Discussion and possible action on the settlement offer dated February 17, 2017, by Plaintiff Excelsior Mining JCM, Inc. in tax appeal matter TX2015-000957, currently before the Arizona Tax Court.

Pursuant to A.R.S. § 38-431.03 (A)(3)and (A)(4), the Board may go into executive session for legal advice with the attorney of the public body and to consider its position and instruct its attorney regarding the public body's position regarding pending or contemplated litigation or in settlement discussions conducted in order to avoid or resolve litigation.

Plaintiff Excelsior Mining JCM, Inc . filed a tax appeal against Cochise County and the Arizona Department of Revenue (“ADOR”) on December 15, 2015. Plaintiff challenges the 2015 and 2016 full cash values assessed by ADOR on centrally assessed property commonly known as the Johnson Mine Camp.

 

For tax years 2015 and 2016, the ADOR valued the property’s full cash value at $21,000,000. Plaintiff’s Complaint alleges that the property should have been valued at no more than $8,400,000, the purchase price paid by Plaintiff for the property on December 14, 2015.

 

The Attorney General’s Office, representing both ADOR and Cochise County, filed a Motion to Dismiss Plaintiff’s Complaint on two grounds. First, defense counsel argued that Plaintiff’s 2015 tax year claim should be dismissed because Plaintiff failed to pay the 2015 taxes by December 31st pursuant to A.R.S. § 42-16210(B). Counsel argued that by failing to pay the 2015 taxes in full, Plaintiff waived its right to appeal the 2015 tax year valuation.

 

Second, defense counsel argued that pursuant to A.R.S. § 42-14052(A), because Plaintiff failed to file a report with ADOR to assist it in making its valuation, Plaintiff forced the ADOR to make its valuation on alternative methods. Furthermore, in failing to file the report, Plaintiff waived its opportunity to appeal the 2016 tax year valuation.

 

Based on the above two arguments, the Tax Court granted Defendants’ Motion to Dismiss. Plaintiff has appealed the Tax Court’s dismissal to the Court of Appeals on constitutional grounds. Plaintiff’s Reply Brief is due in approximately ten days.

The County Attorney will advise the Attorney General’s Office of the Board’s decision.

The case will continue to be litigated in the Court of Appeals. If the Court of Appeals upholds the Tax Court’s ruling, then the case will be dismissed. If the Court of Appeals overturns the Tax Court’s Ruling, the case will be remanded to the Tax Court for further consideration, depending on the appellate court’s findings.

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