Village at Main St. Phase II, LLC v. Dept. of Revenue

Under ORS 305.287, the word “appeal” applies to any appeal to a property tax reviewing body, not solely the Magistrate Division. New issues of valuation may be raised on appeal.

Village at Main St. Phase II, among other respondents, (taxpayers) own apartment rental property in Clackamas County (the county). Taxpayers disagreed with the real market values assessed by the county for 2006, 2007, and 2008. They challenged the valuation of their property before the Board of Property Tax Appeals, which affirmed the county’s assessment. Taxpayers appealed to the Magistrate Division of the Tax Court, solely challenging the valuation of improvements, not land. While trial was pending, ORS 305.287 was enacted, which allowed a reviewing body to consider other issues of property taxation on appeal, even if they were not raised prior. Taxpayers appealed to the Regular Division and the county intervened, believing it had undervalued taxpayer’s land and believing that ORS 305.287 gave them the power to raise the issue. The county argued taxpayer’s appeal to the Regular Division was an “appeal” under ORS 305.287 and taxpayers argued it was not. The Regular Division found for taxpayers, ruling that ORS 305.287 only applied to appeals to the Magistrate Division; thus, the county could not challenge the valuation of taxpayers’ land. The county appealed, renewing their argument. The Supreme Court held the Tax Court erred in ruling the statute did not apply and that the county may not challenge its own valuations. The Court determined the word “appeal,” as used in ORS 305.287, applies to all reviewing bodies, including the Regular Division. Because taxpayers appealed to the Regular Division after ORS 305.287 became effective, it applies to taxpayers appeal. Consequently, the county should have been able to challenge its own land valuations. The limited judgments of the Tax Court are reversed, and the cases are remanded to the Tax Court for further proceedings.