CONSTITUTION REQUIRES UNIFORMITY IN PROPERTY TAX ASSESSMENTS – ARE YOU OVER TAXED?
March 20th, 2018 | Brian P. Stahl
Typical commercial or industrial property values are substantially higher than their residential counterparts. With that said, when a Pennsylvania taxing district decides to appeal the assessments of some of the properties within its boundaries, concentrating solely on commercial or industrial properties may seem like a sound strategy. After all, raising the assessments on non-residential properties would usually result in a greater tax-revenue increase than doing the same with under-assessed single-family homes.
There is, however, a major problem with this assessment appeals strategy. The Pennsylvania Supreme Court unanimously ruled that it violates the Uniformity Clause of the Pennsylvania Constitution. The Uniformity Clause requires that “All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax.” (Article VIII, Taxation and Finance, § 1.)
The Pennsylvania Supreme Court concluded that a taxing authority is not permitted to implement a program targeting only the assessments of one sub-classification of properties, where that sub-classification is drawn according to property type (e.g., commercial, apartment complex, single family residential, or industrial.)
HKQ Law Business Attorney Brian P. Stahl reminds us that “The right to appeal assessments is not limited to taxing authorities. Property owners also have that right, and the result of a successful appeal can be significant.” A recent tax appeal filed by Attorney Stahl saved a commercial shopping mall client a substantial amount of tax liability. The property, previously assessed at $47MM, dropped to $24MM, saving the client over $585,000 annually based on current millage rates.
The person (or entity) appealing the assessment bears the burden of proof.
To successfully challenge the assessment, you’ll need to establish at least one of the following facts:
- The tax assessment relies on information that is incorrect or incomplete.
- The tax assessment sets the taxable value of your property higher than the taxable values of similar properties in your area.
- The tax assessment assumes that the current market value of your property is higher than it actually is.
Deadlines differ from county to county regarding the filing of appeals. Appeals filed before the deadline will generally affect the valuation of the property for local government fiscal years beginning on or after January 1st of the following year.
Assessment appeals are conducted by a local board appointed to hear appeals (or in some smaller counties before the county commissioners). Decisions of the local boards may be appealed to courts of common pleas. The common pleas courts’ decisions are further subject to appeals to the Pennsylvania Commonwealth Court.
A tax assessment appeal can be a complex process, and one that is best handled with the assistance of an attorney that is experienced in tax assessments. HKQ Law’s attorneys are extremely familiar with the nuances of local property tax rules. We represent commercial, industrial and residential property owners throughout the process – from initial challenge to any necessary trial and appellate court proceeding.
To discuss how you or your business can benefit from a tax assessment appeal, call HKQ Law at (800) 760-1529.
