Property Tax Appeals: Should You File a VAB Petition or Go Straight to Court?

January 17, 2012 — Sherri Johnson

Property owners who would like to appeal their property tax assessments are faced with two choices in Florida – they can file a petition to the county value adjustment board or they can file a lawsuit in circuit court.  Some attorneys contend that filing a VAB petition is a waste of time as the deck is stacked against the petitioner in those proceedings.  I disagree, and think that there are pros and cons to both venues.  This post will summarize the benefits of filing a VAB petition versus the benefits of going straight to circuit court.

Benefits of Filng a VAB Petition

1.  Limited Discovery Available to Property Appraiser.  In a circuit court action, both parties have the right to obtain documents from the other side, and to question the opposing parties under oath through written Interrogatories or in a deposition before a court reporter.  In a VAB proceeding, however, the Property Appraiser is at a distinct disadvantage in that, while the Property Appraiser’s documents are public records that must be made available upon request, the property owner need not disclose any documents other than the documents they intend to use as evidence.  While the Property Appraisers technically have statutory authority to obtain a subpoena for the production of taxpayer records, this mechanism is rarely used, except for very large taxpayers.  On the other hand, in a lawsuit, both parties have the ability to obtain documents from each other, including documents that the property owner may not want to produce.

2.  Value Disputes Heard by Appraisers.  If your dispute is solely a dispute over appraisal methodology and does not involve any complex legal issues, the VAB can be a good choice of venue, as value disputes in larger counties are heard by licensed appraisers, as opposed to judges, who may have very little knowledge of appraisal theories and concepts.

3.  Attorneys Not Required.  Normally, corporations, LLC and other such entities must be represented by an attorney.  However, in VAB proceedings, taxpayers are allowed to be represented by an unlicensed agent if they desire.  Please note, however, that testimony at a VAB hearing is recorded and may be used against you in a later court case.  Thus, if you think there is any chance that you might want to take the case to court, it would be advisable to be represented by counsel at your VAB hearing.

4.  Lower Costs.  The fee for filing a VAB petition is much lower than the cost of filing a circuit court action.  Also, for those who desire legal counsel, most attorneys will handle VAB petitions on a flat fee or contingent fee basis.

Benefits of Filing a Circuit Court Action

1.  Power to Subpoena Witnesses.  One of the most important benefits of a circuit court action is that, in a court proceeding, your attorney can subpoena witnesses to testify on your behalf and can depose adverse witnesses prior to trial.  Thus, testimony and evidence that may be unobtainable in a VAB proceeding can sometimes by compelled in a court proceeding.

2.  More Preparation Time.  In a VAB proceeding, the Clerk is only required to give you 25 days’ notice of the hearing and, in many smaller counties, the hearings are held very soon after the deadline for VAB petitions has expired.  Thus, if you need more than a few weeks to prepare your case, VAB is probably not the best venue for you.

3.  Cases Heard by Judge.  If your case involves a complex legal or evidentiary issue, you may be better off taking your case to circuit court, where it will be decided by a judge.  In contrast, value disputes before VABs are heard by either an appraiser or, in smaller counties, by the value adjustment board itself, which may not include anyone with a legal background.

4.  Flexibility in Scheduling.  One of the biggest disadvantages of the VAB process is the lack of flexibility in the scheduling of hearings.  In small counties, the VAB may only have two meeting dates available for your hearing.  In larger counties that hold hearings in front of special magistrates, the Clerk generally will not consult with the petitioner before scheduling the hearing and, once a hearing is scheduled, it can only be re-scheduled once, unless the petitioner shows good cause.  In court cases, on the other hand, the parties’ attorneys coordinate the scheduling of hearings around the parties’ schedules and hearings may be rescheduled even without good cause.

5.  Time to Present Case.  Finally, if you have multiple witnesses and boxes of exhibits to present, a VAB hearing may not be a good venue, as only a limited amount of time is allocated to each petitioner.

Conclusion

As a general rule, cases involving multiple witnesses and complex legal issues should probably be filed in circuit court.  However, even in those cases, there may be a benefit to filing a VAB petition if you would prefer to have your case heard by a licensed appraiser or if you are concerned about being forced to turn over confidential business documents in discovery.  For simpler cases, filing a VAB petition can be an inexpensive way to challenge a property tax assessment without waiving your right to file a circuit court action if you are unsuccessful before the VAB.

Posted in Appeals to Circuit Court, Value Adjustment Board. Tags: , , , , , . 2 Comments »

New in 2011: Payment of Taxes During Pending VAB Appeal

July 12, 2011 — Sherri Johnson

Taxpayers who file Value Adjustment Board petitions in 2011 must now make sure that they pay their taxes before they become delinquent.  The newly-enacted Fla. Stat. 194.014, which took effect on July 1, 2011, requires taxpayers who file VAB petitions to pay all non ad valorem taxes and at least 75% of their ad valorem taxes before they become delinquent.  Likewise, taxpayers who challenge the denial of an exemption or classification or a determination that their improvements were substantially complete must pay all non ad valorem taxes and the amount of ad valorem taxes that they admit in good faith to be owing.  In Florida, property taxes become delinquent if not paid by April 1st of the next year.  Thus, if a taxpayer fails to pay their 2011 property taxes by April 1, 2012, the VAB is required to automatically deny their petition on that property.

What is not clear from the new statute is whether a taxpayer’s failure to pay its taxes before they become delinquent will also result in the dismissal of cases pending before the VAB from prior years.  Fla. Stat. 194.171(5), which applies to property tax cases in circuit court, requires the court to dismiss all pending cases if the taxes on the property in question become delinquent in any future tax year.  In some larger Florida counties, VAB cases are sometimes not resolved until several years after they are filed.  Thus, depending on how the statute is interpreted by the VABs, taxpayers whose taxes become delinquent in those counties could risk having all of their prior years’ pending VAB cases denied.

There is one silver lining for taxpayers, though.  The new statute also provides that, if a petitioner is entitled to a refund due to the granting of their VAB petition, the amount of taxes overpaid will accrue interest at the rate of 12% per year from the date the taxes would have become delinquent.

Posted in Property Tax Legislation, Value Adjustment Board. Tags: , , , , , , , . 3 Comments »

DOR Bulletins and VAB Training Materials Deemed Not Binding on VABs

June 28, 2011 — Sherri Johnson

A Florida Administrative Law Judge issued a Summary Final Order in Turner v. Dep’t of Revenue, finding that the Florida Department of Revenue’s advisory bulletins and Value Adjustment Board training materials are not binding on VABs or Special Magistrates, and that Rule 12D-9.020 contravenes Florida law to the extent that it provides that the disclosure of evidence by a VAB petitioner is optional.

Earlier this year, several county Property Appraisers filed a legal challenge to the Florida Department of Revenue’s 2010 Value Adjustment Board training materials and Property Tax Oversight Bulletin 11-01, contending that the materials were improperly-promulgated administrative rules that were contrary to the requirements of the Florida Constitution and statutes.  The Property Appraisers’ primary areas of concern were the DOR’s statements that the Higgs v. Good case did not apply to VABs, its statement that the petitioner has the option of initiating an evidence exchange, and its indication that a “costs of sale” adjustment under Fla. Stat. 193.011(8) should be made to values calculated by the cost and income approach, as well as the sales comparison approach.

On June 22, 2011, the Judge ruled that the bulletins and training materials do not constitute invalid, unpromulgated rules because the “value adjustment boards and their magistrates are not required to apply – and therefore possess the discretion to deviate from – the legal principles enunciated within the materials when conducting VAB hearings.”  In support of their contention that the materials should be treated as administrative rules and thus be subject to the same promulgation procedures, the Property Appraisers had submitted evidence that certain VABs and Special Magistrates had perceived the bulletins and training materials as being mandatory.  However, the Judge found that, regardless of the perception of those individuals, the DOR has no authority to enforce its bulletins or the statements in the training materials and that they were merely non-binding recommendations that the VABS and Special Magistrates were not required to adhere to.

The Judge also ruled that the DOR’s Rule 12D-9.020 was contrary to Fla. Stat. 194.011, Fla. Stat, which requires the VAB petitioners to disclose their evidence at least 15 days before the VAB hearing.  However, the effect of this part of the ruling appears to be nominal, since the Judge also acknowledged that the only penalty for the petitioner’s failure to disclose its evidence is that the Property Appraiser is not required to disclose its evidence to the petitioner.  Thus, the effect on the requirements for exchange of evidence between the parties is essentially nil.  Basically, if the Property Appraiser requests documentation, that documentation must be provided 15 days before the hearing or it may not be admitted into evidence.  But as to evidence not requested by the Property Appraiser, the Petitioner only needs to disclose that evidence if they would like to see the Property Appraiser’s evidence before the hearing.

Posted in Evidence, Value Adjustment Board. Tags: , , , , , , , . 1 Comment »

New Policies & Procedures for 2010 VAB Hearings

August 4, 2010 — Sherri Johnson

Just when I think I know everything there is to know about property tax appeals, they go and change the rules on me again.  VAB season should be interesting this year, given all of the new policies and procedures promulgated by the Florida Department of Revenue and its infamous (and at times puzzling) 2010 Value Adjustment Board Training materials that are required reading for all VAB Special Magistrates in Florida.  Below is a quick summary of some interesting administrative changes that are included in the new Rules and the VAB Training materials.

Good Cause for Late VAB Petitions

The DOR has now included a definition of “good cause.”  According to Rule 12D-9.015(11)(a), “good cause” means the verifiable showing of extraordinary circumstances.  Examples given by the DOR include a personal, family or business crisis, or a physical or mental illness, infirmity or disability that would reasonably affect the petitioner’s ability to timely file, as well as miscommunications with the Board Clerk, Property Appraiser or their staff regarding the filing time.

Agents for Taxpayers

Rule 12D-9.018(3) clarifies that a taxpayer may be represented by anyone, including a family member, and that the agent need not be a licensed individual.  However, a petition filed by an unlicensed agent must be signed by the taxpayer or be accompanied by a written authorization from the taxpayer.

Rescheduling Hearings

Florida Statute 194.032(2) allows a petitioner to reschedule a hearing one time without good cause.  In my experience last year, some Value Adjustment Board Clerks interpreted this section as only allowing the petitioner to request one rescheduling, regardless of whether they had a conflict or other good cause.  Rule 12D-9.019 clarifies that a rescheduling for good cause shall not be treated as the one time rescheduling to which a petitioner has a right upon timely request under Fla. Stat. 194.032(2).  This Rule also clarifies that if a hearing is rescheduled, the deadlines for the exchange of evidence shall be computed from the new hearing date, if time permits.

Effect of Failure to Provide Income Data/Higgs v. Good

Higgs v. Good is, of course, the case that held that where a taxpayer refused to provide his income data to the Property Appraiser when the Property Appraiser was trying to prepare the tax roll, the taxpayer could not later use that data in an administrative or judicial challenge to their property tax assessment (yes, the case did expressly say “administrative or judicial”).  Thus, the DOR has created quite a stir by stating in its 2010 VAB Training materials that “the case of Higgs v. Good does not apply to proceedings of the value adjustment board.”

Note, however, that Fla. Stat.  194.034 still prohibits the VAB from accepting evidence if the Property Appraiser requested it from the petitioner in connection with the VAB proceeding and the petitioner had knowledge of it, but declined to provide it to the Property Appraiser.  If such a request is made by the Property Appraiser (and it always is), Rule 12D-9.020(8) deems the petitioner’s evidence timely if it is submitted at least 15 days before the hearing.  If submitted less than 15 days before the hearing, it is still considered timely if the VAB finds that it was provided a reasonable time before the hearing.

Order of Presentation of Evidence

Rule 12D-9.024(7) clarifies that the Property Appraiser should present their evidence first in a hearing involving a value dispute.  Presumably, the taxpayer would still present their evidence first in exemption and classification hearings.  However, if the parties agree, the Special Magistrates generally prefer for the Property Appraiser to state their reasons for denial of an exemption before the taxpayer presents their case.

Applicability of Rules of Evidence

Rule 12D-9.025(2)(a) provides that VAB proceedings are not to be controlled by strict rules of evidence and procedure.  However, while formal rules of evidence do not apply, fundamental due process shall be observed and shall govern the proceedings.  The VAB Training materials further state that the VABs must not apply strict standards of relevance or materiality in deciding whether to admit evidence into the record, and that any decisions to exclude evidence must not be arbitrary or unreasonable.

In practice, what this likely means is that the VABs should give the parties a bit of leeway when their evidence is challenged on relevance or materiality grounds.  However, parties should still be wary about relying on hearsay to prove their case (such as affidavits or appraisals by persons not present at the hearing).  The Rules specifically allow petitioners to notify the VAB on their petition that they do not intend to appear, but that they would like their evidence considered anyway. In such situations, Rule 9.024(11) states that the VAB must take into consideration the inability of the opposing party to cross-examine the non-appearing party in determining the sufficiency of the evidence.

Applicability of USPAP

Florida Statute 194.301 now requires the Property Appraiser to comply with “professionally accepted appraisal practices.”  Some (including me) had speculated that these “practices” could be construed to include the Uniform Standards of Professional Appraisal Practice [“USPAP”].  Not so, however, as the DOR’s 2010 VAB Training materials have instructed the VABs and Special Magistrates that they are not authorized to determine whether a party is required to comply with USPAP or whether their evidence complies with USPAP.

The Eighth Factor (Costs of Sale)

Another issue that has many people scratching their heads is the DOR’s discussion of “the eighth criterion” in the VAB Training materials.  The materials seem to suggest that where the Property Appraiser has reported to the DOR on Form DR-493 a certain percentage adjustment for the eighth criterion of Fla. Stat. 193.011, but has not made such an adjustment to the petitioned property, the VAB should go ahead and make that adjustment.  Thus, it would seem that the DOR is advising the VABs to ensure that the same adjustment is made to all properties, regardless of the approach used to calculate the assessment and regardless of whether it would result in an assessment at less than fair market value.  I expect that the DOR will be receiving questions from many people about this, and hopefully further clarification will be forthcoming.

Working Waterfront Properties

The VAB Training materials clarify that, despite the legislature’s failure to pass implementing legislation, the constitutional provisions relating to working waterfront properties do apply in 2010, and the DOR anticipates issuing rules later in the summer of 2010.

Electronic Hearings

Finally, the new Rules allow for electronic hearings if the VAB approves of their use and the special magistrate agrees.  Procedures for the use of electronic hearings are set forth in Rule 12D-9.026.

Posted in Property Tax Legislation, Value Adjustment Board. Tags: , , , , , , , , , . 1 Comment »

Taking a Property Tax Dispute to Court

June 3, 2010 — Sherri Johnson

With the Value Adjustment Board process winding down in most Florida counties, many taxpayers and some Property Appraisers are now contemplating whether to take the next step of filing a lawsuit in circuit court.  This post will explain the deadlines and requirements for filing a circuit court action, the effect of the VAB proceeding in court cases, and the difference between a VAB and court proceeding.

Deadline to File a Circuit Court Action

The timeframe to file a circuit court action in a property tax or exemption dispute is very short and, because the deadlines are jurisdictional, failure to file an action by the statutory deadline will result in permanent dismissal of your case.  Thus, anyone who is contemplating appealing a VAB decision to the circuit court is encouraged to consult with an attorney as soon as possible after receiving their VAB decision.

Pursuant to Fla. Stat. 194.171, those taxpayers who choose not to file a VAB petition must file their circuit court actions no later than 60 days after the certification of the tax roll, which generally occurs around mid-October in many counties.  Taxpayers who file a VAB petition, but are unsatisfied with the outcome can file an appeal of the VAB decision to the circuit court, but those appeals must be filed within 60 days of the date that the VAB renders its decision.  Pursuant to Fla. Stat. 196.151, an appeal of a VAB decision denying a homestead exemption must be filed within 15 days of the date that the VAB decision is rendered.

The question of when a VAB decision is “rendered” is a bit more complicated now that the Record of Decision forms contain two signature lines – one for the Chairman of the VAB, and another for the Clerk to sign when the decision is mailed.  At least one judge has indicated that he believes the 60 day deadline begins running on the date that the VAB Chairman signs the Record of Decision, even if the decision is mailed by the Clerk on a later date.  Thus, it would be wise to err on the side of filing the lawsuit within 60 days of the date the decision is signed by the VAB Chairman.

Of course, the county Property Appraisers also have the option of appealing an unfavorable VAB decision to circuit court.  While that situation is less common, if a Property Appraiser chooses to go that route, they must file an action against the taxpayer prior to extension of the tax roll or, if the tax roll was extended prior to completion of the VAB hearings, within 30 days of recertification.

Payment of Amount Admitted to be Owed

Prior to filing an action in circuit court, the taxpayer is also required to pay that year’s property taxes.   However, they have the option of paying their taxes in full or paying the amount that they admit in good faith to be owing.  As with the deadlines discussed above, this requirement is jurisdictional and failure to pay the taxes prior to filing the lawsuit will result in dismissal of the case.  In addition, it is imperative that the taxpayer continue to pay their taxes in a timely manner in future years while the lawsuit is pending, as the case may also be dismissed if any later years’ taxes become delinquent.

Effect of VAB Proceeding

Although referred to as an appeal of the VAB decision, a circuit court action in a property tax dispute is “de novo” – meaning that the parties will not be relying on the record created before the VAB, but rather will have the opportunity to present their case again, in full, before a circuit court judge.  Thus, regardless of how many procedural or evidentiary errors may have been committed by the VAB or the Special Magistrate, none of that matters once the case gets to circuit court.  That said, although the VAB decision is not dispositive and the parties are essentially getting a fresh start before the circuit court, it is important to note that the VAB proceedings are recorded.  Thus, it is certainly possible for one party to use the other parties’ recorded VAB testimony to impeach them at trial.

Lawsuits Against the VAB

Fla. Stat. 194.036 allows the Property Appraiser to sue the VAB for violations of the law if the Department of Revenue finds probable cause that a particular county VAB has consistently and continuously violated the intent of the law or administrative rules in its decisions.  Once the Department makes such a finding, the Property Appraiser has 20 days to file a lawsuit against the VAB.  If the Property Appraiser prevails, they are entitled to reversal of the VAB’s decisions, as well as an injunction against further violations of the law.

The Florida statutes do not provide a mechanism for an aggrieved taxpayer to sue the VAB over violations of the law and, although some taxpayers have filed such suits anyway, I have not seen any that were successful, as the courts tend to find that the taxpayer’s remedy is to sue the Property Appraiser, as discussed above.  However, the Department of Revenue’s VAB training materials indicate that written complaints alleging noncompliance with the law by the VAB, Special Magistrates, Clerk or parties should be sent to the VAB Attorney, with a copy to the Department of Revenue.

One Final Caveat . . .

Unlike a VAB hearing, where the rules of evidence are somewhat lax, litigants in circuit court are expected to abide by all of the Florida Rules of Civil Procedure and the Rules of Evidence.  Moreover, the circuit courts are not bound by the various instructive materials issued by the Department of Revenue and the VABs.  Rather, they are free to interpret the tax statutes as they see fit.  Given the many different opinions as to how the new burden of proof and other procedural matters should be applied, it is entirely possible that the circuit courts could apply the new statutes very differently than the VABs.

Posted in Appeals to Circuit Court, Value Adjustment Board. Tags: , , , , , , . Leave a Comment »

What to Expect at the Final Value Adjustment Board Meeting

May 17, 2010 — Sherri Johnson

So you finally received a decision from the Special Magistrate and, whether you won or lost, at least your VAB appeal is over and done with, right?  Not quite. For those Florida counties that employ Special Magistrates, the recommendations of the Special Magistrates are just that – recommendations.  Florida Statute 194.035 authorizes the value adjustment boards to accept those recommendations without further hearing, but the ultimate authority to grant or deny a petition rests with the VAB, which consists of two county commissioners, a school board member, and two citizen members.

In most counties, the final VAB meeting is not particularly exciting.  Unless they have a question about a particular petition, the VAB members will usually move to approve all of the recommendations of each Special Magistrate as a group, without any discussion.  The Special Magistrates usually attend the final VAB meetings in case the Board members have a question, and occasionally Board members will ask a Special Magistrate to further explain their recommendations.   There is usually no opportunity for the taxpayer or Property Appraiser to re-argue their position as to a particular petition, although the Board will often have an open “public comment” session at the end of the meeting, after they have rendered their decisions.

Of course, there are exceptions.  Some county value adjustment boards have adopted procedures whereby the taxpayer or Property Appraiser can file written objections to a Special Magistrate’s recommendation, as long as they limit their objections to legal issues, and do not try to introduce any new evidence.  Other VABs allow Property Appraisers and petitioners to orally address the Board and object to adverse Special Magistrate recommendations at the final VAB meeting.

In general, even in counties where the VAB allows for oral or written objections, the parties are not allowed to introduce new evidence that was not presented at the hearing before the Special Magistrate. In fact, an appellate court recently held that a VAB did not have authority to hold a rehearing and allow new evidence to be presented after it had accepted the Special Magistrate’s recommendations.  This case does not necessarily preclude a VAB from rejecting a Special Magistrate’s recommendation and holding its own evidentiary hearing.  However, such a scenario is highly unlikely in most counties, as the VABs tend to defer to the expertise of the Special Magistrates.

After the final VAB meeting, the Clerk has 20 days to issue the final Record of Decision for each petition.  Taxpayers who are not satisfied with the decision of the VAB can file an action in circuit court, but such actions must be filed within 60 days after the decision was rendered by the VAB.   Actions challenging the denial of a homestead exemption must be filed no later than 15 days after the VAB renders its decision.  These deadlines are jurisdictional requirements that cannot be waived, so if you are considering filing a court action, it is essential that you contact an attorney as soon as possible, as failure to meet the deadline will result in dismissal of your court case.

Posted in Value Adjustment Board. Tags: , , , , , , , , . Leave a Comment »

Responding to Requests for Financial Data from the Property Appraiser

May 10, 2010 — Sherri Johnson

If you own commercial property, especially hotels/motels, apartment buildings, self-storage facilities, or other property that is commonly rented, you have probably received a request from the county Property Appraiser for your property’s income and expense data.  This post will explain why the Property Appraiser seeks this data, how it is used, whether you are required to respond, and the consequences for failure to respond.

Why does the Property Appraiser need my financial information?

Commercial property is commonly assessed by what is referred to as the “income approach.”  In a nutshell, the value of the property is determined by capitalizing the property’s net operating income from the prior year.  In order to determine a reasonable amount of revenue and expenses for each commercial property, the Property Appraiser’s office requests that the property owners provide that data, which is then analyzed and used county-wide.

Will my financial information be treated as confidential?

Yes, for the most part.  Fla. Stat. 195.027 authorizes the Property Appraisers to seek taxpayers’ financial records, but states that the financial information is confidential in the hands of the Property Appraiser, except upon court order or order of an administrative body having quasi-judicial powers in ad valorem tax matters.  Thus, in most cases, your information will be kept confidential.

However, if another owner of income-producing property were to take the Property Appraiser to court over their assessment, they could conceivably ask the court to order the Property Appraiser to produce any income data that they used to assess the property, including data received from other taxpayers.  Of course, in my experience, if a judge is going to order the Property Appraiser to produce confidential taxpayer data, they will usually allow the Property Appraiser to redact any identifying information.

Also, if you challenge the Property Appraiser’s assessment of your own property in court or before the Value Adjustment Board, the Property Appraiser will in all likelihood want to use any previously-provided data in their defense.  There has been some disagreement as to whether the Property Appraisers can do so without a court order, but in such a situation the court would in all likelihood allow the Property Appraiser to use your data in court.

What happens if I refuse to respond?

If a taxpayer does not voluntarily provide their financial records to the Property Appraiser, the Property Appraiser has the authority under Fla. Stat. 195.027 and Florida Administrative Code Rule 12D-1.005 to file an action in circuit court requesting a subpoena duces tecum directing the taxpayer to produce the records.  However, this procedure is used very rarely.  Usually, if a taxpayer does not respond, the Property Appraiser will just assess their property using the best available information, such as information provided by owners of similar property in the area or data from national publications.

The most serious consequence of failing to respond is that you essentially forfeit your ability to use that data to challenge your property tax assessment, even if your own income and expenses would result in a lower value.  Years ago, the Supreme Court of Florida in Palm Corporation v. Homer held that a taxpayer who refused to provide their income data to the Property Appraiser could not use it in a later lawsuit to challenge the Property Appraiser’s assessment.

Can I wait until I receive my Trim notice to decide whether to respond?

In Higgs v. Good, the taxpayer did just that and the appellate court held that he could not use his income data in a court action to challenge the Property Appraiser’s assessment.   Basically, the Property Appraiser needs this information in the spring in order to use it in the assessment process, since the tax roll must be completed by July 1st.  The courts have thus found that it is unreasonable to withhold financial data until after the assessments are completed and then submit it only if it suits the taxpayer (i.e. if it would indicate a lower value).

That said, the Florida Department of Revenue has recently raised quite a ruckus by stating in its proposed 2010 VAB Training Materials that, in the Value Adjustment Board process, as long as the taxpayer submits their evidence to the Property Appraiser 15 days before the hearing, it should be considered timely, regardless of when the data was requested.  This proposal has no doubt received a lot of negative commentary from the Property Appraisers, as it appears to ignore the court ruling in Higgs v. Good.  But unless this is changed, it is possible that, beginning in 2010, taxpayers may have the option of withholding their income data until they receive their TRIM notice.  Although they would not be able to use that data in court, the DOR’s materials may allow them to use that data in a VAB hearing.

Posted in Commercial Property. Tags: , , , , , . 1 Comment »

Department of Revenue Clarifies VAB Hearing Procedures

December 28, 2009 — Sherri Johnson

The Florida Department of Revenue recently issued Property Tax Oversight Bulletin 09-29, which clarifies the order of presentation of evidence and other procedural issues that have arisen in the 2009 Value Adjustment Board hearings.  Among other things, the bulletin explains that:

  • The first issue to be considered at the VAB hearing is whether the Property Appraiser’s assessment will be presumed correct.
  • In determining whether the Property Appraiser’s assessment is presumed correct, the Property Appraiser should be required to present their evidence first.
  • Evidence regarding the general appraisal practices of the Property Appraiser’s office or approval of the tax roll by the Department of Revenue is insufficient to establish the presumption.  The Property Appraiser must explain how those practices were applied to the specific property at issue.
  • If the Property Appraiser does not present evidence on this issue, or if the presumption is otherwise lost, the VAB may establish the value or remand to the Property Appraiser for a reassessment.
  • Regardless of whether the Property Appraiser retains the presumption of correctness, the taxpayer still has the right to a determination of the appropriateness of the Property Appraiser’s appraisal methodology.
Posted in Burden of Proof, Evidence, Value Adjustment Board. Tags: , , , , , . Leave a Comment »

Do VAB Special Magistrates Have Authority to Remand for a Reassessment?

October 27, 2009 — Sherri Johnson

It’s time for me to get on my soapbox about a big blunder the Florida Department of Revenue made in its new VAB forms and proposed rules.  Okay, so there was probably more than one blunder, but this one sticks in my craw because I filed a public comment and apparently nobody paid any attention.  The blunder I’m referring to is the authority apparently bestowed on the Special Magistrates by the DOR to order Property Appraisers to revise their assessments.  The Florida statutes allow the circuit court or value adjustment board to remand for a reassessment under appropriate circumstances, but the Special Magistrates plainly do not have any statutory authority to issue an order directing the Property Appraiser to change their assessment.

Florida Statute s. 194.301 provides that if the Property Appraiser’s assessment is overturned and the record lacks substantial competent evidence of value, the matter must be remanded to the property appraiser with appropriate directions from the value adjustment board or the court.  While the VAB is authorized by Florida Statute 194.035 to appoint special magistrates for the purpose of taking testimony and making recommendations to the board, the final decision as to whether to overturn the assessment and, if so, whether to set the value or remand to the Property Appraiser for a reassessment, is a decision for the board.  The Board can act on the recommendations of the Special Magistrate without further hearing, but nothing in the Florida statutes suggests that Special Magistrates have any authority to directly order a Property Appraiser to reassess property.

So why then did the Department of Revenue promulgate a form (Form DR-485R) that invites the Special Magistrates to order the property appraisers to reassess property even before the VAB has determined whether the original assessment is valid?  And why do the DOR’s proposed Rules provide procedures for the Special Magistrates to remand an assessment to the Property Appraiser without prior approval of the Value Adjustment Board?  I cannot answer these questions, but I will say that the proposed regulations are clearly beyond the DOR’s rulemaking authority.

Comments on the DOR’s proposed rules can be sent to VAB@dor.state.fl.us or you can call the DOR at (850) 922-7945.

 

Posted in Value Adjustment Board. Tags: , , , , , . 1 Comment »

Evidence Disclosure Requirements for Florida VAB Hearings

October 13, 2009 — Sherri Johnson

The Florida statutes provide a fairly detailed procedure for the exchange of evidence between the taxpayer and the Property Appraiser.  However, the statutes are a bit vague on the consequences of failing to disclose evidence in a timely manner.  This post will try to address some common questions about Florida’s evidence disclosure requirements for Value Adjustment Board hearings.

Is the Property Appraiser required to share their evidence with the petitioner prior to the VAB hearing?

It depends.  Pursuant to section 194.011(4), Fla. Stat., the Property Appraiser is required to disclose their evidence to the petitioner at least 7 days prior to the hearing only if the petitioner discloses their evidence (witness information and copies of documentary evidence) to the Property Appraiser at least 15 days prior to the VAB hearing and the petitioner sends the Property Appraiser a written request for disclosure of the Property Appraiser’s evidence.  If the petitioner fails to disclose their evidence in a timely manner, or if the petitioner discloses their evidence but neglects to send the Property Appraiser a written request for disclosure of evidence, the Property Appraiser is under no duty to share their evidence with the petitioner.  That said, the Property Appraiser’s records are, for the most part, still subject to the disclosure requirements of the Public Records Act, and thus a petitioner may still be able to make a request for specific documents.

If the Property Appraiser does disclose their evidence in a timely manner, will it be excluded from evidence?

No.  If the petitioner complies with the requirements of section 194.011(4), Fla. Stat. and the Property Appraiser fails to disclose their evidence at least 7 days prior to the hearing, the hearing will be re-scheduled, but there is no indication in the statute that the Property Appraiser’s evidence would be inadmissible.

Is the petitioner required to disclose their evidence to the Property Appraiser prior to the VAB hearing?

No.  If the petitioner wants to see the Property Appraiser’s evidence prior to the hearing, the petitioner must disclose their evidence at least 15 days prior to the hearing.  However, according to the training materials provided by the Florida Department of Revenue to the VABs and Special Magistrates, the petitioner’s initiation of an evidence exchange with the Property Appraiser is strictly optional.  If the petitioner chooses not to disclose their evidence, the evidence is not necessarily inadmissible.  The only consequence provided in the statute is that the  petitioner does not have a right to see the Property Appraiser’s evidence in advance.

What if the Property Appraiser sends the petitioner a request for documents?  Must the petitioner respond?

Yes.  Pursuant to section 194.034(1)(d), Fla. Stat. and the Higgs v. Good case, if the Property Appraiser makes a written request for information and the taxpayer fails to respond, the taxpayer will be prohibited from using that information at the VAB hearing or in court.  Thus, while the taxpayer is  not required to initiate an evidence exchange, failing to respond to a written request from the Property Appraiser could affect their right to introduce the requested information at a later hearing.

What transmission methods can be used for exchanging evidence?

Rule 12D-10.0044 of the Florida Administrative Code provides that the exchange of evidence can be accomplished by mail, fax, e-mail, hand delivery or any other method agreed upon by the parties.  See Rule 12D-10.0044 for more information on delivery methods.

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