STC Submarine, Inc. v. Department of Revenue

16 Citing cases

  1. Helms Deep LLC v. Multnomah Cnty. Assessor

    TC-MD 190153N (Or. T.C. Jul. 23, 2021)

    In making this economic analysis, the court considers the use of the property as of the assessment date, including the "viability of taxpayer's entire operation." See STC Submarine, 320 Or. 589, 593 n6, 890 P.2d 1370 (1995) (concluding that the current use of a marine fiber optic cable manufacturing plant was its highest and best use based on evidence of "a strong active market for marine fiber optic cable"); Freedom Federal, 310 Or at 726 (concluding that current use of financial institution's headquarters was its highest and best use. "Although the savings and loan industry may have been weak, on the assessment dates taxpayer fully occupied the property as its headquarters.

  2. General Motors Corp. v. Linden City

    22 N.J. Tax 95 (Tax 2005)   Cited 53 times

    See STC Submarine, Inc. v. Department of Revenue, 13 Or.Tax 14, 18, 1994 WL 34941 (Or. T.C. 1994), aff'd, 320 Or. 589, 890 P.2d 1370 (1995) (discussing the distinction between highest and best use analysis and valuation). Just as valuation "should have some relationship to reality," Hackensack Water Co. v. Old Tappan Bor., 77 N.J. 208, 214, 390 A.2d 122 (1978) (cited for this proposition in Ford Motor Co., supra, 127 N.J. at 302, 604 A.2d 580), so, too, highest and best use analysis, as part of the valuation process, must take into account the reality of the nature of a property and determine the use that will produce the highest value.

  3. Seneca Sustainable Energy, LLC v. Dep't of Revenue

    363 Or. 782 (Or. 2018)   Cited 12 times
    In Seneca Sustainable Energy, LLC v. Department of Revenue, 429 P.3d 360, 369-72 (Or. 2018), the Supreme Court of Oregon had to determine whether the PPA negotiated by the property owner was taxable using the income approach under an ad valorem taxation framework similar to ours in Texas, which excludes intangible assets from ad valorem taxation.

    OAR 150-308-0260(1)(c). The department requires a property to be valued at its highest and best use, because a seller " ‘can expect to receive the highest offer from a prospective buyer who intends to put the property to its most profitable use.’ " Hewlett-Packard , 357 Or. at 602, 356 P.3d 70 (quoting STC Submarine, Inc. v. Dept. of Rev. , 320 Or. 589, 592 n 5, 890 P.2d 1370 (1995).The revenue that might be earned under a particular contract may play into the determination of which use of the property is the most profitable, insofar as one use may produce limited revenues while another use of similar property may produce much higher revenue, as evidenced by the terms of a particular contract, or have a higher real market value, as evidenced by higher sale prices.

  4. Ellison v. Dep't of Revenue

    362 Or. 148 (Or. 2017)   Cited 24 times
    In Ellison, the Supreme Court considered whether a taxpayer who successfully defended against a defendant's request to increase the real market value had received a ruling in its favor for purposes of an attorney fee award under ORS 305.490(4)(a).

    Use value essentially looks to the economic value that the property has to its current owner, without regard to what price the property might draw in the market. Appraisal of Real Estateat 24-25; STC Submarine, Inc. v. Dept of Rev., 320 Or. 589, 595-96, 890 P.2d 1370 (1995) (to same effect). Use value often differs from market value, and it can be significantly higher than market value:

  5. Hewlett-Packard Co. v. Benton Cnty. Assessor

    357 Or. 598 (Or. 2015)   Cited 36 times
    Explaining approaches

    ORS 308.205(2) (requiring a property tax appraisal to be completed “in accordance with rules adopted by the Department of Revenue”). The department's rules call for an appraiser to value the property according to its “highest and best use.” OAR 150–308.205–(D)(3)(i) (“Determining the highest and best use for the unit of property is necessary for establishing real market value.”). The department requires valuing property according to its highest and best use because a seller “can expect to receive the highest offer from a prospective buyer who intends to put the property to its most profitable use.” STC Submarine, Inc. v. Dept. of Rev., 320 Or. 589, 592 n. 5, 890 P.2d 1370 (1995).The department defines “highest and best use” as “the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, and financially feasible, and that results in the highest value.

  6. Lowe's Hiw, Inc. v. Marion Cnty. Assessor

    TC-MD 210115R (Or. T.C. Feb. 3, 2022)

    Appraisal Institute, The Appraisal of Real Estate 307 (15th ed 2020). In STC Submarine v. Dept. of Rev., 320 Or. 589, 596, 890 P.2d 1370 (1995), the Oregon Supreme Court held the Tax Court "properly considered the continued viability of taxpayer's entire operation" because the continued market demand for the "taxpayer's products and services support[ed] the department's conclusion that taxpayer's existing use of its building and structures was their 'highest and best use.'" See also STC Submarine 320 Or at 594 n6.

  7. Macy's Dep't Stores, Inc. v. Clackamas Cnty. Assessor

    TC-MD 180138G (Or. T.C. Jan. 21, 2020)

    Property is valued at its highest and best use because a typically motivated seller will accept the highest offer and "a seller 'can expect to receive the highest offer from a prospective buyer who intends to put the property to its most profitable use." Hewlett-Packard II, 357 Or at 602 (quoting STC Submarine, Inc. v. Dept. of Rev., 320 Or. 589, 592 n 5, 890 P.2d 1370 (1995)). Here, the appraisers agree that the highest and best use of each subject was its current use as an anchor department store; whatever headwinds confront the department-store industry, the cost of repurposing the subjects was not justified as of the date of valuation.

  8. Symantec Corp. v. Lane Cnty. Assessor

    TC-MD 130286N (Or. T.C. Mar. 17, 2014)

    “The first issue is the highest and best use of the property; the second issue is the market value of the property at that use.” Freedom Fed. Savings and Loan v. Dept. of Rev. (Freedom Fed), 310 Or. 723, 726-27, 801 P.2d 809 (1990) (emphasis in original); see also STC Submarine, Inc. v. Dept. of Rev. (STC Submarine), 320 Or. 589, 593, 890 P.2d 1370 (1995). Highest and best use is defined as “the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, and financially feasible, and that results in the highest value.”

  9. NORPAC FOODS, INC. v. DEPT. OF REV

    18 OTR 41 (Or. T.C. 2005)   Cited 14 times
    Commenting on role of Department rules under ORS 308.205

    The fair market value principle includes a consideration of HBU. See STC Submarine, Inc. v. Dept. of Rev., 320 Or 589, 890 P2d 1370 (1995). See also Sabin v. Dept. of Rev., 270 Or 422, 528 P2d 69 (1974).

  10. Department of Revenue v. River's Edge Investments, LLC

    359 Or. 822 (Or. 2016)   Cited 13 times
    Concluding the same and citing Wallace P. Carson, Jr., "Last Things Last": A Methodological Approach to Legal Argument inState Courts , 19 Willamette L Rev 641, 643-45, 654 (advocating for a legal analysis in sequence beginning with administrative rules, then statutes, then state constitution, then federal law, then federal constitution)

    The department has implemented that statute through its "especial property" rule, OAR 150-308.205-(A)(3). See STC Submarine, Inc. v. Dept. of Rev., 320 Or 589, 595, 890 P2d 1370 (1995) (so noting). Under the especial property rule, an appraiser does not need to use the comparable sales approach, because there are no comparable sales.