Opinion ID: 2630804
Heading Depth: 1
Heading Rank: 14

Heading: Physical Depreciation1998 Values

Text: [¶ 42] With regard to use of the allocated 1998 sales values, Thunder Basin raised two new arguments in 2002. First, it points to statements made in the Price Waterhouse appraisal upon which the values were based as indicating they were not to be used for this type of purpose. The appraisal stated: The premise of Fair Market Value is applicable only for this engagement, and accordingly, our results should not be used for any other purpose. Further, the value reported does not represent the amount that might be realized from the sale of the individual assets on the open market or from their use for an alternate purpose. However, it also stated: We define Fair Market Value as the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell, and both having reasonable knowledge of the relevant facts, (Estate Tax Regs., Sec. 20.2031-(9b); Rev. Rul. 59-60, 1959-1, C.B. 273). In estimating the Fair Market Value in Continued Use, we assumed that the subject property would continue to be part of the respective ongoing businesses, unless otherwise specified. [¶ 43] On the basis of this language, Thunder Basin claims the Price Waterhouse appraisal, on its face, was not intended to establish fair market value of the property for personal property tax purposes and its reliance on continued use and not value in exchange was inconsistent with the applicable tax statutes. We find two problems with Thunder Basin's position. First, the 1998 values from the Price Waterhouse appraisal were provided to the County Assessor by Thunder Basin for the very purpose of establishing the company's book values to be utilized by the County Assessor in determining personal property tax valuations. It was not unreasonable for both the County Assessor and the County Board to rely upon that information as reliable and a disclaimer by the accounting firm, the obvious purpose of which was to limit its own liability, should not prevent them from doing just that. Second, despite Thunder Basin's attempts to inject confusion into the issue by reference to the concepts of continued use and use in exchange, the definition of fair market value used by Price Waterhouse bears a very close resemblance to that contained in both the statute and DOR rules. Wyo. Stat. Ann. § 39-11-101(a)(iv); DOR Rules, Ch. 9 § 4(f). Further, the SBOE cites to authorities which suggest when a property is utilized at its highest and best use, its value in use and its value in exchange are the same. Property Assessment Valuation 16 (International Association of Assessing Officers, 2d ed. (1996)). We see nothing in the Price Waterhouse appraisal which would have prevented the County Board from relying upon the information submitted to it by Thunder Basin as the book value of the property at issue. See also, Guthrie, 2005 WY 79, ¶ 14, 115 P.3d at 1092; Airtouch Communications, 2003 WY 114, ¶ 39, 76 P.3d at 357; RT Communications, 11 P.3d at 927. [¶ 44] Second, in an effort to demonstrate use of the 1998 values resulted in an inaccurate valuation of the improvements, Thunder Basin presented the testimony of a local real estate appraiser who had compared the County Assessor's valuation of buildings on the mine property with its valuation of other commercial buildings in Campbell County and, on a per square foot basis, the latter values were much lower. The obvious purpose of this evidence was to demonstrate the County Assessor's valuations were not uniform and equal as required by law. However, the local appraiser admitted on cross-examination that the buildings he used for comparison were selected by Thunder Basin, none were located on mining property, and he did not attempt to find any similar mining buildings to include in his comparison. Given the problems in finding true comparable values in this situation, little weight can be given to Thunder Basin's effort to show the values resulting from the cost approach were inaccurate by comparing them to randomly selected buildings. Instead, the difference in the value of the improvements between the County Assessor's and Thunder Basin's appraisals arose simply from the County Assessor's use of the 1998 value which resulted in fewer years of depreciation. As we previously discussed, that approach was not inconsistent with the statute or the regulations. [¶ 45] We would also note the County Assessor's expert testimony in 2002 clarified that use of allocated sales data in the cost method for property tax purposes, such as was done in the case of the Coal Creek Mine, was typical and, in fact, had been used by the County Assessor to value personal property after the sale of at least three other Campbell County mines. Use of either the original cost data or an allocated purchase price was acceptable for purposes of the cost method. Even the County Assessor's expert testified that while his approach was an accepted method, it was not the only one, and Thunder Basin's approach was also acceptable. The choice between the two was, therefore, a matter of appraisal judgment. RT Communications, 11 P.3d at 921. There was substantial evidence to support the appraiser's approach; consequently, we find no basis upon which to reverse the County Board's decision affirming the County Assessor's use of the 1998 values.