Justia Tax Law Opinion Summaries

Relators, two businesses, sought certiorari review of the Minnesota Tax Court's determination of the fair market value on the 2007, 2008, and 2009 assessment dates for an office building located in Ramsey County. At trial, the tax court heard expert testimony from Relators' appraiser and Ramsey County's appraiser. After trial, the County submitted a post-trial brief that argued for higher property valuations than the market values assigned to the property by either appraiser. The court then adopted, verbatim, the County's proposed market valuations on the three assessment dates. The Supreme Court reversed the tax court's decision, holding that the court's findings and conclusions failed to meet the standard articulated in Eden Prairie Mall, LLC v. County of Hennepin, which states that when the tax court rejects the testimony of both appraisers, the court must give a basis for its calculations and provide an adequate explanation and factual support in the record for its conclusions.

Berry and Co. petitioned the tax court for relief from the County's property tax assessment of its property for 2007 and 2008. At trial, Berry and the County each offered expert appraiser testimony as to the estimated market value of the property. Both appraisers used the market sales comparison approach to value the subject property. The tax county determined that the highest and best use for the subject property was redevelopment and agreed with the County's expert on the valuation, which was higher than the original assessment. The Supreme Court affirmed, holding (1) the tax court's determination that the highest and best use of the subject property was redevelopment was not erroneous, and (2) the tax court's valuation of the subject property was supported in the record and was not clearly erroneous.

Continental Retail sought certiorari review of the market value determinations by the Minnesota Tax Court for a Continental commercial building for the assessment dates of 2006, 2007, and 2008. Continental filed petitions challenging the county assessor's estimated market value for the three years, and at trial, the tax court increased the market value determinations for all three years. On appeal, Continental argued that the tax court's value determinations were excessive and not supported by the record over the assessed value of the property. The Supreme Court affirmed, holding that the tax court's value determinations were supported by the record and were not clearly erroneous.

Continental Retail sought certiorari review of the market value determinations by the Minnesota Tax Court for a Continental commercial building for the assessment dates of 2006, 2007, and 2008. Continental filed petitions challenging the county assessor's estimated market value for the three years, and at trial, the tax court increased the market value determinations for all three years. On appeal, Continental argued that the tax court's value determinations were excessive and not supported by the record over the assessed value of the property. The Supreme Court affirmed, holding that the tax court's value determinations were supported by the record and were not clearly erroneous.

In 2008, Olmsted County changed the property tax classification of farmland owned by Frederick Farms from agricultural-homestead to agricultural-nonhomestead property. The tax court denied Frederick Farms' petition to change the classification of the property back to agricultural homestead for taxes payable in 2009 and later. Frederick Farms appealed, arguing that it was operating a joint family farm venture with its sole shareholder, James Frederick, and that the County must classify the property as agricultural homestead because it was used by the joint family farm venture. The Supreme Court affirmed the decision of the tax court, concluding (1) that a joint family farm venture must own or lease, and not merely use, the property in order for a participant of the joint family farm venture to claim an agricultural-homestead classification; and (2) because the family farm corporation, not the joint family farm venture, owned the land in question, Frederick Farms was not entitled to claim an agricultural-homestead classification as a participant in a joint family farm venture.

In 2008, Marlow Timberland (MT) filed a tax petition challenging the taxes payable in 2008 on the belief that Lake County's property tax assessment of MT's recently purchased land was too high. MT then filed tax petitions challenging the taxes payable in 2009 and 2010, which were dismissed due to MT's failure to pay the taxes. MT moved to reinstate the 2009 and 2010 petitions based on its contention that the properties were overassessed and that it was unable to pay the taxes due. The Minnesota Tax Court issued an order granting Lake County's motion to dismiss the 2008 petition and denying MT's motion to reinstate the 2009 and 2010 petitions. On review, the Supreme Court reversed in part and affirmed in part, holding (1) the tax court erred by not allowing MT to amend its 2008 petition because an amendment would not result in any prejudice to Lake County; and (2) the tax court properly denied MT's motion to reinstate its 2009 and 2010 tax petitions, and reinstatement of those petitions was not required on an equitable basis. Remanded.

Eden Prairie Mall (EPM) challenged the assessed value determinations of one of its anchor tenants. For the tax years 2005 and 2006, the court concluded that the market values of EPM and the tenant should have been assessed at higher rates than the assessments that were entered into evidence at trial. EPM argued that the tax court's valuations were excessive and not supported by the record. EPM filed for bankruptcy during the tax court proceedings and subsequently argued that the tax court violated the automatic stay provision of the bankruptcy code when the court increased its taxes. Upon review, the Supreme Court found that the tax court's reassessment did not violate the automatic stay of the bankruptcy code, but that the record did not support the reassessments. The Court reversed the tax court's holding, and remanded the case for further proceedings.