Montana Attorney General Opinion 15-21

Opinion No. 21 Taxation-Assessment-Valuation. HELD: It is not lawful for an as- sessor, board of county commissioners, or any other tax levying agency to levy tnxes on any land or impl"Ovements in excess of the "true and full valtL'ltion," which means the amount at which the [)roperty would be taken in payment of a just debt from a soh'ent debtor. January 14, 1933. You Il:1ve requested my opinion as to the value to be placed upon agricultural Iands for the purpose of taxation. The term "true and full value" as used in the statute for assessment is used in the same sense in which it is used by people generally. In the case of James et a1. v. Speer, 69 Mont. 100, the Supreme Court has dE-fined yalue as follows: "'Vhen applied to propelty, and no qualification is expressed or implied, 'value' means the price which the property could command in the mar- ket .... ", 'By (value), in common par- lance, is meant (market \'alue) which is no other than the fair value of prop- erty as between one desiring to pur- cha:se and another desiring to sell, and the words (value) and (market yalue) are often used interchangeably, and both as being the equivalent of (actual \'alue) and (salable value)' Hetland v. Hilstad, 140 Iowa, 411, 118 N. ,V. 422." It is not lawful for an assessor, a board of county commissioners, or any other t~x levying agency, to levy taxes on any land or improyements in excess of the true and full yaluation. This term has been construed by the Su- preme Court of this state in the case of State ex reI. Schoonover y. Stewart, S9 Mont. 257. "Section 2001, Revised Codes, 1921, provides that all taxable property must be assessed at its full cash value. '1'his section has !lot been OPI~IO:\S OI!' THE A'l"l'ORXEY GENERAL 31 changed since its enactment « « «; and its mandate is the law today ..... « 'i'he terms "'alue' and 'full casil "alue' mean the amount at which thc prop- erty would be taken in payment of a just debt due from a solvent debtor (Sec. 1996, suM. 5, Revised Codes 1921)." Page 270. Speaking of the classification law the court says: "'Ye agree with the At- torney General that the only purpose of the classification presclibed in Sections 2034 et seq. is to determine relath-e values. The classification is merely a grouping of lands according to the pur- poses for which they are valuable, but the full cash "alue of them does not in any manner emanate from the classi- fication hut on the contrary can only he fixed by the judgment of the taxing officers. 'Ylmte,-er the character of the land it must still be assessed on a uniform hasis, namely: its full cash ,-alue." Page 273. 'i'he purchase price of land does not necessalily control as in a specific case It person may have purchased land at a lesser or greater value than the actual '-alue thereof. Certainly no assessor or other taxing agency is entitled to fix the true and full value of lands and improvements in the locality where they are situate. Bona fide sales and trans- fers of land of the same quality and equal value certainly determine the ac- tual value of land in a given commun· Hy. The specific instances of sales cited in your lettcr do not ncccssmily prove the actual value. There certainl.\' is, howcvcr, a commonly understood and recogniv.c<l Ylilue in a community for lands of a certain class and an assess- ment of such lands at a value greatly in excess of that price would ccrtainly he contrary to law. It has heen held by the Supreme Court of l\Iontana in a decision rendered No- ,-ember 5th, 1932, that a complaint stat- ing that lands were grossly over-,-alued, and it appearing that such o,-el'\'alua- tion is so gross an error as to be incon- sistent with any exercise of honest judg- ment, states a cause of action and in such case the courts will set aside the assessment. Johnson '-. Johnson, 92 Mont. 512, 15 Pac. (2d) 842.