2020 Georgia Code
Title 48 - Revenue and Taxation
Chapter 5 - Ad Valorem Taxation of Property
Article 1 - General Provisions
§ 48-5-6. Return of Property at Fair Market Value

All property shall be returned for taxation at its fair market value except as otherwise provided in this chapter.

(Ga. L. 1909, p. 36, § 15; Civil Code 1910, § 1003; Code 1933, § 92-5701; Code 1933, § 91A-1007, enacted by Ga. L. 1978, p. 309, § 2; Ga. L. 1979, p. 5, § 21; Ga. L. 1991, p. 1903, § 3.)

- Ga. L. 1991, p. 1903, § 15, not codified by the General Assembly, provides that the amendment to this Code section shall be applicable beginning January 1, 1992, with respect to ad valorem taxation of timber and shall be applicable beginning January 1, 1992, for all other purposes. Taxation for prior periods shall continue to be governed by prior law.

- For comment on McLennan v. Undercofler, 222 Ga. 306, 149 S.E.2d 705 (1966), see 18 Mercer L. Rev. 290 (1966).

ANALYSIS

• General Consideration
• Factors to Be Considered

Determination of the fair market value of the property involved is generally a question for the trier of fact. Delta Air Lines, Inc. v. Clayton County Bd. of Tax Assessors, 246 Ga. App. 225, 539 S.E.2d 905 (2000).

- Utilization of different methods for determining fair market value for purposes of taxation creates no infirmity under the United States Constitution or under the state constitution or laws. Dougherty County Bd. of Tax Assessors v. Burt Realty Co., 250 Ga. 467, 298 S.E.2d 475, cert. denied, 463 U.S. 1208, 103 S. Ct. 3540, 77 L. Ed. 2d 1390 (1983).

Fair market value is not the retail value to the taxpayer, but the current wholesale value adjusted for the fair market; the taxpayer's cost may be adjusted upward, downward, or remain the same to reflect the "wholesale market" as that term reflects the fair market value of the tangible personalty in the taxpayer's possession. Macon-Bibb County Bd. of Tax Assessors v. J.C. Penney Co., 239 Ga. App. 322, 521 S.E.2d 234 (1999).

- Fair market value of land, whether it be the fee, a leasehold, or any other interest, is a question which necessarily addresses itself to the honesty, the experience, and the familiarity of land values in a given locality of the person or persons whose duty it becomes to determine and fix the value. DeKalb County Bd. of Tax Assessors v. W.C. Harris & Co., 248 Ga. 277, 282 S.E.2d 880 (1981).

- When a taxpayer sold improvements on the taxpayer's property, then filed a return in which the taxpayer left blank the area for "market value," the taxpayer was not entitled to a refund under O.C.G.A. § 48-5-380, as under O.C.G.A. § 48-5-6, returns had to state fair market value; a county was not required to interpret the taxpayer's silence on market value as a declaration that there was no value, and under O.C.G.A. § 48-5-20(a)(1), a taxpayer who failed to return taxable property in a given year was deemed to have returned the property at the same valuation as applied the preceding year. Int'l Auto Processing, Inc. v. Glynn County, 287 Ga. App. 431, 651 S.E.2d 535 (2007).

Statute is not unconstitutional for vagueness of the term "fair market value of property." Chilivis v. Backus, 236 Ga. 88, 222 S.E.2d 371 (1976).

Statute does not violate the uniformity of tax requirement of the Constitution of Georgia because the property of railroads and other utility companies is assessed by the commissioner. Butts County v. Briscoe, 236 Ga. 233, 223 S.E.2d 199 (1976).

- Provision requiring that all property be returned for taxation at the property's fair market value is, undeniably, a statutory mandate. McLennan v. Undercofler, 222 Ga. 302, 149 S.E.2d 705 (1966) commented on in 18 Mercer L. Rev. 290 (1966).

Duty to return all property at fair market value is not supreme, but yields to the duty to avoid discrimination. McLennan v. Undercofler, 222 Ga. 302, 149 S.E.2d 705 (1966) commented on in 18 Mercer L. Rev. 290 (1966); Griggs v. Greene, 230 Ga. 257, 197 S.E.2d 116 (1973).

- Company's personal property purchased through industrial revenue bonds was not entitled to a leasehold interest value of 50 percent of the property's fair market value because neither the leasing agreement, nor any representations purportedly made by the development authority, required a reduction of the company's tax burden and such a reduction violated the uniformity requirements of the state constitution. Coweta County Bd. of Tax Assessors v. EGO Prods., Inc., 241 Ga. App. 85, 526 S.E.2d 133 (1999).

- Bankruptcy court found that for the purposes of ad valorem tax on the debtors' equipment that: (1) for 1997, the value was the lowest of the tax assessors' value due to discrepancies in the tax assessors' values; (2) for 1998, the court accepted the value determined by the board of equalization which gave some weight to the debtors' appraiser who considered comparable sales; (3) for 1999, the court took the tax assessors' lowest value as the debtors' appraiser omitted a laser device; and (4) for 2000, the debtors did not challenge the tax assessors' value. In re R-P Packaging, Inc., 278 Bankr. 281 (Bankr. M.D. Ga. 2002).

Fact that property may be rented for amount which is disproportionate to "fair market value" does not, in and of itself, entitle the owner to an assessment based on some other method of valuation. Williamson v. DeKalb County Bd. of Tax Assessors, 168 Ga. App. 47, 308 S.E.2d 55 (1983).

- "Cost" to the taxpayer may be part and parcel of an assessment of the "fair market value" of personalty. Eckerd Corp. v. Coweta County Bd. of Tax Assessors, 228 Ga. App. 94, 491 S.E.2d 173 (1997).

- Evidence held insufficient to show that the fair market value of inventory equaled the inventory's acquisition cost. J.C. Penney Co. v. Richmond County Bd. of Tax Assessors, 233 Ga. App. 399, 504 S.E.2d 201 (1998).

- It is not proper to determine the fair market value of property on the basis of past assessments or assessments of nearby property without a showing that these assessments are based on fair market value. Evans v. Board of Tax Assessors, 168 Ga. App. 792, 310 S.E.2d 562 (1983).

Construction of term "existing use of property" as used in § 48-5-2. - Term "existing use of property," as used in former Code 1933, § 92-5707 (see now O.C.G.A. § 48-5-2), cannot be assigned any particular value as real property was unique and the extent to which existing use affects the property's value was dependent upon a great variety of other factors. Cobb County Bd. of Tax Assessors v. Sibley, 244 Ga. 404, 260 S.E.2d 313 (1979).

Existing use of property is not exclusive factor in determining fair market value; assessors are directed by former Code 1933, § 92-5702 (see now O.C.G.A. § 48-5-2) to consider also existing zoning of property, existing covenants or restrictions in the deed dedicating the property to a particular use, or any other factors deemed pertinent in arriving at fair market value. Cobb County Bd. of Tax Assessors v. Sibley, 244 Ga. 404, 260 S.E.2d 313 (1979).

- In fixing the fair market value of a leasehold for tax purposes, the rule of "fair market value of property" should always be applied. Delta Air Lines v. Coleman, 219 Ga. 12, 131 S.E.2d 768, cert. denied, 375 U.S. 904, 84 S. Ct. 195, 11 L. Ed. 2d 145 (1963).

- Existence of separate taxable interests and estates in the same property and a determination of their respective "fair market values" for assessment purposes is necessary only when the tax liability is likewise divided among the owners. Martin v. Liberty County Bd. of Tax Assessors, 152 Ga. App. 340, 262 S.E.2d 609 (1979).

- In an action in which a railroad filed suit under the Railroad Revitalization and Regulatory Reform Act of 1976 against the Georgia Board of Equalization, and its individual members, including the Georgia Commissioner of Revenue, challenging the assessment of the fair market value, under O.C.G.A. § 48-5-6, of the railroad's taxable railroad operating property in Georgia, and the Board's acceptance of the assessment under O.C.G.A. § 48-2-18(c), because in Georgia, O.C.G.A. § 48-5-3 defined taxable property as all real property, including but not limited to leaseholds, interests less than fee, and all personal property, and O.C.G.A. § 48-5-520 also provided that a railroad's rolling stock and other personal property appurtenant to the rolling stock was to be taxed on as much as the whole value of the rolling stock and personal property as the length of the railroad in Georgia bore to the whole length of the railroad, without regard to the location of the head office of the railroad, there was no commercial and industrial personal property tax exemption in Georgia. CSX Transp., Inc. v. State Bd. of Equalization, 448 F. Supp. 2d 1330 (N.D. Ga. 2005), aff'd, 472 F.3d 1281 (11th Cir. 2006); rev'd in part, 552 U.S. 9, 128 S. Ct. 467, 169 L. Ed. 2d 418 (2007).

- Low income housing tax credits awarded to taxpayers who owned low income housing properties did not constitute actual income for purposes of determining the value of the property under the income method, O.C.G.A. § 48-5-2(3)(B)(vii)(II), and neither (3)(B)(vii)(I) or (3)(B)(v)(II) violated the taxation uniformity provision under Ga. Const. 1983, Art. VII, Sec. I, Para. III(a). Heron Lake II Apartments, LP v. Lowndes County Bd. of Tax Assessors, 306 Ga. 816, 833 S.E.2d 528 (2019).

- In tax valuation disputes, the value of the property determined by the tax assessors for the previous year is admissible as evidence of the current value of the property at the insistence of the taxpayer. Board of Tax Assessors v. McCauley, 245 Ga. 381, 265 S.E.2d 786 (1980).

- Evidence is sufficient to support judgment of trial court that assessors failed to consider the existing use of land which is generally categorized as vacant land, not commercial, industrial, or residential subdivision, when assessors, relying on the property's highest and best use, assigned such land a base value according to the district in which the land was located, which value was determined by the sale price of other vacant lands purchased for development, which sales did not accurately reflect the value of other vacant land because such sales were often for special purposes such as schools or parks, or speculative development. Cobb County Bd. of Tax Assessors v. Sibley, 244 Ga. 404, 260 S.E.2d 313 (1979).

- Court affirmed the trial court's ruling regarding the assessment of a taxpayer's residential property when the taxpayer presented no evidence of the property's fair market value and the board of assessors presented evidence of comparable sales in the taxpayer's neighborhood that established that the assessment actually approximated fair market value. Smith v. Elbert County Bd. of Tax Assessors, 292 Ga. App. 417, 664 S.E.2d 786 (2008), overruled on other grounds by Gilmer County Bd. of Tax Assessors v. Spence, 309 Ga. App. 482, 711 S.E.2d 51 (2011).

- Although the taxpayers' memberships in a club were not subject to taxation, if a taxpayer relinquished that membership upon sale of the taxpayer's real estate, the buyer could apply for immediate membership, and such an application would normally be granted. Therefore, a county board of tax assessors would have violated Ga. Const. 1983, Art. VII, Sec. I, Para. III and O.C.G.A. § 48-5-1 if the board excluded the enhanced value of the properties attributable to the right to apply for such memberships from ad valorem taxation because the membership was part of the properties' fair market value. Morton v. Glynn County Bd. of Tax Assessors, 294 Ga. App. 901, 670 S.E.2d 528 (2008).

Tax commissioner may legitimately inquire into the cost, depreciation, age, and use of property which is subject to taxation for purposes of investigating the property's fair market value. This does not mean that the property is to be returned or assessed for taxation at other than the property's fair market value; nor does it mean property should be assessed at book value rather than fair market value, although in many cases, fair market value may, in fact, be identical with book value. 1963-65 Op. Att'y Gen. p. 113.

- Formula taking earnings into consideration may be used in arriving at the fair market value of property of a public service corporation; the formula used should not be considered conclusive but be used merely as a guide. 1965-66 Op. Att'y Gen. No. 66-12.

RESEARCH REFERENCES

Am. Jur. 2d.

- 71 Am. Jur. 2d, State and Local Taxation, § 113.

- 84 C.J.S., Taxation, § 449 et seq.

- Taxes: valuing undeveloped mining property as prospect, 2 A.L.R. 1550.

Assessment of corporate property at full value according to law when valuations generally are illegally fixed lower, 3 A.L.R. 1370; 28 A.L.R. 983; 55 A.L.R. 503.

Prospective value as basis of valuation of land for purposes of property taxation, 24 A.L.R. 649.

Rights appurtenant, easements, restrictions, or charges in respect of land as factors in assessment of real property for property taxation, 108 A.L.R. 829.

Valuation of property for purpose of taxation as affected by variation of tax rates for local or special purposes in different local taxing units, or inclusion of property within particular taxing unit, 119 A.L.R. 1300.

Price paid or received by taxpayer for property as evidence of its value for tax purposes, 160 A.L.R. 684.

Separate assessment and taxation of air rights, 56 A.L.R.3d 1300.