Summary
The Supreme Court of Washington held that, under a county's legislatively authorized four-year cyclical revaluation system, a property owner challenging a midcycle assessment must use the property's value as of the date of its last county revaluation rather than establish a new fair market value for the assessment year. The court interpreted RCW 84.36.005, RCW 84.40.020, and RCW 84.41.030 as requiring annual assessments but not annual valuations. It reversed the superior court's partial summary judgment and remanded for further proceedings.
Topics
Practice areas
Questions Presented
- Whether, under Washington's property-tax statutes, a taxpayer challenging a midcycle assessment may establish the property's true and fair value as of January 1 of the assessment year.
- Whether a county using a statutorily authorized four-year cyclical revaluation system must base a midcycle assessment challenge on the property's value as of the year it was last revalued.
- Whether RCW 84.36.005, RCW 84.40.020, and RCW 84.41.030 permit or require a taxpayer-initiated midcycle revaluation.
Holdings
- When a county uses a compliant cyclical revaluation system, a midcycle assessment must be compared with the property's true and fair value as of the date it was last determined through the county's revaluation schedule, not with a newly established fair market value as of January 1 of the assessment year.
- RCW 84.36.005 and RCW 84.40.020 do not provide a basis for requiring a taxpayer-initiated midcycle revaluation or for challenging an annual assessment based on the property's current-year fair market value.
Key quotations
“The plain language of RCW 84.40.020 does not require midcycle assessments to be based on the fair market value of property as of January 1 of each assessment year.” (156 Wash. 2d at 298)
“Assessed value (which is fixed annually) is distinct from the "true and fair value" that is determined through the processes of valuation and revaluation.” (156 Wash. 2d at 299)
“Logically, then, where a county uses a cyclical revaluation system that meets the requirements of chapter 84.41 RCW, each midcycle assessment must be compared to the property's fair market value when it was last determined—in this case, 1999.” (156 Wash. 2d at 299)
Factual background
Grant County used a four-year cyclical revaluation system under which real property was physically inspected and revalued once every four years, without annual statistical updates. Advanced Silicon Materials's three real-property accounts were last revalued in 1999, and those values were carried forward to the 2000, 2001, and 2002 assessment years, subject only to physical additions and deletions. Advanced Silicon Materials alleged that market changes caused the 1999 values to exceed the properties' January 1, 2002, value by nearly $200 million and sought a refund of $2,794,298.58 in taxes paid under protest.
Procedural history
Advanced Silicon Materials sued Grant County for a refund of property taxes paid under protest, alleging that its 2002 assessments were unlawful and excessive. The Kittitas County Superior Court granted partial summary judgment to Advanced Silicon Materials, ruling that the property should be valued as of January 1, 2002, and allowed a midcycle challenge upon clear, cogent, and convincing evidence. The Washington Supreme Court accepted discretionary review, reversed the order, and remanded for further proceedings.
Remand instructions
The superior court's order granting partial summary judgment is reversed, and the case is remanded for additional proceedings consistent with the opinion.