268 P.3d 387
Ariz. Ct. App.2011Background
- South Point Energy Center LLC operates a Mohave County electric generation facility on Tribe land; the Department valued the facility for property tax purposes starting 2002/2003.
- South Point refused to file the required property tax report, asserting the facility was not subject to Arizona property tax due to the Tribe’s ownership of the land.
- Because no report was filed, the Department used § 42-14152(C)(1) to estimate original cost from information available, relying on public sources rather than actual costs.
- The Department’s 2003 and 2004 full cash values were based on estimated original costs; South Point later filed a 2004/2005 report listing actual costs, which were lower than earlier estimates.
- In 2005, South Point claimed the Department’s estimates for 2003 and 2004 were errors subject to correction under the error-correction statutes; the Board reduced the values, prompting appeals.
- The tax court granted summary judgment for the Department, holding there was no 'mistake' under A.R.S. § 42-16251(3); South Point appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Department's valuation constitutes a 'mistake' under § 42-16251(3). | South Point argues the Department erred by using estimated costs based on information available rather than actual costs. | South Point contends the Department's alternate valuation formula is an error-correctable mistake. | No mistake; valuation followed statutory duties and is not an error. |
| Whether failure to report triggers error-correction rights under § 42-16251(3)(d). | South Point asserts misreporting/failure to report property constitutes an error. | Department correctly applied estimation when no report was filed. | Failure to report does not alone create an error under the statute here. |
| Whether the 'exclusive factual' nature of the cost-estimate under § 42-16251(3)(e) constitutes an error. | South Point posits the original-cost estimates were fact-only verifiable errors. | Department’s estimates were not a verifiable error but a lawful application of the statute. | Not an error; estimates were a lawful application of the statute. |
Key Cases Cited
- Walker v. City of Scottsdale, 163 Ariz. 206 (App. 1989) (harmonious statutory construction; avoid absurd results)
- Perini Land & Dev. Co. v. Pima County, 170 Ariz. 380 (1983) (statutory construction to avoid irrational results)
- Wilderness World v. Ariz. Dep't of Revenue, 182 Ariz. 196 (1995) (de novo review; statutory interpretation)
- Nordstrom, Inc. v. Maricopa County, 207 Ariz. 553 (App. 2004) (statutory construction and intent)
- Jennings v. Woods, 194 Ariz. 314 (1999) (ordinary meaning of statutory terms when not defined)