Opinion:Kingfisher Wind v. Wehmuller, 2022 OK 83
Subject matter:Ad Valorem Tax
Date Decided:October 18, 2022
Trial Court:District Court of Canadian County; Judge McCurdy II
Route to this Court:Appeal of trial court’s ruling following a non-jury trial; Retained by OKSCT on Appellant’s motion. 
Facts:In 2015, Kingfisher Wind began construction of a wind farm located partly in Canadian County and partly in Kingfisher County. One hundred turbine generators are located in Kingfisher County and forty-nine are in Canadian County. Following a protest procedure, the Boards of Equalization of Canadian and Kingfisher Counties set the value of the turbines in each county at $157,476,788 and $275,839,357, respectively. Kingfisher Wind appealed the decisions of the Boards of Equalization to their respective District Courts and the cases were consolidated in Canadian County. 

The trial court ruled that Production Tax Credits (PTCs), which had been assessed as part of the value of the property for ad valorem tax purposes, were exempt from ad valorem taxation. Further, the trial court set the total value of the wind farm at $175,000,000, $69,615,000 attributable to Canadian County and $105,385,000 attributable to Kingfisher County. Each county appealed. 
Standard of Review:The Court reviews a district court’s judgment in determining the cash value of property as to whether it is contrary to the clear weight of the evidence. Questions of law, or mixed questions of law and fact are reviewed de novo
Analysis:Central to the counties’ position is that PTCs are of such an economic benefit to owning, operating, and determining the full fair cash value of the wind farm and its real property, they must be included to determine a fair and accurate taxable ad valorem valuation of the wind farm. 
The voters passed State Question 766 in November of 2012 to amend Article 10 §6A of the Oklahoma Constitution to, beginning January 1, 2013, exempt all intangible personal property from ad valorem taxation or to any other tax in lieu of ad valorem taxation. While we have no doubt PTCs have a direct impact on a property’s fair market value, and that ad valorem tax assessments must be based on fair market value, PTCs are not a tangible physical thing like real estate. Instead, they are incorporeal property in that they have limited intrinsic value, and ultimately can only be claimed or enforced by a legal action, much like goodwill, even if they are intrinsically tied to a business or real property.  Where there is a reasonable doubt about a taxing act’s meaning, all ambiguity must be resolved in favor of the taxpayer. We must conclude that PTCs are to be treated as intangible property, even if they have qualities of both tangible and intangible property. Under the plain and ordinary language of the Oklahoma Constitution, intangible personal property is not taxable and PTCs are intangible personal property. 

With respect to the trial court’s findings as to the valuation of the properties, the trial court’s findings were not against the clear weight of the evidence. 
Vote:9-0; Kauger, J. (author)