Luz Solar Partners Ltd., III v. San Bernardino County

Facts: An owner improves their real estate by installing an energy system that generates power through both solar and nonsolar energy. The county changes property appraisal procedures by valuing solar and nonsolar energy system components together, increasing the total tax burden. In the years following the implementation of this policy, the owner’s property taxes increase.

Claim: The owner seeks a refund for the amounts overpaid in property taxes, claiming the county made an error in the property tax calculations since the only taxable energy system components considered in determining the factored base value are its nonsolar components.

Counterclaim: The county seeks to keep the owner’s property tax payments from the years following the property assessment changes, claiming their methodology of calculating the owner’s property taxes by considering all solar and nonsolar components is valid since a buyer would purchase the property improved by the entire energy system, not just the nonsolar components.

Holding: A California court of appeals holds the county may keep the owner’s property tax payments as there was no error in the county’s assessment of the owner’s property taxes since the energy system installed is bought and sold as a unit. [Luz Solar Partners Ltd., III v. San Bernardino County (September 27, 2017)_CA5th_]

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