Can Utah counties challenge aircraft valuation methods under the state constitution? Salt Lake County v. Tax Commission Explained

In Salt Lake County v. Tax Commission, the Utah Supreme Court addressed whether Utah’s Aircraft Valuation Law violates constitutional requirements for property tax assessments at fair market value.

Background and Facts

In 2017, the Utah Legislature enacted the Aircraft Valuation Law, requiring the Tax Commission to assess airline aircraft using the Airliner Price Guide (APG) methodology with fleet adjustments of up to 20%. For Delta Air Lines’ 2017 assessment, this method yielded a $14.8 billion valuation. Salt Lake County challenged this assessment, presenting evidence that alternative unitary valuation methods would have produced valuations between $37.3 billion and $40.9 billion. The County argued the APG method undervalued Delta’s aircraft operating as an integrated airline business.

Key Legal Issues

The case presented two constitutional challenges: (1) whether the Aircraft Valuation Law violated article XIII, section 2 by assessing Delta’s property below fair market value as applied to the 2017 assessment, and (2) whether the law facially violated article XIII, section 6 by improperly divesting the Commission of its assessment authority.

Court’s Analysis and Holding

The Court rejected both challenges. On the as-applied challenge, the Court found that the County failed to satisfy the statute’s safety valve provisions, which allow alternative valuation methods when two conditions are met: (1) clear and convincing evidence that APG values don’t reasonably reflect fair market value, and (2) the Commission cannot identify alternative aircraft pricing guides. While assuming the County met the first condition, it failed to address the second requirement entirely.

Regarding the facial challenge, the Court distinguished between the Commission’s constitutionally mandated authority over mines and utilities and its legislatively granted authority over other properties like airlines. The Court held that prescribing statutory valuation methods does not impermissibly divest the Commission of assessment authority.

Practice Implications

This decision emphasizes the importance of fully utilizing statutory procedures before raising constitutional challenges. Practitioners challenging tax assessments must carefully examine all statutory requirements and safety valve provisions. The ruling also confirms the legislature’s broad authority to prescribe valuation methodologies for specific property types while maintaining constitutional compliance through appropriate procedural safeguards.