Title: Walter Kimbrough v. Idaho Bd of Tax Appeals / Canyon County Bd of Equalization Property assessment and taxation

State: idaho

Issuer: Idaho Supreme Court (civil)

Document:

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IN THE SUPREME COURT OF THE STATE OF IDAHO 
Docket No. 36726 
 
IN THE MATTER OF THE APPEAL OF 
WALTER & JUDITH KIMBROUGH, 
FROM THE DECISION OF THE 
CANYON COUNTY BOARD OF 
EQUALIZATION FOR THE TAX YEAR 
2007. 
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WALTER KIMBROUGH and JUDITH 
KIMBROUGH, 
 
       Petitioners-Appellants, 
v. 
 
IDAHO BOARD OF TAX APPEALS and 
CANYON COUNTY BOARD OF 
EQUALIZATION, 
 
       Respondent. 
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Boise, January 2011 Term 
 
2011 Opinion No: 16 
 
Filed:  February 4, 2011 
 
Stephen W. Kenyon, Clerk 
    
 
 
 
       
 
 
Appeal from the District Court of the Third Judicial District of the State of 
Idaho, Canyon County.  Hon. Gregory M. Culet, District Judge. 
 
The decision of the district court is affirmed.  No attorneys fees are awarded.  
Costs are awarded to Respondents. 
 
Thompson Law Firm, Meridian, attorneys for petitioners. Kristen R. Thompson 
argued. 
 
Hon. Bryan F. Taylor, Canyon County Prosecutor, Caldwell, for respondents. 
Ty A. Ketlinski argued. 
________________________ 
W. JONES, Justice 
I.  NATURE OF THE CASE 
Walter and Judith Kimbrough appeal the district court’s decision affirming the Canyon 
County Board of Equalization’s assessment of their farm and homesite.  They contend that the 
Canyon County Assessor should have applied the agricultural-land exemption to the acre on 
which their farmhouse sits rather than classifying it as a homestead.  They also assert that their 
homesite valuation was excessive. 
 
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II.  FACTUAL AND PROCEDURAL BACKGROUND 
In 2004, Walter and Judith Kimbrough, Appellants, purchased a small farm in rural 
Canyon County, Idaho.  Of their parcel, 0.66 acres underlie a public right-of-way and are exempt 
from taxation, leaving 14.76 subject to assessment.  The Kimbroughs have dedicated most of 
their land to growing alfalfa, but just over two acres contain agricultural outbuildings and the 
Kimbroughs’ home.  The Canyon County Assessor apparently always exempted 13.76 acres of 
the Kimbroughs’ farm from taxation under I.C. § 63-604, which allows an exemption for land 
actively devoted to agriculture.  It then assessed at market value the remaining acre, which 
included the Kimbroughs’ house (the “homesite”).1  Between 2002 and 2006, the Assessor had 
valued the entire property at $209,200, but in 2007 the total assessment more than doubled to 
$419,200.  The County attributed nearly all of the added assessment to the increased value of the 
homesite and residential improvements. 
The Kimbroughs appealed their 2007 property-tax assessment to the Canyon County 
Board of Equalization and then to the Idaho Board of Tax Appeals (the “BTA”), both of whom 
are Respondents in this case, but both affirmed the assessment.  They next appealed to the 
district court, which held a trial de novo on the valuation the County applied to the homesite.  
The district court issued findings from the bench, which it augmented later in the Amended 
Supplemental Findings of Fact and Conclusions of Law.  The court held that the County was 
correct to value the one-acre homesite and residential improvements at market value separately 
from the Kimbroughs’ agricultural acreage and that the valuation was not arbitrary or 
discriminatory. 
On appeal, the Kimbroughs argue that the Idaho Tax Commission’s regulations illegally 
require counties to assess at market value homesites that are contiguous with property that is 
agriculturally exempt under I.C. § 63-604.  They assert that homesites should be subject to the 
agricultural-land exemption.  Alternatively, they challenge the comparable sales the County 
relied upon in valuing their homesite.  Respondents counter that only land actually devoted to 
agriculture can be exempt under I.C. § 63-604 and, further, that the County used a widely 
accepted appraisal method by using the best available comparable sales to value the 
Kimbroughs’ homesite. 
                                                 
1 After determining a market value for the Kimbroughs’ homesite, the County applied the homestead exemption 
under I.C. § 63-602G. 
3 
III.  ISSUES ON APPEAL 
1. 
Whether the County must apply the agriculture exemption under I.C. § 63-604 to 
homesites that are contiguous with land actively devoted to agriculture. 
2. 
Whether the County’s valuation of the Kimbroughs’ homesite was arbitrary, oppressive, 
or discriminatory. 
3. 
Whether the Kimbroughs are entitled to attorney fees under I.C. § 12-117. 
IV.  STANDARD OF REVIEW 
The district court held a trial de novo pursuant to I.C. § 63-3812(c).2  “Where the district 
court conducts a trial de novo in an appeal of a BTA decision, this Court defers to the district 
court’s findings of fact that are supported by substantial evidence, but exercises free review over 
the district court’s conclusions of law.”  Canyon Cnty. Bd. of Equalization v. Amalgamated 
Sugar Co., 143 Idaho 58, 60, 137 P.3d 445, 447 (2006).  The interpretation of a statute is a 
question of law subject to free review.  Callies v. O’Neal, 147 Idaho 841, 847, 216 P.3d 130, 136 
(2009).  
V.  ANALYSIS 
A. 
Homesites Contiguous with Land Actively Devoted to Agriculture Are Not Subject 
to an Exemption Under I.C. § 63-604 
“All property within the jurisdiction of this state, not expressly exempted, is subject to 
assessment and taxation.”  I.C. § 63-601.  Tax exemptions are generally disfavored—they are 
never presumed and cannot be extended by judicial construction.  Housing Sw., Inc. v. 
Washington Cnty., 128 Idaho 335, 337, 913 P.2d 68, 70 (1996) (citing Owyhee Motorcycle Club, 
Inc. v. Ada Cnty., 123 Idaho 962, 964, 855 P.2d 47, 49 (1993)).  Thus, unlike most tax statutes, 
ambiguous provisions related to deductions, exemptions, and credits are “construed strongly 
against the taxpayer.”  Canty v. Idaho State Tax Comm’n, 138 Idaho 178, 182, 59 P.3d 983, 987 
(2002) (citing cases from other jurisdictions).  This Court will follow the plain meaning of an 
unambiguous statute, but will engage in statutory construction if a provision is ambiguous.  
Hayden Lake Fire Prot. Dist. v. Alcorn, 141 Idaho 307, 312, 109 P.3d 161, 166 (2005).  
                                                 
2 Unlike appeals from most state agencies, the Idaho Code does not require the district court to rely on the record 
generated before the Board of Tax Appeal.  Idaho Code § 63-3812(c) provides in part:  
Appeals may be based upon any issue presented by the appellant to the board of tax appeals and 
shall be heard and determined by the court without a jury in a trial de novo on the issues in the 
same manner as though it were an original proceeding in that court.  
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Administrative rules are interpreted the same way as statutes.  Brandon Bay, Ltd. P’ship v. 
Payette Cnty., 142 Idaho 681, 683, 132 P.3d 438, 440 (2006). 
The statute at issue in this case allows farm owners to exempt land actively devoted to 
agriculture.  It provides: 
(1) For property tax purposes, land which is actively devoted to agriculture 
shall be eligible for appraisal, assessment and taxation as agricultural property 
each year it meets one (1) or more of the following qualifications: 
(a) The total area of such land, including the homesite, is more than five 
(5) contiguous acres, and is actively devoted to agriculture which means: 
(i) It is used to produce field crops including, but not limited to, grains, 
feed crops, fruits and vegetables . . . . 
I.C. § 63-604(1) (emphasis added).3  In addition to meeting the above criteria, taxpayers who 
own parcels of five acres or less must also show that their property generates a certain amount of 
income in order to qualify for the agriculture exemption.  Id. § 63-604(1)(b). 
The Tax Commission has issued regulations interpreting this exemption to apply only to 
acreage that actually qualifies for the agriculture exemption, not to associated homesites.  It 
defines a “homesite” as “that portion of land, contiguous with but not qualifying as land actively 
devoted to agriculture, and the associated site improvements used for residential and farm 
homesite purposes.”  IDAPA 35.01.03.645.01.a.  Although homesite acreage counts toward the 
five-acre threshold, it is not exempt under § 63-604.  The Commission requires that homesites 
and their associated improvements be assessed at market value each year.  IDAPA 
35.01.03.645.02.  
The parties agree that the Kimbroughs are entitled to the agriculture exemption for the 
land on which they raise alfalfa.  They also agree that the Kimbroughs’ one-acre homesite is not 
actively devoted to growing any crops or otherwise producing agricultural products.  They 
disagree over whether the Kimbroughs’ homesite is nonetheless exempt under the language of § 
63-604, offering two competing interpretations of that provision.  Respondents assert that 
homesite acreage is only relevant when determining whether a parcel of farmland is large enough 
to qualify for the agricultural exemption.  The Kimbroughs, on the other hand, argue that § 63-
604 also unambiguously exempts the homesite itself in addition to the land actively devoted to 
                                                 
3 The statute’s definition of “land actively devoted to agriculture” for parcels over five contiguous acres also 
includes land devoted to producing nursery stock, grazing, leases for grazing, or acreage in a rotation program.  I.C. 
§ 63-604(1)(a)(ii)–(iv). 
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agriculture because the statute states that “the total area of such land, including the homesite,” 
must exceed five acres. 
The Kimbroughs have their own interpretation of I.C. § 63-604, but not all interpretations 
are reasonable.  “A statute is ambiguous when the language is capable of more than one 
reasonable interpretation.”  Farber v. Idaho State Ins. Fund, 147 Idaho 307, 311, 208 P.3d 289, 
293 (2009) (citing Porter v. Bd. of Trustees, 141 Idaho 11, 14, 105 P.3d 671, 674 (2004)).  A 
statute is not ambiguous if the parties simply offer different interpretations to the Court.  Id.  
Idaho Code § 63-604(1) expressly states that it only applies to “land which is actively devoted to 
agriculture.”  In Ada County Board of Equalization v. Highlands, Inc., 141 Idaho 202, 108 P.3d 
349 (2005), this Court explicitly held that land is only exempt under this provision if there is 
“some actual use” of the land for agriculture or that it is in a crop-rotation program.  This Court 
held in that case that land leased to a rancher was not exempt because it was not actually used for 
grazing.  141 Idaho at 207, 105 P.3d at 354; see also Roeder Holdings, L.L.C. v. Bd. of 
Equalization, 136 Idaho 809, 814, 41 P.3d 237, 242 (2001) (holding that the taxpayer qualified 
for the exemption because he had actually prepared his land for crop cultivation the prior 
autumn) overruled on other grounds by Ada Cnty. Bd. of Equalization., 141 Idaho at 206, 108 
P.3d at 353.  In light of the statute’s plain language and how this Court has previously interpreted 
it, it is unreasonable to read § 63-604 as exempting land from taxation if the land is not actually 
devoted to crop or livestock production and is not in a crop-rotation program.  The statute 
unambiguously does not exempt contiguous homesites. 
The Kimbroughs’ homesite is not exempt under § 63-604 because it is not devoted to 
agriculture.  At trial, Walter Kimbrough conceded that they do not raise alfalfa on over two acres 
of their land, yet the County only assessed one acre at market value for their homesite—it still 
allowed them to apply the agricultural exemption to over one additional acre of land that is not 
actually devoted to alfalfa production.  There is some evidence in the record that the Kimbroughs 
store agricultural equipment and grow some fruits and vegetables on or near their homesite, but 
this Court need not reach the question of whether these uses are enough to constitute land 
“actively devoted to agriculture.”  The Kimbroughs offer no evidence suggesting that these 
activities consume more than this additional exempted acre.  The district court therefore was 
correct to refuse to apply the agricultural exemption to the Kimbroughs’ one-acre homesite. 
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B. 
The County’s Valuation of the Kimbroughs’ Homesite Was Not Arbitrary, 
Oppressive, or Discriminatory 
Real property subject to property taxation is assessed annually at market value.  I.C. § 63-
205.  Market value is defined as the amount “for which, in all probability, a property would 
exchange hands between a willing seller, under no compulsion to sell, and an informed, capable 
buyer, with a reasonable time allowed to consummate the sale, substantiated by a reasonable 
down or full cash payment.”  Id. § 63-201(15).  The State Tax Commission is empowered to 
develop regulations for assessing the market value of property for taxation purposes.  Id. § 63-
208(1).  Among the appraisal methods the Commission has adopted is the sales-comparison 
approach, which involves valuing property based on sale prices for comparable parcels within 
the preceding year.  IDAPA 35.01.03.217.04. This is the method the County used in valuing the 
Kimbroughs’ homesite.  Regardless of which method is being used, the assessor may and should 
consider all relevant factors to ensure that the taxpayer bears his or her share of the public tax 
burden, including the actual cash-sale value in the property’s locality.  Abbot v. State Tax 
Comm’n, 88 Idaho 200, 208, 398 P.2d 221, 225 (1965).   
The assessor’s valuation is presumed to be correct, and this Court will only overturn a 
valuation if the taxpayer can show by clear and convincing evidence that it is “manifestly 
excessive, fraudulent or oppressive; or arbitrary, capricious and erroneous resulting in 
discrimination against the taxpayer.”  Merris v. Ada Cnty., 100 Idaho 59, 64, 593 P.2d 394, 399 
(1979).  An arbitrary appraisal is one that fails to reflect the fair-market or full-cash value of the 
property.  Idaho Power Co. v. Idaho State Tax Comm’n, 141 Idaho 316, 324, 109 P.3d 170, 178 
(2005).   
The County valued the Kimbroughs’ homesite land and residential improvements at 
$405,300 before subtracting the homestead exemption.  Of this, the County assessed their home 
at $117 per square foot for a total of $335,300.  It produced three comparable house sales, two of 
which it adjusted down to reflect added value from larger lot sizes.  The average price per square 
foot was $121.84, higher than the value the County assessed for the Kimbroughs’ home.  
Similarly, the County located three comparable residential bare-land sales averaging over 
$140,000 per acre, but only valued the Kimbroughs’ one-acre homesite at $70,000.  These 
comparables do not reveal a “manifestly excessive” valuation. 
There is no dispute that the $405,300 assessed homesite value in 2007 was a dramatic 
increase over the 2006 homesite assessment at $197,900.  As the Canyon County Rural 
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Appraisal Supervisor explained at trial, however, there were two legitimate reasons for this 
sudden jump in value.  First, the County did not adjust the Kimbroughs’ property assessment at 
all between 2002 and 2006 despite significant property-value gains in the marketplace.  Due to 
the logistical burdens associated with physically examining every property in its jurisdiction, the 
County had a policy of reappraising parcels every five years.  It was not until 2007 that the 
County was able to update its assessment of the Kimbroughs’ home.  Second, the Kimbroughs 
had constructed a new garage and added additional bedrooms to their home in 2004.  This 
addition cost more than $80,000.  Although the Kimbroughs had added roughly 1000 square feet 
to their home, the County did not begin assessing them for the added living space until 2007.  
The County therefore did not act arbitrarily when it valued the Kimbroughs’ homesite. 
The Kimbroughs contend that the comparison properties chosen by the County overvalue 
their homesite because some of them are closer to Nampa and are in more suburban 
neighborhoods.  The County’s Appraisal Supervisor conceded at trial that no perfect comparison 
properties existed in this case and that he had to expand the geographic radius until he found an 
acceptable number of comparable parcels that had been sold within the prior year.  He identified 
a total of six comparables, three for land value and three for residential-improvement value.4  
Again, the County’s appraisal is presumed to be correct.  Merris, 100 Idaho at 64, 593 P.2d at 
399.  Moreover, the party challenging a tax valuation must carry the burden of showing that it 
was manifestly excessive, fraudulent or discriminatory.  Id.  Walter Kimbrough himself testified 
that he had “no idea” what the market value of his home was in 2007.  The Kimbroughs did not 
provide their own property appraisal or any of their own comparables to substantiate their claim 
that their property was overvalued, to suggest that the assessor did not locate enough 
comparables, or to show that the ones chosen were inappropriate.  Substantial evidence therefore 
justifies the district court’s decision to uphold the assessor’s valuation.  
C. 
The Kimbroughs Are Not Entitled to Attorney Fees Under I.C. § 12-117 
The Kimbroughs request attorney fees on appeal under I.C. § 12-117(1).  Even if they 
were the prevailing parties, “I.C. § 12-117(1) does not allow a court to award attorney fees in an 
appeal from an administrative decision.”  In re Approval of Conditional Use Permit #CUP-2008-
                                                 
4 At trial, the Canyon County Rural Appraisal Supervisor testified that the lowest-valued comparable he used to 
establish land value should not be considered because it actually contained a mobile home that might skew its sale 
price upward.  Disregarding this comparable would, of course, increase the average value of the County’s 
comparables and would strengthen its assessment. 
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3, No. 36943, 2010 WL 5140813, at *6 (Idaho Dec. 20, 2010) (quoting Smith v. Washington 
Cnty., No. 35851, 2010 WL 5093625, at *3 (Idaho Dec. 15, 2010).  This case arrived in the 
district court on a petition for judicial review of the BTA’s decision.  The Kimbroughs cannot 
receive attorney fees under I.C. § 12-117(1). 
VI.  CONCLUSION 
The district court correctly held that homesites contiguous with farmland are not subject 
to the tax exemption for land actively devoted to agriculture under I.C. § 63-604.  The district 
court’s decision to affirm the County’s assessment of the Kimbroughs’ homesite was based on 
substantial evidence.  The district court’s ruling is affirmed and the Kimbroughs’ request for 
attorney fees is denied.  Costs are awarded to Respondents. 
 
Chief Justice EISMANN, Justices BURDICK, J. JONES and HORTON CONCUR.