Tiffany v. County Bd. of Review In and For Greene County

• Decision Date: 17 June 1971
• Docket Number: No. 54285,54285
• Citation: 188 N.W.2d 343
• Parties: John F. TIFFANY, (a/k/a J. F. Tiffany), et al., Appellants, v. COUNTY BOARD OF REVIEW IN AND FOR GREENE COUNTY, Iowa, et al., Appellees.
• Court: Iowa Supreme Court

Page 343

188 N.W.2d 343

John F. TIFFANY, (a/k/a J. F. Tiffany), et al., Appellants, v. COUNTY BOARD OF REVIEW IN AND FOR GREENE COUNTY, Iowa, et al., Appellees.

No. 54285.

Supreme Court of Iowa.

June 17, 1971.

Cudahy & Wilcox and Gerald W. Magee, Jefferson, for appellants.

R. K. Richardson, County Atty., and Richardson & Handley, Jefferson, for appellees.

REES, Justice.

This is an appeal from the district court's decree as to valuation of items of personal and real property for tax purposes for the year 1968. Plaintiffs had previously appealed their assessments to the Greene County Board of Review.

Plaintiffs allege that the district court erred in its decision as to the following:

1. A field harvester which plaintiff John F. Tiffany contends should have been deleted from his assessed property list.

2. Three items of farm machinery which taxpayers contend were illegally and excessively valued.

3. Farm buildings and farmland which the taxpayers contend were excessively and illegally valued.

The district court heard testimony and lowered the values on the machinery and both sets of farm buildings involved. Plaintiffs appeal for further reductions and to eliminate the field harvester from their tax assessment rolls.

I. This case involves the tax statute which is now § 441.21, Code, 1971, but which was in the form found in Chapter 354 of the Sixty-second General Assembly when applied to the facts in this case. The amendments in 1969 are now embraced in § 441.21, Code, 1971. The 1969 amendments directed that the assessor give 50 percent consideration to productivity and net earning capacity and current use when valuing agricultural property. These 1969 amendments were not in the statute when applied to the facts in this case and are not a part of our consideration here.

II. Chapter 354 of the Sixty-second General Assembly stated all real and tangible personal property subject to taxation shall be valued at its actual value and assessed at 27 percent of actual value to determine taxable value of the property.

The statute then defined actual value as follows 'The actual value of all property subject to assessment and taxation shall be fair and reasonable market value of such property. 'Market value' is defined as the fair and reasonable exchange in the year in which the property is listed and valued between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and each being familiar with all the facts relating to the particular property. Sale prices of the property or comparable property in normal transactions reflecting market value, and the probable availability or unavailability of persons interested in purchasing the property, shall be taken into consideration in arriving at its market value. In assessing and placing a value on agricultural property, said value shall be determined on the basis of its current market value as reflected by its current use.'

The statute further provides,

'In the event market value of the property being assessed cannot be readily established in the foregoing manner, then the assessor may consider its productive and earning capacity, if any, industrial conditions, its cost, physical and functional depreciation and obsolescence and replacement cost, and all other factors which would assist in determining the fair and reasonable market value of the property but the actual value shall not be determined by use of only one such factor.'

The old statute on taxation, § 441.21, Code, 1966, provided as follows,

'In arriving at said actual value the assessor shall take into consideration its (all taxable property) productive and earning capacity, if any, past, present, and prospective, its market value, if any, and all other matters that affect the actual value of the property; and the burden of proof shall be upon any complainant attacking such valuation as excessive, inadequate or inequitable.'

Changes in the statute from § 441.21, Code, 1966, to the statute in Chapter 354, 62nd G.A., will be noted and discussed in the determination of the issues raised by this appeal. We note the particular issues raised by this case involve a new statute and are matters of first impression before this court.

III. Plaintiffs allege three errors by the trial court:

1. That the court erred in failing to find the taxing authority had not followed the guidelines for determining fair and reasonable market value as set out in Chapter 354, section 1, 62nd G.A.

2. That the court erred in failing to follow the statutory provision (found in Ch. 354, 62nd G.A.) that shifts the burden of proof to the assessor after the taxpayer presents evidence of value lower than assessed value by at least two disinterested witnesses. The specific error alleged is the failure to find the assessor had not met the taxpayer's evidence as to lower value.

3. That the court erred in failing to find plaintiff John F. Tiffany did not own the field havester and that it should be removed from taxpayer's assessment list.

More specifically, plaintiffs argue with regard to the three items of machinery that the court's valuations were excessive in light of the taxpayer's evidence. The evidence as to value of the three items is as follows:

1. A J. D. Tandem Disc--valued by assessor at $75, while highest value given by plaintiffs' three witnesses was $35; district court set value at $50.

2. A Badger Silo Blower--all of plaintiffs' valuation witnesses, except one with no opinion, valued this item at $200; assessor valued it at $410; court set value at $300.

3. A Badger Silo Unloader--value made by assessor was $715; the plaintiffs valued it at $550; two of plaintiffs' witnesses valued it at $400 and $250, respectively; district court set value at $600.

Based on such evidence, the plaintiffs argue they provided evidence as to value of the machinery, but that assessor relied solely on book guidelines as to value of farm machinery compiled by the state taxing authority. Plaintiffs further argue that the assessor and the Board of Review never actually observed these machine items, and that a taxpayer has a right to appeal as to value of specific property items.

With regard to the alleged excessive and illegal valuation of farm real estate and buildings, plaintiffs argue the assessor failed to follow the statute in that he used the method of replacement cost-depreciation to value the farm buildings. Plaintiffs and their witnesses argue farm buildings have a fair market value when such buildings are considered in conjunction with the farmland as a unit. Thus, they insist the assessor erred in failing to value the land and buildings as a unit and by not using fair market value methods. The witnesses for plaintiffs made their valuations of the farm buildings on the basis of their worth as related to the market value of the farm as a unit.

Plaintiffs contend the assessor was arbitrary and unreasonable in requiring more than taxpayer's word and a showing of some checks to establish that taxpayer's son owned the field harvester. Plaintiff John F. Tiffany argued that his son had always owned the harvester but that it had been carried on the plaintiff's tax roll because, prior to the passage of the $2500 tax credit on personal property, there had been no reason not to list it there.

IV. The defendant-assessor argues that the trial court did not err in refusing to remove the field harvester from John F. Tiffany's tax assessment roll. Assessor further contends the trial court was under no obligation to further reduce the valuations for the items of machinery and for the farm buildings and land.

Specifically, defendants contend an Attorney General's Opinion of December 27, 1968 permits the assessor the discretion to require further documentation of ownership of personal property for purposes of applying the newly enacted $2500 tax credit. The only restraint on such discretion is that it must not be used in an arbitrary or unreasonable manner.

Defendants make essentially similar arguments to support the trial court's position with regard to the valuations of the machinery and the farm buildings and land. Defendants say a reviewing court must look not to the individual items which make the aggregate assessed value, but rather the court should look only at the aggregate assessed value to determine whether that figure alone is excessive. Defendants also argue that no burden of proof passed to them even though it could under the new statute; no burden passed to them because, they claim, taxpayer's witnesses accepted, for the sake of argument, the assessor's land values and then simply gave different values for the farm buildings, which values were added to the land value.

V. The specific areas of dispute in this case, i.e., the valuation of machinery, farm buildings and land, and the status of the field harvester for tax credit purposes, raise some fundamental issues concerning the interpretation and application of the newly enacted tax statute, Ch. 354, 62nd G.A., or in its present amended form, § 441.21, Code 1971.

One of the issues involved is what is the meaning of the statutory language which states that the burden of proof shifts to the assessor after taxpayer produces evidence by at least two disinterested witnesses that the value of property is lower than the assessor's value.

A second issue raised, particularly by the dispute over the value of the farm buildings, is how such property should be valued under the statute.

An important related issue is whether the new statute operates to implicitly change the standard for appellate court review of cases that allege excessiveness and illegality in assessed valuations.

The final issue raised involves a determination of the nature and scope of the assessor's discretion in requiring taxpayer documentation of ownership of property that may be subject to the $2500 personal property tax credit.

VI. Considering first the issue of the standard for...