Property:
Kansas: Appellate Court Remands Big-Box Store Valuation Case in Light of Caselaw Involving Dark Store Theory
Case No. 124,621, Kan. Ct. App. (6/7/24). In an unpublished decision involving the property tax valuation of an in-state big-box retail store, the Kansas Court of Appeals (Court) agreed with the county appraiser that the Kansas Board of Tax Appeals’ (BOTA) 2021 decision in favor of the taxpayer was invalid because it erroneously relied on an exclusionary rule set forth in a 2012 case that was subsequently overruled by the Kansas Supreme Court in 2022 “to the exclusion of other available evidence.” The Court therefore remanded the case to the BOTA to reconsider the subject property’s value without such limitations. In doing so, the Court explained that in 2022, the Kansas Supreme Court overruled the exclusionary rule established in the 2012 case that “rental rates from commercial build-to-suit leases do not reflect market conditions and may not be relied on by appraisers without adjustments.” The Court explained that pursuant to the 2022 case, the Kansas Supreme Court now requires the BOTA “to engage in fact-finding as the highest administrative tribunal to determine the reliability of conflicting appraisals without the limitations set forth” in the 2012 case. Please contact us with any questions.
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