Opinion ID: 1147197
Heading Depth: 3
Heading Rank: 2

Heading: Valuation: The Statutory Scheme

Text: When imposing property taxes, the assessor must consider the property's full cash value, the assessment ratio, and the tax rate. See A.R.S. §§ 42-201(1), 42-227, and 42-304. In arriving at an accurate full cash value, the assessor is required to determine market value. A.R.S. § 42-227. Market value is synonymous with full cash value and is that estimate of value that is derived annually by the use of standard appraisal methods and techniques or as provided by law. A.R.S. § 42-201(4). Thus, property may be valued by the market data, cost, or income approach. County of Maricopa v. Sperry Rand Corp., 112 Ariz. 579, 581, 544 P.2d 1094, 1096 (1976). A taxpayer may challenge the department's assessment in superior court. A.R.S. § 42-178. The trial court, however, may not make an independent evaluation of full cash value until the taxpayer presents evidence to rebut the statutory presumption that the valuation is correct. A.R.S. § 42-178(B) (The valuation or classification as approved by the appropriate state or county authority shall be presumed to be correct and lawful); Department of Property Valuation v. Trico Elec. Coop., Inc., 113 Ariz. 68, 546 P.2d 804 (1976). The trial court must determine that the valuation is either excessive or insufficient before it makes its own evaluation. Id. The trial court in the present case considered the testimony of Rec Centers' witnesses regarding the value of the property on the open market. One witness was the manager of a real estate brokerage firm, the other the manager of a realty appraisal firm. Addressing only the property's value in the marketplace, they testified that the deed restriction quoted above destroyed marketability. In their opinion, no one would buy property that could not be operated on a for-profit basis. Based on the testimony that the property was not marketable while subject to the deed restriction, the trial court found the valuation excessive and concluded that the property had no value for tax purposes. See Findings of Fact, Conclusions of Law, filed Jan. 29, 1985.