DOBSON — A move to delay revaluations on homes and businesses could save taxpayers a little money, county officials believe.
At its most recent meeting, the Surry County Board of Commissioners heard a recommendation from Penny Harrison, interim tax administrator.
She suggested holding off one more year on doing the regular revaluation cycle for property taxes due to surrounding counties working on forming a “data sharing committee.”
Such committees were mentioned in May by Kimberly Simpson, president of the North Carolina Association of Assessing Officers. On the public finance blog Death and Taxes, she noted that when homeowners and business owners call to complain about a valuation, it is easy to see they have done their homework.
“You do know that Durake County dropped their value to $47 per square foot, and New Catamance dropped their value to $52 per square foot. Don’t you think $90 is a little high?” Simpson wrote as an example of the types of phone calls tax offices routinely get.
A data sharing committee would create better communication between county tax offices, including a contact person in each department.
“Wouldn’t it be better for the counties at $47 per square foot to know other counties are much higher, and why?” she asked.
Waiting a year, Harrison wrote to the board in a memo, ”This will help in our defense with surrounding commercial wide cases with the Property Tax Commission, as well as with rural areas so that our values will be on the same page.”
One of the reasons some counties want to put off tax revaluations is because of current litigation by big retailers like Lowe’s Home Improvement, said Commissioner Larry Phillips.
According to an article last month in Education Week, Lowe’s, Home Depot, Target and Menards are among those that have filed lawsuit seeking to get their property values lowered. The article says the companies have won suits in Michigan, Indiana and Wisconsin.
In these cases, the companies have successfully used what is being called a “dark store” argument. Rather than value the property based on how it looks with a retailer inhabiting the building, imagine how much less the property would be worth if the company pulled out, the theory goes.
For example, now that K-Mart has closed its store at Mayberry Mall, the property value would be less. The lawsuit would argue that this lower tax rate is what the mall owner should always pay, even if a new tenant moves in.
According to Education Week, Menards admitted in court to spending $10.6 million to buy land and build a new store in Wisconsin, but then argued that the property should be valued at just $5.8 million because that is all the company could expect to get out of the location of it were sold, considering “comparable sales” of other real estate in the area.
This is just a tax scam, said Phillips. The commissioner believes something like this could result in homeowners having to foot a bigger portion of the tax bill.
The retailers counter that they are doing what they can to cut costs so that they can afford to stay open when so many people are shopping online. They have argued that without concessions such as these taxes, more and more of these stores will go dark.
In the meantime, the county board said the delay could benefit the public.
The last time revaluations were done in 2016, property values had dipped from the previous cycle, the commissioners pointed out.
Commissioner Eddie Harris said those lower values ended up costing the county about $342,000 in lost tax revenue per year. With property values and the housing market in better shape now, it is reasonable to think that the revaluations would bump things right back up to the revenue level it was before, if not a little more, he believed.
So, if the county puts off that assessment for another year, the taxpayers have one more year to get by at a lower rate.
After discussion, the board agreed to extend the usual four-year wait to five years. Since the last revaluation was in 2016, that means the next one will occur in 2021.