The Pennsylvania Supreme Court in Valley Forge Towers Apts. N, LP v. Upper Merion Area School District, 49 MAP 2016, held that the taxpayer’s complaint set forth a valid claim that Upper Merion Area School District’s appeal policy of appealing only the real estate assessments of commercial properties violates the Uniformity Clause of the Pennsylvania Constitution.
The case reversed lower court dismissals of taxpayer’s complaint and remanded the matter back to the Montgomery County Court of Common Pleas for further proceedings. The Court found “that a taxing authority is not permitted to implement a program of only appealing the assessment of one sub-classification of properties, where that sub-classification is drawn according to property type – that is, its use as commercial, apartment complex, single family residential, industrial, or the like.”
The Court noted that the Commonwealth Court has been misconstruing the two main principles articulated in Downingtown and Clifton, which are as follows:
- All property in a taxing district is a single class, and as a consequence, the Uniformity Clause does not permit the government, including taxing authorities, to treat different property sub-classifications in a disparate manner.
- This prohibition applies to any intentional or systematic enforcement of the tax laws, and is not limited to wrongful conduct.
This case is significant for taxpayer’s because it now gives them an avenue to attack school district appeals on Uniformity grounds based on the school district’s appeal policy. If it can be shown through discovery that the school district intentionally or systematically appeals only a subclass of properties then the school district appeal may be dismissed before the taxpayer has to hand over requested discovery from the school district, which may include confidential or proprietary information that the school district could use to try and increase the properties assessed value.
The Valley Forge Towers decision is a big win for taxpayers, but the battle is still far from over. There are many questions still left unanswered by the Court’s decision that still need to be answered.
If your property is appealed by a school district, please contact either Paul R. Morcom, or any member of McNees’ state and local tax group to make sure all of your rights as a property owner are protected.