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PROPERTY TAX COMMISSION

PROPERTY TAX COMMISSION. North Carolina Department of Revenue 2011 Advanced Real and Personal Property Seminar September 14, 2011 Joseph S. Koury Convention Center Greensboro, NC. Property Tax Commission G.S. 105-288.

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PROPERTY TAX COMMISSION

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  1. PROPERTY TAX COMMISSION North Carolina Department of Revenue 2011 Advanced Real and Personal Property Seminar September 14, 2011 Joseph S. Koury Convention Center Greensboro, NC

  2. Property Tax CommissionG.S. 105-288 • Constitutes the State Board of Equalization and Review for the valuation and taxation of property in North Carolina. • Five members, three of whom are appointed by the Governor and two of whom are appointed by the General Assembly, one on recommendation of the Speaker of the House and one on recommendation of the President Pro Tempore of the Senate. • Governor appoints the chair and members elect the vice-chair.

  3. Duties of the Commission • Members: • Terry L. Wheeler, Chair • Paul Pittman, Vice Chair • Aaron W. Plyler • Georgette (Gigi) Dixon • William (Bill) Peaslee

  4. Notice of Appeal Application for Hearing • Must be in writing and state the grounds for the appeal. 105-290(f). • Must be filed with the Commission within 30 days after the date the Board mailed a notice of its decision to the taxpayer. 105-290(e). • If by US Mail--must have a timely and legible postmark affixed by the US Postal Service, OR • If not by US Mail or if USPS postmark does not show the date of mailing--the appeal will be considered filed when it is received by the Commission. 105-290(g).

  5. The Notice of Appeal Motion to Dismiss • If the notice of appeal is not timely filed, the county attorney shall file a Motion to Dismiss the appeal for failure of the taxpayer to meet the statutory time limit. • Commission Form AV-2 (Motion to Dismiss). • Form AV-2 is available online www.dornc.com/downloads/property.html

  6. Application for Hearing • Application for Hearing (Form AV-14): • Untimely filed (17 NCAC 11 .0212). • Failure to file (17 NCAC 11 .0212). • Appeal dismissed by motion of the Commission. • The county attorney may file a written answer to the taxpayer’s AV-14 (17 NCAC 11 .0212).

  7. Application for Hearing • Application must be signed and filed by the taxpayer or the taxpayer’s attorney who is licensed to practice law in North Carolina.

  8. Discovery • Discovery Rule: 17 NCAC 11 .0218. • Discovery must occur before scheduling an appeal for hearing. • Examples: Depositions, Interrogatories, Production of Documents. • Motions to Compel Discovery. • Motions to Dismiss Appeal (taxpayer fails to respond to discovery).

  9. Commission Hearings • FAQs: www.dornc.com/taxes/property/ptc_faq.html • Hearing dates: www.dornc.com/taxes/property/ptc_hearingdates.pdf • 50 day notice of hearing: (example: September 21-23, 2011 Session of Hearings). • 20 day notice: (example: Wednesday, September 21, 2011, at 1:00 p.m.).

  10. Commission Hearings • All monthly hearings in Raleigh, unless Commission designates another location (17 NCAC 11 .0207). NCDOR Building, Room 135, located at 501 N. Wilmington Street. • The hearing before the Commission is a formal adversarial proceeding conducted under the Rules of Evidence (17 NCAC 11 .0209).

  11. Commission Hearings • Exhibits (17 NCAC 11 .0213). • Exhibit notebooks (tab exhibits and number pages). • File one copy of the schedule of values, standards and rules. • Include relevant pages from the schedule of values in the exhibit notebook. • Pre-Hearing Order (17 NCAC 11 .0214). • Subpoenas.

  12. Commission Hearings • Exchange documents and enter into Order on Final Pre-Hearing Conference. • File six copies with Commission Secretary. • File briefs (legal issues). • You are the expert. • Testimony is taken under oath or affirmation by the witness. • Court reporter is present.

  13. Commission Hearings • Motions to dismiss: • Failure to Appear at Hearing (17 NCAC 11 .0217). • (Dismissal is appropriate sanction for failure of the taxpayer to follow the rules. • In re Fayetteville Hotel Assocs., 117 N.C. App. 285. 450 S.E.2d 568 (1994) aff’d per curiam, 342 N.C. 405, 464 S.E.2d 298 (1995).

  14. Commission Hearings • Commission Hearings are open to the public. • By motion of either party, the Commission may grant a request to close the hearing to the public to protect a “trade secret” or other confidential information.

  15. Commission Hearings • The North Carolina Rules of Evidence govern the admissibility of evidence and order of presenting evidence at the hearings (17 NCAC 11 .0216).

  16. Commission Hearings • Ad valorem tax assessments are presumed to be correct. In Re Amp, Inc., 287 NC 547, 215 S.E.2d 752 (1975). • If the taxpayer rebuts the initial presumption, then the burden shifts to the taxing authority to demonstrate that its methods produce true values. In re IBM Credit Corporation (IBM Credit II) , N.C. App.,689 S.E.22d 487, 489 (2009).

  17. Commission Hearings • The taxpayer rebuts the presumption by presenting “competent, material and substantial evidence” that tends to show that: (1) the county tax supervisor used an arbitrary method of valuation; or (2) the county tax supervisor used an illegal method of valuation; and (3) that the assessment substantiallyexceeded the true value in money of the property. In Re Amp, Inc., 287 NC 547, 215 S.E.2d 752 (1975).

  18. Commission Decisions • The Commission deliberates in private to reach a decision; but all final decisions and orders are public records.

  19. Judicial Review • The notice of appeal and exceptions must be filed within 30 days after the entry of the Commission’s final decision. • The appeal is to the North Carolina Court of Appeal as provided in G.S. 7A-29. (G.S.105-345). • Failure of Appellant to file record on appeal. • File Motion to Dismiss. (Appellate Rules).

  20. Case Law Update In re IBM Credit Corporation, (Durham County) 01 PTC 544, entered June 24, 2011. Ruling: The Commission rejects both the U5 schedule and the valuation method proposed by IBMC’s expert witness from NACOMEX and relies instead on testimony of IBMC’s sales manager for marketing and personal property manager to develop a depreciation schedule to arrive at a value of $144,472,252 for the subject property as of January 1, 2001.

  21. Case Law Update In re Family Tree Farm, LLC, (Halifax County) 07 PTC 719, entered 21, 2010. Ruling: County’s value affirmed where taxpayer’s Forest Management Plan did not refer to wasteland, and taxpayer provided no evidence of governmental restrictions that further reduced the land’s value. Commission also rejected the claim that individual shares in the LLC should be individually valued.

  22. Case Law Update In re Rivershore, LLC, (Craven County) 09 PTC 019, entered February 3, 2011. Ruling: When qualifying trust transferred present-use classified timberland to Rivershore, the property was disqualified from present-use value qualification as forestland and roll-back was triggered because the owner’s primary purpose was not commercial growing of trees as required in G.S. 105-277.2(4).

  23. Case Law Update Farrier’s Ridge Development, LLC, (Wilson County) 09 PTC 186, entered October 15, 2010. Ruling: Developer applied for special use valuation for Phase II of residential subdivision alleging that the land continued to be used for agricultural purposes. County denied application. Commission affirmed County’s denial by ruling that taxpayer’s principle business was residential development.

  24. Case Law Update In re David H. Murdock Research Institute, (Cabarrus County) 09 PTC 022, entered May 31, 2011. Ruling: Exemption application filed in July 2008 by exempt charitable/scientific nonprofit organization was not untimely. The County should have granted exemption for tax year 2008 as provided in G.S. 105-282.1(a1).

  25. Case Law Update In re Home Health and Hospice Care, Inc., (Wayne County) 09 PTC 322, entered July 12, 2011. Ruling: Administrative offices of hospice facility also qualify for exemption as used for charitable and charitable hospital purposes as provided in G.S. 105-278.7 and G.S. 105-278.8.

  26. Case Law Update In re Joshua McLamb (Sampson County) 10 PTC 954, entered February 25, 2011. Ruling: Taxpayer challenged schedule of values which classified special use agricultural land at different rates depending upon soil type submitted by landowner. Commission upheld the schedule of values, noting that the Machinery Act places the burden of establishing entitlement to special use classification on the applicant.

  27. Case Law Update In re Louisiana Pacific Corporation, (COA10-500), filed December 7, 2011. Ruling: Commission lacks jurisdiction to consider taxpayer’s appeals when the taxpayer did not timely file notices of appeal with the Commission. See G.S. 105-290.

  28. Case Law Update In re Fontana Village, Inc., (Graham County) 09 PTC 322, entered July 12, 2011. Ruling: Fontana Village’s leasehold interest in exempt federal property is not taxable by Graham County.

  29. Case Law Update In re Novartis Vaccines and Diagnostics (Wake County) 10 PTC 434, [real property] and 11 PTC 028 [personal property]entered June 30, 2011. Ruling: Commission held that 40% of the value of the real and personal property is exempt from taxation until all ownership interest vests to Novartis.

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