Graham County v. Graham County Elec. Co-op., Inc., 10853--PR

Decision Date10 July 1973
Docket NumberNo. 10853--PR,10853--PR
Citation512 P.2d 11,109 Ariz. 468
PartiesGRAHAM COUNTY and the Arizona State Department of Property Valuation, Appellants, v. GRAHAM COUNTY ELECTRIC COOPERATIVE, INC., an Arizona corporation, Appellee.
CourtArizona Supreme Court

Gary K. Nelson, Atty. Gen., by James D. Winter, Asst. Atty. Gen., Phoenix, for appellants.

Anderson, Welker & Flake by Dudley S. Welker, Safford, Jennings, Strouss & Salmon by Robert E. Hurley, Phoenix, for appellee.

HOLOHAN, Justice.

We accepted review of the decision of the Court of Appeals, 16 Ariz.App. 554, 494 P.2d 754 (1972), which reversed the decision of the Superior Court. The decision of the Court of Appeals is vacated.

Appellee, Graham County Electric Cooperative, Inc., brought two actions in the Superior Court of Graham County challenging the valuation of its property for the years 1968 and 1969 and seeking a refund of property taxes paid under the assessments. The actions were consolidated for trial.

The Arizona State Department of Property Valuation determined that appellee's property in Graham County had a value of $2,355,950 in 1968 and $2,189,655 in 1969. The trial court found these valuations were excessive and determined that the value of the property for each year was $1,923,511.

In Arizona valuation for property tax purposes is to be found 'by the use of standard appraisal methods and techniques.' A.R.S. § 42--201, subsec. 7. A taxpayer dissatisfied with the valuation of his property may appeal to the superior court. A.R.S. § 42--146.

The statute in effect at the time this case was tried (A.R.S. § 42--147, subsec. B) provided:

'B. At the hearing both parties may present evidence of any matters that relate to the full cash value of the property in question as of the date of its assessment. The valuation as approved by the state board shall be presumed to be correct and lawful.'

A taxpayer in challenging an assessment in the superior court has the burden of proof. State Tax Commission v. Magma Copper Co., 41 Ariz. 97, 15 P.2d 961 (1932). He must prove that the assessment is excessive and present evidence from which the trial court can determine the full cash value of the property in question.

The statutory presumption that the valuation of the assessing authority is correct has long been construed to be simply one of fact. As this Court stated in State Tax Commission v. Phelps Dodge Corp., 62 Ariz. 320, 157 P.2d 693 (1945):

'The presumption, although declared by statute, is one of fact, and may be rebutted and overcome by the evidence . . ..

'. . . Whenever evidence contradicting the presumption is received, the presumption disappears, and the trial court is bound to follow the usual rules of evidence in reaching the ultimate conclusion of fact. The presumption is never to be placed in the scale and weighed as evidence. When the opposite party has produced Prima facie evidence, the presumption has spent its force and served its purpose, and the party in whose behalf it had theretofore operated must meet the opponent's Prima facie case With evidence and not with presumptions.' (62 Ariz. at 330, 157 P.2d at 697.)

In the Four Corners supplemental opinion (Navajo County v. Four Corners Pipe Line Co., 107 Ariz. 296, 486 P.2d 778 (1971)) this Court had occasion to review the principles applicable to tax evaluation assessment cases. The Court held that, unlike some states, there is no necessity for the taxpayer to prove or the court to find, that the assessment was fraudulent, capricious or arbitrary.

'In Arizona, in order to overturn the valuation fixed by the taxing authority there must be a finding--substantiated by competent evidence--that such valuation was 'excessive.' The burden of proof is on the plaintiff.' (107 Ariz. at 298, 486 P.2d at 780.)

The statute, A.R.S. § 42--147, subsec. C (now A.R.S. § 42--152, subsec. C), provides that if the court finds that the valuation is excessive, the court shall find the full cash value of the property and render judgment. It is clear that before the superior court may change the valuation it must first find that the valuation of the assessing authority is excessive. It is true, as was pointed out in the Four Corners supplemental opinion and State Tax Commission v. Phelps Dodge Corp., Supra, that the procedure may be part of a single trial, and the evidence offered to show excessiveness may also be a part or all of the evidence in determining the full cash value.

The taxpayer in this case to establish that the assessment was excessive offered evidence directed against the method of valuation used by the Department and also evidence of a different full cash value....

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30 cases
  • Recreation Centers of Sun City, Inc. v. Maricopa County, CV-87-0087-PR
    • United States
    • Supreme Court of Arizona
    • November 2, 1989
    ...Arizona courts have specifically addressed challenges to tax valuation by nonprofit enterprises. See Graham County v. Graham County Elec. Coop., Inc., 109 Ariz 468, 512 P.2d 11 (1973). In Graham County, as in the present case, the trial court accepted the taxpayer's low valuation of the pro......
  • Inspiration Consol. Copper Co. v. Arizona Dept. of Revenue, 1
    • United States
    • Court of Appeals of Arizona
    • September 19, 1985
    ...and that whenever evidence contradicting the presumption is received, the presumption disappears. Graham County v. Graham County Electric Cooperative, Inc., 109 Ariz. 468, 512 P.2d 11 (1973); Department of Property Valuation v. Trico Electric Co-Op, Inc., 113 Ariz. 68, 546 P.2d 804 (1976); ......
  • State v. Grilz, 5345
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    • Supreme Court of Arizona
    • June 14, 1983
    ...546 P.2d 804 (1976); Maricopa County v. Sperry Rand Corp., 112 Ariz. 579, 544 P.2d 1094 (1976); Graham County v. Graham County Electric Cooperative, Inc., 109 Ariz. 468, 512 P.2d 11 (1973), and State Tax Commission v. Phelps Dodge Corp., 62 Ariz. 320, 157 P.2d 693 (1945) (presumption establ......
  • Sulphur Springs Valley Elec. Coop., Inc. v. Ariz. Dep't of Revenue, 1 CA-TX 14-0002
    • United States
    • Court of Appeals of Arizona
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    ...Sulphur Springs' appeals for all four years, reasoning that our supreme court's holding in Graham County v. Graham County Electric Cooperative, Inc., 109 Ariz. 468, 512 P.2d 11 (1973), prohibits the use of an income approach in valuing the property of a nonprofit electric distribution coope......
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