A county Board of Equalization in Washington state recently examined one of my equipment appraisal reports in an on-going tax appeal case. The report had been originally submitted to the county assessor, who dismissed it, citing
… the statement by the appraiser that the purpose of the appraisal is to assist with an ad valorem tax appeal shows the immediate bias of the appraisal judgment and renders the value conclusion irrelevant for purposed of estimating true and fair market value.
Have to admit that when I read that initial response from the county tax assessor, I had to give my head a shake. An appraisal report that states its specific scope of work and then satisfies that scope is biased and irrelevant? That’s not the USPAP I’m familiar with. The client immediately filed an appeal.
Today, I got an email from the tax consultant in the case that made my day:
Hey, Jack,
Looks like the County accepted your appraisal. See attached.
The attached document stated:
The BOE finds that the appraisal conducted for the Petitioner to be compelling evidence, particularly the fair market value of property listed in the schedule of subject assets, Appendix A-1, pp. 1-7. The Board concludes that the Petitioner has provided clear, cogent, and convincing evidence sufficient to overcome the Assessor’s presumption of correctness and to warrant a reduction in the valuation.
What did that mean for the Petitioner? Acceptance of the appraisal report by the Board of Equalization lowered the taxable value of the manufacturing equipment more than $10,000,000.
I’m delighted, of course, that the BOE found my report “clear, cogent, and convincing,” and I’m especially glad that my appraisal report was able to support the opinion of value without me being present.
One of the big lessons I’ve learned in appraisal practice for litigation is that an appraisal report should include all the compelling evidence and reasoning needed to support the conclusion of value. I’m happy to attend dispositions or provide expert witness in court if necessary. I always arrive with my report in hand, ready to answer any questions and citing report page numbers.
Even better, for me and for my clients, is when the report stands alone — as in this tax appeal — providing all the information and exposition needed to understand and accept the report as compelling evidence in the case.
Jack Young, ASA—MTS/ARM, CPA
NorCal Valuation Inc.
