Opinion ID: 1348704
Heading Depth: 2
Heading Rank: 3

Heading: The Reduced Benchmark Value as Applied to Overage

Text: The Tax Appeal Court valuation applied 25% of the benchmark value to the Steiner overage area. We cannot conclude that there is good and sufficient reason to overturn this decision. See In re Puna Sugar Co., 56 Haw. 621, 623, 547 P.2d 2, 4 (1976). The court's conclusions of law indicate that the City failed to adequately adjust for dissimilarities between Kahala Beach overage and Black Point overage, including topography, shoreline access, utility and other factors affecting valuation. While we found that the City's benchmark sufficiently incorporated these factors, we agree with the tax court that the overage calculation did not. Contrary to its eighteen year practice which was based on the characteristics of the overage area of the Steiner property, the City used the same overage formula for unbuildable, rock-strewn overage with no beach access as it did for level, usable Kahala Beach beach-front overage. The City failed to adjust its overage formula in contradiction of its own assessment guidelines. See Procedure and Reference Manual §§ 911.00, 913.00, 941.31 & 941.34; see also Part III. A.1., above. The court concluded that the City's assessment discriminated against the landowner by requiring payment of more than the land's allocable share of the total real property tax burden, thus violating equal protection. We agree. The equal protection clause of the U.S. Constitution is violated when taxation in fact bears unequally on persons or property of the same class. Allegheny Pittsburgh Coal Co. v. County Comm'n of Webster County, 488 U.S. 336, 343, 109 S.Ct. 633, 637, 102 L.Ed.2d 688 (1989) (citations omitted); see also In re Swann, 7 Haw.App. 390, 401, 776 P.2d 395, 401-02 (1989). [T]he fairness of one's allocable share of the total property tax burden can only be meaningfully evaluated by comparison with the share of others similarly situated relative to their property holdings. 488 U.S. at 346, 109 S.Ct. at 639. In this case, fairness requires the assessment of Steiner's overage at a lower percentage of benchmark than Kahala Beach overage, because each has significantly different characteristics affecting value. By failing to reduce the overage assessment, the City denied Steiner's right to equal protection under the law.