In the recent case of Level 3 Communications, LLC v. Arizona Department of Revenue, the Arizona Court of Appeals affirmed the Arizona Tax Court’s decision rejecting the taxpayer’s claims of obsolescence regarding the valuation of personal property. 

The taxpayer’s contention was that the utility and salability of its property were impaired as a result of  overbuilding its network of fiber and conduit. 

The Court of Appeals agreed with the Tax Court’s opinion that obsolescence cannot be established by factors within the taxpayer’s control. In its decision the Tax Court states: 

“Taxpayer’s evidence did not satisfy its requirements because ‘the loss in value of the property was not caused by obsolescence.’ Rather, ‘Level 3 simply underestimated the future supply of fiber-optic capacity. Mere erroneous business judgment does not create obsolescence.’” 

The Tax Court relied heavily upon the Eurofresh case in arriving at its decision.

In the case of Aida Renta Trust v. Maricopa County the Arizona Court of Appeals recently affirmed a trial court decision finding that Maricopa County engaged in unconstitutional, discriminatory property tax valuation procedures. It appears as though Maricopa County decided to value properties within the same class (apartments) differently. The Decision states: 

“The County did not merely make an appraisal error; it applied a wholly different valuation procedure to properties within the same class. The County acted purposefully. The multiple incidences reaffirm the belief that they are systematic and intentional. We do not believe repeated taxation conduct is a random mistake.”