John T. Adams II
Town of Sudbury
On Appeal from Superior Court, Rutland Unit, Civil Division Cortland Corsones, J.
Peter H. Banse of Banse & Banse, P.C., Americus, Georgia, for Plaintiff-Appellant.
Cindy Ellen Hill, Middlebury, for Defendant-Appellee.
PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton, JJ.
¶ 1. This case arises from the often complex struggle that Vermont towns have had with taxing parcels of land that lie in more than one town. It is also the latest episode in a decades-long dispute between taxpayer and the Town of Sudbury. Taxpayer owns three units in a condominium community that lies in both Sudbury and its neighbor, Hubbardton. Taxpayer objects to Sudbury's tax assessment of the portion within its boundaries. He argues that the trial court erred in upholding: (1) the state law through which Sudbury made its tax assessment; (2) Sudbury's valuation of the portion within its boundaries; and (3) Sudbury's method of apportioning the tax burden among the owners of the condominium community. We affirm on all three issues.
¶ 2. The condominium community is known as Wanee Villas and Resorts (Wanee). It is located on the grounds of a former children's camp and consists of twenty-one individually owned units-residential buildings and their footprints-and an expanse of common land. Wanee's ownership and governance are detailed in two documents filed in the Sudbury land records: a 1978 declaration of protective covenants and a 1993 amendment to those covenants. These documents not only assign a percentage of ownership interest in the common land to each unit but also detail that each unit has an easement to access the common land. Moreover, they create a common interest community as defined by 27A V.S.A. § 1-103(7) and a condominium as defined by 27A V.S.A. § 1-103(8).
¶ 3. Wanee encompasses a total of 26.9 acres. The vast majority of this land- including all the privately owned units-lies in Hubbardton. The Sudbury portion consists solely of 1.29 acres of common land but includes 385 feet of prime frontage on Lake Hortonia, which greatly enhances the appeal of Wanee and its individually owned units. Taxpayer personally owns three units and further owns a substantial stake in Wanee Enterprises, which is the successor corporation to the former children's camp and which itself owns eleven units.
¶ 4. In 1996, taxpayer appealed Sudbury's tax assessment of the Sudbury portion of Wanee's land to the state appraiser. Taxpayer and Sudbury stipulated to a valuation of $89, 460 for the Sudbury portion, and the state appraiser entered this stipulation on the condition that this valuation would be listed for three years. In 2007, taxpayer again objected to Sudbury's tax assessment of the land, arguing before the town's Board of Civil Authority and, later, the trial court, that Sudbury could not tax the land because all the individually owned units lay within Hubbardton. Taxpayer voluntarily dismissed the case by agreement with Sudbury that it would not tax the units owned by taxpayer, Wanee Enterprises, or taxpayer's mother for the years 2007-2009. Sudbury adhered to this agreement for those three years and then continued to refrain from taxing the land at all as it waited on clarification from the Legislature regarding how to tax common lands belonging to a condominium community whose units lie entirely in another town.
¶ 5. In 2012, the Legislature provided this clarification through an amendment to 27A V.S.A. § 1-105, which now states, in part:
(a) In a condominium or planned community:
. . .
(2) if there is any unit owner other than a declarant, each unit shall be separately taxed and assessed, and no separate tax or assessment may be rendered against any common elements for which a declarant has reserved no development rights; provided, however, that if a portion of the common elements is located in a town other than the town in which the unit is located, the town in which the common elements are located may designate that portion of the common elements within its boundaries as a parcel for property tax assessment purposes and may tax each unit owner at an appraisal value pursuant to 32 V.S.A. § 3481.
27A V.S.A. § 1-105(a). Sudbury then reappraised the Sudbury portion as part of a town-wide reappraisal that it had begun two years prior and whose results and methods were approved by the Vermont Department of Taxes. Through this reappraisal-which used a systematic, multiple-factor formula derived from land tables, schedules, and adjustments-Sudbury valued the Sudbury portion at $177, 445. In response to the recent amendment to § 1-105, Sudbury then levied taxes for the land against the individual unit owners. In doing so, it apportioned the tax ...