Department of Revenue v. Anaconda Am. Brass Co.

• Decision Date: 13 December 1968
• Parties: DEPARTMENT OF REVENUE, Commonwealth of Kentucky, et al., Appellants, v. ANACONDA AMERICAN BRASS COMPANY et al., Appellees.
• Court: United States State Supreme Court — District of Kentucky

Page 65

435 S.W.2d 65

DEPARTMENT OF REVENUE, Commonwealth of Kentucky, et al., Appellants, v. ANACONDA AMERICAN BRASS COMPANY et al., Appellees.

Court of Appeals of Kentucky.

Dec. 13, 1968.

Cyril E. Shadowen, William S. Riley, Dept. of Revenue, Frankfort, Sam McCracken, Franklin, for appellants.

J. David Francis, Bowling Green, for appellees.

DAVIS, Commissioner.

At issue is whether the Kentucky Board of Tax Appeals has erroneously fixed the assessment for 1967 taxes of about 189 acres of land owned by appellee, Anaconda American Brass Company. The circuit court sustained the finding of the Board of Tax Appeals, fixing the assessment at $73,670. The Simpson County Tax Commissioner had assessed the property at $133,000 for 1967 taxes, and that assessment was affirmed by the Simpson County Board of Supervisors upon Anaconda's appeal to that body. It was upon Anaconda's appeal to the Board of Tax Appeals, and after a hearing by that agency, that the assessment was reduced from $133,000 to $73,670.

According to brief for appellants, the question presented is: 'What is the correct method to be used in assessing property at a fair cash value?' In our view, that is hardly a fair statement of the question presented. Rather, we think the true issue on appeal is whether the assessment, as determined by the Board of Tax Appeals, conforms to the law and is supported by facts presented to the Board. KRS 131.370(3).

The land in question was purchased by Anaconda in December 1966 for $133,720. The Simpson County Tax Commissioner testified that he fixed the assessment so as to coincide with the purchase price. The commissioner said that the same tract had been assessed for 1966 taxes at $42,780, being its fair cash value for farm purposes calculated at about $230 per acre. He pointed out that a tentative assessment for 1967--made before the Anaconda transaction--had been fixed at about $277 per acre, for a total fair cash value of $50,330. In further explanation of his assessment at $133,000, the commissioner said: 'In appraising property at 100% of fair cash value, we as Tax Commissioners were instructed by the Department of Revenue to use sale prices whenever they were available. As far as we can tell this was a bona fide sale as there was a willing seller and a willing buyer.'

For Anaconda it was shown that only 50 acres of the tract were intended for industrial use within the foreseeable future. The other 139 acres are being rented by Anaconda for agricultural purposes. A representative of Anaconda explained that the company desired for its prime purposes the 50-acre tract and might have purchased slightly more than 50 acres, but the owner adamantly declined to sell less than the entire tract. The clear impact of evidence for Anaconda was that it knowingly paid a premium price for all the land in order to assure its acquisition of the 50 acres which it really desired to purchase. Upon the basis of the testimony heard by the Board of Tax Appeals, the Board fixed the assessment of the 50 acres shown to be intended for industrial purposes at $700 per acre or $35,000; the 139.6 acres being used for agricultural purposes was assessed at $277 per acre or $38,670. It is proper to note that evidence was presented to the Board by the tax commissioner that the only other industrial land in Simpson County was assessed at the rate of $500 per acre as respects the industrial portion of the tract and at $310 per acre for so much of the tract as is dedicated to agriculture.

The litigants recognize that since Russman v. Luckett, Ky., 391 S.W.2d 694, property is to be assessed for tax purposes at its fair cash value. Appellants point to Floyd County v....