Opinion ID: 1589764
Heading Depth: 1
Heading Rank: 10

Heading: Town Sq. Case

Text: Schuyler Apartment Partners also assigns that TERC erred in relying on Town Sq. v. Clay Cty. Bd. of Equal . [7] In that case, the South Dakota Supreme Court held that tax credits under LIHTC should be considered in valuing property for tax purposes. TERC cited to Town Sq. for the proposition that LIHTC credits are transferable and a part of the economic reality of parcels subject to the agreements which make their use possible, and it further noted that the rationale described by the Town Square Court for inclusion of value of LIHTC credits in the valuation of real property is persuasive and consistent with Nebraska law. Schuyler Apartment Partners complains on appeal that Town Sq. is inconsistent with § 77-1333. This argument is also without merit. Section 77-1333(1) provides in relevant part as follows: Any low-income housing tax credits authorized under section 42 of the Internal Revenue Code that were granted to owners of the project shall not be considered income for purposes of the calculation but may be considered in determining the capitalization rate to be used when capitalizing the income stream. Schuyler Apartment Partners claims this means that the credits cannot be valued and that thus, TERC's adoption of such holding was in error. Our reading of § 77-1333 does not comport with Schuyler Apartment Partners' conclusion. While § 77-1333 does indicate that the credits cannot be used as income in conducting an income-approach valuation, the language clearly allows for consideration of those credits in the form of the capitalization rate used to determine the present value of the property. The Town Sq. rationale that such credits are part of the economic reality of the property is applicable here as well. We find Schuyler Apartment Partners' third assignment of error is without merit.