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MLS Properties, Inc. v. Weld County Board of Equalization.

2022 COA 117. No. 21CA0552. Real Property Taxation—Valuation for Assessment—Level of Value—Unusual Conditions.

October 6, 2022

Plaintiffs are 55 Weld County commercial property owners and taxpayers. They requested revaluation of their 2020 property valuations under the unusual conditions statute based on the COVID-19 pandemic and resulting governmental orders. Plaintiffs exhausted their administrative remedies for protesting the valuations and filed this action in district court. The Weld County Board of Equalization and Weld County assessor (collectively, defendants) moved to dismiss, arguing that plaintiffs’ amended complaint lacked specificity and was conclusory and that the claims failed as a matter of law because the pandemic and resulting governmental orders occurred after January 1, 2020 and thus could not be considered for the 2020 tax year, even if they were unusual conditions. The district court granted the motion on grounds that plaintiffs’ claims were nonspecific and conclusory, and that, as a matter of law, the pandemic and resulting orders occurred too late to be considered for 2020 property valuations. It did not address whether the pandemic was an unusual condition.

On appeal, plaintiffs contended that the district court erred by ruling that the pandemic and orders occurred too late to be included in property assessments for that tax year. They maintained that the assessor may revalue their properties for the 2020 tax assessment based on unusual conditions that occurred after the conclusion of the base period—June 30, 2018—and at any point during the 2020 calendar year. By statute, real and personal property must be assessed and valued every two years. On January 1 of odd-numbered years, the assessor assigns the level of value for each property, which is the actual value of the property “for the one-and-one-half-year period immediately prior to July 1 immediately preceding the assessment date.” CRS § 39-1-104(10.2)(d). Taxpayers pay taxes based on their properties’ values at the end of the data-gathering period preceding the odd-numbered year in the reassessment cycle, not on the properties’ current actual value. Generally, this level of value is carried over to the even-numbered year, but CRS § 39-1-104(11)(b)(I) makes exceptions for unusual conditions, which allow assessors to consider “in determining actual value for the years which intervene between changes in the level of value, any unusual conditions in or related to any real property which would result in an increase or decrease in actual value.” The unusual conditions statute does not impose a cutoff date of January 1 of the even year or otherwise suggest that an “intervening year” does not span the entire calendar year; if an “unusual condition” exists, the assessor is required to revalue the property for the intervening tax year. Here, the phrase “years which intervene between changes in the level of value” means the time period between the dates when a new level of value for the biennial cycle was assessed for the plaintiffs’ properties: from January 1, 2019, to January 1, 2021. Because this includes the entire even-numbered calendar year between reassessment cycles, plaintiffs were not precluded by law from invoking the unusual circumstances statute in their valuation protest based on events during spring 2020. Accordingly, the district court erred.

Plaintiffs also contended that the court erred by concluding they did not plead sufficient facts to support their claim. Here, plaintiffs identified each group of taxpayers and described how the pandemic and resulting orders affected property values. The facts alleged were sufficient to support a plausible claim for relief.

Plaintiffs further argued that the district court erroneously ruled that COVID-19 was not, as a matter of law, an unusual condition. The case record is insufficient to conclude as a matter of law whether the pandemic or the governmental orders were unusual conditions requiring revaluation of plaintiffs’ properties.

The judgment was reversed and the case was remanded to reinstate the amended complaint and to conduct further proceedings.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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