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Wheatland Industries, LLC v. Perkins County Board of Equalization

Supreme Court of Nebraska

December 6, 2019

Wheatland Industries, LLC/Mid America Agri Products, appellee,
v.
Perkins County Board of Equalization, appellant.

         1. Taxation: Judgments: Appeal and Error. Appellate courts review decisions rendered by the Tax Equalization and Review Commission for errors appearing on the record.

         2. Judgments: Appeal and Error. When reviewing a judgment for errors appearing on the record, an appellate court's inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable.

         3. Administrative Law: Judgments: Words and Phrases. Agency action is arbitrary, capricious, and unreasonable if it is taken in disregard of the facts or circumstances of the case, without some basis which would lead a reasonable and honest person to the same conclusion.

         4. Taxation: Valuation: Presumptions: Evidence. A presumption exists that a board of equalization has faithfully performed its official duties in making an assessment and has acted upon sufficient competent evidence to justify its action. That presumption remains until there is competent evidence to the contrary presented, and the presumption disappears when there is competent evidence adduced on appeal to the contrary.

         5. ___:___:___:___. Once the challenging party overcomes the presumption of validity by competent evidence, the reasonableness of the valuation fixed by the board of equalization becomes one of fact based upon all of the evidence presented.

         6. Taxation: Valuation: Proof: Appeal and Error. The burden of showing a valuation to be unreasonable rests upon the taxpayer on appeal from the action of the board of equalization.

         7. Taxation: Valuation: Proof. The burden of persuasion imposed on a complaining taxpayer is not met by showing a mere difference of [304 Neb. 639] opinion unless it is established by clear and convincing evidence that the valuation placed upon the property when compared with valuations placed on other similar property is grossly excessive and is the result of a systematic exercise of intentional will or failure of plain duty, and not mere errors of judgment.

          Appeal from the Tax Equalization and Review Commission.

          Richard H. Roberts, Perkins County Attorney, and Gary F. Burke for appellant.

          Frederick D. Stehlik and Zachary W. Lutz-Priefert, of Gross & Welch, PC, L.L.O., for appellee.

          Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

          Cassel, J.

         INTRODUCTION

         This review proceeding addresses the taxable valuation of commercial real estate used as an ethanol plant. The taxpayer unsuccessfully protested the county's $16.3 million valuation-a valuation based upon mass appraisal techniques-and then appealed to the Tax Equalization and Review Commission (TERC), which reduced the value to $7.3 million based upon the taxpayer's appraisal. Here, because the county's valuation relied upon admittedly incorrect information and lacked evidentiary support regarding applicable depreciation, the evidence showed more than a mere difference of opinion. Finding no error appearing on the record, we affirm TERC's ruling. But our decision should not be read to categorically reject mass appraisal as a proper valuation methodology for an ethanol plant.

         BACKGROUND

         Wheatland Industries, LLC/Mid America Agri Products (Wheatland) owned an ethanol plant on commercial real estate in Madrid, Perkins County, Nebraska (Madrid property). The [304 Neb. 640] Perkins County assessor, Peggy Burton, assessed the value of the Madrid property at $16, 364, 768 for the 2017 tax year.

         Wheatland protested the assessment to the Perkins County Board of Equalization (Board). At the protest hearing, Wheatland did not present evidence. The Board affirmed Burton's valuation of the Madrid property.

         Wheatland appealed to TERC. A hearing was held and both parties presented evidence. We first summarize the evidence regarding the county's assessment, then the evidence of the taxpayer's appraisal, and finally TERC's decision.

         County Assessment

         For the county, Darrell Stanard conducted an appraisal of the Madrid property using the mass appraisal method. He had appraised five other ethanol plants in different counties using the mass appraisal ...


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