On November 9, 2021, the Arizona Tax Court issued an 11-page ruling in favor of the taxpayer, Mesquite Power, LLC (“Mesquite”), following a four-day trial that took place in August of 2021. MWMW represented Mesquite at trial. The case was tried by Paul Mooney and Bart Wilhoit. The Tax Court ruled that the assessed value of Mesquite’s natural gas-fired electric generation facility located in western Maricopa County – as determined by the Arizona Department of Revenue (“ADOR”) – exceeded the market value of that property in violation of Arizona law. In her ruling, Judge Danielle Viola (Arizona Tax Court Judge), found that Mesquite and its expert witness, Mark Simzyk, ASA, proved that ADOR’s assessed value was excessive. Judge Viola also found that the opinions offered by ADOR’s expert witness, Stephen Barreca, ASA, were not credible, primarily because he did not value only Mesquite’s taxable property, but that he instead valued Mesquite’s business. Specifically, Judge Viola ruled that the value of a favorable contract that was owned by Mesquite’s business – a Power Purchase Agreement (or “PPA”) – was a non-taxable, intangible asset. As such, the PPA had to be excluded from any determination about the market value of the taxable property. During trial, ADOR’s expert offered his opinion that the market value of the business (including the PPA) was $432 million, whereas Mr. Simzyk offered his opinion that the value of the tangible, taxable property was $105 million. After listening to all the evidence and assessing the credibility of the respective expert witnesses, Judge Viola ruled that the market value of Mesquite’s taxable property was $105 million. As a result of this ruling, ADOR’s assessed value of nearly $200 million ($196,870,000) must be reduced to $105 million. Based on that ruling, Mesquite will receive a large refund of the property taxes it was required to pay to Maricopa County in order to challenge ADOR’s excessive valuation.