SUBJECT:

PROPERTY TAX -- State Tax Commissioner's Statement Concerning Primary Reliance on the Green Guide for the Appraisal of Used Heavy Equipment.

On July 1, 1992, the State Tax Commission filed Legislative Regulations CSR § 110-1P-1 et seq. concerning the appraisal of industrial real and personal property. This notice will address the Commission's primary reliance on the Green Guide for the appraisal for property tax purposes of used heavy equipment.

DISCUSSION

The Green Guide for Administrative Valuation and Assessment of Used Construction Equipment provides a comprehensive, reliable, and up-to-date source for estimates of current market value of construction equipment manufactured during the past ten years.

The values in this guide are derived from an extensive data reporting system supplied by equipment dealers and distributors, manufacturers, auctioneers, and contractors. This information is analyzed by the professional staff of the Green Guide using the most up-to-date computerized methods. The values presented in Green Guide are compiled from analysis of used heavy equipment sales. Standard economic analysis (including such factors as inflation and depreciation rates, current replacement costs, average life of equipment, supply and demand, and current construction industry activity) is used in conjunction with actual sales reports and are relied upon when sufficient sales data on any particular piece of equipment is not available.

The values presented in Green Guide represent a nationwide average for equipment in typical working condition. Any dollar amounts shown in this guide are adjusted to fit the mechanical condition of a specific unit. Market conditions also have a bearing on the value of equipment and can vary in different areas. Each section in this Green Guide has a value modification map, and where sufficient data exists a percentage change (plus or minus) from average values is indicated by region.

The Green Guide has been in publication for over thirty (30) years and there are roughly 6,000 guides in circulation today that are used by the following industries or categories of industries.

Agriculture Equip. Mfg. Gen. Bldg. Contractors Logging Companies State Government Construction Dealers Consulting Engineers Appraisers Leasing Companies Utility/Power Lift Truck Mfg. Architects Import/Export Companies

Hwy/Heavy Const. Contractors Const. Material Mfg. Mining Companies County/Local Government Lift Truck Dealers Unions/Trade Associations Auctioneers Banks Heavy Equip. Mfg. Federal Government Insurance Companies Construction Mfg.

The Green Guide average resale value for heavy equipment that is used by the State Tax Commission reflects the national average of prices, adjusted to this region, reflecting equipment sold by dealers and contractors under fair market conditions. It is considered to be the price that an end user and willing buyer will pay for a machine for which he has an immediate use. The Green Guides are used and accepted by a wide range of industries and have long been the standard used by the State Tax Commission for referencing equipment values.

For more information concerning the appraisal of used heavy equipment, please contact the Property Tax Division of the State Tax Commission at telephone number (304) 558-3940.

Issued: January 30, 1998	Richard E. Boyle, Jr. State Tax Commissioner West Virginia State Tax Commission
State Tax Commission Property Tax Division P.O. Box 2389 Charleston, WV 25328-2389	Operator on duty 8:30 am - 4:30 pm Monday through Friday Phone: (304) 558-3333 or 1-800-982-8297 Fax: (304) 558-3269 TDD Service/Hearing Impaired 1-800-282-9833