The opinion
IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Property Tax
RICHARD A. KING, )
)
Plaintiff, ) TC-MD 190107G
)
v. )
)
COLUMBIA COUNTY ASSESSOR, )
)
Defendant. ) DECISION
Plaintiff appeals the 2018–19 real market value and assessed value of his home, relying
on an argument that those values should correspond to a ratio derived from other properties’
assessment data. Plaintiff appeared and testified on his own behalf. Andrea Jurkiewicz, Oregon
Registered Appraiser, appeared and testified on behalf of Defendant. Plaintiff’s Exhibits 1 to 56,
79, and 80 were admitted, and Defendant’s Exhibits A and B were admitted.
I. MEASURE 50
The subject’s tax roll values over the years preceding 2018–19 have been affected by
Article XI, section 11 of the Oregon Constitution, commonly known as Measure 50. Measure 50
and its implementing statutes place certain limits on property tax increases. Understanding
Measure 50’s impact on the subject’s tax assessment history requires understanding three
specialized terms: real market value, assessed value, and maximum assessed value.
Real market value is defined as “the amount in cash that could reasonably be expected to
be paid by an informed buyer to an informed seller, each acting without compulsion in an arm’s-
length transaction occurring as of the assessment date for the tax year.” ORS 308.205(1). 1 For
property tax purposes, a tax year runs from July 1 to June 30, and its assessment date is the
1
The court’s references to the Oregon Revised Statutes (ORS) are to 2017.
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January 1 immediately preceding it. ORS 308.007; 308.210(1); 308.250(1). Thus, the
assessment date for the 2018–19 tax year is January 1, 2018.
A property’s assessed value is the dollar amount by which the tax rate is multiplied to
determine the tax. Before the passage of Measure 50, assessed value was equal to real market
value except in special cases, like farmland and forestland. Thus, properties worth more on the
open market incurred a proportionately greater tax. A sharp increase in a property’s real market
value would result in a proportionately sharp increase in its tax burden.
Measure 50 altered that system by establishing a maximum assessed value for every
property. Assessed value is now the lesser of a property’s maximum assessed value or its real
market value. ORS 308.146(2). Unless an exception applies, a property’s maximum assessed
value “equals 103 percent of the property’s assessed value from the prior year or 100 percent of
the property’s maximum assessed value from the prior year, whichever is greater.” ORS
308.146(1). The result is that in a rising market a property’s assessed value will generally
increase no more than 3 percent each year, even if its real market value increases considerably
more. However, maximum assessed value does not decrease in the ordinary course. If a
property’s real market value decreases below its maximum assessed value, it is assessed at the
lower value and its maximum assessed value does not change. If the property’s real market
value rises again, its assessed value will also rise up to its maximum assessed value—even if that
rise is more than three percent of the previous year’s assessed value.
There are exceptions requiring a recalculation of the maximum assessed value on a
property account. ORS 308.146(3). The first among those exceptions applies where an account
contains “new property or new improvements to property.” ORS 308.146(3)(a). Another
exception applies where a lot line adjustment is made; in that circumstance, the total assessed
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value of the resulting properties may not exceed the total maximum assessed value of the
original properties. ORS 308.146(3)(f). Both of those exceptions have applied to the subject in
the course of its assessment history.
II. STATEMENT OF FACTS
As of the assessment date on January 1, 2018, the subject consisted of a 0.31-acre lot in
Scappoose improved with an 840-square-foot house and an older shop. (Ex A at 7.) The house
has a “great room” living and kitchen area, two bedrooms, and two bathrooms—each of the latter
with a shower, but no bathtub. Along the length of the exterior wall outside the front door runs a
6-by-42-foot covered porch on decking planks.
A. Assessment History
The subject’s 2018–19 tax statement shows a real market value of $252,380 and an
assessed value of $207,410. (Ex 12.) Those values were a marked increase over the values on
the 2014–15 tax statement for the subject’s property account: a real market value of $141,970
and an assessed value of $118,430. (See Ex 7.) The increases in real market value and assessed
value were accompanied by changes in the property account during the intervening period.
At the outset of 2014, the subject’s property account—identified as Account 2970—
comprised considerably less land, being listed on the roll as 0.14 acre. (Ex 79.) At that time, it
was improved by the shop and a double-wide manufactured structure. (Id.) In November 2014,
Plaintiff purchased the 0.14-acre lot together with an adjacent lot for $110,000. The lot line
between the two parcels was eliminated, resulting in the 0.31-acre subject lot.
Defendant’s original 2015–16 tax statement for the newly expanded account put the
subject property’s real market value at $190,850 and its assessed value at $151,440. (Ex 7.) The
increase in the subject’s maximum assessed value was the result of combining the maximum
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assessed values of the two merged lots pursuant to ORS 308.146(3)(f). Because real market
value exceeded maximum assessed value, assessed value was equal to maximum assessed value
pursuant to ORS 308.146(2).
After receiving his 2015–16 tax statement, Plaintiff approached Defendant and requested
review of the subject’s tax roll values in light of his purchase price. In response, Defendant
decreased both the real market value and assessed value to $125,950. (Ex 8.) Pursuant to ORS
308.146(2), the assessed value was now equal to the real market value because the real market
value was lower than the maximum assessed value, which remained at the increased level set
after the merger of the two lots.
Meanwhile in 2015, Plaintiff began building his 840-square-foot house, which he
completed in 2016. With the house partially complete, the 2016–17 tax roll reflected increases
in the subject’s real market value to $182,720 and its maximum assessed value and assessed
value to $173,090. (Ex 10; Ex B at 2.) After completion of the house, the 2017–18 tax roll
reflected increases in the subject’s real market value to $251,300 and its maximum assessed
value and assessed value to $224,130. (Ex 11; Ex B at 2.) In each year, the subject’s maximum
assessed value had been increased from the previous year due to the presence of new property on
the account and the requirement of ORS 308.146(3)(a).
In March 2017, Plaintiff sold the manufactured structure and removed it from the subject.2
Due to that retirement, the subject’s 2018–19 tax statement reflected a reduction in maximum
assessed value and assessed value to $207,410, while the subject’s real market value increased
slightly to $252,380. (Ex 12.) Defendant reports that it derived those values as follows. First, it
2
The statement in Defendant’s exhibit that the manufactured structure was removed in March 2018 appears
to be a typographical error. (Cf. Ex B at 2.) Its description of the subject’s improvements as of January 1, 2018,
does not include a manufactured structure. (See Ex A at 7.)
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determined the market was rising and the subject’s 2018–19 real market value with the manufactured
structure had risen with it to $280,900, whereas the subject’s maximum assessed value and assessed
value rose three percent to $230,850. (Ex B at 2.) Defendant arrived at the tax roll values by
reducing both those figures by 10.15 percent, the proportion of the real market value allocated to the
manufactured structure. (Id. at 2–3.)
The subject’s assessment history through 2018–19, the year at issue, is summarized in the
following table.
Tax Year RMV MAV AV Comment
2014–15 $141,970 $118,430 $118,430 Subject comprised 0.14 acre
2015–16 $190,850 $151,440 $151,440 Merger with adjacent lot resulted in subject
(original) comprising 0.31 acre
2015–16 $125,950 $151,440 $125,950 Assessor reduced RMV based on November
(final) 2014 purchase for $110,000
2016–17 $182,720 $173,090 $173,090 New house partially completed
2017–18 $251,300 $224,130 $224,130 New house completed
2018–19 $252,380 $207,410 $207,410 Manufactured structure retired
B. Valuation Evidence
1. Plaintiff’s Evidence
Plaintiff provided an undated letter from a broker suggesting a “listing price” for the
subject of $215,000. (Ex 30.) According to the letter, that suggested price was based on a
comparative market analysis (CMA) that yielded “a range of possible price[s] for sale at the
current time.” (Id.) The broker wrote:
“Comparable homes in the Scappoose area are going for an average of $261 a
[square foot], list price of your house at this rate would be $219,000. I looked at
your home and seeing the projects that need to be completed, quality of the home,
out buildings, and area of the home [sic].
“I suggest a listing price of $215,000. A [square-foot] price of $256.”
(Id.)
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Plaintiff provided a spreadsheet analyzing tax roll data for recently sold properties
identified by Defendant as comparable to the subject at the board of property tax appeals hearing.
(Ex 29.) According to that spreadsheet, the average ratio of real-market-value-to-sale-price
among those properties was 82 percent, and the average ratio of assessed-value-to-sale-price was
54 percent. (Id.) Plaintiff asserts that the subject’s tax roll real market value and assessed value
should bear a similar ratio to the price at which it would sell. Plaintiff provides two calculations:
if the subject’s “sold price” is taken as its current tax roll real market value—$252,380—then he
would reduce its real market value to $206,951.60 and its assessed value to $136,285.20; if the
subject’s “sold price” is taken as the broker’s suggested $215,000 listing price, he would reduce
its real market value to $187,050.00 and its assessed value to $131,150.00. (Id.)
2. Defendant’s Evidence
Defendant submitted an appraisal report concluding to a value for the subject of $275,000
as of January 1, 2018. (Ex A.) Defendant’s appraiser developed the sales comparison and the
cost approaches for the subject after concluding that its highest and best use was as improved.
(Id. at 8–12.) Under the sales comparison approach, four comparables were identified. (Id. at 9.)
Adjustments were made for site size ($3 per square foot), gross living area ($60 per square foot),
garage bays ($7,500 per bay), and for condition, all based on paired sale analyses not included
with the report. (Id.) Adjustments for heating and cooling systems were based on Marshall &
Swift data not in the report and the subject’s pole building was assigned a “lump sum depreciated
cost value of $4,300” by which the comparables were adjusted. (Id.) A $500-per-plumbing-
fixture adjustment was also made. (Id.) No time trend was applied because “[i]mproved
property market conditions showed a stable market.” (Id. at 11.)
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Defendant’s appraiser placed the most weight on a 912-square-foot bungalow on a 5,662-
square-foot-lot that was built in 1940 and sold for $258,000 in cash on March 5, 2018. (Ex A at
16.) That comparable’s adjusted sale price was $275,500 after a $23,520 upward adjustment for
lot size and $10,000 in downward adjustments for gross living area, garage bays, and a shed.
(Id.) Defendant’s appraiser also gave weight to two cottages: one built in 1957 and measuring
816 square feet on at 4,700-square-foot lot, the other built in 1940 and measuring 880 square feet
on a 5,000-square-foot lot. (Id. at 15.) Defendant’s appraiser made upward adjustments of over
$40,000 for each cottage for site size and condition, as well as smaller adjustments for living area
and garage. (Id.) The adjusted sale prices of those two comparables were $267,800 and
$268,100, respectively. (Id.)
Defendant’s appraiser briefly summarized the cost approach as applied to the subject.
(Ex A at 12.) Defendant’s appraiser “deemed to use a site value of $116,000” on the basis of
bare-land sales time-trended at 1.5 percent a month. (Id. at 12, 17.) From contacting “local
developers,” Defendant’s appraiser determined the subject’s on-site developments cost $28,000.
(Id.) Using data from Marshall & Swift / CoreLogic, Defendant’s appraiser concluded to a
depreciated improvement value of $87,660. (Id.) The concluded value using the cost approach
was $232,290. (Id.) However, Defendant’s appraiser gave that value less weight in the final
reconciliation because her cost approach “uses cost factors as they have been developed for the
Portland area and have not been further refined to the Scappoose market.” (Id. at 14.)
C. Relief Requested
Plaintiff asks the court to find that the subject would sell for $215,000 and to lower its
real market value and assessed value to $187,050 and $131,150, respectively. Defendant
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DECISION TC-MD 190107G 7 of 13
requests that the court uphold the 2018–19 tax roll real market value of $252,380 and assessed
value of $207,410.
III. ANALYSIS
The subject’s real market value and assessed value are at issue in this case. Plaintiff
raises a legal question as to how those values are related to the price for which a property would
sell on the market. He also raises a factual question as to what the subject’s sales price would be.
A. Proportionate Reduction of Assessed Value and Real Market Value
As is discussed more fully in Huynh v. Multnomah County Assessor, TC–MD 190077G,
2019 WL 3546833 (Or Tax M Div Aug 5, 2019), assessed values in Oregon do not bear a
uniform proportion to market values. Under Article XI, section 11 of the Oregon Constitution—
commonly known as Measure 50—assessed value is the lower of a property’s real market value
or its maximum assessed value. Maximum assessed value does not fluctuate with the market;
instead, it rises no more than three percent per year unless an exception (such as the presence of
“new property or new improvements to property” on an account) applies. By isolating assessed
value from market forces, Measure 50 helps taxpayers predict their annual property tax
assessments. However, because there is no fixed relation between assessed value and market
value, disparities in the taxation of similar properties may develop on account of each property’s
unique history. For that reason, Measure 50 exempts itself from our Constitution’s requirement
that taxation “be uniform on the same class of subjects within the territorial limits of the
authority levying the tax.” Or Const, Art I, § 32; see Or Const, Art XI, § 11(18) (exempting
Measure 50 from uniformity provisions).
Because market value and assessed value bear no proportional relationship, claims based
on such arguments are subject to dismissal. See Theda v. Dept. of Rev., 20 OTR 237 (2010);
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Gall v. Dept. of Rev., 17 OTR 268 (2003). In Theda, the court granted dismissal where the
taxpayers had argued for a reduction in assessed value “so that the relationships of [assessed
value] and [real market value] for their property approximates that which they allege exists for
similar properties.” 20 OTR at 238.
In the present case, Plaintiff distinguishes real market value from what he terms “sales
price,” the latter concept denoting the price at which a property would sell on the market.
Plaintiff asserts that analysis of tax roll data indicates both real market value and assessed value
is typically set at a proportional fraction of “sales price.” In Plaintiff’s view, a property is
entitled to a tax roll real market value somewhat less than the amount for which that property
would sell.
In contrast, ORS 308.232 requires that every property be “valued at 100 percent of its
real market value.” Real market value is defined by ORS 308.205(1) as follows:
“Real market value of all property, real and personal, means the amount in
cash that could reasonably be expected to be paid by an informed buyer to an
informed seller, each acting without compulsion in an arm’s-length transaction
occurring as of the assessment date for the tax year.”
To the extent any property’s tax roll real market value was less than the amount that property
would have sold for on the relevant assessment date according the criteria of ORS 308.205(1),
that property’s tax roll real market value is incorrect. 3 Plaintiff’s ratio-based argument for
reducing real market value does not succeed.
Plaintiff’s argument for deriving the subject’s assessed value from a ratio of similar
properties’ assessed values to market values is indistinguishable from the argument of the
3
The real market values of the comparable properties analyzed by Plaintiff are not at issue here, but the
data in evidence do not establish they are incorrect. The terms of the sales are unverified, and numerous factors
could contribute to a gap between sale price and tax roll real market value, including pre-sale repair work not
reflected on the prior year’s tax roll and a market rising between the assessment and sales dates.
DECISION TC-MD 190107G 9 of 13
taxpayers in Theda and likewise fails. See 20 OTR at 238. Given the string of exception events
in the subject’s assessment history—including a lot line adjustment, two years of new
construction, and a retirement—it is unsurprising that the subject’s maximum assessed value
should have grown faster than the maximum assessed values of other properties. Each exception
event triggered a recalculation of maximum assessed value under Measure 50. Nothing in
evidence suggests those recalculations were performed incorrectly. The subject’s assessment
appears to be a consequence of Measure 50, which foresees and allows nonuniform assessment
of similar properties. See Or Const, Art XI, § 11(18).
B. Uniformity
Although maximum assessed value is excused from uniformity by Measure 50, real
market value was not created by Measure 50 and must still satisfy Article I, section 32 of the
Oregon Constitution. Deschutes County Assessor v. Leszar, TC–MD 170099N, 2018 WL
334450 at *7 (Or Tax M Div Jan 9, 2018). To prove a property’s real market value is affected by
a uniformity violation, a taxpayer must show either that the property’s classification lacks a
rational basis or that there is “widespread and systematic” nonuniformity within the property’s
class. See id. at *7–*9.
Although Plaintiff stated at a case management conference that he intended to develop a
uniformity claim, he did not ultimately introduce evidence supporting such a claim. There is no
evidence comparing the subject to other properties within its class, and no evidence suggesting
the subject’s property classification lacks a rational basis. Countywide spreadsheet data
provided by Plaintiff does not distinguish properties by class, and includes a wide array of
construction years, sale prices, and acreage. Plaintiff has not made out a uniformity claim.
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DECISION TC-MD 190107G 10 of 13
C. Real Market Value
Apart from his legal theory about proportional assessment, Plaintiff raises a factual
question of the subject’s 2018–19 real market value. On such factual questions, the party
seeking affirmative relief from the court must bear the burden of proof. ORS 305.427.
Any method used to determine real market value for tax purposes must accord with rules
adopted by the Department of Revenue. ORS 308.205(2). In pertinent part, the Department of
Revenue’s rule governing use of the sales comparison approach states:
“In utilizing the sales comparison approach, only actual market
transactions of property comparable to the subject, or adjusted to be comparable,
may be used. All transactions utilized in the sales comparison approach must be
verified to ensure they reflect arms-length market transactions. When non-typical
market conditions of sale are involved in a transaction (duress, death,
foreclosures, interrelated corporations or persons, etc.), the transaction may not be
used in the sales comparison approach unless market-based adjustments can be
made for the non-typical market condition.”
OAR 150-308-0240(2)(c).
Here, Plaintiff’s primary evidence of real market value is the letter from the broker.
However, that letter does not show that Plaintiff’s broker valued the subject in accord with
OAR 150-308-0240(2)(c). The letter relies on values taken from a listing service rather than
verified market transactions and on values taken from properties in the Scappoose area generally
rather than from comparable properties. Because Plaintiff’s broker did not testify at trial, the
contents of his letter are hearsay; no one is responsible under oath for the truth of that letter’s
conclusions. Relatedly, it was not possible to question the broker about ambiguities in the letter,
such as the relation between listing price and real market value and the date of the valuation.
Plaintiff has not borne his burden of showing a lower real market value for the subject property.
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Defendant’s evidence of value consists of its appraiser’s report and testimony. Although
Defendant’s appraiser concluded to a real market value higher than that on the tax roll for the
subject, Defendant reiterated after trial that it sought only to uphold the tax roll values.
The court has authority to determine real market value based on the evidence, without regard
to the pleaded values. ORS 305.412. According to a practice antedating the enactment of
ORS 305.412, the court may decline to find values outside the range within the parties’ pleaded
values. Chart Development Corp. v. Dept. of Rev., 16 OTR 9, 14–15 (2001); but see Ellison v. Dept.
of Rev., 362 Or 527, 529, 412 P3d 201 (2018) (declining to rule on whether ORS 305.412 abrogated
Chart Development because Tax Court had not ruled in first instance); cf. Covington v. Dept. of Rev.,
TC 5370, 2020 WL 1033578 at *2 (Or Tax Reg Div Mar 3, 2020) (commenting that court may limit
value determination based on parties’ agreement). In the present case, the court limits the potential
values under consideration to the range within the values pleaded by the parties. See Chart
Development, 16 OTR at 14–15. The court will not raise the subject’s tax roll real market value
because, even apart from the merits of Defendant’s appraisal report, neither party requests it.
The court would reduce the subject’s value if the evidence supported such a reduction.
However, the best valuation evidence available is Defendant’s appraisal report, which concludes
to a real market value higher than that on the tax roll. While an appraisal report might contain
data that warranted finding a value other than that to which the report concluded, such is not the
case here. Indeed, the probative value of Defendant’s appraisal report is diminished by its
conclusory form. Although Defendant’s appraiser based many adjustments on paired-sales
analyses and other pertinent market data, the report does not contain that supporting information.
Other adjustments are presented without reference to supporting data. Notably, the report asserts
a stable market—and no time trend—for improved properties at the same time it asserts a time
DECISION TC-MD 190107G 12 of 13
trend for bare land amounting to 18 percent annually. The data included with the report are not
sufficient to support a determination of real market value less than the tax roll value of
$252,380. 4
IV. CONCLUSION
Plaintiff’s arguments for proportionate reduction of real market value and assessed value
are without foundation in law. He has not established the elements of a uniformity claim and he
has not carried his burden of proving a lower real market value for the subject. Now, therefore,
IT IS THE DECISION OF THIS COURT that Plaintiff’s appeal be and hereby is denied.
Dated this ____ day of September 2020.
POUL F. LUNDGREN
MAGISTRATE
If you want to appeal this Decision, file a complaint in the Regular Division of
the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563;
or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.
Your complaint must be submitted within 60 days after the date of this Decision
or this Decision cannot be changed. TCR-MD 19 B.
Some appeal deadlines were extended in response to the Covid-19 emergency.
Additional information is available at https://www.courts.oregon.gov/courts/tax.
This document was signed by Magistrate Poul F. Lundgren and entered on
September 16, 2020.
4
Plaintiff challenges Defendant’s valuation by challenging the accuracy of the appraisal card maintained by
Defendant for the subject. Plaintiff alleges errors amounting to a $15,000 valuation error, including the subject’s
room count, the quality and quantity of the fixtures, and the classification of the carpentry outside the subject’s door
as a “covered deck” as opposed to a “front porch.” Plaintiff’s challenge misses the mark because the tax roll is not a
starting point for calculating value in this court and Defendant’s appraisal report does not purport to rely on the
appraisal card. Even if $15,000 were removed from the Defendant’s $275,000 value conclusion, the resulting value
would exceed the tax roll value.
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