Opinion ID: 1342414
Heading Depth: 2
Heading Rank: 2

Heading: Tax Year 2007 (Case Number 33881)

Text: Again, in tax year 2007, Bayer MaterialScience and Bayer CropScience filed separate challenges of their respective tax assessments with the Kanawha County Commission sitting as the Board of Equalization and Review. By Notice of Appraised Value dated January 11, 2007, the Assessor notified Bayer MaterialScience that the Tax Commissioner had determined the appraised value of its industrial personal property, specifically its equipment and machinery, to be $41,921,884. [12] Similarly, the Assessor, by Notice of Appraised Value dated January 11, 2007, notified Bayer CropScience that the Tax Commissioner had determined the appraised value of its industrial personal property, specifically its equipment and machinery, to be $67,424,204. [13] Both Bayer companies challenged these property valuations before the Kanawha County Commission sitting as the Board of Equalization and Review. Bayer MaterialScience argued that the Tax Commissioner's appraisal of its equipment and machinery did not account for the property's economic obsolescence [14] due to inutility. [15] Accordingly, Bayer MaterialScience contended that such economic obsolescence should have been calculated at 5.4% of the property's appraised value of $41,921,884, thereby reducing such valuation by $2,263,782. Thus, the revised appraised value of its industrial personal property proposed by Bayer MaterialScience was $39,658,102. Following a hearing on this matter, the Board upheld the Tax Commissioner's appraisals and resulting tax assessments by order entered February 15, 2007. Likewise, Bayer CropScience argued that the Tax Commissioner's appraisal of its equipment and machinery did not account for the property's economic obsolescence [16] due to inutility. [17] Accordingly, Bayer CropScience contended that such economic obsolescence should have been calculated at 44.7% of the property's appraised value of $67,424,204, thereby reducing such valuation by $30,138,619. Thus, the revised appraised value of its industrial personal property proposed by Bayer CropScience was $37,285,585. Following a hearing on this matter, the Board also upheld the Tax Commissioner's appraisals and resulting tax assessments by order entered February 15, 2007. Following the Board's adverse rulings, the Bayer companies appealed to the Circuit Court of Kanawha County, which appeals were consolidated over Bayer's objection. In summary, Bayer complained that the procedure for challenging tax appeals denied appealing taxpayers of due process because the County Commission sitting as the Board served a dual role and was not impartial. Bayer additionally challenged the correctness of its tax assessments and the appraisals upon which they were based. Following a hearing, the circuit court, by order entered October 23, 2007, affirmed the decisions of the Board and denied the relief requested by both Bayer MaterialScience and Bayer CropScience. The circuit court concluded 1. The assessments by the Tax Commissioner are presumed to be correct. Petitioners [Bayer MaterialScience and Bayer CropScience] have failed to meet the burden of showing that the Tax Commissioner's assessments were erroneous by clear and convincing evidence. The Tax Commissioner's use of the income method to calculate economic obsolescence was well within its discretion and the Tax Commissioner did not abuse his discretion in applying this approach to economic obsolescence. Therefore, the Board did not clearly err or abuse its discretion in finding that Petitioners failed to prove by clear and convincing evidence that the assessments are erroneous. The Board did not clearly err or abuse its discretion in finding that Petitioners failed to prove by clear and convincing evidence and that the Tax Commissioner abused his discretion in considering the economic obsolescence of the subject property. 2. The Court concludes that the Tax Commissioner's assessments of Petitioners' property are supported by substantial evidence in the record and by the testimony of the Tax Commissioner's witness. The Court concludes that the Tax Commissioner's assessments of Petitioners' property is not in contravention of any regulation, statute, or constitutional provision. 3. The Court concludes that there is no merit to Petitioners' allegations that they were denied due process. The legislatively mandated system to equalize and review the assessments is set forth in West Virginia Code § 11-3-24, and the Board properly followed the statutes and properly applied the burden of proof to Petitioners' case. Accordingly, the Court determines that Order Number 2007-185 of the County Commission of Kanawha County sitting as the Board of Equalization and Review affirming the State Tax Commissioner's assessments on the industrial personal property of Bayer MaterialScience, LLC., and on the industrial personal property of Bayer CropScience, L.P., are hereby AFFIRMED as the Petitioners were unable to prove that the Board clearly erred or abused its discretion.... (Emphasis in original).