Real Estate Taxes

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The Pennsylvania State Tax Equalization Board has released the Common Level Ratio (“CLR”) real estate valuation factors for 2017.  The common level ratio is the ratio of assessed value to market value used to value properties in a particular county for property tax purposes, and is used for purposes of appealing property tax assessments.  Click on the following link A6383603 to see the 2017 CLR list.  To determine if your property is currently over-assessed – take the properties current assessed value and divide it by the CLR.  This will give you your property’s current implied fair market value.  If you know that your property’s current fair market value is for example $100,000 (based on a recent appraisal value) and the current implied fair market value is $200,000, then your property is over-assessed and an annual assessment appeal should be filed to lower your assessed value and consequently your real estate taxes.  If you have any questions regarding the CLR and how to determine if your property is over-assessed, please call Paul Morcom (717-237-5364) or Randy Varner (717-237-5464) to discuss.

 

Lancaster, Pa. – (February 13, 2018) Nissin Foods topped the list of over 5,200 Lancaster County property owners that successfully appealed their assessed values.  The Nissin plant on Hempland Road in East Hempfield Township originally had an assessed value of $15,686,900 after the county-wide reassessment and due to a successful appeal, the new assessed value is $9,390,000 – a reduction of $6,290,900.  Representing Nissin in this appeal was Paul Morcom of McNees Wallace & Nurick LLC.

Paul has more than fifteen years of experience in state and local tax litigation.  Although Paul has significant experience in all state and local taxes such as sales/use, corporate net income, franchise, PURTA, gross receipts, gross premiums, realty transfer and personal income, most of his practice focuses on real estate tax.  Paul has successfully represented clients in real estate tax matters in 28 of Pennsylvania’s 67 counties.

Paul’s other recent real estate tax successes are as follows:

●   negotiated a $5,837,000 reduction in assessed value for a retail store in Allegheny County in December 2017, saving company $233,000 of real estate taxes per year;

●   received exempt status for non-profit in Cumberland and Lancaster Counties in November 2017, saving company $2,500,000 of real estate taxes per year;

●   negotiated an $84,609,800 reduction in assessed value for an industrial property in Blair County in March 2017, saving the company $1,100,000 of real estate taxes per year;

●   negotiated an $85,862,500 reduction in assessed value for a retail store in downtown Philadelphia in August 2016 saving the company $1,150,000 of real estate taxes per year; and

●   negotiated exempt status for two properties owned by a nursing home in Montgomery County in December 2016, resulting in $981,000 of refunds for real estate taxes paid in years deemed exempt and $337,400 of tax savings per year going forward.

Paul also coauthors the leading assessment treatise in Pennsylvania – Assessment Law & Procedure in Pennsylvania, which is published by The Pennsylvania Bar Institute every two years.  Be on the lookout for the 16th Edition, which will be out in the Spring of 2018.

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McNees is a full-service law firm based in central Pennsylvania with more than 130 attorneys representing corporations, associations, institutions and individuals. The firm serves clients worldwide from offices in Harrisburg, Lancaster, State College and Scranton, PA; Columbus, OH; Frederick, MD; and Washington, D.C. McNees is also a member of the ALFA International Global Legal Network.

www.mcneeslaw.com | @McNeeslaw | LinkedIn

On September 22, 2017, Judge Idee Fox of the Philadelphia Court of Common Pleas issued orders quashing the Philadelphia School District’s 2017 reverse assessment appeals for lack of uniformity. At oral argument on September 8, 2017, Judge Fox ruled from the bench, using the recent July 5, 2017 Pennsylvania Supreme Court’s decision in Valley Forge Towers Apartments et al. v. Upper Merion Area School District, 163 A.3d 962 (Pa. 2017) as a guide, that the school district violated the uniformity clause of the Pennsylvania Constitution by only appealing commercial properties and not appealing any of the under-assessed single-family residential properties in the city for the tax year 2017.

Philadelphia was the first big arena for the Valley Forge Towers uniformity analysis to be used and the Philadelphia commercial property owners are glad to see that the court correctly applied the Supreme Court’s analysis in finding that the school district discriminated against commercial property owners by only filing 140 reverse assessments appeals on 140 of the largest commercial properties in the City of Philadelphia. All of the other school districts in Pennsylvania that have been for years systematically filing reverse assessment appeals only on commercial properties within their taxing districts should be on notice that similar rulings are on the horizon. Going forward, commercial property owners should be requesting extensive discovery regarding the school districts policies and procedures for selecting properties to appeal, and which properties were reviewed and ultimately appealed by the school district.

The Valley Forge Towers decision and the Philadelphia Court of Common Pleas ruling have now given commercial property owners the long awaited tools needed to successfully fight these school district reverse assessment appeals.

If you are subject to a school district initiated assessment appeal, please make sure your rights are protected by contacting Paul R. Morcom (717-237-5364) or Randy Varner (717-237-5464), who represent property owners in school district reverse assessment appeals throughout Pennsylvania’s 67 counties.

McNees State and Local Tax team members Randy L. Varner and Paul R. Morcom will be presenters for the Pennsylvania Bar Institute’s seminar, “Local, State and Federal Taxes Affecting Real Estate Transactions.”  This seminar will be held on September 8th in Mechanicsburg with simulcast locations across the Commonwealth.  The seminar will also be presented in Philadelphia on September 27th.  For more information go to http://catalog.pbi.org/store/seminar/seminar.php?seminar=96602.  Randy and Paul are co-authors of the Pennsylvania Bar Institute treatise, “Assessment Law and Procedure in Pennsylvania,” the leading authority on Pennsylvania property tax law for over 20 years.

 

 

The annual assessment appeal deadline of September 1, 2017 is quickly approaching for the following Pennsylvania Counties:

Armstrong                               Lebanon

Beaver                                     Lycoming

Bedford                                  McKean

Blair                                        Mercer

Bradford                                 Mifflin

Cameron                                  Montour

Carbon                                    Northumberland

Centre                                     Perry

Clarion                                    Pike

Clearfield                                Potter

Clinton                                    Schuylkill

Columbia                                 Snyder

Crawford                                Somerset

Cumberland                            Sullivan

Elk                                           Susquehanna

Forest                                      Tioga

Fulton                                      Union

Greene                                     Venango

Huntingdon                             Warren

Jefferson                                 Washington

Juniata                                     Wayne

Lackawanna                            Westmoreland

Each county has its own separate set of local rules pertaining to assessment appeals that need to be navigated in order to successfully file an annual assessment appeal.  If you have commercial or industrial properties in any of these counties that you feel are over assessed, please contact Paul Morcom (717-237-5364) or Randy Varner (717-237-5464) to help you timely appeal those properties.

The annual assessment appeal deadline of August 1, 2017 is quickly approaching for the following Pennsylvania Counties:

Adams, Bucks, Butler, Cambria, Chester, Dauphin, Delaware, Erie, Fayette, Franklin, Indiana, Lawrence, Lehigh, Luzerne, Monroe, Montgomery, Northampton and York.

Each county has its own separate set of local rules pertaining to assessment appeals that need to be navigated in order to successfully file an annual assessment appeal.  If you have commercial or industrial properties in any of these counties that you feel are over assessed, please contact Paul Morcom or Randy Varner to help you timely appeal those properties.

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:

  1. 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.
  2. 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.

Those who pay property tax in Pennsylvania have an annual opportunity to appeal the assessed value of property. Deadlines for these appeals vary by county, but most are either August 1st or September 1st, so now is the time to analyze your assessment to determine whether you may be able to have it lowered to reduce your tax burden.

In order to properly analyze your assessment, you must have an idea of what your property is actually worth. That is, what is the price that you would be able to sell it to a willing buyer? Once you have made that determination, you must then go to your assessed value and apply your county’s applicable common level ratio to determine the “implied market value.” If the “implied market value” from your assessment is higher than what you believe your property is worth, your assessment is likely too high which results in you paying more property tax than is warranted.

In this economy, many property owners are experiencing issues that result in a lowering of property values. For instance, landlords may be experiencing higher than normal vacancy rates, for prolonged periods of time, which will affect the value of property. Those who own factories may be facing factors relating to obsolescence. Property owners may own property in blighted areas that have seen dramatic decreases in property values since the last revaluation. Regardless of context, all property owners should examine assessment annually to make sure they are in line with fair market value.

MCNEES ATTORNEYS VARNER AND MORCOM AUTHOR 2016 EDITION OF ASSESSMENT LAW & PROCEDURE IN PENNSYLVANIA

McNees Wallce & Nurick attorneys Randy L. Varner and Paul Morcom are the proud authors of the 2016 edition of Assessment Law & Procedure in Pennsylvania, published by the Pennsylvania Bar Institute. The treatise is a comprehensive manual that incorporates years of practical experience by McNees attorneys in this specialized area of the law.   Designed to provide the reader with a guide through each step of the assessment and appeal process, Assessment Law & Procedure in Pennsylvania also provides detailed discussions of the relevant case law and statutory provisions that provide the framework for Pennsylvania assessment law. Originally circulated informally, the first edition was published in 1994 by the Pennsylvania Bar Institute and quickly became the “assessment bible” for counsel, assessment appeal board members, assessors and appraisers.

WE CAN HELP

The property tax assessment and appeal process can be confusing and intimidating and directly affects the bottom line of your business. We can help you analyze the assessment on your property and, if necessary, handle an appeal. Feel free to contact us for any questions related to the assessment and appeal process.