Two recent property tax cases demonstrate that taxpayers must be aware of what they need to prove when challenging their property tax assessments. In the first case, Andersen v. Falmouth Board of Assessors, the Massachusetts Appellate Tax Board rejected a homeowner’s challenge to the valuation of her home, which was located roughly a quarter-mile from a 400-foot, 1.65-megawatt wind turbine owned by the town of Falmouth, and operated as part of the town’s waste-water treatment facility. The turbine operated at all hours, whenever there was sufficient wind to power the turbine.
The taxpayer presented evidence that she and her husband suffered physical and mental ailments, including headaches, depression, nausea, vertigo, and sleep loss, due to the turbine’s constant low-frequency noise. Although the board noted that the taxpayer demonstrated these physical and mental issues, it ultimately rejected her challenge because she failed to show that the turbine’s presence had an impact on the property’s market value.
The crux of the taxpayer’s challenge was that the property value should be reduced because of its proximity to the turbine; however, the board’s decision emphasizes that to receive a reduced valuation, the challenger must actually show that the market reflects that reduced value. Thus, the taxpayer would need to show that other, comparable houses located within a similar distance to the same turbine, or a similar turbine, were selling for less money because their occupants were experiencing those physical and mental ailments. In other words, if houses are still selling at the same prices regardless of how noisy the turbine is, the taxpayer will not receive a reduced value.
In the second case, In re Raleigh Community Council, the Tennessee Board of Equalization denied a nonprofit corporation’s application for a property tax exemption for a wooded area associated with its community garden. The exemption request was originally denied in a letter from the state board, because the taxpayer failed to demonstrate that the wooded area was actually used for an exempt purpose. The board noted that there were no walking trails, benches, or picnic tables. “It just seems to be an open wooded area,” the letter concluded.
After receiving the board’s letter, the taxpayer created a 100-yard walking trail through the property, from the community garden, through the wooded area to the adjoining road, and added a picnic table along the trail. Despite the taxpayer’s efforts, the board again rejected the taxpayer’s exemption application, still maintaining that the taxpayer failed to show that anyone actually used the trail. “There is nothing to establish that the public is in any way aware of the trail,” the board added.
Again, this decision demonstrates that taxpayers must be cognizant of what they must prove to get the relief they seek. Here, the Tennessee statute authorizing exemptions for charitable and other nonprofit property requires that the property not only be owned by an authorized organization, but also that it is “actually used” for its exempt purposes. The taxpayer’s construction of a trail and erection of a bench did not show that anyone was actually using the trail or bench. Perhaps pictures of people walking on the trail and eating at the benches would have helped demonstrate actual use.
Both decisions demonstrate that courts and boards of appeal will ensure that taxpayers actually prove what they need to mount a successful challenge. A taxpayer contesting her property value must put forward proof of lower value, not simply proof of headaches. And a taxpayer seeking an exemption must demonstrate that it uses the property for exempt purposes, not that it merely placed a picnic bench in an empty wooded area.
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