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 Dodge County is a county located in the U.S. state of Minnesota. As of the 2004 census estimates, the population is 19,355. Its county seat is Mantorville6. Geography
According to the U.S. Census Bureau, the county has a total area of 1,139 km² (440 mi²). , where it operates a large manufacturing plant. McNeilus alleged that the county assessor overvalued Overvalued
A stock whose current price is not justified by the earnings outlook or price/earnings (P/E) ratio and thus, expected to drop in price. Overvaluation may result from an emotional buying spurt, which inflates the market price of the stock or from a deterioration in a 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 A person selected or appointed by a competent authority or an interested party to evaluate the financial worth of property.
Appraisers are frequently appointed in probate and condemnation proceedings and are also used by banks and real estate concerns to determine the market 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 [Latin, In fact.] In fact, in deed, actually.
This phrase is used to characterize an officer, a government, a past action, or a state of affairs that must be accepted for all practical purposes, but is illegal or illegitimate. 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