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This is a hypothetical question. I am in SC and we pay annual property tax on vehicles. I have been arguing with the county auditor about the valuation of my car, which is $10,000 over the actual value and this happens every year.

Assuming that this type of overvaluation is being applied to all vehicle owners in the county, is this a valid basis for a class-action suit against the county? Or is the government pretty much untouchable in regard to taxation?

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The government is touchable, but not in terms of disagreeing with their method of computing value. An example is Coleman & Colman v. Glynn County, which was certified as a class action; the situation there is that the county did not correctly follow the law. There is a similar situation in Washington (which as far as I know is not going to court – yet), where the state sometimes had erroneous base prices for vehicles (this is being fixed, it is said). But the method of computing is not in legal doubt: it's based on MSRP and a state-determined depreciation formula. These formulas often generate significant revenues and don't reflect the actual resale value of a vehicle, but that is just the way the tax system works. The crucial question would be whether they are actually following the law in their assessment (or, whether the method of assessment is discriminatory, since valuation lawsuits can be based on the illegality of a method of computing tax, in light of a discriminatory effect).

  • Thanks for the response. From what I read in the tax law the valuation is set by the SC Dept. of Revenue based on "values from reputable public sources." They just so happen to use NADA and Auto Red Book which inflate the car values. – John K. Jun 6 '17 at 11:50

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