Toxic Tax Assessments: The Ad Valorem Taxation of Contaminated Property

  • October 22, 1999
  • • Written by: Robert P. Carver, Esq. Anthony W. Crowell, Esq. 

Fall 1999, Vol 24, No 3
Abstract: In tax assessment review proceedings involving contaminated property, taxpayers typically contend that property value is substantially impaired or erased by the presence of environmental contamination. Some taxpayers contend contaminated property has no value even when it is fully usable and the taxpayer is liable for the cleanup. These cases present courts with difficult and competing questions of law, equity, and public policy concerning the interplay of ad valorem taxation and sound environmental policy. This manuscript reviews and analyzes the reasoning of the courts when addressing these issues in the leading tax assessment review cases involving contaminated property nationwide. It addresses issues affecting the marketability of contaminated property in the face of environmental liability statutes; reviews the methodologies adopted by the courts in adjudicating claims of assessment overvaluation; and considers the effect of the usability of contaminated property, the cleanup obligation of owners and purchasers of contaminated property, and the public policy concerns of taxing authorities on the outcome in tax assessment review litigation.