Contact: Ron Roach (916) 441-0490
May 1, 1996
Perhaps it is a sale of nearby, comparable property during a depressed real estate market. Maybe it is a survey of other property values that was not available earlier.
Yet this proof that you, and not your assessor, were closer to the appropriate appraisal cannot be considered by the court as evidence that the assessor was mistaken.
At issue is "trial de novo," which describes the amount and type of evidence a court may consider in a particular proceeding. In California, courts are free to take new evidence in property tax cases on issues of law, such as whether a change of ownership has occurred. But, in local property tax cases, they may not take new evidence and make their own judgment on issues of fact, such as the value of property.
This is the case even if there is compelling new evidence that the assessment appeals board made a mistake in setting property value.
The court is limited to determining whether the assessment appeals board's decision was supported by any evidence, no matter how flimsy, in the administrative record.
This is the assessor's biggest advantage over taxpayers.
It also is a business climate issue, because only California and Massachusetts, of 11 major states surveyed, do not have trial de novo for local property taxes. Thus, California's competitor states have a much better climate for taxpayers who appeal property tax overassessments.
Supporters of trial de novo also believe that property tax jurisprudence would be improved as assessment appeals boards realize that the Superior Court will be able to evaluate all the evidence. Thus, the appeals board is likely to be much more careful and complete in its hearings.
Thirty years ago, trial de novo was a recommended safeguard against corruption in the property tax system. The Assembly Revenue and Taxation Committee, in 1966, published an interim study report in the wake of several assessor scandals and inequalities in assessments. The report noted that "one of the major factors contributing to the breakdown in property tax administration in California has been the lack of an effective means for administrative appeal and judicial review of assessments."
In 1979, trial de novo was recommended by the Commission on California State Government Organization and Economy (the Little Hoover Commission).
Critics -- mainly county assessors and counsels -- say trial de novo will cause too many appeals and unleash a flood of litigation. There is no evidence that this would occur. Instead, consider that in California all other state and local taxes are eligible for trial de novo, and the courts have not been overburdened with tax appeals.
In fact, of more than 10 million personal income taxpayers, 400,000 business franchise taxpayers, and 800,000 payers of sales and use taxes in California, there were only 52 appeals that went to trial in the 1994-95 fiscal year.
Trial de novo has been allowed since 1989 for state-assessed property tax cases going to trial. In the last year before trial de novo became effective for state assessees, 1988, there were 54 cases filed with the Superior Court. For 1992, there were 51.
More than 20 types of state and local taxes in California allow trial de novo. In fact, the local property tax is the only exception.
Trial de novo is the standard of fairness for tax cases. It is the standard used in every other California state or local tax, including state-assessed property taxes. It is the standard used by most of the nation's major states for local property taxation.
There is no evidence that trial de novo would cause anything but better decisions on the fair market value of property.
Under current law, assessors are virtually guaranteed the upper hand against taxpayers by restricting the evidence a court can consider.
Trial de novo is a reasonable step toward bringing balance to the property tax system.
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