The Perry County Property Valuation Administrator’s (“PVA”) recent attempts to increase property tax assessments in the heart of Kentucky coal country have been rejected by the Kentucky Board of Tax Appeals (the “Board”). On March 24, 2016, the Board issued five orders adjudicating real property appeals from Perry County. With one exception, the Board found the PVA failed to present sufficient evidence to support increasing the value of the properties.
Four of the five appeals involved the same taxpayer, Glenn Baker. The Board upheld the decision of the Perry County Board of Assessment Appeals lowering the value of a parcel of commercial property owned by Mr. Baker from $2,450,000 to $2,100,000. The Board noted the PVA failed to present any valuation evidence at the hearing, did not provide an income or sales comparison approach, and did not conduct an appraisal of the property. Although the PVA utilized the sales price in a deed for the property from a 2011Master Commissioner’s sale and from a quitclaim deed the following year, the taxpayer presented evidence at the hearing that neither the 2011 or 2012 deeds represented the fair cash value of the property due to circumstances surrounding each sale. Because the Board had no valuation evidence on behalf of the PVA upon which it could raise the value of the property, the Board affirmed the value set by the local board.
Likewise, the Board affirmed the local board’s ruling valuing an unimproved lot owned by Mr. Baker at $35,000. The PVA valued the lot at $70,000. Although the PVA’s representative relied upon the value of three other properties to support the assessment, the Board found that unlike the lot at issue, each of the other properties had an improvement. Furthermore, the PVA’s witness testified the lot was in the flood zone and therefore could not be improved. The taxpayer testified that he receives no income from the lot, which is used for free parking.
Finally, the Board upheld the local board’s value of Mr. Baker’s commercial hotel property, which lowered the PVA’s assessment from $2,421,000 to $2,000,000. Once again, the Board found the PVA failed to present any valuation evidence in support of the assessment. The Board also affirmed the local board’s ruling valuing a motor inn at $850,000, significantly lower than the PVA’s assessment of the property at $1,650,000. Although the PVA relied upon assessments of other hotels in the area, the Board noted that assessments do not constitute competent probative valuation evidence.
The PVA did score one victory with respect to an unimproved, partially paved lot. The Board upheld the PVA’s assessment valuing the lot at $700,000, which was based upon the 2006 deed price for the property. The Board noted that the taxpayer listed the property for sale at $700,000, and testimony from the PVA’s witness indicated the commercial area surrounding the lot was doing well. Thus, the Board held the PVA met his burden of proof that the property was worth $700,000 for 2015.