Spring 2014
In This Spring 2014 Issue:
Lower Valuations May Not Mean Tax Breaks
Tax Appeal Procedures Strictly Enforced
Assessment of Computer Software In Connecticut
Lower Valuations May Not Mean Tax Breaks
Many Connecticut communities have conducted revaluations on their October 1, 2013 Grand Lists. Many of these towns recognize that real estate market values have dropped over the last few years and the new assessment notices generally reflect this reality.
However, lower valuations do not necessarily lower taxes. As one assessor observed not so long ago, “[T]he same amount of taxes will likely need to be collected, so the mill rate will likely have to go up. That means many property owners might not see a tax break at all.”
This cautionary remark should be taken to heart by all Connecticut property owners who are considering whether or not to challenge their new assessments after receiving notice from their local Board of Assessment Appeals.
Tax Appeal Procedures Strictly Enforced
State Line Propane, LLC sued the Cromwell assessor and tax collector in 2012. It claimed that the town’s assessments against gas tanks allegedly owned by the plaintiff were excessive and that the plaintiff did not even own the tanks on the assessment dates in question.
The Town officials sought to dismiss the case before trial because State Line had not filed appeals under the relevant tax appeal statutes and the statute of limitations had expired.
State Line argued to the court that it was entitled to invoke the defense of “equitable tolling” even though it had filed its appeal too late. This esoteric rule enables a plaintiff to trump the application of a statute of limitations if “despite diligent efforts, a plaintiff (does) not discover (an) injury until after the limitations period (expires).”
The assessor and tax collector produced considerable documentation showing that State Line was on notice of these assessments. (State Line also asserted that an assessment on property it did not own was void and could be challenged at any time.)
Both arguments failed. State Line’s sole recourse was to go the tax appeal route which it failed to follow in a timely fashion, the court ruled. The case was dismissed by Superior Court Judge Julia L. Aurigemma sitting in the Middlesex Judicial District.
State Line Propane, LLC v. Baran, et al. docket number CV-12-2007242 2013. For further information about the issues presented in this case, please contact Tiffany K. Spinella, Esq. at 860-424-4360 or tspinella@pullcom.com.
Assessment of Computer Software In Connecticut
Once upon a time, software was assessable – no further discussion. After a Connecticut Supreme Court decision, the law was changed so that computer software is not assessable “except when the cost thereof is included, without being separately stated, in the cost of computer hardware.”
As East Hartford Assessor Brian Smith pointed out in the May 2013 issue of Fair & Equitable, “most of the time, (the cost of computer software) is not separately stated because the companies that make the machines or computers do not want you to know the cost of the software versus the total cost.”
As a result, very little software is assessed in Connecticut.
For further information about this topic, contact Gregory Servodidio at gservodidio@pullcom.com or at 860-424-4332.
One Bite At The Apple!
The owner of a New Britain strip shopping center authorized its tenant Wal-Mart to appeal the property assessment. Since the first stop in the Connecticut ad valorem tax appeal process is the local board of assessment appeals, Wal-Mart petitioned the board which reduced the value of the property from $11,173,000 to $9,875,000 on the City’s October 1, 2008 Grand List. Not satisfied with this reduction, the property owner itself challenged the assessment the following year. This time, the Board held firm. In response to the owner’s appeal to the Superior Court which followed, the City claimed that the prior year’s reduction precluded the owner from pursuing any further reduction and sought dismissal of the action. Sitting in the New Britain Superior Court, Judge Trial Referee Arnold W. Aronson agreed with the City.
The Superior Court ruled that “(O)nce Wal-Mart availed itself of the (local) appellate process, it bound the property owner for each successive tax year until the next city-wide revaluation.”
The Appellate Court upheld the Superior Court’s decision, albeit on a different basis. It referred to a 2009 Public Act which provides that “(w)hen the Board (of Assessment Appeals) increases or decreases the gross assessment of any taxable real property or interests therein, the amount of gross assessment shall be fixed until the (next) revaluation of all real property (in the community).”
Writing for a unanimous court, Judge Bethany J. Alvord ruled that the statutory amendment applied retroactively and made it impossible for a property owner, or anyone else, to challenge the assessment again until the City of New Britain conducted its next revaluation.
The most important lesson to be learned from the Appellate Court’s ruling is that a local board decision, even if favorable, but does not achieve the petitioner’s objectives, should be challenged in Superior Court. The second lesson is that when a property owner delegates the responsibly of challenging an assessment to a tenant, better communication about objectives and case management is in order.
Samnard Associates, LLC v. City of New Britain, 140 Conn.App. 290 (2013)
Elliott B. Pollack at 860-424-4340 or ebpollack@pullcom.com. can respond to questions about this appellate matter.
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