“Young man, young man, what do you wanna be?” – YMCA, The Village People. The YMCA is a Christian organization and sought religious and charitable use tax exemptions from property taxes. The exemption applications were eventually denied. The Colo. Const. provides for both exemptions, as does CRS 39-2-117, 39-3-106 and 108. Each are determined by examining the property’s use, not the character of the entity. Activities of religious organizations that further their religious purposes constitute religious worship, and entities can use facilities for charitable purposes without requiring participation in entity-organized activities. In each case, the Tax Board failed to examine whether the activities furthered declared religious or charitable purposes. The court of appeals reversed, remanded and ordered the Board to apply the correct legal standards for each exemption.
Tag Archives: Taxes
Larimer County Board of Commissioners, Grand County Board of Commissioners, Board of Assessment Appeals v. Colorado Property Tax Administrator, and YMCA of the Rockies, 2013COA49 (April 11, 2013)
Northglenn Urban Renewal Authority v. Gil Reyes as Adams County Assessor and Board of County Commissioners of Adams County, 2013COA24 (February 28, 2013).
The technical task of taxing property under tax increment financing (TIF) plans is, well, technical. A TIF is used to fund the sale of municipal bonds for urban renewal. Under CRS 31-25-101 to 115, a TIF property is valued before it is included in the urban renewal plan (base value); subsequent increases in value, and the increased taxes therefrom, then finance the urban renewal authority (URA). Here, property was included in a TIF but later removed. The statute does not address how to calculate a TIF in this situation. The Assessor included the property in the base value, but not in the newly assessed value. This method, the court of appeals held, was erroneous because it created an imbalance in the URA’s TIF funding. But, the Assessor correctly measured the TIF’s 25-year termination date from the date the TIF was adopted, not after property was added. A new TIF calculation was ordered.
Bachelor Gulch Operating Company, LLC v. Board of County Commissioners of Eagle County, and Board of Assessment Appeals, 2013COA46 (March 28, 2013)
“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice…” Adam Smith. In 2007, after Assessor valued the Ritz-Carlton’s property in Beaver Creek (Ritz), but before the next assessment, the Ritz turned 50 rooms into condos. The assessor then apportioned the taxes between the Ritz and the condos based on the 2007 value. The Ritz objected, arguing Assessor should have determined its actual value, treating the condos as omitted properties under CRS 39-5-125. Finding the condos were not “omitted,” and because no other statute applied, the court of appeals upheld the apportionment procedure as consistent with the Assessor’s Reference Library (ARL). Last, Constitutional property valuation provisions only apply at the time of assessment, not here, between assessments.
CTS Investments, LLC v. Garfield County Board of Equalization and Board of Assessment Appeals, 2013COA30 (March 14, 2013)
“Society doesn’t have values. People have values.” Milton Friedman. And property values are decided by people – specifically, assessors. One property (P1) could be valued less if the sale of another (P2) was considered. Assessor excluded the sale of P2, valuing P1 higher, concluding P2 was sold at a discount because the seller was compelled by economic duress, as reported in the news, and the sale was not “arms-length.” P1’s owner objected to the use of the reports and the conclusion that the P2 sale was not “arms-length.” The court of appeals held the reports, though hearsay, were admissible because a prudent person could rely on them. Sales under duress are typically excluded in valuations. The court, relying on the ALR, determined that “duress” means a seller not typically motivated, as was the circumstance with P2. Thus, the P2 sale was not arms-length and P1 was properly valued.
James and Betsy Fifield v. Pitkin County Board of Commissioners and Board of Assessment Appeals, 2012COA197 (November 8, 2012)
Property taxes—a dry topic, but important to those who pay them. In this case, property owners subdivided one parcel of property into two. Only one parcel had a house. The second parcel, which was vacant except for a road that provided access to the house, was classified as vacant land. The property owners challenged that classification and claimed it was “Residential Land” under Colorado statutes. The court of appeals agreed with the property owners. “Residential Land” includes two commonly owned parcels, contiguous with one another, where one parcel has a residential dwelling, and the other parcel is used in conjunction with the residential dwelling. The court remanded the case for a determination of how much of both parcels were used as a unit in conjunction with a residential improvement.
One theory about the fall of the French monarchy is that its taxation system was inefficient. In this case, Denver assessed taxes on concessionaires in DIA. DIA, as a city entity, is exempt from ad valorem (property) taxes. However, private possessory interests in property located on exempt property may nonetheless be taxed. Case law defines a possessory interest as taxable if: 1) revenues are provided by private sources, 2) owner can exclude others, and 3) ownership lasts long enough for a private benefit. According to the court of appeals here, the Colorado Constitution imposes the tax, but the methodology for assessing taxes on possessory interests is statutory. Here, the court rejected the concessionaires’ constitutional challenge to the statute and the court held that the concessionaires had a taxable possessory interest. Accordingly, the concessionaires were taxed.
Interlocutory appeals under the new Appellate Rule 4.2 are hard to get, but this conservation easement tax credit appeal adds substance to the rule. Plaintiffs appealed a Dept. of Revenue disallowance of a tax credit to the trial court. The appeals court granted interlocutory review of the trial court’s order denying DOR relief. The court gave 4 reasons for granting interlocutory review under the “controlling issues of law” prong: 1) widespread public interest; 2) failure to join parties can be dispositive; 3) resolution would control the ultimate outcome; and 4) to avoid inconsistent results. The court will review the merits of 4 issues related to conservation easements: 1) who is a “taxpayer;” 2) who is liable for tax deficiencies; 3) are tax credit transferees necessary parties to a tax credit appeal; and 4) what are the service requirements on transferees.