Property Tax Objections and Appeal Procedures: Changes in the Law!

July 15, 2008

Introduction
In the past, property owners who objected to assessments of properties by the local assessor had a number of opportunities to challenge that assessment. Invariably, these challenges took the form of appearing before the Board of Review and attacking the assessment. Many times, the presentation before the Board of Review did not involve the property owner making his or her “case.” Rather, the proceeding simply focused on the methodologies utilized by the local assessor. Once the Board of Review rendered its decision, the property owner could then appeal that decision to the Circuit Court. The appeal options to the Circuit Court were either by certiorari or by a separate procedure relating to a claim for excessive assessment. Once the property owner got to the Circuit Court, the property owner was generally free to present new evidence to the Circuit Court as to the proper methodology in assessing the property. The foregoing procedure many times resulted in Board of Review proceedings becoming nothing more than an event which noted the objection, with no evidentiary hearing being conducted on the merits of the claim. The real litigation would later on occur in the Circuit Court.

The foregoing has been changed significantly by recent legislation, adopted in early 2008. Now, a tax district has a new statutory option which allows it to change the property tax assessment objection appeal procedure. A tax district exercises this option if it enacts an ordinance granting the taxpayer a 60-day extension for the assessment objection hearing. Wis. Stat. § 70.47(7)(c) (2008). The amended law outlines the appeal procedure, evidence reviewed on appeal, and requirements for a review board’s hearing transcript. Wis. Stat. § 70.47. The following is a summary of the new law.

I. Excessive Assessment Claims

A. Excessive Assessment Claims Barred if the Tax District Enacts an Optional Ordinance Granting a 60-day Assessment Objection Extension. Wisconsin law allows excessive assessment claims. Wis. Stat. § 74.37. However, the 2008 amendment bars a taxpayer from filing such a claim if the tax district enacts the optional ordinance granting a 60-day assessment objection extension. Wis. Stat. § 74.37(d)(4). A taxpayer may then bring an excessive assessment claim only if he is not given proper assessment change notice. Id. Even if the tax district does not pass such an ordinance, the taxpayer may not object to an assessment using both an excessive assessment claim and the review board appeal process. Wis. Stat. § 74.37(4)(c).B. Substantive and Procedural Differences Between Excessive Assessment Claim and Review Board Appeal. Prior to 2008, there were significant differences between a review board appeal and an excessive assessment claim. The new amendment grants the taxpayer additional protections during a review board hearing.

1. Prior Differences. Before 2008, significant differences existed between the two procedures. Nankin v. Village of Shorewood, 2001 WI 92. Both the review board hearing and appeal denied substantial taxpayer advantages provided in an excessive assessment claim. The review board hearing did not offer significant taxpayer protections which are available under a court trial. Id. ¶ 28. The parties could offer only sworn testimony as evidence; documents were not admissible. Id. ¶ 29. Only the review board could compel evidentiary documents and subpoena witnesses. Id. ¶¶ 29, 30. Also, the review board could provide as little as 15 days notice to file an objection, and the taxpayer might have as few as two days notice before his hearing. Id. ¶ 32. This process did not create an adequate record, nor did it provide the taxpayer enough time to prepare his case. In contrast, an excessive assessment court trial provided the taxpayer more preparation time. The court could admit any relevant evidence and allow the taxpayer to subpoena his own witnesses. Id. ¶¶ 29, 30.Additionally, a taxpayer was also significantly disadvantaged by using the pre-2008 review board appeal procedure. Id. ¶ 19. Under the old review board appeal, the court could only consider evidence presented during the review board hearing. Id. ¶ 20. The court was required to uphold a review board valuation if it was supported by any reasonable view of the evidence, and to remand to the review board any valuation rendered void by error. Id. ¶ 21. In contrast, an excessive assessment claim provided the taxpayer with two opportunities to lower his assessment. First, the taxpayer could make his case to the review board. If he was unable to persuade the board, the taxpayer could then file an excessive assessment claim and obtain a court trial. That court reviewed the assessment without deference to the review board. Id. ¶ 25. The taxpayer could introduce new evidence, and the court need not remand the case to the review board. Id. These significant differences provided a clear advantage to the taxpayer filing an excessive assessment claim.

2. Recent Changes. For a taxpayer who is required or elects to appeal from a review board decision, the 2008 amendments reduce the differences between the prior appeal processes and an excessive assessment claim by granting the taxpayer more time to prepare for the review board hearing, improving the review board’s evidentiary record, and providing a full court trial if the taxpayer shows that the review board’s valuation is incorrect. These appeals changes apply statewide.

II. Specific Changes to Wisconsin’s Tax Assessment Objection Statute

A. Changes to Review Board Objection Procedure. If the tax district enacts the optional ordinance granting a 60-day objection hearing extension, the taxpayer is barred from bringing an excessive assessment claim. Wis. Stat. 74.37(4)(d). Additionally, the new law affects the review board hearing by granting a hearing extension, the production and exchange of evidence used in the hearing, and notice of objection deadlines. Wis. Stat. § 70.47(7)(c).
1. Extended Preparation. The amended law provides the taxpayer with more time to prepare a case for the review board. First, the tax district must provide notice of the objection filing deadline at least 15 days before the first hearing. Wis. Stat. § 70.47(7)(c). Second, the tax district must already have enacted an ordinance which grants the taxpayer a 60-day hearing extension if the taxpayer pays a $100 fee. Id. Third, the taxpayer may gain an additional extension by showing good cause. Id.2. Evidentiary Record. The taxpayer can now develop a more complete record at the review board hearing. First, both parties are not limited to only sworn testimony, but may present any relevant evidence which supports their position or sheds light on the property value. Id. Such evidence is specified in the Wisconsin Department of Revenue’s internet assessment manual. Wis. Stat. 73.03(2a). Second, both parties may depose and subpoena hearing witnesses and compel document production. Wis. Stat. § 70.47(8)(d). Third, ten days prior to the hearing, both parties must exchange all documents they will present at the hearing if the taxpayer receives an objection extension. Wis. Stat. § 70.47(7)(c). The taxpayer and assessor must provide the review board with all evidence they use to support their arguments. Id.

B. The Court Defers to Review Board’s Valuation During Appeal. If the taxpayer appeals the review board’s valuation, the court must defer to that valuation. Wis. Stat. § 70.47(13). The taxpayer can rebut that presumption by showing that the board’s valuation is incorrect. Id. However, if the taxpayer can show that the board’s valuation is incorrect, the court reviews that decision de novo. The statute is silent about whether the taxpayer may introduce evidence to the court which was not admitted to the review board in order to rebut the valuation. However, prior case law clarifies that the court may not hear new evidence on review unless explicitly permitted by statute. State ex rel. Hemker v. Huggett, 114 Wis.2d 320, 323 (Ct. App. 1983). Thus, the court can only consider evidence already created by the review board hearing when determining the validity of the review board’s assessment.C. De Novo Review and New Evidence Allowed for Incorrect Valuation. Although the taxpayer is restricted to using evidence from the hearing record to show incorrect valuation, the taxpayer can now build a more complete evidentiary record at the review board hearing than in the past. If the taxpayer successfully shows that the review board’s valuation is incorrect, then the court grants a de novo review, just as in an excessive assessment claim. Wis. Stat. § 70.47(13). In a de novo review, the taxpayer may present any evidence to the court, including new evidence or evidence that the review board refused to consider. Id. If a taxpayer’s objection to a previous year’s assessment has not been resolved, both years’ reviews may be combined. Id.

D. Review Board Hearing Transcript. The revised statute makes no changes to the requirements for a review board hearing transcript. The tax district must record every hearing. Wis. Stat. § 70.47(8)(e). If the case is appealed, the tax district is required to transcribe the recording at its own expense. Id. Copies of all material submitted to the review board including the hearing transcripts and recordings must be publicly available for seven years. Wis. Stat. § 70.47(8)(f).

Conclusion
A taxpayer is generally barred from bringing an excessive assessment claim if the tax district enacts an ordinance allowing the taxpayer a 60-day hearing extension. The amended law reduces the substantive differences between the prior appeals options by providing more time for the taxpayer to prepare for the hearing, allowing the taxpayer to introduce more evidence at the review board hearing, and granting a de novo court review if the taxpayer shows that the board’s valuation is incorrect.

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For more information about "Property Tax Objections and Appeal Procedures: Changes in the Law!," contact Timothy D. Fenner at tfenner@axley.com or 608.283.6733.