O'Neil v. Conejos County Board of Commissioners
2017 COA 30
| Colo. Ct. App. | 2017Background
- James and Mary O’Neil purchased property in 2010, built a log house as a vacation/second home and for inheritance to their sons.
- The family primarily lived in New Mexico, used the house intermittently for vacations, and advertised it on VRBO beginning August 2011.
- The O’Neils obtained a county special-use permit and paid sales/lodging taxes for short-term rentals; zoning and the permit did not reclassify the parcel from residential.
- In 2012 the Conejos County Assessor reclassified the property from residential to commercial for ad valorem tax purposes; the O’Neils appealed to the Board of Assessment Appeals.
- The Board reversed the Assessor and returned the classification to residential for 2012–2013; the County appealed to the Colorado Court of Appeals.
Issues
| Issue | Plaintiff's Argument (O’Neil) | Defendant's Argument (Conejos County) | Held |
|---|---|---|---|
| Proper classification: residential vs. commercial | Property was designed, intended, and actually used predominantly as a residential second home despite occasional short-term rentals | Short-term rentals, availability most of the year, and permit/tax payments show commercial use | Affirmed residential: Board reasonably found predominant use residential and statute/ARL factors support that result |
| Whether Board applied presumption favoring Assessor | Taxpayers rebutted the presumption with competent evidence of predominant residential use | Board failed to apply the presumption and thus erred | Rejected County: Board implicitly applied presumption and found O’Neils met their burden to rebut it |
| How to measure “actual use” (days rented v. days residential) | Days the house was unoccupied may still be residential; actual rental days were limited; intended use matters | Compare number of days rented/available to days owner-occupied—rental days exceed owner days, so commercial | Affirmed Board’s approach: counting empty days as residential use is reasonable; intended/actual use controls, not mere availability |
| Effect of sales/lodging tax and special-use permit | Permit and tax payments do not transform predominant residential use into commercial use | Obtaining permit and paying lodging tax indicate commercial lodging activity | Permit and tax payments are not dispositive; they do not override evidence of predominant residential use |
Key Cases Cited
- Gyurman v. Weld County Bd. of Equalization, 851 P.2d 307 (Colo. App. 1993) (taxpayer bears burden to rebut presumption favoring assessor)
- Board of Assessment Appeals v. Sampson, 105 P.3d 198 (Colo. 2005) (taxpayer entitled to relief upon meeting burden to show classification incorrect)
- Mission Viejo Co. v. Douglas County Bd. of Equalization, 881 P.2d 462 (Colo. App. 1994) (distinguishing residential v. commercial uses; profitability not controlling)
- Farny v. Board of Equalization, 985 P.2d 106 (Colo. App. 1999) (cabin used sparingly can still be residential based on intended/devoted use)
- E.R. Southtech, Ltd. v. Arapahoe County Bd. of Equalization, 972 P.2d 1057 (Colo. App. 1998) (mixed-use classification for properties with discrete commercial/residential divisions)
- Home Depot USA, Inc. v. Pueblo County Bd. of Commissioners, 50 P.3d 916 (Colo. App. 2002) (appellate review standard: board’s mixed questions of law and fact upheld if lawful and supported by substantial evidence)