JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal.

120 	285 NEBRASKA REPORTS
The district court erred in ordering Kearney County to refund
the $480,411.50.
We acknowledge that this construction of § 77-1734.01
leads to the harsh result of double taxation in this case. But
a contrary construction would have led to the harsh result of
Kearney County’s being required to refund tax receipts which
it collected and has long since paid over to other taxing author-
ities within its jurisdiction. In the end, we can only interpret
the existing statute under our established principles, as we have
done here. If the Legislature wishes to provide broader relief
to taxpayers under similar circumstances in the future, it has
the power to enact a statute or statutes specifically providing
such relief.
CONCLUSION
For the reasons discussed, we reverse the judgment of the
district court and remand the cause with directions to reinstate
the order of the Board denying Kaapa’s claim for a refund.
R eveRsed and Remanded with diRections.
JQh L a vista confeRence centeR deveLopment LLc,
appeLLant, v. saRpy county BoaRd
of eQuaLization, appeLLee.
825 N.W.2d 447
Filed January 25, 2013. 	Nos. S-12-054, S-12-055.
1. Taxation: Judgments: Appeal and Error. Appellate courts review decisions
rendered by the Tax Equalization and Review Commission for errors appearing
on the record.
2. Judgments: Appeal and Error. When reviewing a judgment for errors appearing
on the record, an appellate court’s inquiry is whether the decision conforms to
the law, is supported by competent evidence, and is neither arbitrary, capricious,
nor unreasonable.
3. Taxation: Valuation: Presumptions: Evidence. A presumption exists that a
board of equalization has faithfully performed its official duties in making an
assessment and has acted upon sufficient competent evidence to justify its action.
That presumption remains until there is competent evidence to the contrary
presented, and the presumption disappears when there is competent evidence
adduced on appeal to the contrary. From that point forward, the reasonableness of
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
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JQH LA VISTA CONF. CTR. v. SARPY CTY. BD. OF EQUAL. 	121
Cite as 285 Neb. 120
the valuation fixed by the board of equalization becomes one of fact based upon
all of the evidence presented.
4. Taxation: Valuation: Proof: Appeal and Error. The burden of showing a val-
uation to be unreasonable rests upon the taxpayer on appeal from the action of the
board of equalization.
5. Taxation: Valuation: Proof. The burden of persuasion imposed on a complain-
ing taxpayer is not met by showing a mere difference of opinion unless it is
established by clear and convincing evidence that the valuation placed upon
his property when compared with valuations placed on other similar property is
grossly excessive and is the result of a systematic exercise of intentional will or
failure of plain duty, and not mere errors of judgment.
6. Taxation: Valuation: Real Estate: Words and Phrases. The actual value of real
property is the market value of real property in the ordinary course of trade.
7. Taxation: Valuation: Real Estate. Actual value may be determined using pro-
fessionally accepted mass appraisal methods, including, but not limited to, the (1)
sales comparison approach, (2) income approach, and (3) cost approach.
8. Taxation: Valuation: Real Estate: Words and Phrases. Actual value is the
most probable price expressed in terms of money that a property will bring if
exposed for sale in the open market, or in an arm’s-length transaction, between a
willing buyer and willing seller, both of whom are knowledgeable concerning all
the uses to which the real property is adapted and for which the real property is
capable of being used.
9. Taxation: Valuation: Evidence. When an independent appraiser using profes-
sionally approved methods of mass appraisal certifies that an appraisal was per-
formed according to professional standards, the appraisal is considered competent
evidence under Nebraska law.
Appeals from the Tax Equalization and Review Commission.
Affirmed.
Rosalynd J. Koob, of Heidman Law Firm, L.L.P., for
appellant.
Michael A. Smith, Deputy Sarpy County Attorney, for
appellee.
heavican, c.J., wRight, connoLLy, stephan, mccoRmack,
and miLLeR-L eRman, JJ.
heavican, c.J.
INTRODUCTION
This appeal arises from a property tax protest filed by JQH
La Vista Conference Center Development LLC (JQH). The
property at issue is a convention center located off Interstate
80 in La Vista, Nebraska, known as the La Vista Conference

122 	285 NEBRASKA REPORTS
Center. In both the 2009 and 2010 tax years, the conference
center was valued by the Sarpy County assessor at a total of
$23,400,000. In both years, JQH protested that valuation to the
Sarpy County Board of Equalization, which denied the protest.
JQH then appealed both denials to the Tax Equalization and
Review Commission (TERC). The cases were consolidated
into one hearing before TERC. TERC denied JQH’s appeal and
valued the conference center at $23,400,000 for both tax years.
JQH appealed TERC’s decision as to both the 2009 and 2010
tax years. We affirm.
FACTS
Construction on the conference center and an adjoining
hotel began in 2007, and both opened for business in July
2008. Originally, the city of La Vista was the entity build-
ing the conference center, but during construction, it was
determined that this arrangement was not financially feasible.
JQH, which was developing the hotel project, agreed to con-
tinue construction on the conference center in return for cer-
tain enticements, including $3 million from the city toward
construction costs and a low-interest loan in the amount of
$18 million.
In May 2009, another adjoining hotel was opened. The con-
ference center is now located between two connecting hotels.
Both hotels and the conference center are owned by JQH and
are managed as one entity. In addition, the conference center
and one of the hotels are located under the same roof and
have joint financial records. However, the three properties are
located on separate parcels of land and are assessed separately
for tax purposes. According to the record, the conference cen-
ter comprises 42,032 square feet and construction costs were
about $17.8 million.
In both 2009 and 2010, the county assessor placed a total
valuation on the conference center of $23,400,000 ($1,710,475
for the land and $21,689,525 for the improvements). JQH pro-
tested that valuation to the Sarpy County Board of Equalization
and requested for 2009, a valuation of $12,710,475 ($1,710,475
for the land and $11 million for the improvements), and for
2010, a valuation of $11,700,000 ($1,500,000 for the land and

JQH LA VISTA CONF. CTR. v. SARPY CTY. BD. OF EQUAL. 	123
Cite as 285 Neb. 120
$10,200,000 for the improvements). Both protests were denied,
and JQH appealed those decisions to TERC.
JQH presented evidence before TERC from an appraisal
JQH had done on the property. That appraisal valued the
property under the income, sales, and cost approaches to val-
uation, but relied most heavily on the income approach. JQH’s
appraiser ultimately recommended a value of $7,100,000 for
2009 and $10,100,000 for 2010.
The Sarpy County Board of Equalization presented the testi-
mony of the county assessor who conducted the assessment of
the conference center. The county assessor relied upon the cost
approach, concluding that the income and sales approaches
were not valid because of a lack of data.
TERC rejected the opinion of JQH’s appraiser, specifically
finding that JQH
has not provided competent evidence to rebut the pre-
sumption that the [board of equalization] faithfully per-
formed its duties and had sufficient competent evidence
to make its determination. [TERC] also finds that [JQH]
has not provided clear and convincing evidence that the
determination by the [board of equalization] was arbitrary
or unreasonable.
JQH appeals.
ASSIGNMENT OF ERROR
On appeal, JQH assigns, restated and consolidated, that
TERC erred in determining that JQH had failed to meet its
burden of establishing that the market value as assessed by the
Sarpy County Board of Equalization was arbitrary, capricious,
and unreasonable.
STANDARD OF REVIEW
[1,2] Appellate courts review decisions rendered by TERC
for errors appearing on the record.1 When reviewing a judgment
for errors appearing on the record, an appellate court’s inquiry
is whether the decision conforms to the law, is supported
1 Republic Bank v. Lincoln Cty. Bd. of Equal., 283 Neb. 721, 811 N.W.2d
682 (2012).

124 	285 NEBRASKA REPORTS
by competent evidence, and is neither arbitrary, capricious,
nor unreasonable.2
ANALYSIS
On appeal, JQH assigns that TERC erred in affirming the
valuation of the Sarpy County Board of Equalization.
Neb. Rev. Stat. § 77-5016(9) (Cum. Supp. 2012) provides:
In all appeals, excepting those [involving the taxpayer-
initiated appeal of a county tax levy], if the appel-
lant presents no evidence to show that the order, deci-
sion, determination, or action appealed from is incorrect,
the commission shall deny the appeal. If the appellant
presents any evidence to show that the order, deci-
sion, determination, or action appealed from is incorrect,
such order, decision, determination, or action shall be
affirmed unless evidence is adduced establishing that the
order, decision, determination, or action was unreason-
able or arbitrary.
[3-5] We have held that this language creates
“a presumption that a board of equalization has faithfully
performed its official duties in making an assessment and
has acted upon sufficient competent evidence to justify its
action. That presumption remains until there is competent
evidence to the contrary presented, and the presumption
disappears when there is competent evidence adduced on
appeal to the contrary. From that point forward, the rea-
sonableness of the valuation fixed by the board of equal-
ization becomes one of fact based upon all the evidence
presented. The burden of showing such valuation to be
unreasonable rests upon the taxpayer on appeal from the
action of the board.”3
And we have further held that
“the burden of persuasion imposed on the complaining
taxpayer is not met by showing a mere difference of
2 Id.
3 Brenner v. Banner Cty. Bd. of Equal., 276 Neb. 275, 283-84, 753 N.W.2d
802, 811 (2008) (quoting Ideal Basic Indus. v. Nuckolls Cty. Bd. of Equal.,
231 Neb. 653, 437 N.W.2d 501 (1989)).

JQH LA VISTA CONF. CTR. v. SARPY CTY. BD. OF EQUAL. 	125
Cite as 285 Neb. 120
opinion unless it is established by clear and convincing
evidence that the valuation placed upon his property when
compared with valuations placed on other similar prop-
erty is grossly excessive and is the result of a systematic
exercise of intentional will or failure of plain duty, and
not mere errors of judgment.”4
[6-8] The “actual value” of real property is
the market value of real property in the ordinary course
of trade. Actual value may be determined using profes-
sionally accepted mass appraisal methods, including, but
not limited to, the (1) sales comparison approach . . . , (2)
income approach, and (3) cost approach. Actual value is
the most probable price expressed in terms of money that
a property will bring if exposed for sale in the open mar-
ket, or in an arm’s length transaction, between a willing
buyer and willing seller, both of whom are knowledge-
able concerning all the uses to which the real property
is adapted and for which the real property is capable of
being used. In analyzing the uses and restrictions applica-
ble to real property, the analysis shall include a consider-
ation of the full description of the physical characteristics
of the real property and an identification of the property
rights being valued.5
JQH makes several arguments regarding the county’s valua-
tion and TERC’s affirmance of that value. JQH first argues
that TERC erred in its standard of review when it found that
JQH did not present sufficient “competent evidence” to rebut
the presumption that the “board of equalization ha[d] faithfully
performed its official duties.” JQH agrees that the burden of
persuasion always remained with it, but distinguishes between
that burden and the initial presumption afforded to a decision
of a county board of equalization.
The county defends TERC’s order by suggesting that the
appraisal of David Sangree, a certified appraiser, offered a
mere difference of opinion and that such was insufficient to
4 Id. at 284, 753 N.W.2d at 812 (quoting Bumgarner v. County of Valley, 208
Neb. 361, 303 N.W.2d 307 (1981)).
5 Neb. Rev. Stat. § 77-112 (Reissue 2009).

126 	285 NEBRASKA REPORTS
overcome the presumption of validity for the county’s valua-
tion. But as is argued by JQH, this argument conflates the
presumption of validity offered by § 77-5016(9) with the bur-
den of persuasion. The former is overcome by the production
of competent evidence,6 while the latter requires a showing of
more than a mere difference of opinion.7
[9] And in this case, we conclude that TERC was incorrect
when it concluded that the presumption of correctness was
not overcome by competent evidence. This court held in US
Ecology v. Boyd Cty. Bd. of Equal.8 that when an indepen-
dent appraiser using professionally approved methods of mass
appraisal certifies that an appraisal was performed according
to professional standards, the appraisal is considered compe-
tent evidence under Nebraska law.9 And at the hearing before
TERC, JQH offered the 2009 and 2010 appraisals of Sangree.
Sangree testified that the appraisals were prepared in con-
formity with the uniform standards of appraisal practice. The
appraisals provided three alternative valuations of the confer-
ence center, using each of the three methods provided for by
§ 77-112. We therefore agree with JQH insofar as it argues
that TERC incorrectly applied the standard of review and con-
cluded that JQH had not overcome the presumption of validity
under § 77-5016(9).
Because JQH overcame the presumption of validity for the
county’s valuation, the reasonableness of the valuation fixed
by the board of equalization becomes a question of fact based
upon all of the evidence presented.10 The burden of showing
such valuation to be unreasonable rests upon the taxpayer on
appeal from the action of the board.11
6 See, § 77-5016(9); Brenner, supra note 3.
7 See Brenner, supra note 3.
8 See US Ecology v. Boyd Cty. Bd. of Equal., 256 Neb. 7, 588 N.W.2d 575
(1999).
9 See, also, Schmidt v. Thayer Cty. Bd. of Equal., 10 Neb. App. 10, 624
N.W.2d 63 (2001).
10 See Brenner, supra note 3.
11 Id.

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With respect to valuation, JQH argues that TERC erred in
concluding that it had failed to overcome its burden to show
that the market value of the property as assessed by the county
was unreasonable or arbitrary. JQH essentially contends that
Sangree’s appraisal was correct and that the county assessor’s
was not. JQH primarily takes issue with the assessor’s (1) fail-
ure to value the property under all three approaches allowed
under § 77-112: income, sales, and cost; (2) incorrect classi-
fication of the property when applying the Marshall Valuation
Service cost factors; (3) failure to take into account physical
depreciation of the property; and (4) failure to consider exter-
nal or locational depreciation. We conclude that JQH has not
overcome its burden of showing that the county’s valuation
was unreasonable or arbitrary.
Under Neb. Rev. Stat. § 77-201(1) (Reissue 2009), all
nonexempt real property is subject to taxation and should be
valued at its actual value. As is set forth above, actual value is
defined under state law,12 and that definition provides for three
methods to determine that actual value—the income approach,
the sales approach, and the cost approach.
As is argued by JQH, Sangree utilized all three approaches
when valuing the conference center. But it does not follow that
Sangree’s use of all three methods means that the county’s val-
uation was incorrect simply because it utilized just one of those
methods. First, the plain language of the statute requires the
use of only one method. The county assessor’s cost approach is
obviously permitted under § 77-112.
Moreover, the county assessor had an explanation for his
failure to utilize the other methods. The county assessor indi-
cated that at the time of the 2009 assessment, he lacked
market data with which to perform an income approach.
And he further indicated that there were few, if any, sales of
stand-alone conference centers to use as a basis for the sales
approach. Indeed, though Sangree does provide an appraisal
under the sales approach, he acknowledges that in his search,
he was unable to find comparable sales for stand-alone confer-
ence centers.
12 § 77-112.

128 	285 NEBRASKA REPORTS
Because the county assessor was not provided with the
actual costs of construction, he utilized the Marshall Valuation
Service, which is a mass appraisal tool approved by Nebraska’s
Tax 	Commissioner 	and 	the 	Department 	of 	Revenue. The
Marshall Valuation Service was also used by Sangree in his
appraisal under the cost approach.
JQH contends that the county assessor improperly classified
certain building materials when entering data into the Marshall
Valuation Service—particularly taking issue with the county
assessor’s classification of the building materials as “Class B”
rather than “Class C.” But the county assessor noted in his
testimony that he was able to visit the building site during
construction and was also able to discuss the property with the
city building inspector.
JQH next argues that the county assessor’s valuation did not
take into account physical depreciation in the 2010 appraisal.
But when questioned about it, the county assessor noted that
the county would be required to make such an adjustment only
when reassessing an entire class, which occurs only every 4
to 5 years. Upon further questioning, the county assessor also
indicated that if he were accounting for physical depreciation,
he would also update his “manual date,” and that under the cost
approach, this update would likely result in an increase of the
cost of the building.
JQH also contends that the county’s valuation was incorrect
in that it did not account for external depreciation. External, or
locational, depreciation allows for a decrease in value based
upon either the location of real property or other external fac-
tors.13 But the county assessor testified that he did not make
any deductions for external depreciation, because he “did not
see any or observe any. . . . [T]his is one the hottest locations
in Sarpy County, probably the hottest.”
JQH acknowledges that it has the burden to overcome the
county’s valuation. Unless the taxpayer shows that the county’s
valuation was unreasonable or arbitrary, that valuation should
be affirmed. And we conclude that JQH has not met its burden.
13 See Darnall Ranch v. Banner Cty. Bd. of Equal., 276 Neb. 296, 753
N.W.2d 819 (2008).

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Cite as 285 Neb. 120
A review of the county assessor’s testimony shows a reasonable
basis for the differences between the county’s valuation and
Sangree’s appraisals. We further question Sangree’s appraisals
to the extent that the appraisals showed a substantial difference
in 2009 and 2010 between the income and cost methods. It was
only after deductions in those respective amounts were made
for external depreciation that the income and cost approaches
were equal to each other. These large deductions are suspect
under the record in this case.
JQH is correct insofar as TERC erred when it found that
JQH had not rebutted the presumption of validity of the
county’s valuation. Nevertheless, TERC did not err in affirm-
ing the valuation of the property, because JQH failed to meet
its burden of showing that the county’s valuation was unrea-
sonable and arbitrary. TERC’s decision conforms to the law,
is supported by competent evidence, and is neither arbitrary,
capricious, nor unreasonable. JQH’s assignment of error to the
contrary is without merit.
CONCLUSION
The decisions of TERC are affirmed.
affiRmed.
casseL, J., not participating.