                   IN THE COURT OF APPEALS OF TENNESSEE
                              AT KNOXVILLE

    KENNETH M. SEATON d/b/a KMS ENTERPRISES v. TENNESSEE
           STATE BOARD OF EQUALIZATION, ET AL.

                 Direct Appeal from the Chancery Court for Sevier County
         Nos. 94-10-310 and 94-12-345    Bobby H. Capers, Judge, By Interchange



                   No. E1998-00880-COA-R3-CV - Decided June 28, 2000


        The petition in this case seeks judicial review of real property valuations established by a
final order of the State Board of Equalization (“the Board”). The Board’s order fixed, for ad
valorem tax purposes, the separate values of six hotel properties in Sevier County owned by the
petitioner, Kenneth M. Seaton doing business as KMS Enterprises (“the Taxpayer”). Following a
bench trial, the court below reversed the Board’s order because the court found that the Board erred
when it calculated an expense ratio for one of the hotels. The court also questioned the Board’s
treatment of replacement reserves for the other hotels. The Taxpayer, as well as the respondent,
Johnny King, Assessor of Property for Sevier County (“the County”), both challenge portions of the
trial court’s judgment. The Board contends that its decision is the correct one. We reverse.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Reversed; Case
Remanded

SUSANO, J., delivered the opinion of the court, in which GODDARD , P.J., and SWINEY , J., joined.

Jerry H. McCarter, Gatlinburg, Tennessee, and Donna J. Orr, Sevierville, Tennessee, for the
appellant, Johnny King, Assessor of Property for Sevier County, Tennessee.

C. Dan Scott, Sevierville, Tennessee, for the appellee, Kenneth M. Seaton d/b/a KMS Enterprises.

Paul G. Summers, Attorney General and Reporter, and Margaret M. Huff, Assistant Attorney
General, for the appellee, State Board of Equalization.

                                            OPINION
                                             I. Facts

        In 1989, the County, in conjunction with the State Department of Property Assessments (“the
DPA”), conducted a mass reappraisal of property in Pigeon Forge. Among the properties
reappraised were (1) the Grand Hotel and Convention Center (“the Grand”), and (2) several smaller
hotels, namely Carlstown Inn Motel, Family Inns of America-East, Family Inns of America-South,
Family Inns of America-West, and Ken’s Riviera (collectively “the Smaller Hotels”). All of the
above-mentioned properties are owned by the Taxpayer.

        The Grand was initially valued by the DPA at over $14,000,000. Dissatisfied with this
valuation, the Taxpayer appealed to the Sevier County Board of Equalization, which determined the
value of the Grand to be $13,435,300. The Taxpayer appealed this valuation, as well as the
valuations of the Smaller Hotels, to the State Board of Equalization, and a hearing before an
administrative law judge was held on January 16, 1991. At this hearing, the Taxpayer introduced
the appraisal and testimony of Norman Hall and the County introduced the testimony of Ray
Kennedy. On June 14, 1991, the administrative law judge entered his initial decision and order,
valuing the properties as follows:

               The Grand                                               $11,480,600
               Carlstown Inn Motel                                       2,380,800
               Family Inns of America-East                               2,873,000
               Family Inns of America-South                              1,182,000
               Family Inns of America-West                               2,450,000
               Ken’s Riviera                                             1,625,000

      Being once again dissatisfied with the valuations, the Taxpayer appealed to the Assessment
Appeals Commission (“the AAC”), and a hearing was held before that body on May 13 and 14,
1992. At the hearing, the Taxpayer submitted the detailed appraisals of Robert J. Fletcher, and the
DPA submitted the detailed appraisals of Ray Kennedy.

        Hall, Kennedy, and Fletcher all relied primarily on the “income approach” appraisal method
which is designed to determine the value of income-producing property by reducing to present value
the anticipated future net earnings stream of the property. The income approach begins with a
calculation of gross income. This gross income figure is then reduced by expenses. The resulting
net income figure is then capitalized at an appropriate rate to arrive at the value of the income-
producing property.1

        Based on Fletcher’s appraisal, the Taxpayer contended that the Grand should be valued at
no more than $5,250,000. The DPA, relying upon Kennedy’s appraisal, contended that the value
of the Grand was $10,000,000. One of the primary differences between the competing appraisals


       1
       The AAC found that this “income approach” appraisal method should receive primary
emphasis. This determination is not an issue on this appeal.

                                               -2-
revolved around the manner in which replacement reserves are deducted from gross income.2
Replacement reserves represent the estimated replacement cost of personal property and the
anticipated cost of maintaining the physical improvements to the property. After evaluating the
evidence, the AAC found Fletcher’s treatment of the replacement reserves more convincing than
Kennedy’s. The AAC, however, did not deduct the entire amount of replacement reserves suggested
by Fletcher -- $442,815 -- but rather deducted only $152,456, the amount of the replacement reserves
pertaining to the real property.3 The AAC’s determination of the appropriate amount of replacement
reserves to be deducted from gross income is one of the issues in the instant appeal.

        Having derived a projected net operating income of $1,222,544, the AAC then adopted a
capitalization rate of 13.3% to be applied to the Grand’s net operating income.4 After the net
operating income was capitalized, the result was reduced by the value of the personal property --
$489,846 -- which had been separately assessed. Applying this methodology to both the Grand and
the Smaller Hotels, the AAC arrived at the following values:

                 The Grand                                                 $8,702,000
                 Carlstown Motel                                            1,827,000
                 Family Inns of America-East                                2,517,000
                 Family Inns of America-South                                 778,000
                 Family Inns of America-West                                2,094,000
                 Ken’s Riviera                                                955,000


       2
         Another primary difference concerned the number of rooms to be used to project gross
income. Fletcher used the actual number of rooms available for rental at the time of the appraisal --
395 -- while Kennedy used 425, the number of rooms originally available for rental. Thirty rooms
had been converted to other uses. The AAC agreed with Kennedy and used a room count of 425,
but the Board agreed with the Taxpayer and used a room count of 395. The 395 number resulted in
a projected gross income of $5,230,048, a figure that is no longer in dispute.
       3
           With respect to this narrow determination, the AAC stated as follows:

                 Mr. Fletcher estimated a replacement reserve of $442,815 based on
                 information provided by an accountant for the taxpayer, concerning
                 the cost and useful life of the real and personal property which would
                 need replacement. Since we are valuing only the real property and
                 improvements and will deduct the value of tangible personal property
                 from the final appraisal, we will use only the portion of estimated
                 reserves attributed to the real property.
       4
         The AAC essentially split the difference between the parties’ contentions with respect to the
Grand’s capitalization rate. The AAC adopted different capitalization rates for the Smaller Hotels,
each similarly derived by averaging the parties’ respective capitalization rates. None of the
capitalization rates are at issue on this appeal.

                                                  -3-
       Both the DPA and the Taxpayer appealed to the Board, which held a hearing on February
26, 1993. The treatment of replacement reserves was again a primary point of disagreement.

        The County asserted that the proper expense ratio for the Grand was 75%, a figure high
enough to account for deduction of replacement reserves. This figure was based on material from
three sources: the Taxpayer’s actual historical data, data derived from the local market, and regional
data derived from an industry-wide survey.

        The Taxpayer’s asserted expense ratio was 79.3%, not including replacement reserves. This
ratio was based on the Taxpayer’s actual historical data, data derived from the local market, and the
same industry-wide survey data that had been relied upon in part by the DPA’s appraiser.

         The Board, stating that it was unclear whether the industry data concerning the expense ratio
included replacement reserves, found the Taxpayer’s argument concerning the treatment of
replacement reserves more compelling. In calculating the proper deductions from projected gross
income, however, the Board did not apply Fletcher’s expense ratio. Instead, it applied an expense
ratio derived by averaging the Taxpayer’s actual historical expenses.5 The resulting 69% expense
ratio was then applied to projected gross income to arrive at projected expenses of $3,608,733.6
When the projected expenses of $3,608,733 are deducted from the projected gross income of
$5,230,048, the difference is a projected net income of $1,621,315. The Board then deducted from
this latter figure all of the Taxpayer’s estimated replacement reserves, both for personal property and
real property, to arrive at a net operating income of $1,178,500. After application of the
capitalization rate and following the deduction of personal property assessed separately, the Board
determined the value of the Grand to be $8,371,000.

        With respect to the Smaller Hotels, the Board stated that it “considered application of our
approved method for valuing the Grand Hotel to the smaller properties, but the results are so
anomalous as to be unacceptable.”7 The Board then simply affirmed the AAC’s determinations as
to the Smaller Hotels. Thus, with respect to the Grand, all personal property and real property
replacement reserves were deducted from gross income, but, with respect to the Smaller Hotels, only
the real property replacement reserves were deducted from gross income. The final valuations
according to the Board are as follows:



       5
           The Board also reduced the expense ratio by excluding tax, interest, and depreciation.
       6
         As noted in footnote 2, the Board modified the AAC’s determination of gross income,
finding that gross income should be derived by using a room count of 395 rather than 425.
       7
        The anomaly was that if the approach utilized with respect to the Grand was applied to the
five Smaller Hotels, three of them would have been valued higher than contended by the County,
and the other two would have been valued lower than contended by the Taxpayer.

                                                 -4-
               The Grand                                                  $8,371,000
               Carlstown Motel                                             1,827,000
               Family Inns of America-East                                 2,517,000
               Family Inns of America-South                                  778,000
               Family Inns of America-West                                 2,094,000
               Ken’s Riviera                                                 955,000

        The Taxpayer petitioned the trial court for judicial review of the Board’s decision. By
stipulation of the parties, the issues at trial were framed as follows:

                                          As to the Grand

               Did the Board err in using an expense ratio based on historical data
               for the capitalization of income appraisal method instead of industry
               data? If the Board’s use of historical data expense is proper, should
               historical data income also be used?

                                     As to the Smaller Hotels

               Did the Board err in affirming the ACC’s decision employing the
               capitalization of income method for the other hotels that used only a
               portion of the replacement reserves proposed by the Taxpayer as a
               reduction of gross income?

       The parties appeared before the trial court on March 26, 1998. As to the first issue, the court
found that

               [t]he Taxpayer sustained his burden of proof that the [Board] erred in
               valuing the Grand Hotel real estate. The Board calculated projected
               gross income from market data in its capitalization of income
               appraisal method, but erred in calculating expenses by application of
               a ratio derived from the Taxpayer’s actual historical expenses.

The trial court went on to specifically find that

               the theory of appraisal expounded by Fletcher is the proper theory for
               the valuation of The Grand Hotel. The Court makes a specific
               finding of the credibility of Fletcher in respect to the method of
               valuation to use and the implementation of that method as to The
               Grand Hotel.

The court then applied Fletcher’s method, correcting for mathematical and typographical errors, and
arrived at a value for the Grand of $5,360,481.


                                                    -5-
       As to the second issue, the court ruled that the Board, in affirming the AAC as to the Smaller
Hotels, erred in failing to deduct personal property replacement reserves, as well as real property
replacement reserves, from projected gross income. More specifically, the court found

               that the valuation of the Smaller Hotels stated in the appraisals of
               Jeffrey Fletcher, with certain corrections of mathematical and
               typographical errors, and using the capitalization rate adopted by the
               Board (rather than Fletcher’s capitalization rate) is the fair market
               value of the properties for ad valorem real property tax purposes.

The court accordingly valued the properties as follows:

               The Grand                                                 $5,360,481
               Carlstown Motel                                            1,675,000
               Family Inns of America-East                                2,394,000
               Family Inns of America-South                                 751,000
               Family Inns of America-West                                2,021,000
               Ken’s Riviera                                                820,000

        The County now appeals the trial court’s valuation of the Grand. The Taxpayer appeals the
trial court’s valuation of the Smaller Hotels.

                                        II. Applicable Law

       Our review in this case is governed by principles recently enunciated by us in our opinion
in Willamette Industries, Inc. v. Tennessee Assessment Appeals Commission, 11 S.W.3d 142, 147-
48 (Tenn. Ct. App. 1999) (perm. app. denied February 7, 2000), an opinion that was recommended
for publication by the Supreme Court:

               Generally speaking, courts will “defer to decisions of administrative
               agencies when they are acting within their area of specialized
               knowledge, experience, and expertise.” Wayne County v. Tennessee
               Solid Waste Disposal Control Board, 756 S.W.2d 274, 279
               (Tenn.App. 1988). Thus, judicial review of such determinations is
               governed by “the narrow, statutorily defined standard contained in
               [T.C.A.] § 4-5-322(h) rather than the broad standard of review used
               in other civil appeals.” Wayne County, 756 S.W.2d at 279.
               Specifically, T.C.A. § 4-5-322(h)(5)8 provides, as relevant here, that
               the reviewing court



       8
        T.C.A. § 4-5-322 is contained in the Uniform Administrative Procedures Act, codified at
T.C.A. § 4-5-101, et seq.

                                                -6-
       may reverse or modify the decision if the rights of the
       petitioner have been prejudiced because the
       administrative findings, inferences, conclusions or
       decisions are:

                            *   *   *   *

       (5) Unsupported by evidence which is both substantial
       and material in the light of the entire record.

       In determining the substantiality of evidence, the
       court shall take into account whatever in the record
       fairly detracts from its weight, but the court shall not
       substitute its judgment for that of the agency as to the
       weight of the evidence on questions of fact.

Thus, we will not substitute our judgment regarding the weight of the
evidence for that of the agency, even where the evidence could
support a different result. Wayne County, 756 S.W.2d at 279 (citing
Humana of Tennessee v. Tennessee Health Facilities Comm’n, 551
S.W.2d 664, 667 (Tenn. 1977)); Grubb v. Tennessee Civil Serv.
Comm’n, 731 S.W.2d 919, 922 (Tenn.App. 1987); Hughes v. Board
of Commissioners, 204 Tenn. 298, 319 S.W.2d 481, 484 (1958)).
Stated another way,

       [a]n agency’s factual determination should be upheld
       if there exists “such relevant evidence as a reasonable
       mind might accept to support a rational conclusion
       and such as to furnish a reasonably sound basis for the
       action under consideration.”

Wayne County, 756 S.W.2d at 279 (quoting Southern Ry. v. State
Bd. of Equalization, 682 S.W.2d 196, 199 (Tenn. 1984); Sweet v.
State Technical Inst., 617 S.W.2d 158, 161 (Tenn.App. 1981)). As
further explained in Wayne County,

       [t]he general rules governing judicial review of an
       agency’s factual decisions apply with even greater
       force when the issues require scientific or technical
       proof. Appellate courts have neither the expertise nor
       the resources to evaluate complex scientific issues de
       novo. When very technical areas of expertise are
       involved, they generally defer to agency decisions,


                                 -7-
                      and will not substitute their judgment for that of the
                      agency on highly technical matters.

                      However, the court’s deference to an agency’s
                      expertise is no excuse for judicial inertia. Even in
                      cases involving scientific or technical evidence, the
                      “substantial and material evidence standard” in
                      [T.C.A.] § 4-5-322(h)(5) requires a searching and
                      careful inquiry that subjects the agency’s decision to
                      close scrutiny.

              Wayne County, 756 S.W.2d at 280 (citations omitted).

              With regard to the valuation of real property for tax purposes, T.C.A.
              § 67-5-601(a) mandates that

                      [t]he value of all property shall be ascertained from
                      the evidence of its sound, intrinsic and immediate
                      value, for purposes of sale between a willing seller
                      and a willing buyer without consideration of
                      speculative values....

                                            III. Analysis

                                           A. The Grand

       The first issue on appeal is whether the Board erred, in valuing the Grand, by applying to
projected gross income an expense ratio derived by averaging the Taxpayer’s actual historical
expenses. With respect to this determination, the Board stated the following:

              In the absence of clear proof as to the extent to which the industry
              data reflected replacement reserves, we must make do with the actual
              data reconstructed as best we can to exclude expenses for
              depreciation, interest and property taxes. We must only add some
              estimate of the replacement reserves to these actual expenses, since
              it is clear that the taxpayer’s actual expenses did not include this item.
              The taxpayer’s estimate of replacement reserves was better explained,
              and it appears from the testimony that the [DPA’s] appraiser may not
              have considered some items appropriate for the reserves.

              When depreciation, interest, and property taxes are excluded from the
              taxpayer’s actual expenses, the expense ratio averages about 69% for
              the four years for which the data was available. We must deduct
              these expenses from gross income, along with the taxpayer’s estimate

                                                -8-
               of replacement reserves, to derive our estimated net operating
               income....

Thus, the Board looked to the Taxpayer’s actual expense ratios for the four years preceding the 1989
appraisal to arrive at an average expense ratio of 69%. It then applied this ratio to the gross income
figure to arrive at estimated expenses and then proceeded to subtract the estimated expenses from
the estimated gross income to arrive at estimated net operating income.

         We find and hold that the trial court substituted its judgment for that of the Board and thus
erred in reversing the Board’s decision. We have carefully scrutinized the record before us and
found that the evidence, while supporting the trial court’s reasoning for its determination, also
supports the Board’s determination. All three appraisers, in selecting an expense ratio, examined
the historical performance of the Grand, the local market, and regional data available from an
industry-wide survey. Each appraiser utilized these data sets differently. Kennedy used the data to
form his own independent figure. Fletcher settled on a figure that is very close to the Grand’s actual
expense ratio for 1988 and almost identical to an industry-wide figure. Hall utilized the market and
industry data to ensure that the Grand’s actual historical expense ratios were reasonable. Hall
concluded, after reviewing the market and industry data, that the Grand’s actual ratio for the prior
two years was reasonable. He then applied that ratio to his projected income for the Grand to
ultimately arrive at net operating income. Therefore, Hall’s expense ratio, though tested against
market and industry data for reasonableness, was derived from actual historical expenses. Although
there is evidence in the record to support the notion that market and industry data should have more
of an impact on an historical expense ratio, we find that there is substantial and material evidence
to support the Board’s decision to utilize an expense ratio derived by averaging historical expense
ratios of the Grand. Valuation of income-producing property is a highly technical process, one with
which the Board has substantial expertise. The trial court erred in substituting its judgment for that
of the Board. Accordingly, we reverse the trial court’s judgment. We find and hold, as did the
Board, that the value of the Grand is calculated as follows:

       Projected Gross Income                                             $5,230,048
       Less: Estimated Expenses (69%)                                      3,608,733
       Net Operating Income Before Reserves                               $1,621,315
       Less: Replacement Reserves                                            442,815
       Net Operating Income                                               $1,178,500

       Net Operating Income                                               $1,178,500
       Divided by Capitalization Rate of                                        .133
       Equals                                                             $8,860,902
       Less: Personal Property Value                                         489,846
       Value for Tax Purposes                                             $8,371,056

       Rounded to                                                         $8,371,000



                                                 -9-
                                      B. The Smaller Hotels

        The second issue on appeal is whether, with respect to the Smaller Hotels, the Board erred
in affirming the AAC, thereby allowing deduction of real property replacement reserves but
disallowing deduction of personal property replacement reserves. As stated previously, the AAC
chose to deduct only real property replacement reserves because the AAC was “valuing only the real
property and improvements and [would] deduct the value of tangible personal property from the final
appraisal.”

       In considering this issue on appeal, the Board stated as follows:

               Based on their experience before the Commission, the parties no
               doubt expected that we would either approve the proof and arguments
               of one party or the other in their entirety, or adopt our own approach
               for the Grand Hotel which would simply be applied equally to the
               smaller hotels. No proof or argument concerning these smaller
               properties was offered at our hearing, although the appraisal reports
               submitted to the Commission are certainly part of the record.

               With the assistance of staff, we have considered application of our
               approved method for valuing the Grand Hotel to the smaller
               properties, but the results are so anomalous as to be unacceptable.
               We determined the value of the Grand with the benefit not only of the
               fine appraisal reports submitted by the parties, but also having read
               transcripts of testimony by the appraisers and heard the arguments of
               able counsel. We do not have these advantages in the case of the
               smaller properties, and having no basis to disturb the findings and
               conclusions of the Commission, we affirm the values for the smaller
               properties as set forth in the Commission’s final decision.

Specifically, in applying the method the Board used to value the Grand to the Smaller Hotels, the
Board found that three of the five hotels were valued higher than asked by the County and two of
the five were valued lower than requested by the Taxpayer. Finding this result to be unacceptable,
the Board chose to simply affirm the AAC’s determination as to the Smaller Hotels.

        Concerning the treatment of replacement reserves for the Smaller Hotels, we find that the
trial court again substituted its judgment for that of the Board, and thus erred in reversing the
Board’s decision. The three appraisers treated replacement reserves differently. Hall’s appraisal
does not mention replacement reserves. In addition to his appraisal, he prepared a report that he
referred to as an “allocation of value.” This calculation accounted for replacement reserves in
arriving at a value “for tax purposes.” In this latter calculation, Hall deducted only replacement
reserves for personal property and did not mention those for real property, a procedure opposite from
the procedure utilized by the AAC and affirmed by the Board. Hall acknowledged that his


                                               -10-
“allocation of value” approach was “controversial” but that “maybe it did make sense.” In any event,
Hall stood behind his separately-stated appraisal.

         The other two appraisers differed from Hall, and from each other, in their treatment of
replacement reserves. Fletcher deducted reserves for both real and personal property. Kennedy, on
the other hand, testified that his expense ratio of 75% was more than enough to cover deduction of
replacement reserves. Upon a close examination of Kennedy’s appraisal and testimony, however,
it is clear that the replacement reserves of which he was speaking were real property replacement
reserves only. Thus, the record contains evidence suggesting (1) that only personal property
replacement reserves should be deducted; (2) that both personal and real property replacement
reserves should be deducted; and (3) that only real property replacement reserves should be
deducted. In light of this fact, and in light of the high level of deference that should be accorded the
Board due to their expertise in the highly technical subject area of property valuations, we hold that
the trial court erred in substituting its judgment for that of the Board. Accordingly, the valuations
of the Smaller Hotels are those determined by the AAC and affirmed by the Board. They are as
follows:


                                          Carlstown Motel

       Projected Gross Income                                              $ 894,600
       Less: Estimated Expenses                                              581,490
       Net Operating Income Before Reserves                                $ 313,110
       Less: Replacement Reserves                                             51,069
       Net Operating Income                                                $ 262,041

       Net Operating Income                                                $ 262,041
       Divided by Capitalization Rate of                                        .1362
       Equals                                                              $1,923,943
       Less: Personal Property Value                                           96,730
       Value for Tax Purposes                                              $1,827,213

       Rounded to                                                          $1,827,000




                                                 -11-
                         Family Inns of America-East

Projected Gross Income                                 $1,040,600
Less: Estimated Expenses                                  645,172
Net Operating Income Before Reserves                   $ 395,428
Less: Replacement Reserves                                 41,355
Net Operating Income                                   $ 354,073

Net Operating Income                                   $ 354,073
Divided by Capitalization Rate of                           .1362
Equals                                                 $2,599,655
Less: Personal Property Value                              82,491
Value for Tax Purposes                                 $2,517,164

Rounded to                                             $2,517,000


                        Family Inns of America-South

Projected Gross Income                                 $ 449,400
Less: Estimated Expenses                                 314,580
Net Operating Income Before Reserves                   $ 134,820
Less: Replacement Reserves                                22,325
Net Operating Income                                   $ 112,495

Net Operating Income                                   $ 112,495
Divided by Capitalization Rate of                          .1405
Equals                                                 $ 800,676
Less: Personal Property Value                             22,529
Value for Tax Purposes                                 $ 778,147

Rounded to                                             $ 778,000




                                    -12-
                                 Family Inns of America-West

       Projected Gross Income                                           $ 950,316
       Less: Estimated Expenses                                           617,705
       Net Operating Income Before Reserves                             $ 332,611
       Less: Replacement Reserves                                          38,351
       Net Operating Income                                             $ 294,260

       Net Operating Income                                             $ 294,260
       Divided By Capitalization Rate of                                     .1362
       Equals                                                           $2,160,499
       Less: Personal Property Value                                        66,254
       Value for Tax Purposes                                           $2,094,245

       Rounded to                                                       $2,094,000


                                           Ken’s Riviera

       Projected Gross Income                                           $ 442,200
       Less: Estimated Expenses                                           280,377
       Net Operating Income Before Reserves                             $ 161,823
       Less: Replacement Reserves                                          24,177
       Net Operating Income                                             $ 137,646

       Net Operating Income                                             $ 137,646
       Divided by Capitalization Rate of                                    .1405
       Equals                                                           $ 979,687
       Less: Personal Property Value                                       24,391
       Value for Tax Purposes                                           $ 955,296

       Rounded to                                                       $ 955,000

       Our decision to reverse the trial court and reinstate the decision of the Board renders moot
the Taxpayer’s argument concerning the trial court’s correction of certain typographical and
mathematical errors in Fletcher’s appraisals.

                                          IV. Conclusion

        The judgment of the trial court is reversed. The case is remanded for entry of an order
consistent with this opinion and collection of costs assessed below, all pursuant to applicable law.
Costs on appeal are taxed to the Taxpayer.




                                               -13-
