Property Tax Litigation Before the Board of Assessment Appeals
| Publication year | 2006 |
| Pages | 87 |
| Citation | Vol. 35 No. 8 Pg. 87 |
2006, August, Pg. 87. Property Tax Litigation Before the Board of Assessment Appeals
August 2006
Vol. 35, No. 8 [Page 87]
Tax Law
Tax articles are sponsored by the CBA Taxation Law Section to provide timely updates and practical advice on federal, state, and local tax matters of interest to Colorado practitioners.
Article Editors:
Larry Nemirow, Denver, of Davis, Graham & Stubbs LLP - (303)892-7443, larry.nemirow@dgslaw.com; Rachel James, Denver, of Davis, Graham & Stubbs LLP - (303) 892-7214, rachel.james@dgslaw.com
This month's article was written by Robert R. Gunning, a partner in the Denver office of Silverstein & Pomerantz LLP, a law firm that specializes in state and local tax controversy work - (303) 991-3659, rgunning@sptaxlaw.com. The author thanks Neil Pomerantz, Bruce Nelson, and Michael Koertje for reviewing and commenting on drafts of this article, and gratefully acknowledges the assistance of the BAA staff.
The Board of Assessment Appeals ("BAA") is a quasi-judicial tribunal that hears the majority of post-county level property tax appeals in Colorado. This article describes the BAA appeal and hearing process.
The Colorado Board of Assessment Appeals ("Board" or "BAA") provides parties with a relatively efficient and economical forum in which to try property tax disputes. On average, approximately 1,500 petitions are filed with the BAA each year.(fn1) The BAA is a quasi-judicial tribunal governed in part by the Colorado Administrative Procedures Act. Therefore, an appeal to the BAA has some, but not all, of the attributes of a court trial.
After a general discussion of the BAA, this article briefly describes the procedure that precedes a BAA appeal. The article then analyzes pre-hearing issues, including witness and exhibit disclosures, discovery, and subpoenas. Finally, a discussion of BAA hearings, including evidentiary issues and post-hearing appeal rights, is provided.
About the BAA
The BAA is a state agency within the Department of Local Affairs.(fn2) As a quasi-judicial tribunal, the Board hears property tax appeals from decisions of county boards of equalization ("CBOE") (appeals), boards of county commissioners ("BOCC") (abatement and refund requests), and the Property Tax Administrator.(fn3) Hearings usually are conducted at the Board's offices in Denver; however, the Board occasionally hears Western Slope appeals in Grand Junction.(fn4)
BAA hearings typically are conducted by two, and occasionally three, Board members. Currently, the BAA has eight Board members (a maximum of nine is permitted by state law).(fn5) The governor appoints Board members with the consent of the senate.(fn6) Board members must be experienced in property valuation and taxation, and be registered, licensed, or certificated as real estate appraisers.(fn7) Therefore, in practicing before the BAA, it is important to keep in mind that the decision-makers are not attorneys. Also, non-essential evidentiary objections and excessive legal argument generally are considered counter-productive at the BAA. If requested by a Board member, an assistant attorney general may assist the Board at hearings.(fn8)
Perfecting an Appeal To the BAA
A brief review of the local-level appeal processes is provided below. Two appeal routes are discussed: (1) the appeal and protest procedure; and (2) the abatement and refund procedure. Practitioners should be aware that the BAA's jurisdiction is limited to timely and properly filed petitions and, therefore, care should be taken to comply with the local-level appeal process and to timely file the petition.
Because appeals of assessments issued by county assessors constitute the vast majority of appeals at the BAA, this article does not address the appeal process for state-assessed properties (public utilities). Practitioners representing public utilities in valuation disputes should review the state-assessed appeal procedures in Title 39, Article 4 of the Colorado Revised Statutes.
Appeal and Protest Procedure
In Colorado, real property is valued in two-year cycles for property tax purposes.(fn9) Odd-numbered years are re-valuation years, and even-numbered years are referred to as intervening years. Real property may be re-appraised in even-numbered years under limited circumstances. These limited circumstances are referred to as "unusual conditions" that result in an increase or decrease in value, and usually consist of a new or remodeled building or a change in the use of land that occurred by January 1 of the even-numbered year.(fn10) In contrast, business personal property is re-appraised every year.(fn11)
By May 1 of every year for real property, and by June 15 for business personal property, county assessors are required to issue Notices of Valuation ("NOV").(fn12) In intervening years, assessors may include a short notice with the January property tax statement, indicating that the property's valuation will not change for the intervening year. This notice has the same legal effect as an NOV issued in May.(fn13)
Appeal to Assessor: To appeal an assessor's real property valuation or classification, a taxpayer must file a protest with the assessor by June 1 (by delivery or U.S. mail).(fn14) The deadline is June 30 (postmark) or July 5 (in person) for personal property.(fn15) Unless the assessor has opted for an extended appeal period (described below), the assessor has until the last regular working day in June to issue a decision, called a Notice of Determination ("NOD"), for real property. The deadline is July 10 for personal property.(fn16) If the county assessor has opted to use the extended appeal process, the assessor has until the last working day in August to issue an NOD for both real and personal property.(fn17)
Formerly, only four counties were permitted to use the extended appeal period. In 2005, CRS § 39-5-122.7 was amended to permit all counties to use the extended appeal period. A county electing the extended appeal period must file notice with the BAA and the district court by May 1.(fn18) The number of counties using this procedure tends to increase in re-appraisal years, due to the volume of appeals.
Appeal to CBOE: In counties without extended appeal periods, taxpayers who are not satisfied with the assessor's NOD must appeal to the CBOE by July 15 for real property, and July 20 for personal property.(fn19) For extended appeal period counties, the deadline is September 15 for both real and personal property.(fn20) The time period between the assessor's issuance of the NOD and the deadline for appealing to the CBOE therefore is rather short.
CBOEs formally consist of the county commissioners. However, in larger counties, the county commissioners generally appoint hearing officers to conduct the hearings and issue recommendations.(fn21) These hearings are informal and typically last only fifteen to twenty minutes. In counties without extended appeal periods, the CBOEs must issue decisions by August 5. The deadline is November 1 for extended appeal period counties.(fn22)
Appeal to BAA: Taxpayers may appeal CBOE decisions to the BAA, state district court, or binding arbitration.(fn23) Because the majority (approximately 90 percent) of appeals are filed with the BAA, this article focuses on BAA proceedings. Most district court property tax appeals center on discrete legal issues.(fn24) The majority of arbitration appeals are lodged by pro se residential taxpayers, although commercial taxpayers occasionally file for arbitration to receive a prompt and informal hearing.(fn25) However, although it is faster, the arbitration process can be significantly more expensive than the BAA process, as the taxpayer usually must pay at least half of the private arbitrator's fee.(fn26) Additionally, there are no appeal rights from an arbitration decision.(fn27)
Appeals to the BAA must be made no later than thirty days after the date the CBOE decision is mailed to the taxpayer.(fn28) The appeal must be mailed, delivered, or faxed by the deadline.(fn29) Compliance with the statutory time limit for filing the BAA petition is a jurisdictional...
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