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John T. Vogel


Co-chair, Municipal & School Group

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John T. Vogel, Esq.,, (412) 594-5622

GM Berkshire Hills LLC v. Berks County Board of Assessment (2023 Pa. LEXIS 272, February 28, 2023) – – Split Supreme Court Ruling Enables Taxing Body Assessment Appeals Based on Recent Sales to Remain

Counties, schools and municipalities can continue to maintain tax assessment appeals based on recent sales of a property as a result of a split Pennsylvania Supreme Court decision on the matter.  In GM Berkshire Hills LLC v. Berks County Board of Assessment, the Court split 3 to 3, thereby allowing the July 2021 Commonwealth Court decision upholding the legality of such appeals to stand.    

Case Background

As detailed in our Summer 2021 Education Law Report reviewing the Commonwealth Court decision, the case began in 2017 when related owners purchased multiple residential rental properties located in the Wilson School District, Berks County, for about $55 million.  At the time of the purchase, though, Berks County recorded an assessed value for the properties at just under $10.5 million. The following June, the school district passed a resolution authorizing its business office to initiate assessment appeals within the District, and the business office used state-generated monthly sales reports to select properties for appeals.  The resolution further instructed the business office to review sold properties applying the applicable common level ratio (”CLR”)  (the CLR very roughly is a state-published ratio that measures the assessed value of properties sold over the sales price of such properties).  The District filed appeals if the difference between the sales price (adjusted for the CLR) and the assessed value was $150,000.  This $150,000 figure represented the threshold that would justify the legal and appraisal fees necessary for the appeal.  Using the method outlined in the resolution, the District calculated that the CM Berkshire properties combined sales price when multiplied by the applicable CLR, resulted in a combined assessment of over $37 million, well over the approximate $10.5 million assessment. The District appealed the properties’ assessment for the 2018-2019 tax years to the Berks County Board of Assessment.  That Board conducted a hearing and by decision, increased the assessed value of the properties to over $37 million.

The taxpayer, GM Berkshire LLC, first appealed the decision to the Court of Common Pleas of Berks County.  The Court, while recognizing the taxpayer’s constitutional arguments, found acceptable the School District’s method of filing appeals on recently sold properties where the assessment differential after adjusting for the CLR is at least $150,000.  The taxpayer further appealed to the Commonwealth Court, where that Court rejected the taxpayer’s argument that the District was violating the Uniformity Clause of the State Constitution by selectively seeking reassessment of properties based on recent sales while not appealing the assessments of unsold properties that may be similarly under assessed.  (The Uniformity Clause requires that taxes be uniform on the same subjects of taxation: e.g., you cannot tax commercial properties higher than commercial parcels.)  The Court also rejected the taxpayer’s argument that the use of the $150,000 threshold was invalid because it resulted in disparate treatment of otherwise similarly situated properties even if based on a valid cost-benefit analysis. Relying on state assessment statutes, the Court found the School District could file assessment appeals in the same manner that taxpayers are allowed.  Also, based upon recent court cases, differentiation of appeals based on a property’s value and use of a monetary threshold was proper. 


Next the taxpayer further sought review by the Pennsylvania Supreme Court whether the District’s selection of recently-sold properties that also met a revenue threshold violated the state’s Uniformity Clause.  The Court, however, because of the recent death of Justice Max Baer, had six remaining members, who split 3-3 on the issues presented by the taxpayer.  In the Opinion in Support of Affirmance (“OISA”), Justice Mundy, joined by Justices Wecht and Brobson understood the uniformity arguments of the taxpayers: the School District’s program included a subclass of recently purchased properties and targeted only those properties for appeal.  But the OISA Opinion did not find that tax uniformity was upset as the properties subject to appeal were analyzed under a fair market value multiplied by the CLR.  Also, that Opinion asserted that if the Uniformity Clause precludes any and all efforts by taxing districts to select properties to appeal, such would undermine uniformity because property owners would be able to lodge appeals to reduce their assessments, but aggrieved taxing bodies would not be able to seek an increase in a property’s assessment.

The OSIA noted that what the Uniformity Clause did prohibit is systematic differential treatment of a subclass of property, such as the type of residency status of the owner or by neighborhood. These types of factors are prohibited because they are used to create property subclasses but use of monetary figures in recent sales data is qualitatively different.  A sales price has two features making its use consistent with uniformity: it is not unique to one subset of property within the District and as long as the transaction is undertaken at arm’s length, it reflects the properties fair market value, an important piece of evidence in determining whether the property’s assessment ratio varies widely from the norm.  Also, such valuation data is not arbitrary as sales data is directly connected to the ability to gauge whether the parcel’s assessment is non-uniform.  The OSIA found that there was nothing in the decisional law that prohibits the type of methodology used by the School District.  Further, those Justices rejected the argument that a taxing body must appeal all similar comparable properties in the district in order for an appeal program to be valid:  the Uniformity Clause never interpreted to embrace such a requirement. 

In contrast, Justice Donohue, joined by Justices Todd and Dougherty, and Justice Dougherty separately wrote Opinions in Support of Reversal (OSIR).  Justice Donohue’s Opinion did hold that the School District’s policy of focusing on recently sold properties and use of a threshold created an improper sub-classification of properties, in violation of the Uniformity Clause. Her opinion also disavowed language in prior case footnotes implying that monetary thresholds would not violate the Uniformity Clause.  Moreover, use of the CLR does not save the legality of an appeal as the classification of properties to appeal is invalid in the first place.    

Judge Dougherty’s Opinion generally concurred with Justice Donohue’s Opinion, but also that the OSIA’s reliance on the CLR is being reflective of uniformity was not supported in the caselaw.  Both OSIR focus on the fact that the problem raised by the present case has arisen because of the infrequency of county-wide reassessments in Pennsylvania, noting that Pennsylvania is only one of two states that does not have statutorily mandated reassessments on a regular cycle. 

Practical Advice

At least for the short-term, taxing body appeals based upon sales prices can continue.  Any new case addressing taxing body appeals is unlikely until the late Justice Baer’s successor is elected in November, and even then, a new challenge will have to begin at the trial court level.  However, there appears to be some pressure from the state judiciary that regular countywide reassessments are the ultimate solution to these issues.

For more information, contact John Vogel at (412) 594-5622 or click here for more information about John.

June 12, 2023

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