Target could be due a tax refund from Sedgwick County after court ruling

Sedgwick County overestimated by $5 million the value of retailer Target Corp.’s Wichita and Derby stores, a Kansas Court of Appeals ruling has found.

The appeals court last week upheld a Board of Tax Appeals decision on a lower appraised value of four Target store buildings in Sedgwick County.

The ruling means the county may owe Target a refund for a portion of the $1.13 million it paid in property taxes in 2015. Sedgwick County spokeswoman Kate Flavin said in an e-mail Wednesday the county doesn’t have an exact amount of the refund “since there’s no final decision on this case.” She added the county could appeal the court’s ruling.

“Sedgwick County still has the opportunity to petition the Supreme Court for review,” Flavin said.

The county appraised the four Target buildings at $35 million for 2015 property taxes. But Target disagreed, attaching a lower appraisal on the stores and appealing the county’s appraisal to the tax board.

The tax board mostly upheld the findings of a Target appraiser — except for one of the buildings, which the board appraised at $850,000 less than the Target appraiser — with appraised values totaling $29.6 million. That’s $5.4 million less than the county appraisal.

The county asked the board to reconsider its appraisal decision, which it declined, prompting the county to appeal the tax board’s decision to the appeals court.

In its 14-page ruling, the court said “the county did not base its valuations for the 2015 tax year from an actual view and inspection of the property by the appraiser.” Instead, the court said, the county’s “valuations were based on the 2013 tax year agreed-upon settlement values for each of the properties.”

The county’s decision to use that form of valuation was legal at the time, the court said in the ruling. But by the time the tax board conducted its hearing on the dispute, the Kansas Supreme Court had determined in a separate case that method of valuation was unconstitutional.

Further, the county’s appraiser “cannot offer a valid opinion of value” without having personally appraised the property, the court said in its ruling.

“The record reflects BOTA accepted and relied upon substantial competent evidence to determine each property’s value in compliance with Uniform Standards of Professional Appraisal Practice,” the ruling said. “We affirm.”

This story was originally published January 4, 2018 at 6:00 AM with the headline "Target could be due a tax refund from Sedgwick County after court ruling."