Taxpayer, which owned paper mill and hydro-electric power plants, petitioned for review after State Board of Property Tax Review upheld denial by town board of assessors of taxpayer’s request for property tax abatement.
The Superior Court affirmed decision. Taxpayer appealed.
The Supreme Judicial Court held that:
- Two of taxpayer’s arguments were subject to review for clear error;
- Board’s decision to uphold town’s valuation of paper mill assets based on current use was warranted;
- Board did not improperly assess mill in determining highest and best use;
- Board’s finding that assessment had not involved double-counting of value of energy produced by plants was consistent with evidence; and
- Board properly applied statute in determining that town’s assessment and taxpayer’s appraisal were within 10% of each other.
Arguments of taxpayer, operator of paper mill and hydro-electric power plants that sought property tax abatement, that State Board of Property Tax Review committed legal error by deciding that power plant assets should have been valued based on highest and best use, but that mill assets should have been valued based on current use, and that Board committed legal error in deciding that difference between assessed property value and taxpayer’s asserted value was within range designated as accurate within reasonable limits of practicality raised primarily factual, not legal, challenges to Board’s decisions, and thus such arguments were subject to review for clear error, even though operator proposed de novo standard of review.
Decision of State Board of Property Tax Review to uphold town’s valuation of taxpayer’s paper mill assets, which were located partially in town, based on assets’ current use as operating mill, rather than based on assets’ liquidation or salvage value, was warranted, even though taxpayer asserted that liquidation or salvage value was assets’ highest and best use; Board pointed out that, at time of property tax assessment, mill was state-of-the-art facility that operated in the black, that its owners were not in financial difficulty, and that owners had announced mill’s closure without communicating cooperatively with town, and Board found that mill had been closed and its equipment and machinery sold as scrap under restrictions because owners no longer wanted to operate mill, but that owners’ decisions should not have dictated mill’s highest and best use.
State Board of Property Tax Review, in determining highest and best use of taxpayer’s paper mill, for purpose of determining mill’s just value, and thus proper property tax assessment, did not improperly assess mill; Board simply rejected taxpayer’s appraisal of mill as incredible, starting with taxpayer’s view of mill assets’ highest and best use as being liquidation value, which was within Board’s prerogative as fact-finder, and determined that taxpayer failed to prove that judgment of assessors was so irrational or unreasonable that property was substantially overvalued.
Finding of State Board of Property Tax Review that assessment of taxpayer’s paper mill and hydro-electric power plants had not involved double-counting of value of energy produced by plants was consistent with evidence, even though taxpayer asserted that value had been counted once by including value of energy in valuation of plants as “merchant power plants” and again by attributing value of energy supplied to mill as “avoided cost”; while Board found that 40% of mill’s energy requirement that plants provided constituted avoided cost to mill, such finding did not necessarily mean that town, in assessing property tax, factored avoided cost into assessment of mill assets, and individual who provided assessment calculations as guidance relied on cost approach, which did not count value of energy as avoided cost equivalent to income.
State Board of Property Tax Assessment properly applied statute indicating that, in proceedings related to protested assessment, it is sufficient defense of assessment that it is accurate within reasonable limits of practicality, except when proven deviation of at least 10% from relevant assessment ratio exists, in determining that town’s assessment of value of portion of taxpayer’s hydro-electric power plants that was within town and value offered in taxpayer’s appraisal were within 10% of one another; while Board used town’s valuation that excluded equipment that was exempt from taxation pursuant to Business Equipment Tax Exemption (BETE) program, such equipment was not included in protested assessment, and BETE statute required town to value and assess BETE-eligible assets only for purposes of reimbursement.