VALUE VALUE Land $ 92,940 $ 32,530 Building $ 436,570 $ 152,800 Total $ 529,510 $ 185,330
Parce106-25-022-101-065 TRUE TAXABLE VALUE VALUE Land $ 49,490 $ 17,250 Building 0 0 Total $ 49,490 $ 17,250
The total alleged value is as follows: TRUE TAXABLE VALUE VALUE Land $ 276,860 nl $ 96,900 Building $ 873,140 $ 305,600 Total $ 1,150,000 $ 402,500 ni The board notes that although the sum of the alleged true value of the land for the individual parcels equals $ 277,060, appellant has alleged that the total true value of the land is $ 276,860,
Although the appeal was scheduled for hearing July 15, 2004, the appellant failed to appear. Counsel for the county appellees, by letter dated July 12, 2004, waived their right to attend and participate at the hearing. The property owner appeared through its president.
The subject property is a retail/office building located at the southeast corner of North Abbe hK..•//..,,,,,,,1P.ar ^„ /rocvarnh/rPtrieva9 m=h17377hf1t^30r1ce4tI5R7eri5Fi9P9a2a4hRr.csvc=l R/2/2007 ^` Get a Document - by Citation - 2004 Ohio Tax LEXIS 1234 Page 4 of 6
Road and Bon Air Avenue in Elyria, Ohio. The owner purchased the property in August 2002 for $ 1,150,000. However, the owner's president testified that he overpaid for the property. He had the property appraised [*4] after making a down payment. His appraiser opined that the property was worth $ 980,000 as of June 10, 2002. When appellant attempted to rescind the sale, the seller informed him that his down payment would not be returned. Since appellant could not afford to lose the down payment, he agreed to the sale.
The Ohio Supreme Court has consistently held that the best evidence of true value of real property is an actual recent arm's-length sale. ^az^to^slcy_y^li.c(cing C1y ^_d.^f Revision (-1.99-11,-_61,._9hic^.St:.3.d_6Q9.;. t[ifft:arct_CLSX..SChooL.QLs-t..Sd,_.Qf.Edn,...v,---Fr.an..kfr.a..^ty,.-^.d,_4f Revrsion (194^J,_53_Qhio St -3d 57x State^x rel,_Park_IrtYestmeJr_Cotv.._6d _of ^^ ea 5 c)hiQSt _419 In YValxers_v.,_..Knox_Cty^si^fRevislen_(]289a,_4Zp-h^.t 3d_2d, the court provided the following definition of an arm's-length sale:
"In sum, an arm's-length sale is characterized by these elements: it is voluntary, i.e., withouf compulsion or duress; it generally takes place in an open market; and the partie,s act in their own self-interest."
The property owner has asserted [*5] that the sale price is not indicative of the property's value because the risk of losing his down payment compelled him to purchase the property. In essence the owner is arguing that economic duress compelled him to complete the transaction. In Lakeside-qvenue_l;d._P^t^etgh/p--v,-_-Cily_alloga_Cty 8d,--ofReyisl4? jl 991),75 S2hiq_SS3_dd.540,. the Ohio Supreme Court acknowledged that business circumstances can establish the existence of duress. The court stated:
"Today, we resolve this ongoing conflict between the BTA and the Court of Appeals for Franklin County by specifically recognizing that compelling business circumstances of the type at issue in this case are clearly sufficient to establish that a recent sale of property was neither arm's-length in nature nor representative of true value. In this regard, we note that the BTA apparently accepted the credibility of Lakeside's witness, Steven Kimmelman, who testified concerning the compulsive circumstances surrounding Lakeside's decision to purchase the property. However, the BTA apparently concluded that those circumstances did not affect the arm's-length nature of the sale. We disagree with the BTA's [*6] determination in this regard.
"Here, Prime Properties offered to sell the subject property to Triton for a stated price. The price was non-negotiable. The property was not offered for sale on the open market. The record is clear that Triton felt compelled to purchase the property for the stated price. Failure to purchase the property would have resulted in the loss of a significant portion of Triton's business, which, in turn, would have resulted in Triton's bankruptcy. Triton attempted to secure financing for the transaction, but even Triton's primary asset-based lender would not finance the acquisition of the property, apparently due to the excessive asking price. Indeed, Triton's primary asset-based lender prohibited Triton from applying any cash or working capital toward the purchase of the property. Lakeside was formed by the principals of Triton to purchase the property for the price that had been demanded by the seller. Lakeside, Triton and others undertook some extraordinary, if not desperate, efforts to obtain sufficient financing for the transaction. Under these circumstances, we reject the BTA's conclusions that Lakeside's acquisition of the property was an arm's-length [*7] transaction and that the $ 1.2 million purchase price was representative of true value. Rather, in light of the undisputed evidence in this case, we find that Lakeside's purchase of
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the subject property was not voluntary, i.e., (emphasis in original) without compulsion or duress,' within the meaning of kLa1te-C;i,-s_uRCa_,. (emphasis in original) (citation omitted), due to the economic pressures that came to bear on Lakeside's decision to acquire the property.
"The record clearly establishes that Lakeside never had any real choice but to purchase the property in question. The choice between Triton's survival on the one hand and swift and sure corporate death (bankruptcy) on the other hand presented Lakeside with no true aiternative but to pay the price demanded by the seller. Accordingly, we hold that the July 1991 sale of the subject property was not an arm's-length sale due to the compulsive business circumstances fueling Lakeside's decision to acquire the property in question."
The Franklin County Court of Appeals on two occasions has held that where a purchaser is under economic compulsion to purchase a specific property offered at a non-negotiable [*8] price, the presumption is met. See Columbus Bd. of Edn. v. Grange Mutual Casualty Co. (Jan. 28, 1992), Franklin App. No. 90AP-317, unreported; Columbus Bd. of Edn. v. Franklin Cty. Bd, of Revision (Sept. 29, 1992), Franklin App. No. 92AP-281, unreported. But compare Columbus Bd of Edn. v. Franklin Cty. Bd, of Revision (Jan. 30, 1998), BTA No. 1996-A-986, unreported, where this board relied upon the presumption, finding the property owner did not establish that he entered into a sale agreement under duress, but only purchased a particular property for competitive business reasons.
Considering the testimony of the property owner, although the transaction was protracted and difficult, we find there is not sufficient, competent and probative evidence before us which supports a finding that the purchaser was required to purchase the property under compelling business circumstances that would have made the price paid unreflective of true value. Tallarigo v. Hamilton Cty. Bd. of Revision (May 24, 2002), BTA No. 2000-N-728, unreported. At this board's hearing, the owner's president referred to certain contractual terms involving the deposit paid and its forfeiture. However, [*9] this contract, which presumably would constitute the best evidence as to the amount of and conditions involving the deposit, was neither submitted to the BOR nor this board. The board finds that the president's testimony alone is insufficient to demonstrate duress.
The board further finds that the appraisal is not a reliable indicator of the property's value on tax lien date. The appraisal purports to determine the property's value as of June 10, 2002. The tax lien date at issue is January 1, 2002. In Freshwatery,_f^elmst Cty._ Bri._oflZev^io11 0<99.7_),_$Q..Q1uQ.--the Supreme Court addressed the importance of valuing a property as of the tax lien date:
"R.C. 5715.19(D) requires that the determination of a complaint filed for a particular tax year shall relate back to the date when the lien for taxes * * * for the current year attached.' R.C. 323.11 provides that the lien for real estate taxes is the first day of January. Likewise, R.C. 5715.01, which authorizes the Tax Commissioner to direct and supervise the assessment for taxation of all real property, provides that the commissioner shall neither adopt nor enforce any rule that requires [* 10] true value for any tax year to be any value other than the true value in money on the tax lien date of such tax year ***.' Thus, the first day of January of the tax year in question is the crucial valuation date for tax assessment purposes. Ofrnsted Faf1^Vi^ge Assrr, v_ Cyy^hoga_Cty 851,_. at f^visi4n_(14.25^ _ZzOhi.Q_^t,^^_5_^2f * * * "n2
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Although the individual who prepared the appraisal may be qualified to render an opinion of value, we cannot rely upon his conclusion since it does not express an opinion as of tax lien date. p(r.nsted_Fa11s...Villag.e_AsstL„_S4RraF Bd. of Ed. of the WestervUle City School Dist. v. Franklin Cty. Bd. of Revision (Feb. 7, 2003), BTA No. 2002-M-1740, unreported.
n2 In Olmsted Falls Village Assn., the court specifically stated: "We emphasize that the BTA * * * may consider pre-and post-tax lien date factors that affect the true value of the taxpayer's property on the tax lien date.' * * * However, the BTA must base its decision on an opinion of true value that expresses a value for the property as of the tax lien date of the year in question." Idy.a.f<..555, [* 11]
In addition, appraisals based upon factors other than sales price are appropriate for use in determining value only when no arm's-length sale has taken place, or where it is shown that the sale price is not reflective of true value. pingue Y`E[ankliCL_Cty,..Bd_QfB.ey^5ion ( 19991. 8.7 ...The property owner has the burden of persuasion as to the value of the property. It is obligated to bring forth sufficient competent and probative evidence to cause this board to conclude that the value assessed by the board of revision does not accurately reflect value. Based upon the record before us, the board finds that the best evidence of value of the property is the price paid in the August 2002 transaction, since the owner has failed to establish that the sale was not an arm's-length transaction.
Accordingly, the Board of Tax Appeals finds that the total value of the property as of January 1, 2002 is as follows: TRUE TAXABLE VALUE VALUE Land $ 276,860 $ 96,900 Building $ 873,140 $ 305,600 Total $ 1,150,000 $ 402,500
The Auditor of Lorain County is ordered to cause his records to reflect the value determined for the subject real property [* 12] and to assess the same in accordance therewith as provided by law. The board notes the allocation of the sale price made by the appellant in the notice of appeal is incorrect. In addition, no evidence demonstrating the correct allocation has been adduced. Therefore, the auditor is ordered to properly allocate the purchase price among the individual parcels.
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Service: Get by LEXSEE® Citation: 1997 Ohio LEXIS 2457
80 Ohio St. 3d 26, *; 1997 Ohio 362; 684 N.E.2d 304, **; 1997 Ohio LEXIS 2457, ***
FRESHWATER ET AL., APPELLANTS, v. BELMONT COUNTY BOARD OF REVISION ET AL., APPELLEES.
No. 96-2692
SUPREME COURT OF OHIO
80 Ohio St. 3d 26; 1997 Ohio 362; 684 N.E.2d 304; 1997 Ohio LEXIS 2457
May 28, 1997, Submitted October 8, 1997, Decided
SUBSEQUENT HISTORY: [***1] As Corrected April 15, 1998.
PRIOR HISTORY: APPEAL from the Board of Tax Appeals, No. 95-T-1213.
On March 9, 1995, appellants, Ralph D. and Mary E. Freshwater ("Freshwaters"), filed a real property valuation complaint with the Belmont County Board of Revision ("BOR") for tax year 1994. The Freshwaters' complaint challenged the county auditor's valuation of an apartment development they own in Shadyside.
The apartment development is located on three parcels totaling 6.7 acres, with improvements consisting of four two-story brick buildings, built between 1971 and 1977, and a paved parking lot. The four buildings contain a total of fifty one- and two-bedroom, one- bath apartments, plus a manager's apartment, which contains an extra bath and bedroom.
The county auditor valued the property at a true value of $ 810,930. The Freshwaters contend their property should be valued at $ 524,307. The BOR, however, approved the auditor's value. The Freshwaters filed an appeal with the Board of Tax Appeals ("BTA").
At the BTA hearing, the Freshwaters presented two witnesses, Their first witness, appraiser William A. Becker, had prepared two written appraisals. In his appraisal, dated as of April 5, 1996, Becker determined the true value [***2] of the property to be $ 585,000. In another appraisal, dated as of December 30, 1991, Becker determined the true value of the property to be $ 492,000. For the January 1, 1994 lien date, Becker estimated a true value of $ 550,000 for the real property. Becker determined the January 1, 1994 value by taking the difference between his appraisal values as of December 30, 1991 and April 5, 1996, and adding one half of the difference to the December 30, 1991 value and rounding off the result to a value of $ 550,000.
The Freshwaters' second witness was Brian A. Danaher, an attorney and licensed civil engineer. Danaher testified concerning an "owner's determination of fair market value," which he had apparently prepared for the BOR hearing. Danaher's estimate of true value, which he prepared using the income approach, was $ 519,250 for 1994.
The county auditor and BOR's only witness was appraiser Thomas A. Schirack, who, like Becker, considered the income approach to be the only approach worthy of serious consideration for this property. Schirack's estimate of true value as of January 1, 1994, was $ 821,900.
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The BTA accepted Schirack's appraisal, after deducting an amount that Schirack [***3] had added for excess land. The true value of the property as determined by the BTA was $ 782,700.
This cause is now before this court upon an appeal as of right.
DISPOSITION: Decision affirmed.
CASE SUMMARY PROCEDURAL POSTURE: Appellant landowners sought review of a decision of appellee County Board of Tax Appeals (Ohio), which assessed their apartment buildings at $ 782,700. Appellants asserted that the property's fair market value was $ 524,307.
OVERVIEW: Appellants filed a real property valuation complaint with appellee county board of revision for the tax year 1994. Appellants presented two witnesses, an appraiser who estimated the value-of the property as $ 550,000, and an attorney that used the income approach ahd valued the property at $ 519,250. Appellants asserted that the true value should be determined by taking the prior year's value and making adjustments to that value based on the income of the property. On appeal, the court held that appellants' proposal was faulty, as the prior year's valuation could be in error, and would only measure the amount of change since the last assessment. The court noted that the burden of proof shifted from the property owner to the county auditor under appellants' scheme. The court held that the Board of Tax Appeals properly considered all the testimony and was within its discretion to accept the testimony of appellee's appraiser, who talked to three different banks, discussed interest rates, and checked figures. The court affirmed.
OUTCOME: The court affirmed the property assessment.
CORE TERMS: appraiser, valuation, true value, appraisal, prior years, tax lien, interest rates, tax year, auditor's, lounge, real property, gross income, current year, classification, revision, accepting, real estate, prior case, burden of proof, res judicata, mere fact, probative evidence, specialized knowledge, revenue-producing, constant, training, taxation, exact, skill, appraisal values
LEXISNEXISQ HEADNOTES c.; tlLd@ Tax_LZw > Sxate.E^.l QcaL.Taxes > Admin siratlon &_Procaadings > Assess.ments. e«I
Tax_L,aW > 5tat.e_&.Ln.cal..Taxes > Administr.ati4&S'a.Pxoceedlogs > AuGlts..&Investiaatiune5 ^.^:1 Ta:_Lan > State_§S1.o.caLTaxe5 > P_ersonal..Preuer.ty Tax > GQner.als7!ecvieri ^!!: HN3.+The procedure before a board of revision operates differently, the burden of proof before a board of revision is not on the auditor, it is on the party seeking to change or affirm the auditor's assessment. Molel.ilge ThislgA-dnote I Shep:?Ld(ie: RespJ.ct_l3'i-H.€a.4iL4te
Reai.PC4Rel:ty-x.aSy > ProP^tY_Yafaatill '^"yi Tax_1,ayt > S^ate3k.^.OS.a_I_TaXe^ > Adnll.niAr.aliQn &P_x9ce.flQj_ng; > TaxWenS •eL SaK.L.dtix > State..$^.^,2GaLTa^@S > ..R.eaLPrRR.ertY-.T..ax > AS.&ess.ni.flf.tt..B^Valu;?.ti.4D. > [email protected].?rxi.eNl '"-'v ^^z+Qi o Rey., Code_5715_19^D) requires that the determination of a complaint filed for a particular tax year shall relate back to the date when the lien for taxes for the current year attached. 0hLp_tev,_Code3Z_A_1, provides that the lien for real estate taxes is the first day of January. Likewise, Oh q_Rerv,_.C4.41.e_5715.41., which 31 hrtn•/lunxnu laxic rnm/rreParr.h/reTrievP9 m=O6phf7f5afec5h47R9dSRS16214699a4X&r.eve=le R/2/2007 Get a Document - by Citation - 80 Ohio St. 3d 26 Page 3 of 6
authorizes the Tax Commissioner to direct and supervise the assessment for taxation of all real property, provides that the commissioner shall neither adopt nor enforce any rule that requires true value for any tax year to be any value other than the true value in money on the tax lien date of such tax year. Mo[r Like-Ttis Meadn4te I Sb^ar i^e; Rpgtri^ By_Heastio e
Adminis^tr.aiiva.Law. > )udi.ci.aL&eview > R€viewatzillty > Ea&tsaalD_etesnllo^tians AdministratLve-l.aw > Z.udsiaLMvle-w > Staadacds.szf_B-e^[i.e><,e > S_sdhstantiaLF idan_cfl :"; Hn;;A court will not overrule Board of Tax Appeals findings of fact that are based upon sufficient probative evidence. MorgLike rtLHeainQts
HEADNOTES 2 Hida
HEADNOTES
Taxation -- Real property valuation -- BTA's determination of true value in a given year is not controlled by value assessed for prior years -- Appraisers' approach to valuation must be based on facts as they existed as of the tax lien date.
COUNSE..4.:. J. Drew McFarland and Larry G. McQuain, for appellants.
Frank Pierce, Belmont County Prosecuting Attorney, and Robert W. Quirk, Assistant Prosecuting Attorney, for appellees Belmont County Auditor and Board of Revision.
Patricia S. Eshman, urging reversal for amicus curiae, Ohio Home Builders Association.
IUD-6.FS,;. MOYER, C.]., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, Cook and LUNDBERG STRATTON, JJ., concur.
OPINION
[*28] [**306] Per Curiam. Appellants first argue that the BTA should not have determined the true value of the property to be $ 782,700 when it previously was valued at $ 463,000 in 1987, noting that the gross annual income from the property had increased by only about $ 7,500 during the period from 1987 to 1994. We disagree.
The appellants [***4] would have the BTA determine true value only by taking the prior year's value and then making adjustments to that value based on changes in the income. Appellants' argument, although not stated as such, is that the prior year's valuation should be deemed to be correct, and changes in the prior year's valuation should be made only in response to changes which have occurred since the date of the last valuation. The appellants do not cite any statutory authority or decisions of this court to support their argument.
We see a number of problems with appellants' proposal. First, the valuation for the prior year, which appellants would deem to be correct and which would serve as the base from which the change would be measured, may not be correct. Second, a hearing on valuation would change from a determination of true value at a given point in time to a determination of the amount of change since the last assessment.
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Finally, and most important, the burden of proof before the BOR in a case like this would shift from the property owner to the county auditor. This shift would occur when the value determined by the auditor was different from the value of the prior year's assessment. Thus, [***5] when a taxpayer files a complaint, it would be the auditor, not the taxpayer, who would have to defend the change, because the prior assessment would be deemed to be correct. However, H^ptthe procedure before a board of revision operates differently -- the burden of proof before a board of revision is not on the auditor, it is on the party seeking to change or affirm the auditor's assessment. 0,F,.Xeit12..^pJumpu^_Cp ReyjsloL^ (194Z),^48 Ohic^St,_23,26^^35_Qhio_Qp^44^?5^,_Z4Sl.E.2d_36Q^366,
Although we have not previously answered the exact argument posed, we considered a similar question in Std,._Q1( Co ^,_Zar7gerle._(1943^_141 Qhio._St^505^25.O^io_O^ ^, 49 N,_E..;?d 406. That question was whether a classification of property as real or personal, made for a prior tax year, was res judicata for a subsequent year. In holding that the classification was not resjudicata, we [*29] analyzed the appeal statutes and concluded that the prior decision and classification "remained final and conclusive for the current year only." f4.ai' 61f?...26 Ohio Op. at.86, 49-..N..,.E..2d._a.t..41.1. See, also, 5w Sk._6,__10,_21 Ohjo_Qk,_5.11,_Slf.,___j***6]__3.7.__N.E 2d 60^^60Z, wherein we stated, "A correction by either the county board of revision or the Board of Tax Appeals merely substitutes for the then current year complained of a valuation which is binding only for the year in question." In FiddLer v,_.Qd._of_TaxARpeafs^i942),_149_Ohio_St._34, 23_-.[**SO7-L the taxing authorities claimed that they had been reducing the appraisal for the land in question as values in the area declined. In response to that argument we stated, "The question, however, is not how much of a lowering in tax valuation has been made but, rather; what is the true value in money of the property for the year of theassessment." 140.0hi4_St.._1.3.7,..23 Ohio Op. at 233, 42 ._.N..E,.2d_at_152. See, also, Zi[idL@ y,_Sumn^it Cty.._B^f_of /?evisro^_^19$9^_,..44 Ohio St,_3d 202.^z03 204,_542 _E.2d_ 65^65-],. When the BTA makes a determination of true value for a given year, such determination is to be based on the evidence presented to it in that case, uncontrolled by the value assessed for prior years.
Appellants also claim that the BTA erred in rejecting the valuation of their appraiser, William Becker. The BTA did so because his appraisals were not made as [***7] of the tax lien date. We disagree with appellants.
Becker submitted two written appraisals to the BTA, neither of which pertained to the tax lien date, January 1, 1994. To arrive at a value as of the tax lien date, Becker states that he split the difference between the December 30, 1991 and April 5, 1996 appraisal values, added one half of the difference to his 1991 appraisal value, and rounded off the total.
The BTA rejected Becker's procedure and refused to assign any weight to his opinion of true value. The BTA stated that "the mere fact that the tax lien date is approximately midway between the two appraisal dates does not mean that the 1994 value must also be midway between the two appraisals."
In rejecting Becker's opinion of true value, the BTA cited a passage from The Appraisal of Real Estate (10 Ed.1992) 75, which states that because market forces are constantly changing, "an estimate of value is considered valid only for H"sthe exact date specified."
R G, 5715_J.9.(J?) requires that the determination of a complaint filed for a particular tax year "shall relate back to the date when the lien for taxes * * * for the current year attached." R_Ct 323,1], provides that the lien for [***8] real estate taxes is the first day of January. Likewise, which authorizes the Tax Commissioner to direct and supervise the assessment for taxation of all real property, provides that "the commissioner shall neither adopt nor enforce any rule that requires true value for any tax year to be any value other than the true value in money on the tax lien date of such tax year * * * ." Thus, the first day
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of [*30] January of the tax year in question is the crucial valuation date for tax assessment purposes. 9lmste__cLt alls_ViI(dge,4ssn Y Cuyahog.oCty, d^ o^g€yisionL1446.]F7^o11iQZt. 3d 552^664N.E.2d 92_Z.
The essence of an assessment is that it fixes the value based upon facts as they exist at a certain point in time. Becker's approach to valuation was not based upon the facts as they existed as of January 1, 1994, the tax lien date. Becker's appraisals were based upon facts as they existed on December 30, 1991 and April 5, 1996, the dates of his appraisals. Evidence of the valuation as of these two dates is not evidence of the valuation as of January 1, 1994. The real estate market may rise, fall, or stay constant between any two dates, and the assumption that a change in [***9] valuation between two given dates is constant and uniform, without proof, may properly be rejected by the finder of fact. The BTA may accept all, part, or none of the testimony presented to it by an expert. .VYi.tt_Cq_,__^,__Hatn(lton_Cty,_.od... of (3^vision_(1991) 6]_Ohio_-5t,___3d._155^-_5.73_N.E.2d-661. In this case, the BTA chose not to accept Becker's valuation, and we agree.
Appellants also argue that the BTA erred in accepting the testimony of appellees' appraiser concerning commercial lending rates. Appellants claim he did not introduce written confirmation of the rates. Appellees' appraiser testified that he talked with three different bankers, whom he named, concerning their interest rates as of January 1, 1994. In addition, the appellees' appraiser consulted a national mortgage commitment survey to check the figures he obtained from the local lenders. Appellants now claim the BTA erred in accepting the capitalization rate calculated by using these interest rates. We disagree with appellants.
[**308] First, it should be pointed out that the BTA did not rely on the interest rates cited by the appellees' appraiser. The BTA relied on the opinion of value expressed by appellees' appraiser. The [***10] interest rates cited by appellees' appraiser were presented only to show the basis for the appraiser's opinion. An expert's opinion of value in a tax valuation case is of little help to the trier of fact if the expert does not explain the basis for the opinion.
If appellants believed the interest rates used by appellees' appraiser were erroneous, then they should have developed the errors through cross-examination. However, the appellants did not object to the appellees' appraiser's testimony on interest rates, and their cross- examination on the subject merely asked whether the appraiser had any reports from the bankers. The source of the background material that the appraiser uses in arriving at his opinion of value is one of the factors that the BTA weighs in determining the credibility of an appraiser's opinion of true value.
Appellants' next argument is that the BTA erred in accepting the higher gross income amount used by appellees' appraiser to the extent that it included a rental amount for a unit that is being used as a lounge. We disagree.
[*31] During his testimony, appellees' appraiser stated that his valuation was based upon fifty-one units, rather than the fifty units used [***11] by appellants' appraiser. The difference is due to a one-bedroom unit that has had a wall removed so it can be used a lounge. Residents can reserve the lounge for parties.
The BTA accepted appellees' appraisal with only a minor deduction for excess-land valuation. When the BTA accepted appellees' appraisal, it accepted the appraiser's assertion that the current lounge area should be counted as a potential revenue-producing unit for purposes of determining gross income. As we stated above, the BTA may accept or reject all, part, or none of an expert's testimony, In this case, the BTA has accepted as a factual matter that in calculating potential gross income, there are potentially fifty-one revenue-producing units. HN3TWe "will not overrule BTA findings of fact that are based upon sufficient probative evidence." &.F^Z_ASsoc:_ v._Cuyaioga_C^._Bd. of R^yision (1988_^ 38 Oh,io t. 5^7...N..,E.2d.87..4., 3Y httn•//www lPxic cnm/recearch/retrieva7 m=06ehf7fSafe.c5h4799r15R516214699a4Rrr.cvc. le R/2/2007 Get a Document - by Citation - 80 Ohio St. 3d 26 Page 6 of 6
Next, the appellants argue that the BTA should not have disregarded the testimony of Brian Danaher. The primary basis for the appellants' argument is that because Danaher testified before the BTA in a prior case concerning this property, his testimony should have been accepted [***12] as that of an expert in this case. We disagree,
The BTA found that Danaher was a practicing attorney with experience in the engineering field. Danaher himself admitted, "I don't consider myself an appraiser." The BTA found that Danaher did not qualify as an expert appraiser of real property. The mere fact that Danaher testified before the BTA in a prior case does not make him an expert real estate appraiser. One of the requirements of an expert witness, as set forth in Evid,$,_7Q2^BL is that "the witness is qualified as an expert by specialized knowledge, skill, experience, training, or education regarding the subject matter of the testimony." In this case, Danaher did not exhibit any "specialized knowledge, skill, experience, training, or education" in appraising real property.
Finally, the appellants argue that the BTA erred in disregarding Danaher's testimony because it mistakenly believed he had not provided information concerning land value. In light of our ruling concerning Danaher's testimony, the BTA did not err in disregarding his testimony on true value.
For the reasons set forth above, the decision of the BTA, being supported by probative evidence of record, is reasonable [***13] and lawful, and is therefore affirmed.
Decision affirmed.
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, Cook and LUNDBERG STRATTON, 33., concur.
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Ab.QUt.Lexsrlexis I Ierms_^.Corutit.ioos }(ictNe,\'1s'= CopyriolltSS^ 2007 LexisNexis, a division of Reed Elsevier Inc. All rights reserved.
3^^ httnJl.znuw lrvic rnmlra.eearr.h/retrieve9 m=O6ehf7fSafer.5h47R9rI5R51 F214fi99a4Rresvc=le R/2/20t)7 Get a Document - by Citation - 75 Ohio St. 3d 552 Page 1 of 6
Service: Get by LEXSEE® Citation: 1996 Ohio LEXIS 359
75 Ohio St. 3d 552, *; 1996 Ohio 456; 664 N.E.2d 922, **; 1996 Ohio LEXIS 359, ***
Olmsted Falls Village Association, Appellant, v. Cuyahoga County Board of Revision; Olmsted Falls Board of Education, Appellee.
No. 95-839
SUPREME COURT OF OHIO
75 Ohio St. 3d 552; 1996 Ohio 456; 664 N.E.2d 922; 1996 Ohio LEXIS 359
December 14, 1995, Submitted June 5, 1996, Decided
PRIOR HISTORY: [***1] Appeal from the Board of Tax Appeals, No. 93-X-998.
The Olmsted Falls Village Association, appellant, complained to the Cuyahoga County Board of Revision ("BOR"), ("association"), about the true value of its apartment complex as of January 1, 1991. It sought to decrease the value of this complex from $ 2,432,914 to $ 1,870,000. The Olmsted Falls Board of Education ("BOE"), appellee, filed a counter-complaint seeking to increase the value of this property to $ 2,480,000.
The property at issue is a 5.468-acre parcel of land containing five two-story, frame apartment buildings, built in 1971. Each building contains sixteen suites for a total of eighty suites. This total number of suites divides into forty one-bedroom apartments, twenty two- bedroorn apartments, and twenty three-bedroom apartments, Each apartment unit has central air-conditioning, a forced-air, gas furnace, and a thirty-gallon, hot water tank. Each building contains a laundry room with one washer and one dryer. The complex includes an in- ground swimming pool with pool building and associated land improvements and [***2] landscaping, and several service buildings.
The BOR, after hearing, retained the true value determined by the auditor, and the Association appealed to the Board of Tax Appeals ("BTA").
The Association presented the testimony of Wesley Baker, a real estate appraisal expert, to the BTA. He testified that the true value of the property was $ 1,950,000 as of January 1, 1991. The BOE presented the expert real estate appraisal testimony of Sam D. Canitia, who testified that the true value of the property was $ 2,476,000. In testifying about supporting data for selecting a capitalization rate, Canitia engaged in the following colloquy with counsel for the Association:
"Q. Did you have a quarterly report for the last quarter of 1990?
"A. Yes, ma'am.
"Q. You also had a quarterly report for the first quarter of 1991; is that correct?
A. Yes, ma'am.
Q. Wouldn't those reports be more reflective of the market as of January 1st, 1991?
"A. We've got a nomenclature problem here. 1/1/91 is a reflective date, and that's a tax lien
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date, it's not a date of valuation. The date of valuation is for the year -- the activity of the year 1991. I would not look into '90 at all, I would look into the [***3] year of '91.
"So I could not answer your question if you're talking about 1990 because that's not part of my appraisal.
"Q. I believe the taxes became a lien on January 1st, 1991 and the auditor determined value as of January 1st, 1991.
"A, As a reflective date, not as a date certain.
"Q. That is your opinion.
"A. We got a problem here, I don't know whether we are going to cure it, but I can indicate to you that there is a problem with respect to 1991 as against the year 1991, tax lien date '91 and date of va'luation '91.
"Q. You on your first page of your appraisal report say 'As of January 1, 1991.'
"A. That's a reflective date. It reflects the activity for the year 1991."
The BTA valued the property based on Canitia's opinion. Consequently, it determined the true value of the property to be $ 2,476,000 as of January 1, 1991.
This cause is before this court upon an appeal as of right.
DISP.OSITION: Decision reversed and cause remanded.
CASE SUMMARY PROCEDURAL POSTURE: Appellant property owner sought review of a decision from the Board of Tax Appeals (BTA) (Ohio), which increased the value of the property based on appellee city board (board) of education's expert's opinion. The owner brought an action seeking to decrease the value of its complex, while the board of education filed a counter- complaint seeking to increase the value of the property.
OVERVIEW: The BTA valued the property according to the opinion of value given by the board's expert. However, the expert did not value the property as of any certain date. According to his testimony, he valued the property as to the entire year. To him, the tax lien date was a reflective date, not the valuation date. Thus, the evidence on which the BTA relied for its ultimate decision was unlawful. According to Q1io_Rev _Cod_eAnn.`§. 57U.1.9.M., the determination of any complaint regarding the true value of property had to relate back to the date when the lien for taxes for the current year attached. Pursuant to O_hio ^ey,_^ode_f nn_^_323 il, the lien for taxes for each year attached on the first day of January. Although the BTA could consider pre- and post-tax lien date factors that affected the true value of the taxpayer's property on the tax lien date, it had to base its decision on an opinion of true value that expressed a value for the property as of the tax lien date of the year in question.
OUTCOME: The court reversed the BTA's decision and remanded to the BTA to revalue the property.
CORE TERMS: lien date, true value, replacement, real estate, valuation, appraiser, actual income, income approach, authorizes, taxation, valued, tax year
37 ..--4..,.....-..1+I^..kr:ovPJ m-aho^raah2^h793f1a3R9A5ft7R9ee.7393RR^.^svo: I R/7./'7.007 . Get a Document - by Citation - 75 Ohio St. 3d 552 Page 3 of 6
LEXISNEXISQ HEADNOTES G klLdA LtealPrnReLtyl.aw > nlonmortga9a_lieas > CzeneLaLQtiecv.ie_y le TslXldri. > SYat2.&.l^ltal_SdxEfl > 9dmin.i9[[dt141.1.&.P[QGe2SliriqS > Tdxlie_n5 Ia"avi > ^iakQ..§^1acal.Sax2s > AeaI.PLQR.ertyIax > cieaecaL.QveLview authorizes a property owner to file complaints with a board of revision against determinations made by the county auditor concerning the true value of the owner's property. According to OhikRev. Code_ABn .^SZ? 5.L9(D), the determination of any such complaint shall relate back to the date when the lien for taxes for the current year attached. The lien for taxes for each year attaches on the first day of January. Ohio $. M.U. To emphasize the importance of this date, OJ)jo_Zgy^^o^e AJIn_§. 5715:01, which authorizes the Tax Commissioner to direct and supervise the assessment of real property for taxation, including adopting rules to that end, states: The Tax Commissioner shall neither adopt nor enforce any rule that requires true value for any tax year to be any value other than the true value in money on the tax lien date of such tax year. M_QLelni_ke_Tbis_HaaanQte ^ SL7epar4tlzeLftstC.Lct_13yNea9 ncttQ
Ta?WA > State_&.L4Gal Taxes > Adm(n[5tr.aSlon t4J rQ^eed pgs > ludici4LReyieK Tax L^tyt > Stat4 &_LoeaLTaxos > Admin[strsltion & prioce^dirigs > Tax_Lieils ^^si T_dX Layp > 5tatg &,LO4A1_Taxeg > RealTroperty Tax > Gener3l Oygrvie.w tI xiv2-_+The Board of Tax Appeals (BTA) may consider pre- and post-tax lien date factors that affect the true value of the taxpayer's property on the tax lien date. However, the BTA must base its decision on an opinion of true value that expresses a value for the property as of the tax lien date of the year in question. C14re_Like.Thisfigadn4te. ^ SILePard_fZ.e_geaF,rL4t ByAeadnote
(i ^ . . ^'^' A.. tipiStraSive_t,aw > )udiciaj__Reyie^y > Reyjey+agj^i_ty > Pajt^ial__petermu]atkons ^«; Tax_law > Sta.te $Local TaxQS > Admini5trat-=on & PJOCe^dlqqs > Generalqyery.iew HIY3"+A reviewing court will not overrule the Board of Tax Appeals findings of fact that are based upon sufficient probative evidence, Mvr.e ^i-ke_This__Teaanot.a
Tax.La.w > State_&_LQ_Cal T.axes > 9(lmin(str_atioiy&proCe.eding5 > GeneLal Ove.[Yiew Hraa.+The Board of Tax Appeals must factual findings, supported by the record, of the appropriate market rents and expenses to be used in the income approach to value, MoLalike This.H^a4oote
Ts'tx..l.a_W > 5tat.e^ 1 osalSaxes > Adminlst[aSion_& Prose_edJttqs > G.eneiaW .ver_vl_e^ TSUS..I,aNi > S.ta.te_^1.oSalSa.xQS > Real.erpp.grtX.IaX > Gene.l'.aL4YeLVie^ *M il, flr4$1 Oh^oRev_CQde-ApD._.§,_4763 13ffl_ states: Nothing this in this chapter shall preclude a person who is not licensed or certified under this chapter from appraising real estate for compensation. More.Like..Tris..He.ad.hoce
HEADNOTES a t1JSl.Q
HEADNOTES
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Taxation -- Valuation of apartment complex -- Board of Tax Appeals' decision reversed and remanded when it is based on evidence that did not value the property as of the tax lien date.
COU_H9EL_ Fred Siegel Co., L.P.A., and Annrita S. Johnson, [***4] for appellant.
Kolick & Kondzer, Daniel J. Kolick and John P. Desimone, for appellee.
J!I,ZD-Q.E$_ MOYER, C.J., F.E. SWEENEY, PFEIFER and COOK, JJ., concur. DOUGLAS and RESNICK, JJ., dissent. WRIGHT, J., not participating. DOUGLAS, J., dissenting. RESNICK, J., concurs with Douglas' dissenting opinion.
OPINION
[*554] [**923] Per Curiam. We reverse the BTA's decision and remand this matter to the BTA because the BTA based its decision on evidence that did not value the property as of the tax lien date.
a^j^R._C^571^,_19_(9](1^(d)_ authorizes a property owner to file complaints with a board of revision against determinations made by the county auditor concerning the true value of the owner's property. According to R_C_,5715_19.(D^, "the determination of any such complaint shall relate back to the date when the lien for taxes * * * for the current year attached ** *." The lien for taxes for each [**924] year attaches on the first day of January. R,.C. 323 11.
To emphasize the importance of this date, B.C._ 57.1which authorizes the Tax Commissioner to direct and supervise the assessment of real property for taxation, including adopting rules to that end, states:
"The commissioner shall neither adopt nor enforce [***5] any rule that requires true value for any tax year to be any value other than the true value in money on the tax lien date of such tax year * * * ."
The BTA valued the property according to Canitia's opinion of value. However, Canitia did not value the property as of any certain date. According to his testimony, he valued the property as of the entire year. To him, the tax lien date [*555] was a reflective date, not the valuation date. Thus, the evidence on which the BTA relied for its ultimate decision is unlawful. S^^TralJSp.<^Lic_v._^iml^ach_(199^ bCZOhi0_St,_3d6QZ 13 E:2ct1037.
We emphasize that H^'z*the BTA "*** may consider pre- and post-tax lien date factors that affect the true value of the taxpayer's property on the tax lien date." .Y.eun9sLow2S1109_t $c.I_t1b_^^o_y,_Mah4t2!!1^Cty,^^^..QfJ_2^yl5JQt1_(_19$.1^,_66.9h19_^t,_2d_39$^ZSL4hl0 Q9^.^'d. 349,._422-N.E20846, paragraph two of the syllabus. However, the BTA must base its decision on an opinion of true value that expresses a value for the property as of the tax lien date of the year in question.
We also stress that the BTA decides the factual matters in these cases, Wo.lLv_,_L_u_yyloga Gky,^^fsiev^ferl..(19^4)^]1 Qtti^SS._3^_^***@]--ZQ.S,-.297 -I1Ohi9_$.,_.ReR^23 _ 465 N^tL^Q,^^, and that N^`3*"we will not overrule BTA findings of fact that are based upon sufficient probative evidence." R._g,_^_/{sso^._v,Suyahoga C^..._!^ of ^y^1on.(19$8^ 3$._Q.hie_St.._3d..^,98^2Q.1,_SZZ_N_,_E 2d 87^, $Z7.
We turn now to some other specific claims of error presented by the Association. First, the Association claims that the BTA erred when it did not employ the actual income and expenses 39 t,.+„•lA,,..,.,, IPYfc r.nm/resParr.h/retrieve9 m=aheficeah2ch79 iha iR9 i5t^R9eP749 iRR c.cvr=1 R/212007 Get a Document - by Citation - 75 Ohio St. 3d 552 Pane 5 of 6
for the property. In yYet)p-.Corp,-.-.v,:_-Luc^s_Gty._Bd,...af-Reyi.sion-.(.1.49-5-1 -.72_Qhi---- .S-t..._3g-_35,._64.7 f1 E.2_d_1fi2., we held that an appraiser may employ actual income as reduced by actual expenses if both amounts conform to the market. We did not require such use. Moreover, we did not, in ICLla-.Pack l _0.h.ia-_3t,..2d-.215,._625. N.E.2d 6]-3, reject the use of a pro forma expense rate. Instead, we required'vN Tthe BTA to make factual findings, supported by the record, of the appropriate market rents and expenses to be used in the income approach to value. Id_^t_2^8 ^25.S1,E_^d at 6^5.
Furthermore, we did not require the BTA to deduct a reserve for replacement in FreshYa-ter y_^Lmont^ty_^d ,o Rev(^ion_u99^-,_ j***7] 58_Q io^_3d 1_^0 5^8 N.E.2d-1215, as claimed by the Association. In that case, the BTA refused to consider such a deduction, but we reversed and remanded the matter for the BTA to reconsider the components included in and the deductibility of reserves for replacement. We ruled that such an expense category was a proper element in an income approach analysis. We did not require the deduction of a reserve for replacement. In this case, we note, neither appraiser proposed a reserve for replacement. Thus, the record does not support such a reserve deduction.
In summary, as to these latter claims, "we decline to bind the BTA to a particular method of valuation because the imposition of rigid methodological strictures would necessarily impinge upon the BTA's wide discretion to weigh evidence and assess the credibility of witnesses." Youn^sto^yrl Sheet &^u^e Co._-y, M^hpning--C.ty__Bd. of Rev_ision^supra, 66 OJIio ^t__2d at 402,_ZO 01io Op 3d^t 352^42.2 N E 2d_^t 849. [*556]
Finally, the Association claims that Canitia is not qualified to testify, since he has not obtained a certificate under R G._ChapteL47_fZ3, the chapter governing real estate appraisers. However, H'v$tRC 47-^ 13(Fj states:
[***8] "Nothing this in this chapter shall preclude a person who is not licensed or certified under this chapter from appraising real estate for compensation."
Thus, Canitia may testify about the true value of real estate if the BTA decides he is qualified.
[**925] Accordingly, we reverse the BTA's decision because it is based on an opinion of true value that did not value the property as of the tax lien date. We remand the cause to the BTA to revalue the property.
Decision reversed
and cause remanded•
MOYER, C.J., F.E. SWEENEY, PFEIFER and COOK, JJ., concur.
DOUGLAS and RESNICK, 33., dissent.
WRIGHT, J., not participating.
DISSENT BY: DOUGLAS
DISSENT
DOUGLAS, J., dissenting. The semantical argument made by the majority does not change, in any way, the true value of the property in question as of tax lien date. Once again, a majority of the court is invading the province of the BTA. I would affirm the decision of the
h1+r/%sninxr lPVi^ r•nm/reqr.arch/refrieve9 m=ahe(^ceah2ch7930a'iR9ri5f^R9ee739'iRR^csvr.=1 R/2/2007 n Get a Document - by Citation - 75 Ohio St. 3d 552 Page 6 of 6
BTA.
RESNICK, J., concurs in the foregoing dissenting opinion.
Service: Get by LEXSEE® Citation: 1996 Ohio LEXIS 359 View: Full Date/Time: Thursday, August 2, 2007 - 12:26 PM EDT
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Service: Get by LEXSEE® Citation: 1993 Ohio LEXIS 1321
66 Ohio St. 3d 602, *; 1993 Ohio 240; 613 N.E.2d 1037, **; 1993 Ohio LEXIS 1321, ***
SFZ Transportation, Inc„ Appellant, v. Limbach, Tax Commr., Appellee
No. 92-1481
Supreme Court of Ohio
66 Ohio St. 3d 602; 1993 Ohio 240; 613 N,E.2d 1037; 1993 Ohio LEXIS 1321
April 20, 1993, Submitted June 30, 1993, Decided
PRIOR HISTORY:, [***1] Appeal from the Board of Tax Appeals, No. 88-X-744.
DISPOSITION: Decision reversed.
CASE SUMMARY PROCEDURAL POSTURE: Appellant corporation sought review of tax assessments rendered by appellee tax commissioner and approved by the Board of Tax Appeals (Ohio).
OVERVIEW: Certain tax assessments were issued against the corporation. The OUTCOME: The decision of the board was reversed. CORE TERMS: public utility, primary use, common carrier, credibility, rendition, contract carrier, question of law, ultimate fact, legal conclusions, basic facts, mileage, commodity rate, sales tax, use taxes, abuse of discretion, tends to prove, reasonableness, uncontradicted, discrepancies, weighing, factual determination, taxation, tariff, fleet LEXISNEXISQ HEADNOTES S Hide Taxlaw > S.WS^^Q.OLD-xes > P^zllt_V_t lit es Ts^x > Szg.ael.aL4vQr-Vie^ iQ Tax.Law > Sta_ke_#r.l QsaLlaxes > 5a.les.Sax >^x_emRtiA^^„^" i T,^x__LdY,r > St7te^s_49^a1_I^xQS > Use Tac > Lirpita.ti9n5 H+^t^Ohio_Rev, Code_Ann:__§._5734,0_1(E_)^2) excepts from the sales tax purchases that are to be used directly in the rendition of a public utility service, and Q.his?.B.ev., httn //www lPxis rnm/re.eearch/retrirvev m=99c7rf75322e2h292fr029.064ec9674RRccsve=l R/2/2007 Get a Document - by Citation - 66 Ohio St. 3d 602 Page 2 of 5 Code An^^57^1._Q2(^k2^ excepts such purchases from the use tax. The conditions necessary to meet the public utility exception are: First, the taxpayer must be a regulated public utility. Second, it must render a public utility service when the items are purchased. Third, it must use the items directly in rendering the public utility service. )hore,Lik.a-rnis Hea4oote Iax.Law > State_&.LacalIaxeR > AclminiskratiQnB Pxnce.ed nps >^^1 ^ialReYiar b si Iax_La.r[ > ^ta.te ^ 1^.caLSaxes > Sa.tesTax > ExsmRtlQns ti 3'^1x.La.w > SSate^LOtaLSaxe& >^z4-aitiQn_niSax Use TaX > I p, . N^2"+The Board of Tax Appeal is required to consider the primary use of the purchased items. The "primary use" of an item of equipment, for the purposes of taxing, or excepting from tax, its sale or use under_O.hiql3gy._4qdgAtl[t_.§§._SZ34..Q2 and 574_1,.,-Q2 is not to be determined solely from a measure of the relative time it is utilized in a taxable and a nontaxable capacity but also from the value of its direct contribution to the product which is processed. Mnre_Lil^e.ihLa_Hea.dn..ote I SLePardize^_&estrict.By.liead n 4ta A4rN.njstrativ8 4aw > 7ud.icial Beyieyy > St,aAdarG4.0f Reyiew. > AbuSe__p_f_Qtscr.atJ4n Patentl,aw > U.S. patenk.^ TraAerna^ OffiLe^rp^eed_ingg > Cenera.LOve.rvlew Iax.Law > perlQraLlax_.4dminigrati4lL&.PcocQSlure > Tax ^oUrt.(IRC.^es^.Z44L7_4211 > Skaadar.ds nf j^j fieviaw > Akuse_Qf.Diaccetion ^.6' Hrd3.yThe Board of Tax Appeal's determinations on the weight to be given evidence and the credibility of witnesses will not be disturbed, absent a showing of patent abuse of discretion. However, the reviewing court has reversed Board decisions on ultimate factual conclusions. MocQ..l ike_Tris tie^tnoke ^ Sb^pacdLe:_Aescd.^s Gx_t^a4 Qte Aslmi.nis.tra.tive_La.r! > )vdiciai._Review > Standar.dsQPRevi.arc> cza0-er.al_4x.ervieW- tInd1A review as to the reasonableness and lawfulness of the agency decision necessarily includes an examination of the record to examine the evidence and determine as to the ultimate facts established by it, and whether such ultimate facts furnish sufficient legal predicate upon which to base the order complained Of. L9org_1:.ike.Itli.S_Fle.dCl.not& I 5ll.BFardlze,_Re&trick_@X,.Necl.dn.4.t^ HEADNOTES P? &I" HEADNOTES Taxation -- Sales and use taxes -- Exemption from sales tax for items used directly in rendition of public utility service -- Private carrier company meets criteria for classification as a public utility, when. 04UN_SEJ,;.Jones, Day, Reavis & Pogue and John C. Duffy, Jr., for appellant. Lee I, Fisher, Attorney General, and Richard C. Farrin, Assistant Attorney General, for appellee. aUP._S'r.^-Ss Moyer, C.J., A.W. Sweeney, Wright, Resnick, F,E. Sweeney and Pfeifer, 33., concur. Douglas, J., dissents. OPINION BY: PER CURIAM t^3 ^^+•• //••n....IPY;^ enm/rP.eParch/re.trieve9 m=R9r.7ef75i22r2h292fr.02211F4cr.9Fi74RR csvr.=1 >si^n.nm Get a Document - by Citation - 66 Ohio St. 3d 602 Page 3 of 5 OPINION [*603] [**1039] In Proposition of Law No. 1, SFZ argues that the BTA's ultimate legal conclusions concerning Ex. 3 were unlawful and that its [*604] conclusion as to the primary use of the equipment was unreasonable. It asserts that the entire record establishes that the primary use of the equipment was in the common carrier business and that the equipment, consequently, was used directly in the rendition of a public utility service and excepted from taxation. The commissioner, on the other hand, argues that we cannot disturb the factual determination by the BTA as to the primary use of the equipment because SFZ has failed to establish that the BTA's finding was an abuse of discretion. Nevertheless, we agree with SFZ and reverse the BTA's decision. We also take [***2] this opportunity to clarify our review of the BTA's factual determinations. n^t *R C,__SZ^9.Q1LE).(2^ excepts from the sales tax purchases that are to be used directly in the rendition of a public utility service, and R.C,_5741_,_Q2_(C)-U) excepts such purchases from the use tax. In ZU.lAnd_R-efUSeJrRo$fer Co,_y, _LiroL?ac(Z(_I99_0_) 53_OhLp St,_3..d_ip ^l _55$ N.E..2sL42F 43, citing Maofredi_.Mot¢r..IcansLt CQ,_y,__(imkactLf^98@) 3^ 4hio_St ^L7.316 518 N,E 2d 936,_939, we set forth the conditions necessary to meet the public utility exception: "First, the taxpayer must be a reguiated public utility. Second, it must render a public utility service when the items are purchased. Third, it must use the items directly in rendering the public utility service." Further, in Manfredi, we required MNa*the BTA to consider the primary use of the purchased items in light of Ace^teeLR3litlgfl2F...v.^4tteLffie(^(_(1.463),._1.2QhisLS[,2.ti_13Z, 4Q O,_Q2d a 69,_2d4_N "The 'primary use' of an item of equipment, for the purposes of taxing, or excepting from tax, its sale or use under Sectio.as_SZ39.,.Q2 and 574_i Q_2F_Reu[s.ed._^Qde, [***3] is not to be determined solely from a measure of the relative time it is utilized in a taxable and a nontaxable capacity but also from the value of its direct contribution to the product which is processed." We have consistently held that M"/s*the board's determinations on the weight to be given evidence and the credibility of witnesses will not be disturbed, absent a showing of patent abuse of discretion. S4u.t/il"es^c[t.PoLtLan^_CetttentG4,_.v^irtrLteY---G12$^.-6-ZQhi.o_^t.2d_41L. 4_21_ 422.21._0,0,3d„2b1,__264,_424_N.E,,2d__304^_307,; and Cardjna7..(=ed,.._5..._& t,_AssII,__y.. ^uKaLtag.^Gty,.,Bd of_Re.v1^Lo^.^75^44Qltio_St.2st 13R_19.-29+J.3_4 0..2cL$3a 87 .^34 N...E.2d_4.33,_43Z. However, we have reversed BTA decisions on ultimate factual conclusions, i.e., legal conclusions. Avco.$foadcasti.t7g_Cor^?,__v,_ LindJey..(.-978),._53,Ohio_St,2d_64,__7. 4.4.3c1-4S,372_N.^E2d-3 ( court reversed BTA decision on true or real object test), and ^n^atLdat^onS^s2t Csz_Y...Evrterfie1d1^7^J=.2.^_cZhi9^t,2^1_^.;z4^_L*-S^QS^_^^.,4.,2^2Z2,. 2671E,20_304 ( court reversed BTA decision [**1040] on taxable moment as unsupported by any probative evidence). In Ace__Steel_Sa(^r^g,_sugra,._19__Ohio_St,2d_at._742,___[*_**,41_._4$_o:0.2d._at_.?71-.17:2,,_249 N.E.?d 1t_a45_$a, we held as follows: "The decision of the board derived from an inference of an ultimate fact, i,e., a factual conclusion derived from given basic facts. The reasonableness of such an inference is a question appropriate for judicial determination. 'What the evidence in a case tends to prove, is a question of law; and when all the facts are admitted which the evidence tends to prove, Yy ^^^ /% , ,, lav;c rnm/racParch/rPtriP.ve9 m=R9c7rf7S322e2h292fr.022(1(4cc9674RR!csvc=l xi2i2007 Get a Document - by Citation - 66 Ohio St. 3d 602 Page 4 of 5 the effect of such facts raises a question of law only.' TuCner..v.,..Iacr.7er_(.I8,^7),._1.7...9.hi.o_^t,_ 449,-452. See, also, ^ut^^^rr_ Par fic Co _v_ PupLI^ Com^^95^^,^ 1^^1_2c1 ^54^^62, 26_0 P,2d 70. [75]. "In this appeal, the findings of the agency not only do not support, but contradict its conclusion. In such case, the latter must fall and the findings must prevail. ***" (Citations omitted.) HN4+A review as to the reasonableness and lawfulness of the agency decision necessarily includes an examination of the record "to examine the evidence and determine as to the ultimate facts established by it, and whether such ultimate facts furnished sufficient legal predicate upon which to base the order complained of." Hacking_-La7fey-(^Co`y_Puk_UtlL_ [**^^ CotTLr1L_(i914y_ 109 O^o_SS 321^325.,__5.26_ N,E_^97 398. "The fact that a question of law involves a consideration of the facts or the evidence, does not turn it into a question of fact or raise a factual issue; nor does that consideration involve the court in weighing the evidence or passing upon its credibility." O'pa^v,__YVebb_.(^972) ^9 QSt,2A ...4.24,..2$Q..N..E.2:d..$9.6, paragraph two of the syllabus. In the present case, the BTA admitted Ex. 3 into evidence, based on Evi.41.R,_^006. Nevertheless, it gave "little weight" to the exhibit, because it found that a "weak foundation" for credibility had been established. It found that SFZ's witness had not explained discrepancies between Ex. 3's comparisons of contract carrier and common carrier revenues and the commissioner's comparisons of revenues based on the same data. However, the discrepancies were only in the comparisons on the basis of revenues; Ex. 3's comparisons on the basis of mileage were uncontradicted. The BTA's rejection of this uncontradicted data in determining the primary use of the equipment is not the sort of weighing of evidence or determination of credibility to which we must defer. SFZ's witness, [***6] its president, thoroughly explained how he derived the numbers set forth on Ex. 3. The hearing officer freely, and at times in the middle of direct or cross- examination, explored the witness's testimony on this exhibit. Thus, the BTA's apprehension about the exhibit does not square with [*606] the record. In the final analysis, however, the BTA reached its conclusion on primary use because contract carrier revenues were greater than common carrier revenues. SFZ's president's testimony, part of which the BTA complimented for its clarity and credibility, explained this difference, which explanations the BTA ignored. The testimony pointed out that the contract specific commodity rate between certain points SFZ regularly traveled was greater than the rate it could charge for common carrier service over the same distance, certain specific commodity rates in the common carrier tariff were less than the general commodity rates in that tariff, and contract carrier revenues included amounts for loading, unloading, and storage services which SFZ did not normally receive as a common carrier. Consequently, under the given basic facts, we hold that the BTA's ultimate legal conclusion [***7] of the primary use of the equipment is unreasonable. SFZ has established the equipment's primary use to be in the rendition of a public utility service. It had many more common carrier clients than contract carrier clients, its common carrier mileage, at the end of the audit period, increased to exceed the contract mileage, and the revenue disparity was explained by the additional services provided contract clients and higher contract rates. SFZ also could have handled [**1041] the contract business with its existing 1982 fleet; the fleet increased from forty units in 1982 to ninety-six units in 1985. The basic facts support the ultimate factual conclusion that the primary use of the equipment was directly in the rendition of public utility service. By holding as we have, we need not address SFZ's alternative arguments. Accordingly, we reverse the decision of the BTA because it is unreasonable. ti u-. .-.. ^...,; ^^...i ^onCnr!`h/ro}^;PVP7 ..=R9c7rf75^77P9.h292fcf122f164cc9Fi74RR^.csvc=l R/9.h.007 / /-, Get a Document - by Citation - 66 Ohio St. 3d 602 Page 5 of 5 Decision reversed. Moyer, C.]., A.W. Sweeney, Wright, Resnick, F.E. Sweeney and Pfeifer, ]]., concur. Douglas, ]., dissents. Service: Get by LEXSEE® Citation: 1993 Ohio LEXIS 1321 View: Full Date/fime: Thursday, August 2, 2007 - 12:26 PM EDT ` Signal Legend: ^- Warning: Negative treatment is indicated Questioned: Validity questioned by citing refs y- Caution: Possible negative treatment Positive treatment is indicated - Citing Refs. With Analysis Available Citation information available " Click on any Shepard's signal tb Shepardize®that case. A12QUtLekis_NPxic I ZeiLr1A & Conditions 4'i15NeX1s,-, Copy.dght-4. 2007 LexisNexls, a division of Reed Elsevier Inc. All rights reserved. t« •//.. ... i.,.,: „/ o e^r^hlr tri 7„=R4r7rfi7S422P2h292Fr,0224fi4t n9h74RR!t svc=1 R/212007 <^ UR a L0GLIII1e11L - Dy \.1LriL1Vl1 - 1! V V3110 3L. J•4V Service: Get by LEXSEE® CitaUon: 170 Ohio St. 340 170 Ohio St. 340, *; 164 N.E,2d 741, **; 1960 Ohio LEXIS 599, **; 10 Ohio Op. 2d 427 WESTERN INDUSTRIES, INC., APPELLANT, v. HAMILTON COUNTY BOARD OF REVISION, APPELLEE No. 36074 Supreme Court of Ohio 170 Ohio St. 340; 164 N.E.2d 741; 1960 Ohio LEXIS 599; 10 Ohio Op. 2d 427 February 10, 1960, Decided PRIOR HISTORYp [***1] APPEAL from the Board of Tax Appeals. This case involves the valuation, for purposes of taxation, of real estate with improvements thereon located in Hamilton County and known as the Kenwood Plaza Shopping Center. The appellant, owner of the subject premises, objected to the valuation placed thereon by the county auditor for the tax year 1957 and appealed to the county Board of Revision. After a hearing at which evidence was presented, the Board of Revision refused to reduce the valuation. An appeal was taken from the decision of the Board of Revision to the Board of Tax Appeals under authority of Section 5717.01_et seq., Revise_d Code. Section..57_1.7.03 Revised Code, provides that "in the case of an appeal from a decision of a county Board of Revision the Board of Tax Appeals shall determine the true value in money of the property whose valuation or assessment by the county Board of Revision is complained of." The Board of Tax Appeals held that its duty was to determine whether the appellant had carried the burden of showing that the true value in money of the subject property for the tax year 1957 was less than the value listed on the county tax duplicate. After reviewing [***2] the evidence the Board of Tax Appeals found that appellant had not shown that either the land or the structures involved were valued in excess of their "true value in money" on the tax duplicate and adopted the valuation ascribed to the property by the county Board of Revision. An appeal from the decision of the Board of Tax Appeals brings the cause to this court for review. DISPOSITION: Decision affirmed. HEADNOTES Taxation -- Real property -- Valuation -- Appeal to Board of Tax Appeals -- Section 5717,0,3,. Revised Code -- Determination of "true value in money" -- Burden on taxpayer to prove right to reduction. COUNSEL: Messrs. Kyte, Conlan, Heekin & Wulsin, Mr. Joseph J. Connaughton and Mr. Walter F. Hadley, Jr., for appellant. http://www.lexis.com/research/retrieve?_m=eb03a67e77b3da7a1746106562b94783&csvc=l... 8/2/2007 V7 vec a liocument - oy t-ttauon - t iv unto ^!L. _i4v Mr. C. Watson Hover, prosecuting attorney, and Mr. Raymond C. Wetherell, for appellee. 7UDGES: WEYGANDT, C. J., ZIMMERMAN, TAFT, MATTHIAS, BELL, HERBERT and PECK, JJ., concur. OPINION BY: PER CURIAM OPINION [*341] [**742] The ultimate question to be determined by the court is whether the decision of the Board of Tax Appeals is unreasonable or unlawful. Appellant contends that the controversy stems directly from inability to comprehend the term, "true [***3] value in money," as the term is used in the above-quoted portion of the statute; that the statute is unconstitutional because it has no known or ascertainable meaning; that the Board of Tax Appeals must determine the true value in money; that it abdicated its statutory [*342] duty in ruling that its duty was to determine whether appellant carried the burden; and that the valuation adopted was not the true value. "True value in money" is a constitutional term (Section 2, Article XII), and failure of the statute to further define the term does not render the statute so vague or indefinite as to be meaningless. In determining the value of property for the purpose of taxation, the assessing body must ,take into consideration all factors which affect the value of the property. a. F._ Keith Columbus Co. v. Boardof _[**743]._Revis-on_of Franklin_Co_unty, 148 Ohio St, 2.53; American Steel & Wire Co. v. Board of Revision of Cuyahoga County, 139 Ohio St., 388. The burden is on the taxpayer to prove his right to a deduction. He is not entitled to the . deduction claimed merely because no evidence is adduced contra his claim. Higbee Co. v. Evatt, Tax Commr. [***41 , 140Ohio St.,._325; Rollman_ & Sons Co, v, Board ofReyision o Hamilton County, 163 Ohio St., 363. The decision of the Board of Tax Appeals is not unreasonable or unlawful, and it is hereby affirmed. Decision affirmed. Service: Get by LEXSEE® Citation: 170 Ohio St. 340 View: Full Date/Time: Thursday, August 2, 2007 - 4:16 PM EDT Signal Legend: 0 - Warning: Negative treatment is indicated 9 - Questioned: Validity questioned by citing refs Caution: Possible negative treatment Q Positive treatment is indicated (^ - Citing Refs. With Analysis Available (^ - Citation information available Click on any Shepard's signal to ShepardizeOthat case. http://www.lexis.cotn/research/retrieve?_m=cb03a67e77b3da7a1746106562b94783&csvc=l... 8/2/2007 ye- Get a Document - by Citation - 81 Ohio St. 3d 67 Page 1 of 6 Service: Get by LEXSEEO Citation: 1998 Ohio LEXIS 35 81 Ohio St. 3d 67, *; 1998 Ohio 446; 689 N.E.2d 38, **; 1998 Ohio LEXIS 35, *** WESTHAVEN, INC., APPELLEE, v. WOOD COUNTY BOARD OF REVISION ET AL,, APPELLANTS. No. 97-357 SUPREME COURT OF OHIO 81 Ohio St. 3d 67; 1998 Ohio 446; 689 N.E.2d 38; 1998 Ohio LEXIS 35 August 27, 1997, Submitted February 11, 1998, Decided SUBSEQUENT HISTORY: As Corrected July 24, 1998. PRIOR HISTORY: [***1] APPEAL from the Board of Tax Appeals, No. 95-P-1052. Appellee, Westhaven, Inc. ("Westhaven"), filed a real property tax valuation complaint, for tax year 1994, with the Wood County Board of Revision ("BOR"), seeking a reduction in true value from $ 985,000 to $ 720,000. At a hearing before the BOR, appraiser Ronald P. Davis, testifying on behalf of Westhaven, presented the appraisal report he prepared in support of his opinion that the market value of the property was $ 600,000. The BOR rejected Davis's appraisal and affirmed the auditor's valuation. The land portion of the property is a four-acre parcel located in North Baltimore, Ohio. The two-story building located on the parcel contains thirty-four 576-square-foot one-bedroom units and eleven 400-square-foot efficiency units. The apartment units are connected by interior hallways. The building contains a senior center and a dining/recreation center. The building has a brick and aluminum siding exterior, and contains one, two-stop elevator. The property is currently operated under a federally subsidized rental program for senior housing. On appeal to the Board of Tax Appeals ("BTA'), Davis testified that the highest and best use [***2] of the improvements appears to be their present use as an apartment building. To determine market rental rates for his income approach to value, Davis reviewed rental rates of the other three apartment projects in North Baltimore, However, Davis employed only two of the North Baltimore projects in developing his data to determine market rents. He did not include the third project in his market rental data because it was a federally subsidized project. Because of the shortage of rental comparables in North Baltimore, Davis also reviewed apartment rents in Findlay, Ohio. After Davis surveyed market rents, he estimated a market rental rate of $ 250 per month for Westhaven's efficiency apartments and $ 325 per month for the one-bedroom apartments. In addition, Davis added a rental value of $ 200 per month for the senior center space. Using Westhaven's current income figures as a guide, Davis estimated $ 3,000 per year for miscellaneous income. Based on occupancy in the area, he used a five percent vacancy and credit allowance. Using his estimated rents and income figures, Davis arrived at an estimated gross market income for Westhaven of $ 162,600 per year, Davis projected expenses of [***3] $ 1,931 per unit or $ 86,931 total for the year. Using the band of investment method, with rates derived from market information, Davis used an overall capitalization rate of 10.94 percent, plus a tax additur of 1.74 percent, for a total capitalization rate of 12.68 percent. Capitalizing /? hr„ Il.. »,,to^:^ „/ro^ParrhlrrtrievP9 m=44eR(1r117^OPaalSaffiRFfr.r.la2c56f1Rcsvr.=le R/212007 Get a Document - by Citation - 81 Ohio St. 3d 67 Page 2 of 6 the net income at the 12.68 percent rate, Davis determined a final value based on the income approach of $ 596,759, which he rounded off to $ 600,000. Because there were no comparable sales in North Baltimore to use in his market data approach, Davis reviewed five sales from the surrounding area. Two of the sales were in Toledo, two in Defiance, and one in Van Wert. Davis adjusted the value of the comparables for location, age/condition, size, and quality/appeal. Although he indicated a category for an adjustment based on the time of the sale, no adjustments were made even though the sales took place in the time period from 1990 to 1993. After making his adjustments, Davis arrived at a market value for Westhaven of $ 20 per square foot. Using that value per square foot, and a gross square footage of 33,900, Davis determined a value of $ 678,000. Davis did not prepare an estimate of value by the cost [***4] approach because he did not believe it reflected income-related considerations. Placing the major emphasis on the income approach, Davis's opinion of value for Westhaven, as of January 1, 1994, was $ 600,000. On cross-examination, Davis was questioned about his relationship with a third party, Doug Parabeck. Davis admitted that Parabeck paid him to prepare his appraisal for Westhaven and was paying him for his appearance before the BTA. He also admitted that in the past he had prepared approximately two hundred other appraisal reports for Parabeck. On redirect, Westhaven established that Parabeck had no interest in Davis's business and Davis had no interest in Parabeck's business. The auditor and the BOR presented no witnesses. Based upon Westhaven's evidence, the BTA found the true value of the real property to be $ 600,000. The cause is now before this court upon an appeal as a matter of right. DISPOSITION: Decision affirmed. CASE SUMMARY PROCEDURAL POSTURE: Appellant county board of revision (BOR) sought review of an order entered by the Board of Tax Appeals (Ohio) which granted appellee taxpayer's application for a reduction in true value of certain real property. OVERVIEW: The taxpayer filed a real property tax valuation complaint seeking a reduction in true value. The taxpayer's expert testified before the Board of Tax Appeals (BTA), while the auditor and the BOR presented no witnesses. Based upon the taxpayer's evidence, the BTA granted the reduction. The BOR contended that the BTA erred in accepting the taxpayer's appraisal because his expert did not provide all the facts and figures necessary to back up his opinion of value. The court found that the expert did present data in support of his opinion of value. The BTA performed its duty in this case and found the taxpayer's expert to be a credible witness and the evidence to be competent and probative. The BOR contended that the BTA accepted the taxpayer's appraisal because the BOR failed to present independent appraisal evidence. The court noted that while the BTA did comment on the BOR's failure to rebut the taxpayer's evidence, the lack of rebuttal evidence by the BOR was not the basis for the BTA's finding of value. The court also rejected the county board's argument that the BTA erred in accepting the taxpayer's appraisal, because the appraiser was being paid by a third party. OUTCOME: The court affirmed the decision granting the taxpayer's requested reduction in h^+.^•//..^.o, Invie rnmlrPCpareFllrP.rrlP.vP.^ m=44eROr11740eaa35aff3R6fr.c1a2c56f1RRr..cvc=le R/2/2007 f 7% Get a Document - by Citation - 81 Ohio St. 3d 67 Page 3 of 6 the true value of certain real property. CORE TERMS: credibility, appraisal, probative, appraiser's, valuation, evidence presented, department store, weighing, credible, auditor, floor, rebut, accepting, admitting evidence, functionat depreciation, substantiate, deficiencies claimed, comparables, consultant, lawful LEXISNEXIS® HEADNOTES i=iHide (^Iin^istraJYV.e^?_w > ludic{alRe`/lew > Rewewability > Fact_^al pekerrCic[1a.ioIIg?u: ,_, IaK.l_aw > _StDteL201 TaXplS > AdrnilLStr.atl4CL$s.P-c4.4egdi.n9.s > ]udicial..R6vjEYt HNS_+The Board of Tax Appeals has discretion in admitting evidence, weighing it, and granting credibility to testimony. This weighing of evidence and granting credibility are exactly the Board of Tax Appeals' statutory job. More_LJke_Thjs_HeadrLpte ^ SheRard z.e;_Aas[[email protected]. EY dence > J.aferenres_& Pre4uniAtions. > GeneraL4vacvi.e.w ^^+I TaKl a.v > ^take._&Ls.cal..IaxPS > Adrninistratian_&.Pro.cee.dings > 7us1(;:ial__Reviev^ nnz±Where the county auditor and the board of revision are appellees before the Board of Tax Appeals, they are not required to present any evidence. The burden is on the taxpayer to prove his right to a deduction. He is not entitled to the deduction claimed merely because no evidence is adduced contra his claim. The appellant seeking an increase or decrease in value before the Board of Tax Appeals bears the burden of persuasion. More_.Ltke_r)iis._Heasinoke ^ Shepar.dlz.e;_Restri.ce_3y_L{eadnote. Ia2S.Lap^ > $lat@ &..I pCa)_TdKfls > P.dr.QlniStrdtlQrL.&.Pr9ceed.l09s > ^eIlei_a.LQ.Y.^rYieyL ^^"!^ "W±The Board of Tax Appeals need not adopt any expert's valuation, and has wide discretion in granting weight to evidence and credibility to witnesses; it may find all or part or none of the testimony and evidence presented by either party to be credible and probative. rlor.e Like This FLeadnpte. I Shepardize;_Restrict_By Headn^te Iax..Lave > Sta.te.u_4acaL Taxes >_PdaiuxisLratiert&.Pr¢ceedin8fl > Gener.al.Qvervienv na¢±The court will not reverse the Board of Tax Appeals determination on credibility of witnesses and weight given to their testimony unless it finds an abuse of, discretion. More_Like_Th.is_Hepdng,k.@ HEADNOTES HEADNOTES Taxation -- Real property valuation of two-story apartment building operated under a federally subsidized rental program for seniors -- Board of Tax Appeals has discretion in admitting evidence, weighing it, and granting credibility to testimony -- Decision [***5] of Board of Tax Appeals based on property owner's appraiser reasonable and lawful, when. GQUN.S.EI-.:.Todd W, Sleggs & Associates, Todd W. Sleggs and Susan K. French-Scaggs, for appellee. t++ •!h. .na, IP^;^ ^^ ,/rP^Parch/rPtria.ve.^ m=44PRO i174(leaa 15aff iRfifacla2r.5ff1 Grsvc=le. 9/20007 5-1 Get a Document - by Citation - 81 Ohio St. 3d 67 Page 4 of 6 Teaford, Rich & Whee!er and James R. Gorry, for appel!ants. 74lb29ES;_ MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK and LUNDBERG STRATTON, JJ., concur. OPINION [*69] [**40] Per Curiam. Appellants' initial contention is that the BTA erred in accepting Davis's appraisal because he did not provide a!l the facts and figures necessary to back up his opinion of value. We disagree. Appellants cite as the !egal basis for their contention Ro^nan &_Spr?s_CQ _v, Harni.llon^^,_^^,_ ofBevi^iQla_(79-v5),_1_F3._Qhio_St, 3f3 56.Q.b.ia..S29-_^.37,_]^7_N,€,.Zd_i. The taxpayer's expert in Roflman contended that a twelve-story building used for department store purposes was totally inadequate as a department store because of lack of floor space, and that for department store purposes, floors above the third were economica!!y unproductive. The expert's testimony of functional obsolescence was the only evidence on the subject. When asked to substantiate his contention, the expert failed to show any sales-loss ratio [***6] for merchandise sold on the upper floors. We affirmed the BTA's rejection of the expert's opinion, holding, "Where the only evidence as to functional depreciation is the opinion of the taxpayer's witness, which opinion the witness fails to substantiate with facts or figures, a decision of the Board of Tax Appeals that the taxpayer failed to sustain his burden of proof as to functional depreciation and excluding such depreciation in valuation for tax purposes is neither unreasonable [**41] nor unlawful." Id. at paragraph two of the syllabus. Appellants contend that Davis's appraisal was deficient in facts and figures. Among the deficiencies claimed by appellants are an inadequate highest-and-best use analysis, selection and use of inappropriate comparables, and adjustments to comparab!es that are not accurate. This case does not present a situation similar to Ro!lman. Here Davis did present data in support of his opinion of value. Appellants may not like the data used by Davis to arrive at his opinion of value, however, the BTA reviewed Davis's appraisal in light of the deficiencies claimed by appellants and stated, "The comparability of properties or the appropriateness of expense [***7] items are matters we must carefully weigh when we consider the record as a whole." Having weighed the evidence, the BTA did not find "any infirmity so serious that it would cause us to reject Westhaven's evidence in its entirety and exclude it from consideration." The BTA found that Westhaven had "met its duty to submit competent and probative evidence of value." This court is neither a super Board of Tax Appeals nor a trier of fact de novo. youngstQtKn. 5heeL$ube_C6___y, Mrlh^iiing_C^Bd, 400a 20^iQ Op_._3.d 349,_35_1,..42_2_N 1 251^4.E,_84^, aNir`1he BTA has discretion [*70] in admitting evidence, weighing it, and granting credibility to testimony. OraCtc0.e._^ikX_SEhoo7 Diof I224. This weighing of evidence and granting credibility are exactly the BTA's statutory job. Eawn Lakp.Apt5,-Y-c,uyabogasty__@d_oevLi4a-(199_6)^75^hio St._3d ^Q^,__ 3 6 iL_E.^d.^.44,..19$. The BTA performed its duty in this case and found Davis to be a credible witness and the evidence to be competent and probative. Appellants also contend that the BTA erred in accepting Davis's [***8] appraisal. Appellants contend that the BTA accepted Davis's appraisal because they failed to present independent appraisal evidence. We disagree. I+Hn- N-nanv lP,riq r nm/i'P.SPArChIiP.trlevP.7 m=44PR(1r1173(leaa35aff1RC^fr.r.la2r.5fiflR^csvc=le R/20.007 Get a Document - by Citation - 81 Ohio St. 3d 67 Page 5 of 6 While the BTA did comment on appellants' failure to rebut Westhaven's evidence, the lack of rebuttal evidence by the auditor and BOR was not the basis for the BTA's finding of value. The evidence presented by Westhaven was reviewed by the BTA and found to be competent and probative. Based on that evidence, the BTA found that Westhaven had proven its right to a reduction in value. "rv2$Where the county auditor and the board of revision are appellees before the BTA, they are not required to present any evidence. In .Wes.te.ccL..Indus-.tries,._InC.._v,..H.a.miLto.a..^tX.--Rd_.Stf Revisip^]96Q^,^_ZQ ^llio^_3_49^4^,_^i12hi4 S2p._2d 427,_^6_.4_N.F,25^ 74^7^-, where the taxpayer was the appellant before the BTA, we stated, "The burden is on the taxpayer to prove his right to a deduction. He is not entitled to the deduction claimed merely because no evidence is adduced contra his claim." The appellant seeking an increase or decrease in value before the BTA bears the burden of persuasion. CinfJnnati_-icho¢(D»^.t^d,_QfEdn. ^. Na.rnilton_CtX,-.^d --4f .R..erision..(1.9.97)-,..._[-.*---*-.*4.1---^.2677..N...E:2d..11.9Z. At the conclusion bf Westhaven's case before the BTA, the auditor and the BOR, as appellees before the BTA, had. two choices: (1) they could have presented evidence to rebut that presented by Westhaven, or (2) they could have presented no evidence and relied on their cross-examination of Westhaven's appraiser to have discredited him or his appraisal. a'v37The BTA need not adopt any expert's valuation, and has wide discretion in granting weight to evidence and credibility to witnesses; it may find all or part or none of the testimony and evidence presented by either party to be credible and probative. LR.B.Z. Assoc. If the appellee before the BTA in a valuation case does not present any evidence to rebut appellant's evidence, the appellee takes the chance that the BTA may, as in this case, find the valuation evidence presented by the appellant to [**42] be competent and probative, and adopt it as the true value. On the other hand, the appellee may present evidence and the [***10] [*71] BTA may or may not find that evidence to be credible and probative In rebutting the appellant's evidence. The appellants' final contention is that the BTA erred in accepting Davis's appraisal, since he was being paid by a third party. We disagree. The facts of this case presented the BTA with a question of Davis's credibility in light of the payment for his services by a third party. The BTA considered the question and found, "The uncontroverted testimony taken under oath proclaims that this appraiser has no interest in the business of the tax consultant, and the tax consultant has no interest in the business of the appraiser. Moreover, the evidence shows the appraiser's fee was not contingent." The BTA further stated "that an appraiser's credibility is determined on a case-by-case basis after a thorough and comprehensive review of the evidence presented." In IIaX^ Chu^^esiden.c^1 ..LCckittt^^tY ^^_o^RQ.v.isiQn_..(1Q2^) J^._OJ1io-_^t _^^.^2Z,.Sz^^ 114 R._E.2d.24a, we stated that 7we will not reverse the BTA's determination on credibility of witnesses and weight given to their testimony unless we find an abuse of discretion. We do not find that the BTA abused its discretion in this case [***11] in granting credibility to Davis's testimony. For the reasons set forth in this opinion, we find the BTA's decision to be reasonable and lawful and affirm it. Decision affirmed. MOYER, C.J,, DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK and LUNDBERG ti.+.. //.,,.,,.,, 1P,.i^ ^nm/rpcparrh/rptrieve7 m=44PROr11740eaa35aff3Rhfcr.la2r.5F,f1R^.c.cvc=le R/2/7.007 I -^ Get a Document - by Citation - 81 Ohio St. 3d 67 Page 6 of 6 STRATTON, JJ., concur. Service: Get by LEXSEE® Citation: 1998 Ohio LEXIS 35 View: Full DaterTime: Thursday, August 2, 2007 - 12:27 PM EDT * Signal Legend: 0- Warning: Negative treatment is indicated Questioned: Validity questioned by citing refs Caution: Possible negative treatment Positive treatment is indicated ^- Citing Refs. With Analysis Available 0- Citation information available * Click on any Shepard's signal ta Shepardize®that case. r..^ [^o x7=N xl I Terms & Cr,rtdittons ^')Charv+w..'XIS`c C4py.CightS2 2007 LexisNexls, a division of Reed Elsevier Inc. All rights reserved. r tA^^ kA^oarnh/ratrieve9 m=44PROd17^neaa45affiRfifccla7.r.5FflYrsvc=le. R/2/2007 N Get a Document - by Citation - 61 Ohio St. 3d 155 Pane t ot 4 Service: Get by LEXSEE® Citation: 61 Ohio St3d 155 61 Ohio St. 3d 155, *; 573 N.E.2d 661, **; 1991 Ohio LEXIS 1743, *** Witt Company, Appellant, v. Hamilton County Board of Revision et al., Appellees No. 90-1252 Supreme Court of Ohio 61 Ohio St. 3d 155; 573 N.E.2d 661; 1991 Ohio LEXIS 1743 May 7, 1990, Submitted July 17, 1991, Decided PRIOR HISTORY: [*** 1] Appeal from the Board of Tax Appeals, No. 88-C-875. DISPOSITION: Decision affirmed. CASE SUMMARY PROCEDURAL POSTURE: Appellant taxpayer sought review of a decision of appellee Board of Tax Appeals (BTA) (Ohio). OVERVIEW: The taxpayer contended that the BTA erred in failing to consider the appraisal report and testimony of its expert witness. The taxpayer argued that the witness was unaware of the contingency fee arrangement between his employer and the taxpayer, and that whether his employer obtained an interest in the appeal should not have affected his qualifications as an appraiser. Lastly, the taxpayer contended that there was no requirement that an appraiser be "independent." On appeal the court held that there had been no showing that the BTA abused its discretion in placing no credibility on the testimony and appraisal report. Rather, the record demonstrated that the BTA considered all the evidence placed before it at the hearing. Certain facts bore on the witness' credibility, which was within the sound discretion of the BTA to determine. The BTA was not required to adopt any expert's valuation. Sufficient, probative evidence supported the BTA's adoption of the valuation offered by another witness in his appraisal report. OUTCOME: The court affirmed the decision of the BTA. CORE TERMS: appraisal, valuation, appraiser, credibility, subject property, appraisal report, comparable properties, contingency fee, revision, case law, wide discretion, credibility of witnesses, probative evidence, reliable, credible, contingency, comparable LEXISNEXIS® HEADNOTES ,.:^ E'liift Tax.t_aw > SknkQ 8 6osa1_T.axas > P..dnJni Sr.atlvn..^.Prs.sge9inas > QeneraLQvervit^v^ ^«: uNl±The Board of Tax Appeals (BTA) need not adopt any expert's valuation. It has wide discretion to determine the weight given to evidence and the credibility of witnesses before it. Its true value decision is a question of fact, which will be disturbed by the appellate court only when it affirmatively appears from the record that such decision is unreasonable or unlawful. Moreover, the appellate court will not overrule BTA findings of fact that are based upon sufficient probative A^5 hrr lA..:c rnmlracaarrh/rafi•iava9 m=qfalfiR906ri4he416(1635rlehd39lah4(l2R!r.cvr.1 R/2/2007 Get a Document - by Citation - 61 Ohio St. 3d 155 Page 2 of 4 evidence. Mpre_Lik2--7:his_H2d(lnotg I Shepacg}ze A4i17iAi5.traciv_e Law > ludiqal_Revie.4v > StandardS_o.f_Ae_^[ley,, > AbU5e0f Di^Gigtion Iad-Le_w > Sto-te & LQCdI TeKes > Adm i n ^^tration & PrQCeedings > General Qyeryiew 4LA, at^2_+The Board of Tax Appeals (BTA) has wide discretion to accept all, part, or none of the testimony of any appraiser presented to said board. Absent a showing of an abuse of that discretion, the BTA's determination as to the credibility of witnesses and the weight to be given their testimony will not be reversed by the appellate COUrt. MOCe_LikeTI1l5.N..eadnoXe. I 5heparpize•-_Re,et[kt.13y Headriote HEADNOTES i-:i Hide HEADNOTES Taxation -- Real property valuation -- Board of Tax Appeals need not adopt any expert's valuation. COU-C!IS.Ef-;. Stephen Swaim, for appellant. Arthur M. Ney, Jr., prosecuting attorney, Thomas J. Scheve and Scott C. Kirschman, for appellees. J.U..pGE_S: Alice Robie Resnick, J. Moyer, C.J., Sweeney, Douglas and H. Brown, 33., concur. Hoimes and Wright, JJ., dissent. OPINION BY: RESNICK OPINION [*156] [**662] The issue presented to this court is whether the BTA erred in failing to consider the appraisal report and testimony of [* 157] appellant's expert witness, Kennedy. Appellant asserts that the BTA erred in refusing to accept or consider the testimony of and appraisal performed by Kennedy. In support, appellant argues that Kennedy was unaware of the contingency fee arrangement between his employer and appellant, and that whether his employer obtained an interest in the appeal should not affect his qualifications as an appraiser. Lastly, appellant contends that there is no requirement that an appraiser be "independent." This court has consistently held that nNj*"[t]he BTA need not adopt any expert's [**663] valuation. It has wide discretion [***2] to determine the weight given to evidence and the credibility of witnesses before it. Its true value decision is a question of fact which will be disturbed by this court only when it affirmatively appears from the record that such decision is unreasonable or unlawful. ***" (Citation omitted.) 3,.R.^.__As.soc,-y-Cc./yahOgaL-ty-B(1 Qf R-gyisl.on_(19-$8^.,_-38_O.f1j.Q_St_3-^_198 ^O1F5^7 N-,.^,2d 874,_877. See, also, -Cardinal F der 1 &L.Assn, v,..C^yah.o.ga--^tY-_^d -afR^v^sion..(19.ZSa,.44 Qhio...5t42d.13,-73 ._Q-Q.,2-d --83,33-6 K,.h.,2sL433, at paragraphs three and four of the syllabus; C^o.w..Y,_Cuy^hPgd..^ty,_$^4f Re_v.r's(oa..(1990).,_^0_Ohio_St,3^i_55^ 57,_5-.52_f^ E:^d_892F_893 894, Moreover, this court "will not overrule BTA findings of fact that are based upon sufficient probative evidence." &13,Z,. ASSQG,-SUPcaF3@_Uh.i9_^t_}c1._1t_2..0-1,,..52.7_ N_f*..2d.at.$Z7_. 1 H /l..^.^.. In ^ rnm/rneaarrh/ratr PvP^ m=9faz(RR(16d41te4360635tlPhd393ah3(12kcsvo: I R/2/2009 0 Get a Document - by Citation - 61 Ohio St. 3d 155 Page 3 of 4 Appellant's argument is largely directed at the BTA's refusal to give any reliability and/or credibility to the testimony of and appraisal performed by Kennedy. According to appellant's contention, the BTA erred [***3] in finding that Kennedy "cannot be considered an independent fee appraiser" and in holding that "[h]is testimony and opinion of value are not reliable and credible under the instant circumstances." However, as the case law above clearly demonstrates, °lr"z*the BTA has wide discretion to accept all, part or none of the testimony of any appraiser presented to said board. See R:ssocra., Absent a showing of an abuse of that discretion, the BTA's determination as to the credibility of witnesses and the weight to be given their testimony will not be reversed by this court. See Cardina.l.Fe..d..eralF_sstpfa, at paragraphs three and four of the syllabus. There has been no showing that the BTA abused its discretion in placing no credibility on Kennedy's testimony and appraisal report. Rather, the record demonstrates that the BTA considered all the evidence placed before it at the hearing. Kennedy testified at length in regard to his valuation processes, and his appraisal report was admitted into evidence. Kennedy was cross-examined extensively in regard to his approach in appraising the subject property. With [***4] respect to his cost approach method of appraisal, he was questioned at length as to the depreciation rates he employed. A review of this testimony [*158] indicated that when utilizing the market approach to valuate the subject property, Kennedy relied on five comparable sales. His credibility was brought into question by the following facts elicited on cross-examination: (1) Kennedy did not physically inspect any of these comparable properties, he simply drove by them; (2) some of the comparable buildings were over one hundred years old; (3) the land -to-building ratios of the comparable properties and the subject property did not correlate; and (4) some of the comparable properties were multi-story, as opposed to the subject property which was one story. All these facts bear on the witness' credibility, which is within the sound discretion of the BTA to determine. We hold that the BTA did not abuse this discretion in the instant case. We reiterate that the BTA "need not adopt any expert's valuation." R.R,Z,_Assoc„_supia,. 3@ Qhi.4.5Z7..N.E:_Zsl...at_s77. In the present case, sufficient, probative evidence supports the BTA's adoption of [***5] the valuation offered by Carrelli in his appraisal report. See id. We therefore affirm the decision of the BTA. Decision affirmed. Moyer, C.J., Sweeney, Douglas and H. Brown, JJ., concur. Holmes and Wright, JJ., dissent. DISSENT BY: HOLMES DISSENT Holmes, J., dissenting. If the determination of the Board of Tax Appeals ("board") were being reviewed here merely upon the weight of the evidence, I would readily concur with the majority opinion. However, what this court should consider upon review here is the faulty basis upon which the board made its determination. The board, in its decision, indicated that since the appellant had retained its expert on a contingency fee basis, the expert's testimony and appraisal [* *664] were so biased that they should be totally ignored. The language of the board in u-^//•-•••-.• ^..: nnm/rPCPAYI`h/rP}rIPVP^J m=nfa^fiRR(1^iri4hp.43Ff16^5r1rhr1393ab3t12R svr=1 R/2^2f107 ^ Get a Document - by Citation - 61 Ohio St. 3d 155 Page 4 of 4 this regard is as follows: "We have carefully reviewed the fee arrangement between PTR and appellant. We must conclude, as urged by the Board of Revision, that Mr. Kennedy's employer, PTR, has obtained an interest in this appeal by virtue of the contract. As such, Mr. Kennedy cannot be considered to be an independent fee appraiser. His testimony and opinion of value are not reliable and credible under [***6] the instant circumstances. Accordingly, we hereby find that Mr. Kennedy's testimony and appraisal shall not be considered in determining the fair market and taxable values of the subject property." Consequently, the only evidence reviewed by the board was that of the expert for the board of revision. This is shown by the board's language in reference to this evidence: [*159] "The only other evidence properly before this Board is the testimony and appraisal of Mr. Carrelli and the statutory transcript provided by the Board of Revision. Mr. Carrelli mostly relied upoh the market appraisal approach in arriving at his determination of value. He reviewed his analysis and the comparable properties relied upon during the hearing before this Board. We find that his appraisal is acceptable and uncontroverted." It is true that appellant's expert appraiser was an employee of an appraisal corporation which was retained upon a contingency fee basis. There is no law in Ohio, either statutory or case law from this court, which would prohibit consideration of evidence from experts who are employed upon a contingency basis. The fact that the employer company operates upon a contingency fee [***7] basis does not render the evidence from this appraisal expert any less acceptable. The weight and credibility to be given each witness here is within the province of the board. However, all the evidence here should have been considered, and the determination by the board should have beerl made upon the totality of such evidence. In that the determination of theboard was made only after disregarding the testimony and appraisal of the appellant's expert, such decision is improper, Therefore, the decision of the board should be reversed and this matter remanded to the board for a new review in accord herewith. Service: Get by LEXSEE® Citation: 61 Ohio St.3d 155 View: Full Date/t'ime: Thursday, August 2, 2007 - 4:13 PM EDT ' Signal Legend: *- Warning: Negative treatment is indicated - Questioned: Validity questioned by citing refs Caution: Possible negative treatment Positive treatment is indicated ^- Citing Refs. With Analysis Available Citation information available ' Click on any Shepard's signal to Shepardize®that case. Bbosrt-LeXisL^lexi& I T^r.rC!s..&,^ottditiQns xisNe7CIJ"' Copyright..QQ 2007 LexisNexis, a division of Reed Elsevier Inc. All rights reserved. 1«•//.. ... io ;^ rnm/rocoarPh/YPtI'IPVp7 m=9fa76RRf1(A4he4460635rle.hrl393ah3(12Rracvr=l 8/2/9.007 5717-i-1i Discovery. (A) Discovery may be permitted by deposition upon oral examination or written questions; written interrogatories; production of documents or tangible things or permission to enter upon land or other property; and requests for admissions. The "Ohio Rules of Civil Procedure," effective July 1, 20o6, shall be followed for discovery purposes to the extent they are not inconsistent with other board rules. The Ohio rules of Civil Procedure are generally available at a public library, legal library, or on the web at -vwa^v.sconet.state.oh.us/rules/eivil. Discovery shall be subject to the following limitations: (i) Discovery should be commenced by all parties promptly after the filiiig of a notice of appeal and should be completed as expeditiously as possible. Discovery should be completed not more than one hundred twenty days after the filing of the notice of appeal, which shall also be the last day for a party to seek involvement of the board in discovery matters. Upon motion and for good cause, the board may establish other specific times for completion of discovery or consideration of discovery motions. (2) The board expects all counsel to provide for orderly, mutual discovery, freely exchanging discoverable information and documents. Counsel shall make all reasonable efforts to resolve discovery disputes by extra-judicial means, without intervention by the assigned attorney examiner. To the extent counsel may not resolve such disputes, then they may seek intervention of the attorney examiner to supervise discovery. (3) Answers, objections or other responses to discovery requests shall be served within twenty-eight days after service of such requests unless the board orders or the parties agree to a different period of time. Depositions, interrogatories, and admissions shall not be filed with the board, unless the party intends to offer such discovery documents as evidence in a hearing; and in such event, such discovery documents shall be filed at least one day prior to the hearing. (4) Any motion concerning discovery shall include only those specific portions of the discovery documents necessary for resolution of the motion and include counsel's statement describing all extra-judicial efforts undertaken to effect discovery. (5) An expert may not be permitted to testify if he or she has not been timely identified prior to hearing. The parties may mutually agree to the exchange of any written reports of expert witnesses to be relied upon by them. Additionally, an expert's report or portions ^ thereof may be excluded from evidence if the report was not made available in a timely fashion to complete a mutually agreed exchange of reports. In all events, the identity of the expert shall be provided to counsel at least fourteen days prior to hearing, except as otherwise ordered by the attorney examiner, and the written valuation reports shall be provided to counsel at least seven days prior to hearing, except as otherwise ordered by the attorney examiner. (B) No hearing will be continued for purposes of discovery unless good cause is shown. (C) Cost of discovery shall be paid by the party requesting such discovery. (D) Upon the motion of a party and for good cause shown, the board may issue a protective order restricting discovery of a trade secret or other confidential research, development or commercial information. 6^CJ 5717-1-15 Hearings. (A) The board's secretary or the designated assignment commissioner may schedule each appeal for hearing, and written notice thereof shall be given to the parties or their counsel of record by ordinary mail. (B) For good cause shown, hearings may be continued by the attorney examiner to whom the appeal has been assigned, by a board member, or by the board's secretary. The granting of a continuance is within the sound discretion of the board. (C) Requests for continuances should be directed to the attorney examiner assigiied the case and shall be filed, in writing, at least fourteen days prior to the scheduled hearing date, unless otherwise permitted by the board. If a continuance is requested for the reason that counsel or a witness is scheduled to appear for hearing on the same date before the board or another tribunal, a copy of the tribunal's scheduling notice should be attached to the request. (D) A party seeking a continuance shall provide notice to, or obtain the consent of, all other parties. Any objection to a continuance must be filed, in writing, within three days of the filing of the continuance request, unless otherwise ordered by the board. (E) As a condition to any continuance that may be granted, the board may require the parties to supply a definite date for hearing, as agreed upon by the parties and subject to the board's approval. (F) A party may waive, in writing, its right to appear at a hearing, with the consent of the board. Where all parties have waived their right to a hearing, the board may proceed to decide the appeal upon the record. (G) All hearings shall proceed in similar manner to a civil action, with witnesses to be sworn and subject to cross-examination. (H) All hearings before the board shall be open to the public. Hearings may be recorded by stenographic means or by audio or video recording systems, as ordered by the board. An audio or video recording of a hearing will not be transcribed into written form unless found necessary by the board. A stenographic transcript or an audio or video recording shall be made available for examination at the board's office. (I) Each party shall identify its witnesses to all parties and the attorney examiner at least fourteen days prior to the hearing, unless otherwise ordered by the attorney examiner. Each party shall provide copies of the documentary exhibits it plans to offer into evidence (reduced in size, if (P^ necessary) to all parties and the attorney examiner at least seven days prior to the hearing, unless otherwise ordered by the attorney examiner. Article II. JUDICIAL NOTICE RULE 201. Judicial Notice of Adjudicative Facts (A) Scope of rule. This rule governs only judicial notice of adjudicative facts; i.e., the facts of the case. (B) Kinds of facts. A judicially noticed fact must be one not subject to reasonable dispute in that it is either (i) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. (C) When discretionary. A court may take judicial notice, whether requested or not. (D) When mandatory. A court shall take judicial notice if requested by a party and supplied with the necessary information. (E) Opportunity to be heard. A party is entitled upon timely request to an opportunity to be heard as to the propriety of taking judicial notice and the tenor of the matter noticed. In the absence of prior notification, the request may be made after judicial notice has been taken. (F) Time of taking notice. Judicial notice may be taken at any stage of the proceeding. (G) Instructing jury. In a civil action or proceeding, the court shall instruct the jury to accept as conclusive any fact judicially noticed. In a criminal case, the court shall instruct the jury that it may, but is not required to, accept as conclusive any fact judicially noticed. [Effective: July 1, i98o.] 63 323•11 State's lien for taxes aitaches and continues until paid. The lien of the state for taxes levied for all purposes on the real and public utility tax list and duplicate for each year shall attach to all real property subject to such taxes on the first day of January, annually, or as provided in section 5727.o6 of the Revised Code, and continue until such taxes, including any penalties, interest, or other charges accruing thereon, are paid. Taxes may be apportioned in case of transfer of a part of any tract or lot of real estate, in which case the lien of such taxes shall extend to the transferred part and the remaining parts only to the extent of the amounts allocated to such respective parts. Effective Date::a7-o2-i984 (0 ^ 5715.19 Complaint against valuation or assessment - determination of complaint - tender of tax - determination of common level of assessment. (A) As used in this section, "member" has the same meaning as in section 1705.01 of the Revised Code. (i) Subject to division (A)(2) of this section, a complaint against any of the following determinations for the current tax year shall be filed with the county auditor on or before the thirty-first day of March of the ensuing tax year or the date of closing of the collection for the first half of real and public utility property taxes for the current tax year, whichever is later: (a) Any classification made under section 5713.041 of the Revised Code; (b) Any determination made under section 5713•32 or 5713.35 of the Revised Code; (c) Any recoupment charge levied under section 5713.35 of the Revised Code; (d) The determination of the total valuation or assessment of any parcel that appears on the tax list, except parcels assessed by the tax commissioner pursuant to section 5727.o6 of the Revised Code; (e) The determination of the total valuation of any parcel that appears on the agricultural land tax list, except parcels assessed by the tax commissioner pursuant to section 5727.o6 of the Revised Code; (f) Any determination made under division (A) of section 319.302 of the Revised Code. Any person owning taxable real property in the county or in a taxing district with territory in the county; such a person's spouse; an individual who is retained by such a person and who holds a designation from a professional assessment organization, such as the institute for professionals in taxation, the national council of property taxation, or the international association of assessing officers; a public accountant who holds a permit under section 4701.10 of the Revised Code, a general or residential real estate appraiser licensed or certified under Chapter 4763. of the Revised Code, or a real estate broker licensed under Chapter 4735• of the Revised Code, who is retained by such a person; if the person is a firm, company, association, partnership, limited liability company, or corporation, an officer, a salaried employee, a partner, or a member of that person; if the person is a trust, a trustee of the trust; the board of county commissioners; the prosecuting attorney or treasurer of the county; the board of township trustees of any township with territory within the county; the board of education of any school district with any territory in the county; or the mayor or legislative authority of any municipal corporation with any territory in the county ^5 may file such a complaint regarding any such determination affecting any real property in the county, except that a person owning taxable real property in another county may file such a complaint only with regard to any such determination affecting real property in the county that is located in the same taxing district as that person's real property is located. The county auditor shall present to the county board of revision all complaints filed with the auditor. (2) As used in division (A)(2) of this section, "interim period" means, for each county, the tax year to which section 5715.24 of the Revised Code applies and each subsequent tax year until the tax year in which that section applies again. No person, board, or officer shall file a complaint against the valuation or assessment of any parcel that appears on the tax list if it filed a complaint against the valuation or assessment of that parcel for any prior tax year in the same interim period, unless the person, board, or officer alleges that the valuation or assessment should be changed due to one or more of the following circumstances that occurred after the tax lien date for the tax year for which the prior complaint was filed and that the circumstances were not taken into consideration with respect to the prior complaint: (a) The property was sold in an arm's length transaction, as described in section 5713.03 of the Revised Code; (b) The property lost value due to some casualty; (c) Substantial improvement was added to the property; (d) An increase or decrease of at least fifteen per cent in the propert}^s occupancy has had a substantial economic impact on the property. (3) If a county board of revision, the board of tax appeals, or any court dismisses a complaint filed under this section or section 5715.13 of the Revised Code for the reason that the act of filing the complaint was the unauthorized practice of law or the person filing the complaint was engaged in the unauthorized practice of law, the party affected by a decrease in valuation or the party's agent, or the person owning taxable real property in the county or in a taxing district with territory in the county, may refile the complaint, notwithstanding division (A)(2) of this section. (B) Within thirty days after the last date such complaints may be filed, the auditor shall give notice of each complaint in which the stated amount of overvaluation, undervaluation, discriminatory valuation, illegal valuation, or incorrect determination is at least seventeen thousand five hundred dollars to each property owner whose property is the subject of the complaint, if the complaint was not filed by the owner or the owner's spouse, and to each board of education whose school district may be affected by the complaint. Within thirty days after receiving such notice, a board of education; a property owner; the owner's spouse; an individual who is retained by such an owner and who holds a designation from a professional assessment organization, such as the institute for professionals in taxation, the national council of property taxation, or the international association of assessing officers; a public accountant who holds a permit under section 4701.10 of the Revised Code, a general or residential real estate appraiser licensed or certified under Chapter 4763. of the Revised Code; or a real estate broker licensed under Chapter 4735• of the Revised Code, who is retained by such a person; or, if the property owner is a firm, company, association, partnership, limited liability company, corporation, or trust, an officer, a salaried employee, a partner, a member, or trustee of that property owner, may file a complaint in support of or objecting to the amount of alleged overvaluation, undervaluation, discriminatory valuation, illegal valuation, or incorrect determination stated in a previously filed complaint or objecting to the current valuation. Upon the filing of a complaint under this division, the board of education or the property owner shall be made a party to the action. (C) Each board of revision shall notify any complainant and also the property owner, if the property owner's address is known, when a complaint is filed by one other than the property owner, by certified mail, not less than ten days prior to the hearing, of the time and place the same will be heard. The board of revision shall hear and render its decision on a complaint within ninety days after the filing thereof with the board, except that if a complaint is filed within thirty days after receiving notice from the auditor as provided in division (B) of this section, the board shall hear and render its decision within ninety days after such filing. (D) The determination of any such complaint shall relate back to the date when the lien for taxes or recoupment charges for the current year attached or the date as of which liability for such year was determined. Liability for taxes and recoupment charges for such year and each succeeding year until the complaint is finally determined and for any penalty and interest for nonpayment thereof within the time required by law shall be based upon the determination, valuation, or assessment as finally determined. Each complaint shall state the amount of overvaluation, undervaluation, discriminatory valuation, illegal valuation, or incorrect classification or determination upon which the complaint is based. The treasurer shall accept any amount tendered as taxes or recoupment charge upon property concerning which a complaint is then pending, computed upon the claimed valuation as set forth in the complaint. If a complaint filed under this section for the current year is not determined by the board within the time prescribed for such determination, the complaint and any proceedings in relation thereto shall be continued by the board as a valid complaint for any ensuing year until such complaint is finally determined by the board or upon any appeal from a decision of the board. In such case, the original complaint shall continue in effect without further filing by the original taxpayer, the original taxpayer's assignee, or any other person or entity authorized to file a complaint under this section. (p-7 (E) If a taxpayer files a complaint as to the classification, valuation, assessment, or any determination affecting the taxpayer's own property and tenders less than the full amount of taxes or recoupment charges as finally determined, an interest charge shall accrue as follows: (i) If the amount finally determined is less than the amount billed but more than the amount tendered, the taxpayer shall pay interest at the rate per annum prescribed by section 5703.47 of the Revised Code, computed from the date that the taxes were due on the difference between the amount finally determined and the amount tendered. This interest charge shall be in lieu of any penalty or interest charge under section 323.121 of the Revised Code unless the taxpayer failed to file a complaint and tender an amount as taxes or recoupment charges within the tiine required by this section, in which case section 323.121 of the Revised Code applies. (2) If the amount of taxes finally determined is equal to or greater than the amount billed and more than the amount tendered, the taxpayer shall pay interest at the rate prescribed by section 5703.47 of the Revised Code from the date the taxes were due on the difference between the amount finally determined and the amount tendered, such interest to be in lieu of any interest charge but in addition to any penalty prescribed by section 323.121 of the Revised Code. (F) Hpon request of a complainant, the tax commissioner shall determine the common level of arGsessment of real property in the county for the year stated in the request that is not valued under section 5713.31 of the Revised Code, which common level of assessment shall be expressed as a percentage of true value and the common level of assessment of lands valued under such section, which common level of assessment shall also be expressed as a percentage of the current agricultural use value of such lands. Such determination shall be made on the basis of the most recent available sales ratio studies of the commissioner and such other factual data as the commissioner deems pertinent. (G) A complainant shall provide to the board of revision all information or evidence within the complainant's knowledge or possession that affects the real property that is the subject of the complaint. A complainant who fails to provide such information or evidence is precluded from introducing it on appeal to the board of tax appeals or the court of common pleas, except that the board of tax appeals or court may admit and consider the evidence if the complainant shows good cause for the complainant's failure to provide the information or evidence to the board of revision. (H) In case of the pendency of any proceeding in court based upon an alleged excessive, discriminatory, or illegal valuation or incorrect classification or determination, the taxpayer may tender to the treasurer an amount as taxes upon property computed upon the claimed valuation as set forth in the complaint to the court. The treasurer may accept the tender. If the tender is not accepted, no penalty shall be assessed because of the nonpayment of the full taxes assessed. zes Effective Date: 03-04-2002; 09-28-2oo6 / f 5717 o4 Appeal from decision of board of tax appeals to supreme court - parties who mav appeal - certif'ication The proceeding to obtain a reversal, vacation, or modification of a decision of the board of tax appeals shall be by appeal to the supreme court or the court of appeals for the county in which the property taxed is situate or in whicl-i the taxpayer resides. If the taxpayer is a corporation, then the proceeding to obtain such reversal, vacation, or modification shall be by appeal to the supreme court or to the court of appeals for the county in which the property taxed is situate, or the county of residence of the agent for service of process, tax notices, or demands, or the county in which the corporation has its principal place of business. In all other instances, the proceeding to obtain such reversal, vacation, or modification shall be by appeal to the court of appeals for Franldin county. Appeals from decisions of the board determining appeals from decisions of county boards of revision may be instituted by any of the persons who were parties to the appeal before the board of tax appeals, by the person in whose name the property involved in the appeal is listed or sought to be listed, if such person was not a party to the appeal before the board of tax appeals, or by the county auditor of the county in which the property involved in the appeal is located. Appeals from decisions of the board of tax appeals determining appeals from finai determinations by the tax commissioner of any preliminary, amended, or final tax assessments, reassessments, valuations, determinations, findings, computations, or orders made by the commissioner may be instituted by any of the persons who were parties to the appeal or application before the board, by the person in whose name the property is listed or sought to be listed, if the decision appealed from determines the valuation or liability of property for taxation and if any such person was not a party to the appeal or application before the board, by the taxpayer or any other person to whom the decision of the board appealed from was by law required to be certified, by the director of budget and management, if the revenue affected by the decision of the board appealed from. would accrue primarily to the state treasury, by the county auditor of the county to the undivided general tax funds of which the revenues affected by the decision of the board appealed from would primarily accrue, or by the tax commissioner. Appeals from decisions of the board upon all other appeals or applications filed with and determined by the board may be instituted by any of the persons who were parties to such appeal or application before the board, by any persons to whom the decision of the board appealed from was by law required to be certified, or by any other person to whom the board certified the decision appealed from, as authorized by section 5717.03 of the Revised Code. Such appeals shall be taken within thirty days after the date of the entry of the decision of the board on the journal of its proceedings, as provided by such 70 section, by the filing by appellant of a notice of appeal with the court to which the appeal is taken and the board. If a timely notice of appeal is filed by a party, any other party may file a notice of appeal within ten days of the date on which the first notice of appeal was filed or within the time otherwise prescribed in this section, whichever is later. A notice of appeal shall set forth the decision of the board appealed from and the errors therein complained of. Proof of the filing of such notice with the board shall be filed with the court to which the appeal is being taken. The court in which notice of appeal is first filed shall have exclusive jurisdiction of the appeal. In all such appeals the tax commissioner or all persons to whom the decision of the board appealed from is required by such section to be certified, other than the appellant, shall be made appellees. Unless waived, notice of the appeal shall be served upon all appellees by certified mail. The prosecuting attorney shall represent the county auditor in any such appeal in which the auditor is a party. The board, upon written demand filed by an appellant, shall within thirty days after the filing of such demand file with the court to which the appeal is being taken a certified transcript of the record of the proceedings of the board pertaining to the decision complained of and the evidence considered by the board in making such decision. If upon hearing and consideration of such record and evidence the court decides `^that the decision of the board appealed from is reasonable and lawful it shall affirm the same, but if the court decides that such decision of the board is unreasonable or unlawful, the court shall reverse and vacate the decision or modify it and enter final judgment in accordance with such modification. The clerk of the court shall certify the judgment of the court to the board, which shall certify such judgment to such public officials or take such other action in connection therewith as is required to give effect to the decision. The "taxpayer" includes any person required to return any property for taxation. Any party to the appeal shall have the right to appeal from the judgment of the court of appeals on questions of law, as in other cases. Effective Date: 10-05-1987 `7l