In order to reassess the value of taxable property there must be a change in the market value; discovery of an extreme underassessment is insufficient

Merrimack Premium Outlets v. Town of Merrimack
New Hampshire Supreme Court

In order to reassess the value of taxable property there must be a change in the market value; discovery of an extreme underassessment is insufficient

On remand of the N.H. Supreme Court decision in Merrimack Premium Outlets v. Town of Merrimack, 174 N.H. 481 (2021) the Superior Court dismissed an amended complaint filed by Merrimack Premium Outlets based on a violation of RSA 75:8 because the statute did not support a private cause of action. The property owner sought to short circuit lengthier legal proceedings by arguing that the town’s 2017 tax year valuation of the shopping mall was illegal because it was based on loan value for the mall that did not reflect some “change” to the property as required by the version of RSA 75:8 in effect at the time.

In the trial court the plaintiffs filed an amended complaint setting forth two counts, the first captioned as a “statutory claim” and the second as an “equal protection claim.” The Town filed a motion to dismiss both counts, which the trial court granted. The trial court ruled that to the extent count I sought a declaratory judgment, it must be dismissed as moot because the prior decision in Merrimack Premium Outlets “effectively provided the declaratory relief the plaintiffs seek.” The trial court further ruled that to the extent count I was “a statutory cause of action premised on a violation of RSA 75:8,” it failed to state a claim for which relief may be granted because a violation of RSA 75:8 does not support a private right of action.

On appeal the Supreme Court rejected the Town’s argument that the exclusive remedy for disproportionate assessment is through the abatement process. The Court ruled that the Town simply cannot impose a tax based upon an assessment made without statutory authority. Because the inquiry into the legality of an assessment raises a question of law, a plaintiff bringing such a challenge is not necessarily required to follow the statutorily prescribed abatement procedure. While Merrimack Premium Outlets need not prove disproportionality, the factual allegations that the Town employed the illegal 2017 reassessment value for tax years 2018, 2019 and 2020 remain to be proven on remand to the Superior Court.

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Practice Pointer: Normally the exclusive remedy for a claim for disproportionate assessment is through the abatement process. However, a property owner challenging the legality of an assessment raises a question of law, and bringing such a challenge is not necessarily required to follow the statutorily prescribed abatement procedure.