Zhao v. Montoya

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In consolidated cases, homeowners Pinghua Zhao, and Gregg and Janet Fallick appealed the valuation of their residences for property tax purposes as a result of what they alleged was "tax lightning," also known as acquisition-value taxation. Under acquisition-value taxation, a real estate owner's property tax liability is determined by the value of the property when acquired, not by the traditional practice of taxing real property on its current fair market value. Consequently, there could be disparities in the tax liabilities of taxpayers owning similar properties. Upon review, the Supreme Court held that Section 7-36-21.2 (2003) created an authorized class based on the nature of the property and not the taxpayer. The Court also held that the New Mexico tax system did not violate the equal and uniform clause of the New Mexico Constitution because it furthered a legitimate state interest. Furthermore, the Court held that the Court of Appeals erred in its interpretation of "owner-occupant." Therefore, the Court affirmed in part and reversed in part the Court of Appeals. View "Zhao v. Montoya" on Justia Law