Because state law does not authorize county assessors to correct any type of error at any time in their property tax valuations, the Court of Appeals on Thursday voided a car wash owner’s revised property value that was nearly triple Jefferson County’s original estimate.

A three-judge panel for the Court of Appeals rejected Jeffco’s argument that county assessors have broad authority under the state constitution to arrive at a uniform property tax valuation. Instead, the panel found the law does not allow for corrections after the legal deadline for property that the assessor mistakenly undervalued.

 “We believe the decision will preclude county assessors from attempting to increase property values after the statutory deadline,” said Mark W. Gerganoff, the attorney for property owner Yen, LLC. He said the panel’s decision meant significant savings for his client: $4,696 for the 2017 tax year and $5,343 for 2018.

Yen, LLC, the owner of a four-bay, self-service car wash received a notice from the Jefferson County assessor showing a property valuation of $99,715 in 2017. But afterward – and beyond the deadline in state law – the assessor mailed a second notice with a corrected value. The assessor now claimed the value was nearly $300,000.

Yen argued the assessor did not have the legal authority to issue a second notice after the deadline. The state’s Board of Assessment Appeals agreed and voided the notice. Although there are provisions in the law for changing the value, Yen’s situation did not fall into those categories.

“We agree that the county’s error will result in Yen paying less taxes than the county believes Yen owes for the tax year at issue,” wrote Judge Michael H. Berger for the panel in upholding the board’s ruling. But those consequences “do not permit us to rewrite the statute’s clear language.”

Lisa Frizell, president of the Colorado Assessors’ Association and the assessor for Douglas County, said she did not envision the ruling would have substantial impacts to counties’ property tax revenues because of the rarity of this situation.

“What Jefferson County chose to do with sending out a corrected notice of value is not common practice in the assessor community,” she said.

According to the timeline laid out in state law, assessors have until May 1 of each year to mail notices of valuation for residential and non-residential property. The actual value of the property is multiplied by an assessment rate to arrive at an assessed value, for which the tax rates of various taxing authorities (like counties or school districts) apply.

Property owners have the month of May to file protests to the valuation, and can appeal that decision to the county’s board of equalization. Afterward, the assessor compiles an assessment roll that lists all of the taxes due on taxable property in the county. State law allows for the assessor to correct “errors in the assessment roll” at any time before the treasurer receives the final tax bill.

Assistant Jefferson County Attorney Rebecca Klymkowsky argued to the Court of Appeals that assessors have a constitutional duty to determine a property’s actual value.

“Is it your position that the county can change the assessed valuation at any time for any reason?” asked Berger at oral argument.

“Certainly I think the assessor can make early corrections to the value,” she responded.

However, Jeffco’s argument was doomed by the fact that there was no assessment roll created at the time the assessor made the correction. The panel recognized their decision meant that the proactive identification of an error is disallowed under the law, but the judges ultimately found there was simply no legal authorization for the assessor to fix the value under the general constitutional powers.

“What you’re saying is absent a taxpayer protest,” summarized Judge David J. Richman, “the assessor cannot change the evaluation sent out on May 1 … until the valuation shows up on an assessment roll.”

“That is our position,” said Gerganoff, representing Yen, LLC.

Gerganoff said on Thursday that he is aware of 16 other instances across multiple counties where taxpayers received a second notice of their property’s value.

“We maintain that a county’s asserted value of property is not gospel; it is an opinion of value only.  Nothing more – unless the taxpayer does not challenge it,” he said. “The unwary taxpayer, the taxpayer that does not challenge the county’s asserted value timely, will find that the county value will be the value used to calculate the taxpayer’s taxes whether the value is right or wrong.”

The case is Yen, LLC v. Jefferson County Board of County Commissioners.

Correction: Property owners have the month of May to file valuation protests.

Lisa Frizell, president of the Colorado Assessors’ Association and the assessor for Douglas County, said she did not envision the ruling would have substantial impacts to counties’ property tax revenues because of the rarity of this situation.

“What Jefferson County chose to do with sending out a corrected notice of value is not common practice in the assessor community,” she said.