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Kelly v. Board of County Commissioners of Summit County

Court of Appeals of Colorado, Fifth Division

May 31, 2018

Karen L. Kelly, Trustee, Petitioner-Appellant,
v.
Board of County Commissioners of Summit County, Colorado, Respondent-Appellee, and Board of Assessment Appeals, Appellee.

          Colorado Board of Assessment Appeals Case No. 68821

          Ryley Carlock & Applewhite, F. Britton Clayton III, Denver, Colorado, for Petitioner-Appellant

          Jeffrey L. Huntley, County Attorney, Franklin Celico, Assistant County Attorney, Breckenridge, Colorado, for Respondent-Appellee

          Cynthia H. Coffman, Attorney General, Emmy A. Langey, Assistant Solicitor General, Krista Maher, Assistant Attorney General, Denver, Colorado, for Appellee

          OPINION

          DUNN, JUDGE

         ¶ 1 This property tax case involves two adjacent parcels of land in Summit County, Colorado - one classified as residential and one as vacant - with a separate trust holding record title to each parcel. Karen L. Kelly (Ms. Kelly), Trustee of the separate trusts each holding record title to one parcel, sought reclassification of the vacant parcel (subject parcel) for property tax purposes. The Board of Assessment Appeals (BAA) denied her request, concluding that the two differently titled parcels were not under "common ownership" within the meaning of section 39-1-102(14.4)(a), C.R.S. 2017, which defines "residential land" for purposes of the property tax statute.

         ¶ 2 Ms. Kelly appeals the BAA's denial of her reclassification request. Because we conclude that Ms. Kelly presented sufficient evidence establishing common ownership of both parcels, we reverse the BAA's order and remand with directions for the BAA to reclassify the subject parcel as residential land for tax years 2014 and 2015.

         I. Background

         ¶ 3 In the 1990s, Ms. Kelly purchased two adjacent parcels of land in Summit County. She built a home on one parcel (residential parcel) and left the subject parcel undeveloped.

         ¶ 4 Sometime after she purchased the two parcels, Ms. Kelly placed them in trust. In particular, on counsel's advice, she put the residential parcel in the Karen L. Kelly 2011 Irrevocable Trust, a qualified personal residence trust. And she put the subject parcel in the Karen L. Kelly 1990 Declaration of Trust, a revocable family trust. Ms. Kelly was the settlor, trustee, and beneficiary of both trusts.

         ¶ 5 For tax purposes, the Summit County Assessor classified the residential parcel as residential land. But the Assessor classified the subject parcel as vacant land, which is taxed at a higher rate.

         ¶ 6 In 2016, Ms. Kelly appealed the subject parcel's classification to the Summit County Board of County Commissioners (County). She requested that the subject parcel be reclassified as residential land under section 39-1-102(14.4)(a) and sought a tax abatement for the tax years 2014 and 2015. The County denied the petition.

         ¶ 7 Ms. Kelly then appealed the County's decision to the BAA, again requesting to have the subject parcel reclassified as residential land and seeking the associated tax abatement. At the evidentiary hearing, Ms. Kelly and the County presented evidence on the ownership of the parcels.

         ¶ 8 After the hearing, the BAA affirmed the County's classification of the subject parcel as vacant land, determining that the subject parcel and residential parcel were owned by two separate trusts and "[e]ach trust [was] a separate and distinct legal entity." It thus concluded that the parcels were not commonly owned and therefore the subject parcel did not qualify as residential land under section 39-1-102(14.4)(a).

         II. Residential Land

         ¶ 9 Ms. Kelly contends that the BAA erred in concluding that the subject parcel was not residential land. More precisely, she argues that the BAA "misconstrued the 'common ownership' element of section" 39-1-102(14.4)(a). We agree.

         A. Standard of Review and Applicable Law

         ¶ 10 The determination of the appropriate land classification for property tax purposes is a mixed question of law and fact. HomeDepot USA, Inc. v. Pueblo Cty. Bd. of Comm'rs, 50 P.3d 916, 920 (Colo.App. 2002). While we consider the BAA's determination to the extent it's consistent with the relevant statutory provisions, the interpretation of the tax statutes is a question of law ...


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