Current through Register Vol. 50, No. 3, March 20, 2024
A. The criteria for determining fair market
value shall apply uniformly throughout the state. Uniform guidelines,
procedures and rules and regulations as are necessary to implement said
criteria shall be adopted by the Louisiana Tax Commission only after public
hearings held pursuant to the Administrative Procedure Act (R.S.
47:2323.A).
B. Each assessor shall follow the uniform
guidelines, procedures, and rules and regulations within his respective parish
or district in determining fair market value of all property subject to
taxation. Any manual or manuals used by an assessor shall be subject to
approval by the Louisiana Tax Commission or its successor agency (R.S.
47:2323.B).
C. The fair market value of real and personal
property shall be determined by the following generally recognized appraisal
procedures: the market approach, the cost approach, and the income approach, or
a combination of the three. The fair market value of property shall be
determined based upon the individual characteristics of the property that
affect the market value of the property. The assessor shall consider all three
approaches to value and shall utilize all available data that is specific to
the valuation of property used to determine the fair market value of property.
1. In utilizing the market approach, the
assessor shall use an appraisal technique in which the market value estimate is
predicated upon prices paid in actual market transactions. The assessor shall
collect relevant comparable sales data, and shall consider such sales data when
utilizing a market approach. The assessor shall estimate the value of property
based on sales of comparable property in an arm's length transaction under
usual and ordinary circumstances. Allocation of the purchase price by the
purchaser among properties or assets purchased in a single sale or among
elements of a single property may be indicative of fair market value of those
properties or assets. Assessors shall reasonably and in good faith consider
allocation of the purchase price in such sales.
2. In utilizing the cost approach, the
assessor shall use a method in which the value of a property is derived by
estimating the replacement or reproduction cost of the property; deducting
therefrom the estimated physical, functional, and/or external depreciation, and
then adding the market value of the land, if any. In utilizing the cost
approach, the assessor shall legitimately consider and appropriately recognize
functional and external obsolescence in the derived value. The assessor shall
collect market data, including obsolescence, and shall consider such data when
utilizing a cost approach.
3. In
utilizing the income approach, the assessor shall use an appraisal technique in
which the anticipated net income is capitalized to indicate the capital amount
of the investment which produces the net income (R.S.
47:2323). The assessor shall collect market
data and shall consider such market data when utilizing an income
approach.
D. In
determining which appraisal procedure to use for the final determination of
fair market value, the assessor shall consider:
a. the relevance of each approach to the
property being valued.
b. the
amount and accuracy of the data used in each approach.
c. the strengths and weaknesses of each
approach.
E. When
performing a valuation of any affordable rental housing property, the assessor
shall not consider any of the following in determining fair market value:
1. income tax credits available to the
property under section 42 of the Internal Revenue Code;
2. below-market interest rate on financing
obtained under the Home Investment Partnership Program under the
Cranston-Gonzales National Affordable Housing Act, or the Federal Home Loan
Bank Affordable Housing Program established pursuant to the Financial
Institution Reform, Recovery, and Enforcement Act of 1989;
3. any other federal, state, or similar
program intended to provide or finance affordable rental housing to persons of
low or moderate income and requiring restricted occupancy and rental rates
based on the income of the persons occupying such housing.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
47:2323.
NOTE: Also see, Chapter 2,
§213.G thru G.3. and
Chapter 3,
§303.C.4 thru
C.4.c.
