Property Tax Assessment

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WI Court of Appeals – District I

Case Name: Marathon Petroleum Company LP and U.S. Venture, Inc. v. City of Milwaukee

Case No.: 2016AP939

Officials: Brennan P.J., Brash and Dugan, JJ.

Focus: Property Tax Assessment

Marathon Petroleum Company LP and U.S. Venture, Inc. (collectively the “Oil Companies”) appeal the trial court’s order affirming the City of Milwaukee’s 2008 through 2014 property tax assessments for their oil terminals.

On appeal, the Oil Companies argue that the trial court erred as a matter of law in affirming the City’s 2008 through 2014 property tax assessments for their oil terminals because that valuation included non-assessable intangible value. However, we hold that the income-generating capability of the oil terminals “appertains to” and is “inextricably intertwined” with the land and is thus transferable to future purchasers of the land (the “inextricably intertwined test”). Therefore, this income may be included in the land’s assessment because it appertains to the land.

Moreover, based on our independent review of the record, we uphold the trial court’s determination that the Oil Companies failed to introduce significant contrary evidence to overcome the statutory presumption of correctness attached to the City’s assessment. Specifically, the Oil Companies’ expert failed to apply the inextricably intertwined test and, therefore, he did not properly apply WIS. STAT. § 70.32(1)(2009-10) and the Property Assessment Manual, as required by Wisconsin law. Further, we uphold the trial court’s finding that the Oil Companies’ expert’s appraisal report and testimony was not credible.

The following background, which relies primarily on the trial court’s findings of fact, provides helpful context for the issues in this case. Additional facts are included in our analysis as needed.

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.