Hewlett-Packard Co. v. Benton County Assessor
Annotate this CaseThe Department of Revenue appealed a Tax Court decision that accepted the property valuation proposed by taxpayer Hewlett-Packard (HP). In reaching that conclusion, the Tax Court held that the highest and best use of HP's property was a continuation of its current use as a single-tenant, owner-occupied research and manufacturing facility. The Tax Court also held that, of the numerous buildings on the campus, a potential owner would anticipate using only certain "core" buildings and would not anticipate using the "non-core" buildings. As a result, those non-core buildings were components of the property that prevented it from cost-effectively serving its highest and best use. The Tax Court, therefore, assessed the value of the loss caused by the presence of the non-core buildings. To do so, the Tax Court calculated the additional operating expenses that an owner would incur while operating the subject property as compared to the operating expenses that an owner would incur while operating a cost-effective version of the property consisting of only the core space. On appeal, the department raised the narrow issue of whether the Tax Court properly applied the administrative rule defining the value of the loss, OAR 150-308.205-(F)(3)(k). The Supreme Court affirmed, finding that the Tax Court properly identified the value of the loss as the additional operating expenses that an owner would incur to operate the subject property compared to a more cost-effective option.
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