REASSESSMENT AND APPEAL OVERVIEW

Properties are generally reassessed for one of three reasons. New construction taking place on a property, a sale occurs that constitutes an assessable transfer of interest, or a county wide reassessment program is implemented.  In each of those instances, and when a property is assessed for the first time, an assessment notice is mailed to the property owner.  This notice contains information pertaining to both the valuation being placed on the property and the appeal process.  Appeals must be filed within 90 days from the date an assessment notice is mailed, or any time through the first penalty date (usually January 15th) in years where an assessment notice is not mailed.  The following will be information pertaining to legal requirements regarding reassessment, mailing of assessment notices when reassessment occurs, and the appeals process.

Valuation for Assessment Purposes

For property tax years beginning after 2006, the fair market value of real                property is its fair market value applicable for the later for:

• The base year as defined in Section 12-37-3140(C).
• 12-37-3140(C) – For purposes of determining a “base year” fair market value pursuant to this section, the fair market value of real property is its appraised value applicable for property tax year 2007.

• December thirty-first of the year in which an assessable transfer of interest has occurred.
• 12-37-3140(4) – Assessable transfer of interest means a transfer of an existing interest in real property that subjects the real property to appraisal.  For purposes of this definition, an existing interest in real property includes life estate interests.

• As determined on an appeal.

• As it may be adjusted as determined in a countywide reassessment program conducted pursuant to Section 12-43-217, but limited to increases in such value provided in 12-37-3140(B).
• 12-37-3140(B) limits reassessment increases in value to 15% within a 5 year period.

• Subsequent improvements and additions to the property.
• 12-37-3130(1) – Additions and improvements mean:
• new construction
• reconstruction
• major additions to the boundaries of the property or a structure on a property
• remodeling
• renovation and rehabilitation, including installation

• Additions or improvements do not include minor construction or ongoing maintenance and repair of existing structures.

• The repair or reconstruction of a structure damaged or destroyed by a disaster, to included, but not limited to, construction defects, defective materials, fire, wind, hail, flood, and acts of God, is not an addition or improvement to the extent that the structure as repaired or reconstructed, is similar in size, utility, and function of the structure damaged or destroyed, and the rebuilding or reconstruction is begun within eight years after determination or the damage or destruction.

• Construction of facilities in a home that make the home handicapped accessible is not an addition or improvement if the utility and function of the structure remains unchanged.

• Reassessment tables should be used to value all new houses built and additions and improvements for the reassessment period.  EXCEPTION:  if new construction is combined with an ATI in the same year, assessor will use FMV as of December 31, of that year.

• Value attributable to additions and improvements in a property tax year are subject to tax in the following tax year except if the county has adopted an ordinance allowing early recognition per 12-37-670(B).

County Wide Reassessment

SECTION 12-43-217. Quadrennial reassessment; postponement ordinance.
(A) Notwithstanding any other provision of law, once every fifth year each county or the State shall appraise and equalize those properties under its jurisdiction. Property valuation must be complete at the end of December of the fourth year and the county or State shall notify every taxpayer of any change in value or classification if the change is one thousand dollars or more. In the fifth year, the county or State shall implement the program and assess all property on the newly appraised values.
(B) A county by ordinance may postpone for not more than one property tax year the implementation of revised values resulting from the equalization program provided pursuant to subsection (A). The postponement ordinance applies to all revised values, including values for state-appraised property. The postponement allowed pursuant to this subsection does not affect the schedule of the appraisal and equalization program required pursuant to subsection (A) of this section.
(C) Postponement of the implementation of revised values pursuant to subsection (B) shall also postpone any requirement for submission of a reassessment program for approval by the Department of Revenue.

Point Of Sale Reassessment

Certain types of property sales constitute an assessable transfer of interest and triggers reassessment for the subsequent tax year based on fair market value as of December 31st of the year the sale occurred.

I.        What is an Assessable Transfer of Interest (ATI)?   (Section 12-37-3150(A))

• Assessable transfer of interest means a transfer of an existing interest in real property that subjects the real property to appraisal.  For purposes of this definition, an existing interest in real property includes life estate interests. See 12-37-3140(4).

•      ATI’s specified in 12-37-3150(A)
• Conveyance by deed.
• Conveyance by land contract.
• Conveyance to a trust.
• Conveyance by distribution from a trust.
• Change in the sole present beneficiary of a trust.
• Distribution under a will or intestate succession.
• Conveyance by lease if duration and all options is more than 20 years or lease contains bargain purchase option.
• Transfer of more than a 50% ownership interest in a corporation, partnership, sole proprietorship, LLC, LLP, or other legal entity.
• Change in use of agricultural real property which subjects property to roll back tax.
• Change in use of real property resulting from zoning change.
• Passage of 20 years since application of cap or assessable transfer of interest of real property owned by a publicly held entity whose stock is traded on a regulated exchange, a pension fund or similar entity.

•      The following trading transactions are not normal public trading and      may result in an ATI:
• The merger of two or more companies.
• The acquisition of one company by another or by an individual.
• The IPO of the stock of a company.
• The secondary public offering of the stock of a company.
• The trading of the stock of a privately held company.
• A takeover involving a public offer by some one to buy stock from present stock holders in order to gain control a company.

•      An assessable transfer of interest occurs at the time of execution of    the instruments directly resulting in the transfer of interest.
• Failure to record instruments resulting in a transfer of interest gives rise to no inference as to whether or not an assessable transfer of interest has occurred.

•      Partial interest sales
• A partial interest sale by an individual is an ATI and therefore would trigger reappraisal of the entire property, not just the partial interest.
• A partial interest sale of 50% or more of a corporation, partnership, sole proprietorship, LLC, LLP, or other legal entity is an ATI.
• A partial interest sale of LESS than 50% of a corporation, partnership, sole proprietorship, LLC, LLP, or other legal entity is NOT an ATI.

•      A mobile home can be transferred with a title or deed and either would           be considered an ATI. (12-43-230(b))

• Transfers NOT Considered an ATI (12-37-3150(B))

• Transfers not subject to federal income tax:
• 1033 – conversions – fire and insurance proceeds to rebuild
• 1041 – transfers of property between spouses or incident to divorce
• 351 – transfer to a corporation controlled by transferor
• 355 – distribution by a controlled corporation
• 368 – corporate reorganizations
• 721 – non-recognition of gain or loss on a contribution to a Partnership

• Transfer of life estate or life lease retained by the transferor (until life estate or life lease expires or is terminated.).

• Transfer through foreclosure or forfeiture.

• Transfer by redemption or property sold at a delinquent tax sale.

• Conveyance to a trust if settler remains beneficiary of the trust.

• Transfer for security or assignment or discharge of a security interest.

• Transfer among members of an affiliated group.
• An affiliated group generally files consolidated federal income tax returns.
• The corporations must have the following characteristics to be an affiliated group.
• Common parent.
• Corporations are connected through ownership of each others stock.
• Stock ownership must represent 80% of the voting power and 80% of the total value of stock.
• Inter-corporate transfers do not trigger an ATI.
• The Assessor can request information about transfers.  If the taxpayer provides false information he is subject to a civil penalty of not less than two times the taxes due and no more than three times the taxes due.

• Transfer among corporation, partnerships, LLC, LLP, or other legal entity if entities are commonly controlled.
• Commonly controlled means that the entity has 50% of the voting power of another entity AND 50% of the total value of shares of another entity.
• Such transfers are typically between parent and subsidiary or brother-sister corporations.
• Normal public trading of stock is not a transfer of ownership even if the trading cumulatively totals more than 50% of the total ownership of the entity IF ownership interest are both traded in multiple transactions AND involve unrelated individuals, institutions, or other legal entities.
• Parent-Subsidiary corporations – parent owns a controlling interest in the subsidiary.
• Brother-Sister corporations – the same five or fewer individuals own a controlling interest in each entity.

• A transfer of an interest in a timeshare unit by deed or lease.

•   How Do You Find Out About ATI’s?

• Deeds
• Contracts
• Trust Documents
• Deed of Distribution from an estate
• Leases
• Form provided by taxpayer within 45 days of transfer of ownership interest in a single transaction or as a part of a series of related transactions within a 25 year period in a corporations, partnership, sole proprietorship, LLC, LLP or other legal entity.
• Change in use of agricultural real property which subjects the property to the rollback tax.
• Local zoning ordinance change which changes use of real property.
• Passage of 20 years since application of cap or assessable transfer of interest for real property owned by a publicly held entity whose stock is traded on a regulated exchange, a pension fund or similar entity.
• Certificate to be sent out by Assessor.

• If An ATI Has Occurred, When Is the Property Revalued?

• As of December 31 of the year of the ATI.
• The ‘conveyance’ means the date of the transfer of an assessable transfer of interest in real property.  Failure to record legal instruments evidencing a transfer of interest gives rise to no inference as to whether or not an ATI has occurred. (12-37-2130(7))
• The property is valued as of December 31 of the year of the transfer for taxes in the ensuing tax year. (I.e. Property transfers June 1, 2007; assessor should value the property at FMV as of December 31, 2007; this will be the value for 2008.)

Assessment Notices

SECTION 12-60-2510. Property tax assessment notice; contents; written notice of objection.
(A)(1) In the case of property tax assessments made by the county assessor, whenever the assessor increases the fair market value or special use value in making a property tax assessment by one thousand dollars or more, or whenever the first property tax assessment is made on the property by a county assessor, the assessor, by July first in the year in which the property tax assessment is made, or as soon after as is practical, shall send the taxpayer a property tax assessment notice. In years when real property is appraised and assessed under a countywide equalization program, substantially all property tax assessment notices must be mailed by October first of the implementation year. In these reassessment years, if substantially all of the tax assessment notices are not mailed by October first, the prior year's property tax assessment must be the basis for all property tax assessments for the current tax year. A property tax assessment notice under this subsection must be in writing and must include:
(a) the fair market value;
(b) value as limited by Article 25, Chapter 37, Title 12;
(c) the special use value, if applicable;
(d) the assessment ratio;
(e) the property tax assessment;
(f) the number of acres or lots;
(g) the location of the property;
(h) the tax map number; and
(i) the appeal procedure.
(2) The notice must be served upon the taxpayer personally or by mailing it to the taxpayer at his last known place of residence which may be determined from the most recent listing in the applicable telephone directory, the Department of Motor Vehicles' motor vehicle registration list, county treasurer's records, or official notice from the property taxpayer.
(3) In years when there is a notice of property tax assessment, the property taxpayer, within ninety days after the assessor mails the property tax assessment notice, must give the assessor written notice of objection to one or more of the following: the fair market value, the special use value, the assessment ratio, and the property tax assessment.
(4) In years when there is no notice of property tax assessment, the property taxpayer may appeal the fair market value, the special use value, the assessment ratio, and the property tax assessment of a parcel of property at any time. The appeal must be submitted in writing to the assessor. An appeal submitted before the first penalty date applies for the property tax year for which that penalty would apply. An appeal submitted on or after the first penalty date applies for the succeeding property tax year.
(B) The department shall prescribe a standard property tax assessment notice designed to contain the information required in subsection (A) in a manner that may be easily understood.
The Appeal Process

Generally speaking there are four levels of appeal, starting with the assessor’s office and progressing through the court of appeals.

Assessor Office
SECTION 12-60-2520. Written request to meet with assessor constitutes notice of objection; written protest following conference; contents.
(A) A property taxpayer may object to a property tax assessment made by a county assessor by requesting in writing to meet with the assessor within the time limits provided in Section 12-60-2510. This written request is a notice of objection for purposes of this subarticle.
(B) If, upon examination of the property taxpayer's written objection, the county assessor agrees with the taxpayer, the county assessor must correct the error. If, upon the examination, the county assessor does not agree with the taxpayer, the assessor shall schedule a conference with the property taxpayer within thirty days of the date of the request for a meeting or as soon after that as practical. If the matter is not resolved at the conference, the assessor shall advise the property taxpayer of the right to protest and provide the taxpayer a form on which to file the protest. The property taxpayer has thirty days after the date of the conference to file a written protest with the assessor. The protest must contain:
(1) the name, address, and telephone number of the property taxpayer;
(2) a description of the property in issue;
(3) a statement of facts supporting the taxpayer's position;
(4) a statement outlining the reasons for the appeal, including any law or other authority, upon which the taxpayer relies; and
(5) the value and classification which the property taxpayer considers the fair market value, special use value, if applicable, and the proper classification.
The taxpayer may use the form prepared by the department, but use of the form is not mandatory.
(C) The assessor shall respond to the written protest and the response must:
(1) be in writing;
(2) be mailed to the property taxpayer by first class mail within thirty days of the date of receipt of the property taxpayer's protest or as soon thereafter as practical;
(3) include a statement of the initial property tax assessment and the redetermined property tax assessment;
(4) state that the redetermined property tax assessment will become final if the property taxpayer does not appeal the property tax assessment to the county board of assessment appeals; and
(5) inform the taxpayer of procedures for all further appeals.
(D) The assessor may amend, modify, or rescind any property tax assessment, except claims relating to property tax exemptions.
(E) Each protest and each response must be filed and maintained at the office of the assessor for four years, and must be made available for examination and copying by any property taxpayer, at the taxpayer's expense pursuant to Chapter 4 of Title 30, the Freedom of Information Act.
Board of Assessment Appeals
SECTION 12-60-2530. County board of assessment appeals.
(A) Within thirty days after the date of the county assessor's response provided in Section 12-60-2520, a property taxpayer may appeal a real property tax assessment to the county board of assessment appeals. The board may rule on any timely appeal relating to the correctness of any of the elements of the property tax assessment, and also other relevant claims of a legal or factual nature, except claims relating to property tax exemptions. Conferences held by the board are subject to any rules prescribed for the county boards of assessment appeals by the Administrative Law Judge Division. The assessor may extend the time period for filing a taxpayer's appeal if the request for an extension is received by the assessor within thirty days of the date of the county assessor's response provided in Section 12-60-2520.
(B) An appeal to the board begins by giving written notice of intent to appeal to the assessor.
(C) A conference on the appeal must be conducted by the board within thirty days after the date of receiving a notice of appeal, or as soon thereafter as practical. The board shall:
(1) set the place, date, and time for the conference;
(2) give the assessor and the property taxpayer at least thirty days' written notice of the conference;
(3) advise the property taxpayer that all evidence must be presented at the conference; and
(4) have the authority and jurisdiction to enter a default decision if either the property taxpayer or the assessor fails to appear at the conference, if proper notice of the conference was given. If a default decision is entered against the property taxpayer for failure to appear at the conference, the property tax assessment becomes a final property tax assessment. A default order entered against the assessor for failure to appear at the conference results in a final property tax assessment based on the value stated in the property taxpayer's written protest. However, the board may grant a continuance and refrain from entering a default order upon good cause shown by any party.
(D) The intervention by an interested person not a party to the action is allowed where:
(1) the intervenor has a legal or equitable interest in the property which is the subject of the property tax assessment;
(2) the intervention is not prevented by any applicable statute of limitations and the intervenor has exhausted his prehearing remedies;
(3) the disposition of the action could, as a practical matter, impede protection of that interest; and
(4) the intervener’s interest is not being adequately represented by the existing parties, and could be impeded, as a practical matter, if intervention is denied.
(E) Each appeal must be considered by all board members present at a meeting. The lesser of a majority of the members or three members of the board is a quorum, unless the parties agree to a lesser number.
(F) At least fifteen days before the date of the conference, the assessor shall file with the board:
(1) a copy of the original property tax assessment for the subject property;
(2) the written protest of the property taxpayer;
(3) a written response to the taxpayer's protest; and
(4) copies of documents, including appraisals, property sales, and a brief description of other evidence to be presented by him. Copies of the documents filed with the board must be mailed or delivered to the property taxpayer at the same time.
(G) At least fifteen days before the date of the conference, the property taxpayer shall file with the board copies of documents, including appraisals, property sales, and a brief description of other evidence to be presented. Copies of the documents and lists must be mailed or delivered to the assessor at the same time. The requirement that the property taxpayer file the material with the board and mail or deliver it to the assessor may be waived by the board.
(H) At least seven days before the date of the conference, the parties may file with the board any response each may have to the information filed by the other. This material must be mailed or delivered to the other party at the same time.
(I) The conference must be held as follows:
(1) Conferences are open to the public.
(2) The board may meet in closed session to consider evidence presented at the conference.
(3) The assessor shall explain the property tax assessment and his response to the taxpayer's written protest.
(4) The assessor may provide the board with evidence to support the property tax assessment.
(5) The property taxpayer shall state his reasons for protesting the property tax assessment.
(6) The property taxpayer may provide the board with evidence to support amending, modifying, or rescinding the property tax assessment.
(7) A person intervening as a party in the appeal may state his position and present evidence in support of his position.
(8) The assessor may rebut information and arguments presented by the taxpayer or intervener.
(9) The property taxpayer and interveners, if any, may rebut information and arguments presented by the assessor.
(10) Any member of the board may question the property taxpayer, the assessor, and anyone else providing information at the conference. Any member of the board may request additional information.
(J) After the conference, the board shall issue a decision based upon the evidence before it as follows:
(1) The decision must be made by a majority vote of the board members present at the conference. In case of a tie, the assessor's determination is upheld.
(2) At the conclusion of the conference, the decision may be announced orally or it may be reserved for consideration. In either event, the board shall mail a written decision to the parties within fifteen days after the date of the conference, or as soon thereafter as practical.
(3) The written decision of the board shall:
(a) explain the basis for the decision;
(b) state that if the decision is not appealed, it must be certified to the county auditor for entry upon the property tax assessment rolls or tax duplicate; and
(c) inform the parties of their right to request a contested case hearing before the Administrative Law Judge Division.
South Carolina Administrative Law Court
SECTION 12-60-2540. Contested case hearing; time for requesting following board's decision.
(A) Within thirty days after the date of the board's written decision, a property taxpayer or county assessor may appeal a property tax assessment made by the board by requesting a contested case hearing before the Administrative Law Judge Division in accordance with the rules of the Administrative Law Judge Division.
(B) If a taxpayer requests a contested case hearing before the Administrative Law Judge Division without exhausting his prehearing remedy because he failed to file a protest or attend the conference with the county board of assessment appeals, the Administrative Law Judge shall dismiss the action without prejudice. If the taxpayer failed to provide the county board with the facts, law, and other authority supporting his position, he shall provide the representative of the county at the hearing with the facts, law, and other authority he failed to present to the county board earlier. The Administrative Law Judge shall then remand the case to the county board for reconsideration in light of the new facts or issues unless the representative of the county at the hearing elects to forego the remand.
Upon remand the county board has thirty days, or a longer period ordered by the Administrative Law Judge, to consider the new facts and issues and amend its decision. The county board shall issue its amended decision in the same manner as the original. The taxpayer has thirty days after the date the county board's decision was mailed or delivered to the taxpayer to again request a contested case hearing. Requests for a hearing before the Administrative Law Judge Division must be made in accordance with its rules. If the county board fails to issue its amended decision within thirty days of the date of the remand, or a longer period ordered by the Administrative Law Judge, the taxpayer can again request a contested case hearing. At the new hearing the facts, law, and other authority presented at the original hearing must be deemed to have been presented in a timely manner for purposes of exhausting the taxpayer's prehearing remedy. The statute of limitations remains suspended by Section 12-54-85(G) during this process.
Court of Appeals
SECTION 12-60-3380. Appeal of decision to court of appeals.
Except as otherwise provided in this chapter, a party may appeal a decision of the Administrative Law Court to the court of appeals. Appeal of a decision of the Administrative Law Court must be made in accordance with Section 1-23-610(B).