260 P.3d 1234
Kan. Ct. App.2011Background
- Wine purchased a lakefront leasehold on City Lake in Morris County in 1993; County used a composite sales/income approach valuing improvements and land separately; COTA ordered reappraisal for all City Lake improvements under 79-1413a; COTA found the County’s method overvalued leasehold improvements and undervalued land; the County appealed on timeliness, statutory interpretation, and location vs improvement valuation issues; the court reviews under KJRA with unlimited review of statutory interpretation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether COTA's 120-day deadline is mandatory or directory | Morris County argues noncompliance mandates reversal | Wine contends deadline directory with no penalties | Directory; order not overturned for timing though better to comply |
| Whether COTA properly found noncompliance with 79-412 and thus warranted reappraisal | Wine demonstrates improper allocation of leasehold value to tenants | County contends PVD guidelines suffice for substantial compliance | COTA correctly found noncompliance with 79-412, justifying relief under 79-1413a |
| Whether location is an attribute of land, not improvements, affecting leasehold valuation | Wine argues location should affect value of improvements | County argues location is an attribute of improvements | Location is land attribute; leasehold not taxed as separate improvement |
Key Cases Cited
- Lipson, In re Tax Appeal of Lipson, 44 Kan. App. 2d 515 (2010) (rejects treating location as a value attribute of improvements; leasehold taxation not separate)
- Raschke, State v., 289 Kan. 911 (2009) (factors for mandatory vs. directory timing provisions)
- L.C.W., In re, 42 Kan. App. 2d 293 (2009) (confirms interpretive approach to timing and severability of procedures)
- Greenhaw, Board of Johnson County Comm'rs v., 241 Kan. 119 (1987) (leasehold taxation principles and split between leasehold and fee simple)
- Tomasic, State ex rel. v. City of Kansas City, 237 Kan. 572 (1985) (taxation of divided interests; leasehold treated within real property)
- Central Illinois Public Servs. Co., In re Tax Exemption Application of, 276 Kan. 612 (2003) (strict construction of tax-imposition provisions in favor of taxpayer)
- Graceland College Center, In re Tax Appeal of Graceland College Center, 40 Kan. App. 2d 665 (2008) (unlimited review; statutory interpretation framework)