222 N.C. App. 418
N.C. Ct. App.2012Background
- IBM appeals a 2001 tax valuation of 40,779 leased computer items in Durham County.
- This is the third appeal after IBM I (2007) and IBM II (2009), both reversing or remanding.
- The Court previously held the County failed to prove true value and required depreciation adjustments for obsolescence.
- On remand after new briefing, the Tax Commission issued a third final decision adopting a hybrid market/income approach.
- The Court reverses and remands for entry of a decision reducing the assessment to IBM-listed value $96,458,707.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Burden of proof and law of the case applied | IBM shift burden to County per IBM II | County argues law-of-the-case supports its findings | Burden shifted to County; prior law-of-the-case misapplied and reversed |
| Credibility and role of NACOMEX/Zises evidence | NACOMEX and Zises evidence should be credited | Evidence may be weighed by the Commission | NACOMEX/Zises not properly sustained; findings vacated on remand |
| Valuation methodology on remand | Hybrid method was improper and not supported by IBM II | Commission may craft its own method from evidence | Hybrid method rejected; explicit depreciation issues to be addressed on remand |
| Admission of new exhibits and evidence on remand | New exhibits (Exhibits 1.2.3, 5) were not admitted | Evidence can be considered if properly introduced | New valuation theory without proper evidentiary basis rejected |
| Remedy and final relief | IBM seeks value as listed by IBM | Remand sufficient to correct errors | Remanded for entry of assessment at IBM-listed value $96,458,707 |
Key Cases Cited
- In re Appeal of AMP, Inc., 287 N.C. 547, 215 S.E.2d 752 (1975) (North Carolina Supreme Court (1975)) (competent, material and substantial evidence burden-shifting)
- In re Southern Railway, 313 N.C. 177, 328 S.E.2d 235 (1985) (North Carolina Supreme Court (1985)) (burden shifts to county to show true value)
- In re Appeal of Belk-Broome Co., 119 N.C. App. 470, 458 S.E.2d 921 (1996) (North Carolina Court of Appeals (1996)) (income approach as valuation method guidance)
- Hayes v. City of Wilmington, 243 N.C. 525, 91 S.E.2d 673 (1956) (North Carolina Supreme Court (1956)) (law-of-the-case concept and decision scope)
- Newbury v. Sea Board Air Line Ry., 160 N.C. 156, 76 S.E. 238 (1912) (North Carolina Supreme Court (1912)) (severability of judgments; divisible judgments)