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North Carolina Supreme Court Limits Reassessments

by Kevin Baker, Atlanta, March 2013

 

The North Carolina Supreme Court has ruled counties must stick to their reassessment schedule in order to raise property values.

 

Background

 

In 2007, Brunswick County, N.C. conducted a countywide revaluation and was scheduled to do so again in 2011. However, in 2008, the county raised taxable values by hundreds of thousands of dollars for over 100 parcels owned by the Ocean Isle Palms development company.

 

The county argued that the reassessments were based on comparable values that only recently became available. The 2007 lot values were based upon discounts for undeveloped land instead of actual comparable sales. Officials contended the reassessments were permissible under a state law that allows counties to correct mistakes and apply the corrections to future tax bills.

 

High Court Disagrees

 

In its ruling Supreme Court justices determined the reassessment was illegal because it used an entirely new method of appraisal, which couldn't take effect until the next round of reassessments in 2011.

 

“The County may not retroactively label as error an historically approved method endorsed by the schedule,” wrote Associate Justice Robert Edmunds for the court’s majority.

 

The legal dispute was tied up in court since 2010. Initially, the North Carolina Property Tax Commission agreed with Ocean Isle that year. Then the North Carolina Court of Appeals upheld much of the county's interpretation. Finally, the Court of Appeals ruling was overturned by the state Supreme Court.