At trial, the town’s expert offered a methodology to support the 18 percent increase in valuation while the property owners’ expert testified as to how he believed the town’s methodology was flawed. The superior court rescinded the town’s reassessment, ruling that the assessment was disproportionate under RSA 76:17 because it lacked a sound methodology, was arbitrary and lacked a good faith basis.
On appeal to the New Hampshire Supreme Court, the town argued that the trial court should not have rescinded the assessment because the property owners did not prove that their tax burdens were individually disproportionate and erroneously relied on the argument that the methodology was flawed.
The property owners maintained on appeal that they should be allowed to prove disproportionality by demonstrating that the reassessment lacked sound methodology or that the town acted in bad faith and arbitrarily.
The Supreme Court ruled in favor of the town. The taxpayer’s burden of proof is simply stated in the Court’s opinion.
To succeed on their tax abatement claim the plaintiffs have the burden of proving by a preponderance of the evidence that they are paying more than their proportional share of taxes…that the taxpayers’ property is assessed at a higher percentage of fair market value than the percentage at which property is generally assessed in the town.
The property owners in this case failed to meet this burden where they did not produce any evidence regarding the fair market value of their properties and instead relied on demonstrating that the town’s methodology was flawed. The Court reasoned that while it is possible that a flawed methodology may lead to a disproportionate result, it does not, in and of itself, prove a disproportionate result.
The Court also found that the record presented on appeal showed no bad faith or arbitrariness on the part of the town in coming to the final increase in valuation of 18 percent. The Court found that the board of selectmen properly relied on the evidence presented to it by the assessor and that the town’s increase in assessment from 14 percent to 18 percent was made in reasonable reliance on the evidence and was not made in bad faith or retaliation.
The Court further explained that even if the town had acted in bad faith or arbitrarily, if it could produce evidence that the assessment is proportionate and the payer suffered no damage, the taxpayer would again bear the burden of proving that the tax burden is disproportionate in order to be entitled to an abatement.