Pantlind Hotel Co. v. State Tax Commission

Sotteis, J.

(dissenting). In this case, as in Fisher-New Center Company v. State Tax Commission, 380 Mich 340, decided this date, the State tax commission established the value of taxable property for tax assessment purposes at a level grossly in excess of the price paid therefor by the taxpayer in a virtually contemporaneous sale. The Pantlind Hotel, including its land, building and personal property, was purchased in May of 1963 for $626,438. The commission, on the other hand, claims the true cash value of the real property to have been $1,772,060 for determining the 1964 assessment and the true cash value of the personalty to have been $424,4631 for determining the 1965 assessment.

This record discloses that the commission computed its value of the real property by separately computing the value of the land on a per foot basis, the value of the hotel by its reproduction cost less depreciation and obsolescence, and the value of the personalty by its original cost (to the original purchaser, and not to taxpayer) less depreciation and obsolescence. It also discloses that the commission disregarded the price actually paid by the taxpayer for the property involved ostensibly because the cor-*404póraté taxpayer was, at the time of purchase, solely owned by the wife of one of the principal stockholders2 of the corporate seller.

The taxpayer offered substantial evidence to support its claim that its purchase price was the true cash value of the property — that it could not be sold for more than the price actually paid. I do not suggest that the commission is bound to accept such evidence when it is rebutted or when other evidence of true cash value is offered, but in this case there was no evidence offered to suggest that the sale was other than at arm’s length, and there was no other competent evidence of true cash value. The only other evidence of value in this record was the testimony of the city and State tax commission appraisers regarding their use of the mechanical valuation techniques used to determine the challenged assessments. Neither of these witnesses testified, nor did anyone else, that his computations accurately measured the properties’ true cash values.

All this record discloses, therefore, is that the commission’s valuations were computed in accordance with techniques it has ordered used for such purposes and that the resulting values were grossly larger than the price commanded by the properties in a virtually contemporaneous sale. I do not understand how it can be said from such a record that this taxpayer’s property was assessed on the basis of true cash value as our Constitution requires. Const 1963, art 9, § 3.

1 would reverse and remand for rehearing before the State tax commission in accordance with the hearing procedures suggested in my opinion in Fisher-New Center Company v. State Tax Commis*405sion, 380 Mich. 340. Plaintiff should be allowed to tax its costs.

Dethmers, C. J., and O’Hara, J., concurred with Souris, J.

Of this figure, a minor part represents inventory, stores and supplies and other personalty purchased after the taxpayer’s acquisition of the hotel.

Mr. Jason Honigman and members of Ms family owned a 35% interest in the corporation which sold the hotel to plaintiff corporation, all of the stock of which was owned by his wife.