Lower income during "Recession" does not Translate into Lower Property Tax Value

There is a general belief that the "economic downturn," "recession," or whatever you want to call it that has been gripping our country for the last few years should translate into property tax savings now that county assessors are going through the process of reappraising property. Makes sense enough. We have certainly seen the sales price of  personal residences going down.

For business property, that conventional wisdom does not always hold true. Take a recent administrative decision in Tennessee involving the Loews in Nashville. The Taxpayer argued that the valuation of the hotel should be reduced relying on an income analysis that used the reduced income for the hotel in 2009. The judge rejected the focus on one year of income adopting instead the assessor's valuation that relied on an income analysis for the period from 2005 through 2009. The low point was 2009, so the income used by the assessor was considerably higher, resulting in a higher property tax value.

For taxpayers developing valuation positions, this case is instructive on what factors administrative judges will look at when considering fair market value challenges. 

Decision: http://www.comptroller1.state.tn.us/repository/SB/judgeminsky/2012.02.17-LoewsNashvilleHotelCorp.pdf