SHC Half Moon Bay, LLC v. County of San Mateo

“[T]he California Constitution requires generally the assessment of property at ‘fair market value.’ . . . [Assessors have a constitutional mandate to tax all property at fair market value if not exempt under federal or state law.” (Elk Hills Power, LLC v. Board of Equalization (2013) 57 Cal.4th 593, 606-607 [ 160 Cal.Rptr.3d 387 , 304 P.3d 1052 ] (Elk Hills).) “Intangible assets and rights are exempt from taxation and . . . shall not enhance or be reflected in the value of taxable property.” (Rev. & Tax. Code, § 212, subd. (c).) Section 110, subdivision (d) prevents the direct taxation of “intangible assets and rights relating to the going concern value of a business” and mandates the “value of intangibles that directly enhance that income stream cannot be subsumed in the valuation of taxable property (§ 110(d)(1)), and must be deducted . . . from an income stream analysis prior to taxation.” (Elk Hills, supra, 57 Cal.4th at pp. 618-619.)

In Elk Hills, our high court clarified which intangible assets and rights have “a quantifiable fair market value that must be deducted from an income stream analysis prior to taxation” pursuant to sections 110 and 212. (Elk Hills,…