Background
Veritas Village, LLC owned a 189-unit luxury apartment building in downtown Madison and challenged the City’s tax assessments for 2020, 2021, and 2022 under Wisconsin’s uniformity clause (WIS. CONST. art. VIII, § 1). The City assessed Veritas’s property at full market value ($28.5 million to $38.3 million), while Veritas alleged that comparable apartment buildings in the district were assessed significantly below their market values through a different methodology. The three consolidated cases proceeded to bench trial, where the circuit court found uniformity violations in each year and remanded to the board of review to determine remedies.
The City’s assessment process employed different methodologies for different apartment properties. For properties that had recently sold in arm’s-length transactions (“sales properties”), the City set initial assessments at or near the actual sales prices. For properties without recent sales (“non-sales properties”), the City applied a “trend analysis,” adjusting prior-year assessments by a percentage multiplier. Expert testimony showed that non-sales apartment properties increased in average assessed value by 10–12% annually, while sales properties increased 21–37% annually, producing systematically lower assessments for the majority of comparable buildings.
The circuit court accepted expert analysis concluding that the City’s mixed methodology violated the uniformity requirement and remanded for remedial proceedings. The City appealed the uniformity finding and a discovery sanction; Veritas cross-appealed the remand decision.
The Court’s Holding
The Wisconsin Court of Appeals affirmed, holding that Veritas proved a uniformity violation under the second category of uniformity challenges: the City used an “arbitrary and improper” assessment methodology that systematically undervalued comparable properties in the apartment strata. Although Veritas’s property was assessed at true market value, the uniformity clause was violated because the City’s practice of setting sales properties at their selling prices while using trend-based multipliers for unsold properties created unequal results inconsistent with professional appraisal standards and statutory requirements.
The court rejected the City’s arguments that Markarian hierarchy (WIS. STAT. § 70.32(1)) required the sales-price approach or that adjusting both categories annually defeated “sales chasing” claims. The empirical evidence—showing non-sales properties systematically undervalued relative to sold properties—demonstrated the trending multipliers did not reflect market conditions and violated the requirement that all properties be assessed uniformly at full value or at the same percentage thereof. The court affirmed the remand to the board of review, as the record did not establish the precise amount of tax relief owed.
Key Takeaways
- Uniformity violations can arise from the methodology itself, not just discriminatory application to individual properties or one-off errors.
- Mixing assessment methodologies across comparable property subsets (strata) violates uniformity when it produces systematically unequal results, even if individual assessments reflect market value.
- Statistical evidence of disparate rate-of-change in assessed values between similar properties is probative of systematic undervaluation and uniformity breach.
- Assessors must ensure trending multipliers reflect actual market conditions; using multipliers derived from prior assessments rather than current market data can create uniformity violations.
Why It Matters
This decision reinforces that Wisconsin’s uniformity requirement extends beyond final assessment values to the underlying methodologies employed. Municipalities cannot assess different categories of comparable properties using fundamentally different methods and expect uniformity merely because both categories receive annual adjustments. The ruling clarifies that mass appraisal systems must produce reasonably equal appraisal levels across property subsets—not just address individual outliers—and that professional standards (IAAO guidelines, the Wisconsin Property Assessment Manual) inform the legal standard for uniformity compliance.
For assessors and municipalities, the decision provides significant guidance: when a jurisdiction uses sales-price-based assessment for recently sold properties, it must apply a consistent methodology to unsold comparable properties that produces equivalent valuation levels, or risk facing uniformity challenges and potential tax refunds. The case also demonstrates that expert statistical analysis comparing rates of change and assessment ratios will be given weight in uniformity litigation, making defensible, data-driven trending practices essential to withstanding constitutional scrutiny.