Portland Canning Co. v. State Tax Commission
| Decision Date | 15 July 1965 |
| Citation | 404 P.2d 236,241 Or. 109 |
| Parties | PORTLAND CANNING COMPANY, an Oregon corporation, Respondent, v. STATE TAX COMMISSION, Appellant. |
| Court | Oregon Supreme Court |
A. W. Pedersen, Asst. Atty. Gen., Salem, argued the cause for appellant. With him on the brief was Robert Y. Thornton, Atty. Gen., Salem.
DeMar Batchelor, Hillsboro, argued the cause for respondent. On the brief were Carrell F. Bradley and Bush & Bradley, Hilsboro.
Before McALLISTER, C. J., and SLOAN, GOODWIN, HOLMAN, and LUSK, JJ.
Plaintiff, Portland Canning Company, hereinafter referred to as the taxpayer, owns and operates two food canning plants in Washington County. The defendant, State Tax Commission, assumed the responsibilty, pursuant to ORS 306.125, of evaluating the plants for tax purposes for the tax year 1962-1963. Using the values as determined by the commission, the Washington County Assessor assessed the plants. The taxpayer petitioned the Board of Equalization of Washington County for a reduction of these values. After a hearing in which the commission participated, the Board of Equalization reduced the values placed upon the equipment in the plants but not on the land and buildings. Neither the taxpayer nor the Washington County Assessor appealed the board's decision. The commission then, without a hearing in which the taxpayer had an opportunity to participate, rendered a supervisory order under ORS 306.111 directing the assessor to reinstate the values on the assessment rolls as originally determined by the commission.
The taxpayer appealed the supervisory order to the Tax Court. The Tax Court set the commission's order aside and reinstated the values as determined by the Board of Equalization. The commission has appealed.
The taxpayer contends it was denied due process of law by the commission's action in reversing the Board of Equalization without providing a hearing in which the taxpayer could participate. The Tax Court found against the taxpayer on this issue because it was afforded a trial de novo in the Tax Court which satisfied the due process requirement. Mallatt v. Luihn, 206 Or. 678, 692, 294 P.2d 871 (1956). With this ruling this court agrees.
The parties have disagreed as to which valuation the presumption of validity attends upon trial. This dispute becomes irrelevant because of the manner in which we dispose of the principal contentions of the parties.
The principal issue is the manner of the evaluation of the canning machinery and equipment in the taxpayer's plants. In evaluating it the commission used the cost approach to determine the value to the owner. This is done by taking replacement cost new at present cost and subtracting depreciation because of age and obsolescence. The taxpayer contends that under the statutes and the commission's regulations the market data approach must be used in which value is based on the sales price of comparable properties which have been sold recently. ORS 308.232 states in part as follows:
'(1) Except as provided in subsections (2) and (3) of this section, beginning with the assessment date January 1, 1961, all real or personal property within each county shall be assessed at 25 percent of its true cash value.'
ORS 308.205 is as follows:
The rules and regulations promulgated by the commission, Article 8205.1, in force at the time, were as follows:
'Market value, as a concept, assumes that there are buyers and sellers for all properties. Actually, as related to a particular class of property, a market may or may not exist.
'1. Market value as a basis for true cash value shall be taken to mean the amount of money or money's worth for...
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