Wheatland Industries, LLC/Mid America Agri Products v. Perkins County Board of Equalization

Summary

The Nebraska Supreme Court affirmed the Tax Equalization and Review Commission’s reduction of the assessed value of an ethanol plant from approximately $16.3 million to $7.3 million. The court held that competent evidence overcame the presumption supporting the county board’s valuation, which relied on incorrect information and failed to account for applicable depreciation. The court also upheld TERC’s use of 40 percent economic depreciation while emphasizing that the decision did not categorically reject mass appraisal methods for ethanol plants.

Holdings

1. After Wheatland presented competent evidence rebutting the presumption of validity, the evidence supported TERC's finding that the Board's $16,364,768 valuation was grossly excessive and unreasonable because it relied on incorrect information and failed to account for depreciation.
2. A taxpayer challenging a property valuation must establish by clear and convincing evidence that the valuation, compared with valuations of similar property, is grossly excessive and resulted from intentional disregard of duty or failure of plain duty rather than mere judgment error; Wheatland met that burden here.
3. TERC did not act arbitrarily, capriciously, or unreasonably by relying on Wheatland's appraisal and determining that 40-percent economic depreciation was appropriate.
4. The court did not categorically reject mass-appraisal valuation techniques for ethanol plants; the particular valuation was rejected because the evidence showed it was unreliable and grossly excessive.

Questions Presented

1. Whether competent evidence supported TERC's determination that the county board's valuation was unreasonable and arbitrary.
2. Whether competent evidence supported TERC's application of 40-percent economic depreciation to the ethanol plant property.
3. Whether the Nebraska Supreme Court should affirm TERC's valuation, eliminate economic depreciation, or remand for a new depreciation determination.

Disposition

affirmed