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Out-of-state comparable sales deemed appropriate to assess fair market value.

The Supreme Court of Minnesota ruled that a tax court's informal rule prohibiting the use of out-of-state comparable sales violated its obligation to assess property at fair market value.

McNeilus Truck & Manufacturing, Inc. (McNeilus), owns real estate in Dodge County, Minnesota, where it operates a large manufacturing plant. McNeilus alleged that the county assessor overvalued the property for the tax years 2001 and 2002. In its decision, the tax court rejected the out-of-state sales comparisons offered by McNeilus and gave greater weight to the comparable sales utilized by Dodge County's appraiser in arriving at its valuation. McNeilus appealed, arguing that the tax court erred when it rejected the out-of-state comparable sales.

The Supreme Court of Minnesota concluded that the tax court had created a de facto rule prohibiting the use of comparables from outside Minnesota. "This informal rule against the use of sales transactions from states other than Minnesota," the court said, "without further explanation, violated the tax court's obligation to use its independent judgment in evaluating all testimony and evidence before the court" The court emphasized that the application of a rule barring out-of-state comparables violated the tax court's duty to assess property at market value. The tax court decision was reversed and the case sent back for further proceedings.

McNeilus Truck & Manufacturing v. County of Dodge

Supreme Court of Minnesota

November 10, 2005

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Title Annotation:McNeilus Truck & Manufacturing, Inc.
Publication:Appraisal Journal
Article Type:Brief article
Geographic Code:1USA
Date:Jun 22, 2006
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