Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2017

Revenue and Taxation Code

Property Taxation

Part 2. Assessment

Chapter 4. Assessment by State Board of Equalization Generally

Article 1. General Provisions*

Section 723

723. Use of principle of unit valuation. The board may use the principle of unit valuation in valuing properties of an assessee that are operated as a unit in a primary function of the assessee. When so valued, those properties are known as "unitary property." Property of an assessee not valued through the use of the principle of unit valuation are known as "nonunitary property." When valuing nonunitary property, the board shall consider current market value information of comparable properties provided by the assessor just prior to the reappraisal by the board of that property.

History.—Stats. 1983, Ch. 694, in effect January 1, 1984, substituted "those" for "such" after "valued," in the second sentence, and added the fourth sentence.

Construction.—Unit taxation of public utilities and railroads is properly characterized as the taxation of property as a going concern, not as the taxation of real property or personal property, or even a combination of both. Under the unit taxation method, the Board considers the earnings of the property as a whole, and does not consider, less still assess, the value of any single real or personal asset. Union Pacific Railroad Co. v. State Board of Equalization; GTE Sprint Communications Corp. v. Alameda County, 26 Cal.App.4th 992. 49 Cal.3d 138. The Board properly assessed a cellular company as a unit at its highest and best use, undifferentiated into separate types of assets. It has long been recognized that a public utility property cannot be regarded as merely land, buildings, and other assets. Rather, its value depends on the interrelation and operation of the entire utility as a unit. Thus, the Board was not required to attempt to isolate and separately value the company's Federal Communications Commission station authorization or to deduct any amount from the company's unitary value. Los Angeles SMSA Ltd. Partnership v. State Board of Equalization, 11 Cal.App.4th 768.

* Article 1 was added by Stats. 1976, Ch. 877, p. 1990, in effect January 1, 1977.