Rodeo Tel. Membership Corp. v. Greeley County, 36428

• Decision Date: 10 March 1967
• Docket Number: No. 36428,36428
• Citation: 181 Neb. 492,149 N.W.2d 357
• Parties: RODEO TELEPHONE MEMBERSHIP CORPORATION, Appellant, v. The COUNTY OF GREELEY et al., Appellees.
• Court: Nebraska Supreme Court

Page 357

149 N.W.2d 357

181 Neb. 492

RODEO TELEPHONE MEMBERSHIP CORPORATION, Appellant, v. The COUNTY OF GREELEY et al., Appellees.

No. 36428.

Supreme Court of Nebraska.

March 10, 1967.

Syllabus by the Court

1. Formulas or standards are merely methods for determining the ultimate fact of valuation for purposes of taxation. There are no settled and infallible rules for determining actual value.

2. The value of the property of a telephone utility as returned to the Nebraska State Railway Commission for ratemaking purposes may be considered in arriving at actual value for taxing purposes.

3. There is a presumption that the county board of equalization properly performed its official duties in determining actual value for tax purposes and the burden is on the taxpayer to establish that the valuation for tax purposes is excessive.

4. The use of a formula or standard in determining the actual value of the tangible personal property of a telephone company is not improper in the absence of evidence that it was arbitrary, capricious, or unreasonable. The taxpayer must establish that the application of the formula resulted in the assessment of its property at more than its actual value, or violated the constitutional requirement that taxes on tangible property be levied uniformly and proportionately.

Vogeltanz & Kutitschek, Ord, for appellant.

Clarence A. H. Meyer, Atty. Gen., H. G. Hamilton, Asst. Atty. Gen., Lincoln, Harold E. Connors, County Atty., Greeley, for appellees.

Heard before WHITE, C. J., and CARTER, SPENCER, BOSLAUGH, SMITH, McCOWN, and NEWTON, JJ.

McCOWN, Justice.

The valuation of tangible personal property of a telephone company for tax purposes is involved. The plaintiff, Rodeo Telephone Membership Corporation, owns and operates a telephone system extending into several counties. For the year 1964 the company filed its tangible personal property tax schedule for its property in Greeley County, Nebraska, and reported an actual value of $43,270. The actual value was increased to the sum of $86,088. Plaintiff's protest was rejected by the county board of equalization. Plaintiff appealed to the district court where its petition was dismissed and this appeal followed.

The essential question is whether or not a formula not specified by statute, based upon valuations reported by the taxpayer to the Nebraska State Railway Commission for rate purposes, may be used as the principal basis for fixing actual value of the property for tax purposes. The formula involved here is based on the value of the property of a telephone company returned to the railway commission for ratemaking purposes. After deductions for real estate and personal property otherwise valued and taxed, the figure is further reduced by 40 percent for depreciation. The resulting figure becomes the actual value of tangible personal property to which the statutory assessment percentage is applied. This assessed valuation is then allocated on a mileage basis to the various counties in which the company operates. The manager of the plaintiff conceded that the figures in its report to the railway commission reported the values of its property in their true sense. There is no issue of uniformity raised and this method of valuation is used for all telephone companies in Nebraska.

As nearly as we can determine, the plaintiff's position is that only the Legislature may prescribe standards and methods for determination of value and the use of any formula not prescribed by the Legislature is somehow illegal or improper. The ultimate facts to be established are value and uniformity in the case of the ad valorem tax on tangible property provided for by the Constitution of Nebraska. Formulas or standards,...