Following a trial held in March of this year, the Arizona Tax Court issued its ruling regarding the full cash value of grazing land in Yavapai County, Arizona. The case was brought by several cattle ranchers (“Ranchers”) who claimed the County Assessor had illegally increased the value of their property by more than 300% from $7.56 per acre to $25 per acre.

Under Arizona law, the value of grazing land is determined pursuant to a statutory formula based on the income approach to value. At issue was the average annual net cash rental value of grazing leases. The Tax Court ruled in favor of the Ranchers.

The Assessor testified at trial that her office had relied on a statistical survey performed by the Arizona Department of Revenue (“ADOR”), which ADOR later told her could not be used to value individual properties. Specifically, the Court found: “Based on the evidence presented at trial, the Court finds the ADOR study lacks foundation and, consistent with [ADOR]’s memorandum to all assessors, it should not have been used to establish the full cash values of grazing land in Yavapai County for tax years 2012 or 2013.” The Tax Court agreed that the Assessor did not follow the law, and even ruled that: “[T]he manner in which the Assessor’s Office utilized the ADOR report was an abuse of discretion.”

Based on the evidence presented by the Ranchers’ expert witness at trial, the Tax Court found that the Assessor’s $25 per acre full cash value for natural grazing land was excessive and had to be reduced to $9.19 per acre for the 2012 tax year and $10.10 per acre for the 2013 tax year.