This decision has been designated as "Supreme Court of Vermont Appeals Disposed of Without Published Opinion or Memorandum Decision." table in the Atlantic Reporter
Appeal from: PVR Division. DOCKET NO. PVR 2012-24.
Reiber, C.J., Skoglund, and Crawford, JJ.
In the above-entitled cause, the Clerk will enter:
Taxpayer appeals the decision of the state property tax hearing officer listing his residential property at $2,085,902 for the year 2012. We reverse and remand.
The subject property's principal structure is a premium custom-built log cabin containing 6370 square feet of above-grade living space, a 4526-square-foot basement that includes 2884 square feet of finished living space, and over 3000 square feet of exterior decks. The subject property also includes four other structures located on 267 acres, most of which are in the Vermont Current Use Program. Construction of the residence commenced in 2005 and was mostly completed by 2007. The property was assessed at just under $2 million from 2007 to 2008 and just over $3.5 million from 2009 to 2011.
The Town of Brookline assessed the property for the year 2012 at $3,555,887. The Town used land sales and the Computer Assisted Mass. Assessment (CAMA) program to apply a reproduction cost approach to valuing the property. In response to taxpayer's grievance, the town listers reduced the fair market value of the property to $2,188,512. For the most part, the Town arrived at the lower assessment by inserting into its calculation a percentage reduction for physical, functional, and economic depreciation related to age, condition, functionality, and location. Notwithstanding the significant reduction in value, taxpayer then appealed to the Board of Civil Authority (BCA), which increased the fair market value of the property back up to $3,509,700. Taxpayer then appealed to the state hearing officer, who found the listers' determination of $2,188,512 to be the most persuasive evidence of fair market value. After calculating an excluded reduction, the hearing officer placed the subject property on the Town's grand list at $2,085,902.
Taxpayer's two principal arguments on appeal are: (1) the Town's manipulation of quality level input data to increase the fair market value of his property violated the proportional contribution clause set forth in Chapter I, Article 9 of the Vermont Constitution; and (2) the Town's violations rendered every stage of the proceedings constitutionally infirm, thereby justifying the extraordinary remedy of this Court striking the manipulated data and entering a new number supported by the evidence -- not only for the contested year but for every year that the manipulated data was part of the calculation of the assessment of the subject property.
Taxpayer's first argument arises from the Town's insertion of a quality factor of 10 for his residence, when no other residential property in the town had a higher rating than 4.5. He asserts that the Town intentionally manipulated that quality factor to arrive at its preconceived notion of what the assessed value of the house should be. He compares this case to Allen v. Town of West Windsor, 2004 VT 51, ¶ 5, 177 Vt. 1, 852 A.2d 627, where the record before the state appraiser established that the town listers manipulated quality-level inputs in its computer program to arrive at appraised values matching the prices paid for recently sold properties. Because the upward adjustment to the quality-level input was not applied uniformly to all town properties in that case -- but rather only to recently sold properties -- the owners of recently sold property were paying a disproportionate amount of property taxes. Id. Accordingly, we affirmed the state appraiser's decision to reduce the assessed value of the five grieving taxpayers' properties. Id. ¶ 10; see M.T. Assocs. v. Town of Randolph, 2005 VT 112, ¶ ¶ 12, 17, 179 Vt. 81, 889 A.2d 740 (stating that taxpayers claiming violation of proportional contribution clause have burden of showing absence of any rational basis for government's differing treatment of similarly situated taxpayers).
As we stated in Allen, " [t]he overriding goal is to ensure that, whatever the fair market value of a property might be, its listed value corresponds with the listed value of comparable properties so that no taxpayer pays more than his or her fair share of the property tax burden." 177 Vt. 1, 2004 VT 51, ¶ 9, 852 A.2d 627. In contrast to Allen, however, taxpayer in this case has not demonstrated that his property is assessed at more than its fair market value or higher than other town properties relative to fair market value. In other words, taxpayer has not shown that he is paying a disproportionate amount of the town tax burden. Cf. id. ¶ 10 (stating that evidence supported state appraiser's determination that there was disparity between listed value of recently sold properties and comparable properties that had not been recently sold). Rather, he has demonstrated only that his residence was the only one in the town to be given a quality rating of 10, a rating significantly higher than any other property in the town.
Taxpayer argued before the state hearing officer that his property was assessed higher than other comparable properties in the area. The Town challenged taxpayer's comparable properties -- as well as taxpayer's evidence valuing his property at approximately $1.5 million -- and offered comparable properties of its own. Both sides presented expert testimony regarding the propriety of assigning a quality value of 10 to taxpayer's residence. After finding no evidence of sales to support the property's fair market value, the hearing officer stated, in relevant part, as follows:
The site inspection indicated a property that was in fact unique in Brookline, but beyond being a large log structure, did not have any quality items in the construction that were much different than in most well built houses in the area. The size of the house at over 6000 sq. ft. above grade and with finish in the ...