Who is ultimately responsible for the costs of the arbitrator in a tax appeal taken to arbitration?

In the context of arbitration for tax appeals, the responsibility for the costs associated with the arbitrator often falls on the party whose value is not selected. This is because arbitration is designed to resolve disputes by comparing competing valuations presented by each party. When the arbitrator makes a decision, they inherently endorse one party's valuation over the other.

If a property owner and the local government both present their appraisals for a property, and the arbitrator favors the valuation from the property owner, typically the local government would then bear the costs of the arbitration process. This structure encourages both parties to present well-supported and reasonable claims, as it adds a financial incentive to avoid submitting inflated or unreasonable valuations.

This framework is intended to balance the interests and responsibilities of both the property owners and the municipalities by assigning the financial burden of arbitration costs to the party that did not prevail, thus promoting fairness and accountability in the arbitration process. It also mitigates the risk of excessive or frivolous claims, as parties are aware that they may incur additional costs if they do not substantiate their valuations effectively.