Wednesday, February 29, 2012

US Supreme Court hears sewer hookup assessment case

From the Indianapolis Star:

"The U.S. Supreme Court appeared split Wednesday over whether Indianapolis treated some homeowners fairly when it forgave the outstanding debt their neighbors owed for sewer hookups.

The homeowners argue that their constitutional right to be treated equally under the law was violated when they paid the full $9,278 for a sewer hookup while others in the same neighborhood, who chose to pay in installments, ended up paying only $309. The homeowners who paid in full want to be refunded the difference."

Revenue Finds Taxpayer Not Responsible for Payment of Corporate Trust Tax

Formation and membership of an Indiana limited liability company (LLC) included the Taxpayer. The LLC did not remit the proper amount of withholding tax to Indiana for the tax period from 1999-2011. From 2006 through January 2011, the Indiana Department of Revenue (Department) assessed the outstanding corporate withholding tax, interest, and penalty against the Taxpayer personally.
The Department assessed the proposed withholding taxes against the Taxpayer pursuant to IC § 6-3-4-8(g), which provides that "[i]n the case of a corporate or partnership employer, every officer, employee, or member of such employer, who, as such officer, employee, or member is under a duty to deduct and remit such taxes shall e personally liable for such taxes, penalties, and interest."
Taxpayer admitted his membership with the LLC. However, Taxpayer asserted that he did not have any responsibilities in connection with the company, but rather that Taxpayer was a passive investor. Taxpayer further asserted, and provided documentation showing, acquisition of the LLC by another company in 2005. That acquisition severed Taxpayer's connection with the LLC. Taxpayer provided substantial documentation indicating that he was not responsible for the payment of corporate trust taxes during the 2006 through 2011 tax period.

The Taxpayer's protest is sustained.

Appeals to the Tax Court Filed in February

Appeals to the Tax Court in February

02/29/12 Zotec Partners, LLc v. Indiana Dept. of State Revenue N/A 49T10-1202-TA-11
02/28/12 Indiana Michigan Power Co., Inc., et al. v. Ind. Dept. of State Revenue N/A 49T10-1202-TA-10
02/27/12 Clark E. and Karen S. Hiler v. Ind. Dept. of State Revenue N/A 49T10-1202-TA-9
02/24/12 Asplundh Tree Expert Co. v. Indiana Dept. of State Revenue N/A 49T10-1202-TA-8
02/23/12 Brightpoint, Inc. and Subsidiaries v. Indiana Dept. of State Revenue N/A 49T10-1202-TA-7
02/08/12 Lowe's Home Centers, Inc. v. Indiana Dept. of State Revenue N/A 49T10-1201-TA-6
02/08/12 Ronald J. Newhouse v. Indiana Dept. of Revenue N/A 02T10-1201-TA-5

Tuesday, February 28, 2012

IndyPolitics: "The Coming Tiff Over TIFs" has a very interesting post on TIF districts, including audio of an interview with Deron Kitner, Executive Director and General Counsel of the Indianapolis Bond Bank. 

Check it out here:

Miami County Council Considers Redistribution of Local Option Income Tax to Offset Losses from Property Tax Caps

"Peru — In an attempt to offset losses from state tax caps, the Miami County Council is considering restructuring the distribution of property tax credits in 2012. But the move could increase tax rates on homestead property owners by 31 percent.

The county currently puts 30 percent of the LOIT revenue toward homestead tax relief, 20 percent toward residential and commercial rentals and 50 percent toward relieving taxes on all properties in the county.

Duckwall said there are three different options for redistributing LOIT money to ease the impact of the tax caps. However, he argued the best option would be distributing 50 percent of the funds to residential properties, including homesteads, while still giving 50 percent across-the-board relief to all properties.

Although the redistribution would allow the county to take in more than $400,000 in extra tax revenue compared to current LOIT rates, the increase would come exclusively from higher taxes on homestead property owners, who would see tax rates increase 31 percent on average.

However, the new distribution would lower tax rates on commercial apartments by 8 percent and other residential property by nearly 7 percent. Tax rates would remain the same on agricultural businesses, farmland, mobile home land and personal property."

Monday, February 27, 2012

Special Projects Committee of Vigo County Council Votes Unanimously to Allow a Personal Property Tax Exemption for Advics Manufacturing

"Advics Manufacturing Indiana LLC, undergoing a $15.26 million expansion of new equipment, Thursday passed the first hurdle toward obtaining a 10-year personal property tax abatement following a unanimous vote from the special projects committee of Vigo County Council."

Vigo County Hoping to Avoid Provisional Property Tax Bills

"Vigo County Auditor Tim Seprodi said his office is waiting on approval of a preliminary budget order, called a “1782 notice” from the Indiana Department of Local Government Finance. Once that notice is received, taxing units such as the county public library, the county and city of Terre Haute have 10 days to request any budget changes.

Seprodi has until March 15 to deliver to the state and the county treasurer a certified copy of an abstract of the property assessments, taxes, deductions and exemptions for taxes payable this year in each taxing unit in the county.

If a tax billing abstract is delivered after April 1, then under a law passed by the 2010 Indiana General Assembly, the county treasurer is to issue provisional tax bills. Tax bills must be in the mail by April 25 with property tax bills due May 10."

TIF funds won't solve shortfall in Valparaiso schools budget

From the Northwest Indiana Times:

"Stuart Summers, executive director of the city's Redevelopment Commission, said an analysis done by financial consultant Carl Cender showed the impact of tax caps on schools is about $1.8 million for 2012. If the commission decided to release $100 million of the $190 million in assessed value from the Center Township TIF districts so property taxes would go to schools and other taxing entities, it would reduce the impact by about $589,000, but none of that would go to the general fund."

Read more:

Saturday, February 25, 2012

Proposed legislation to curb redevelopment commissions once again dies in Indiana General Assembly

From the Indianapolis Star:

"For the second year, the Indiana House has refused to consider legislation that would rein in redevelopment commissions like the one Carmel Mayor Jim Brainard has used to fund his city's massive redevelopment.
Sen. Luke Kenley, R-Noblesville, authored Senate Bill 25, which would stop the mayor-controlled commissions from spending large amounts of taxpayer money without approval from their city councils. The Senate has overwhelmingly approved the legislation the past two years, only to see it die in the House Government and Regulatory Reform Committee without so much as a hearing.
Kenley says it's a matter of protecting taxpayers. But House Speaker Brian Bosma, R-Indianapolis, and committee Chairman Kevin Mahan, R-Hartford City, say mayors throughout the state oppose the bill.

Mahan, a freshman lawmaker in his first year as chairman, said it was his decision to deny the bill a hearing. Kenley, though, placed the onus squarely on Bosma's shoulders.

Mahan also won't call a related bill -- Senate Bill 105 -- for a vote. The Senate passed legislation 48-2 to add a school board member to redevelopment commissions. Mahan gave that bill a hearing, but -- as with Kenley's bill -- he said lawmakers viewed it as targeting one community."

Lake Central referendum complaint doesn't make the grade with elections board

From the Northwest Indiana Times:

"County elections officials dismissed two complaints challenging tactics advocates used to win last year's Lake Central School Corp. referendum.
Richard J. Hucker, of Dyer, and Joe Hero, of St. John, complained that school officials permitted the use of school property and employees to wage their campaign for new school construction.
The Lake County elections board unanimously decided its authority is too limited to regulate the conduct of the contending parties in that debate.
Dyer, St. John and Schererville voters gave school officials permission to raise taxes for a major renovation of Lake Central High School in St. John and construction of a new Protsman Elementary School in Dyer.
Jeffrey F. Gunning, an attorney for the elections board, suggested Hucker and Hero take their complaints to a criminal or civil court.
Hero argued the elections board has jurisdiction over the matter. Both he and Hucker filed amended complaints early Thursday alleging pro-building advocates failed to report the use of school resources in campaign finance documents.
Elections board members said they will take up that new issue in a future hearing."

Read more:

Portage Considers Raising Property Tax Rate

From the Northwest Indiana Times:

"City officials have begun discussions on increasing the tax rate to boost the cumulative capital development fund.
The Portage City Council's Ordinance Committee referred a proposed ordinance Tuesday to the full council for discussion at its March 6 meeting. The ordinance would increase the present rate of 2 cents per $100 assessed valuation to 5 cents, the state-set maximum level.
The city uses the cumulative capital development fund to buy equipment for the Fire and Police departments. However, the proposed ordinance also states the money can be used for public buildings, infrastructure, parks and other purposes.

The proposal would increase property taxes for homes valued at $100,000 by $9.19 per year and by $18.31 for homes valued at $150,000 a year.
However, those owning homes valued at about $160,000 per year or more would not see an increase in their property tax, Stidham said.
Homes at that value already have hit the property tax cap limit and would not be affected by the proposed tax rate increase, he said."

Read more:

Counties may get New Options for Unpaid Property Taxes

From the Northwest Indiana Times:

"Counties may be able to clear their backlogs of tax sale properties and get delinquent property owners back paying what they owe under legislation approved Tuesday by the Indiana Senate.
House Bill 1090 allows counties to adopt an ordinance reducing the minimum price for a tax sale property to 75 percent of the assessed value of the property.
Currently, tax sale purchasers must pay at least the total of back taxes, penalties, cost of the tax sale, the unpaid cost of prior tax sales and other county fees, which often exceeds the value of the property.
Allowing counties to accept 75 percent of the assessed value, or the current charges if they are lower, should get more parcels off the county's books and back on the tax rolls, said the sponsors, state Sen. Ed Charbonneau, R-Valparaiso, state Sen. Lonnie Randolph, D-East Chicago, and state Sen. Earline Rogers, D-Gary.
The legislation also allows counties to grant a one-time amnesty to property owners who are delinquent on their property taxes by waiving interest and penalties on unpaid taxes so long as the back taxes owed are paid by July 1, 2013.
The Republican-controlled Senate approved the measure 50-0. The Republican-controlled House must agree to Senate changes before the proposal can go to the governor."

Read more:

Friday, February 24, 2012

Shelbyville Plans to Enact TIF District

"At Monday's Shelbyville Redevelopment Commission meeting, board members voted 3-0 with members Mark McNeely and Sam Terrell absent to recommend part of the Intelliplex become an economic development area, a first step in making a TIF district.

The TIF district would allow the city to take future increases in property taxes and uses it to fund other projects. The change in tax delineation is a commonly used development tool, and Shelbyville already has two TIF districts -- near Indiana Live! Casino on the city's far north side and on the east side surrounding Kroger, Shelbyville Marketplace and Progress Parkway."

Clark County residents can get electronic property tax statements

"Clark County is among the first counties in the state to authorize the program that allows county residents to receive their property tax statements through their email account, according to a press release from Clark County Treasurer David Reinhardt.

 Taxpayers who wish to receive their property tax bill by email can sign up at or they can visit the treasurer’s office for an application form. The program is voluntary and the deadline for signing up is April 1."

Thursday, February 23, 2012

Agricultural Land Base Rates For The Assessment Dates: March 1, 2005 – 2012

Short but interesting memorandum graphing the change in base rate for agricultural farmland since 2005, and identifying the changes in legislation that have impacted the base rate calculation.

Committee Strips Special Property Tax Increase for Clark County from SB 344

In the House Ways and Means committee, the special property tax increase that would have given Clark County approximately $500,000 a year in increased property tax revenue was stripped from SB 344:

Section 34 of SB 344 as it was sent to the House read as follows:

SOURCE: ; (12)SB0344.2.34. --> SECTION 34. [EFFECTIVE JULY 1, 2012] (a) This SECTION applies to Clark County.
(b) The department of local government finance shall recalculate the 2013 maximum permissible ad valorem property tax levy under IC 6-1.1-18.5 for the county by using the 2007 maximum permissible ad valorem property tax levy for the county and then increasing the 2007 levy by applying the cumulative effect of using the assessed value growth quotient applicable to the county for 2008 through 2012.
(c) Notwithstanding the expiration of this SECTION, the 2013 maximum permissible ad valorem property tax levy for the county is to be used as the county's previous year maximum permissible ad valorem property tax levy for determinations under IC 6-1.1-18.5 after 2013.
(d) This SECTION expires January 1, 2015.

The committee report, linked below, merely inserts a new Section 34 in place of the Clark County property tax increase:

Wednesday, February 22, 2012

Agricultural Land Base Rate for 2012

Attached is the link to the Department of Local Government Finance's "Certification of Agricultural Land Base Rate Value for Assessment Year 2012."  In it, the Department calculates the income value of agricultural land to be $1,630 per acre based on the "lowest five years of a six year rolling average".

Also, the Department published its supporting documents:

Tuesday, February 21, 2012

Businesses Seek Tax Abatements Under Richmond's "Alternative Abatement Schedule"

"In January, council members passed an alternative abatement schedule, which would allow council to approve a 75 percent abatement on projects that include a minimum investment of $3 million, the creation of at least 10 jobs, wages paid that are more than 50 percent higher than the state minimum and for the employer to provide health insurance to all full-time employees."

"Three tax abatements from two Richmond businesses both seeking to take advantage of the city's more liberal new alternative abatement schedule come to the Richmond Common Council on Tuesday night.
Wayne Dairy is seeking a 90 percent abatement for 10 years on two abatement requests, one on equipment and one on real estate, first submitted in October 2011.  That project is expected to include a $12 million investment by the company and the creation of 11 jobs.

Perpetual Recycling Solutions is also seeking a 100 percent abatement for 10 years on equipment and real estate on their project, which calls for a $26 million investment and the creation of 55 job.
That abatement request was initially submitted to the city in December 2010."

Two Page Report Regarding Streamlining Property Tax Procedures Cost County $6,000

"For its $6,000, the county received a report that appears to be two pages in length. Or four, depending on who you ask.
The report -- not officially released but obtained in two-page form last week by The Walker/Roysdon Report -- not only cost taxpayers a startling amount per page but seemed to be short on solutions.
County officials have been vocal about the conflicting software systems used among the offices of county assessor, treasurer and auditor. The software doesn't play well with others and officials seem stumped as to what to do, which certainly is a problem.
Twenty of the two-page report's 27 paragraphs recap the problem and seven paragraphs offer recommendations along the lines of "perform a more detailed analysis" and "facilitate a discussion" between companies offering the two types of software."

Monday, February 20, 2012

State Cuts Shelbyville Budget

"The Shelbyville Common Council is trying to wade through more city budget issues after getting the 2012 budget back from the state.

The state made cuts in several areas, including the city's general fund, despite efforts by the council late last year to cut $1.8 million to try to offset an expected shortfall.

It's unclear if the state took those cuts into account when they finalized the budget.


One notable fund was the utilities fund. The council voted in January to pay the city's fire hydrants from racino funds, which should have cut the utilities budget and left property tax money for use elsewhere. The state didn't take that into account in its returned budget, probably because that was passed in January.

Zerr said he will look into whether he can take money from that fund and put it elsewhere.

Other funds, including the cumulative capital development fund, had steep cuts. The fund pays for things such as police cars and leases on fire trucks and ambulances.

The city also borrowed $750,000 from the sewage improvement fund to help pay health insurance costs for employees and $328,000 from the economic development income tax fund to shore up the budget, which the city will have to repay this year.

Mayor Tom DeBaun said is considering cost saving moves such as asking department heads not to replace someone who retires or quits."

Little Cal Funding Bill Heard in Senate Committee

"The Indiana State Senate Committee on Local Government held a hearing Wednesday on House Bill 1264 the Little Cal funding bill.
The bill passed out of the House by a vote of 84-10 earlier in the session. The Northwest Indiana delegation was unanimous in its support. The bill is the result of bipartisan cooperation and discussion. Rep. Ed Soliday, R-Valparaiso, and Hammond Mayor Thomas McDermott Jr. worked together to develop a very good piece of compromise legislation.
The current legislation will be the vehicle by which the $250 million flood reduction project will be maintained and repaired in the future. More than 22 miles of berms and floodwalls need upkeep; trees must be removed before they cause blockages. Preparations for closures must be implemented.
The original bill approved in the House requires fees based on parcels. All properties in the Little Calumet/Burns Ditch watershed would pay based on the following formula: residential $45, commercial $180, agricultural $90 and industrial $360.
The fees do not differentiate by parcel size. It was determined that the cost of breaking out the individual parcel sizes would be cumbersome and time consuming."

Local Governments Adjust to Property Tax Caps

"Local governments are holding their breath to see how the first general reassessment since the implementation of property tax caps in 2008 will ultimately affect revenues.
In the meantime, some have adjusted to the new realities brought about by the tax caps. The town of Highland for the first time in years won't have to issue tax anticipation warrants to keep its cash flow in the black, said Michael Griffin, Town of Highland clerk/treasurer.
"That doesn't mean we have tons and tons of money," Griffin said. "It just means we have sufficient cash flow."
Still, it's going to be tough going for many larger municipalities in the region, which have higher costs due to the greater demand for services there, Griffin said.
State revenues have beat forecasts for two straight quarters now. That means cuts to education and other basic services may be over, although no one expects big increases in state or federal spending anytime soon."

Friday, February 17, 2012

Hoosier Homeowners Receive Income Tax Deduction for Property Taxes

"Hoosier homeowners (buying or own outright) are eligible to take off the amount of property tax paid on their Indiana home. You can deduct the amount of property tax paid or $2,500, whichever is less; this can result in a tax savings of up to $85."

Thursday, February 16, 2012

DLGF Publishes Final Rule Regarding Mobile Homes

50 IAC 3.3-2-2 to clarify the definition of "annually assessed mobile home". Amends 50 IAC 3.3-2-3 to add "manufactured home" to the definition of "mobile home". Adds 50 IAC 3.3-2-3.5 to define "permanent foundation". Amends 50 IAC 3.3-2-4 to clarify the definition of "real property mobile home". Amends 50 IAC 3.3-3-1 to add "county assessor or township assessor, if any" and to require use of residential cost Schedule A. Adds 50 IAC 3.3-3-2 regarding liability for property tax. Amends 50 IAC 3.3-5-1 to add "county assessor or township assessor, if any".

Property Tax Appeals Increase in Ogden Dunes

"Property tax appeals jumped dramatically late last year on nearly 21 percent of the homes in Ogden Dunes, despite the town having the largest decrease in values in the county.
Arocho said 2011 appeals were filed on behalf of 132 of the 633 residential properties in Ogden Dunes. By contrast, 19 appeals were filed in 2010 and eight in 2009, when values were holding steady."

Duneland School Board Approves Referendum for May

"Members of the Duneland School Corp. board voted unanimously Monday to ask voters in the spring to bless the district's request for more money.
A ballot question in May will ask voters to accept or reject an increase in their taxes by 22 cents per $100 of assessed property valuation for a maximum of seven years. The additional money would be used to offset a shortfall in the district's operating fund."

Tax Court Upholds Board's Finding that For Profit Entity Leasing an Assisted Living Facility Failed to Raise a Prima Facie Case for Exemption

“[T]he Foundation asserts that because Autumnwood is an assisted living facility that provides for the needs of the elderly, no other evidence is necessary to show that it is entitled to a charitable purposes exemption. … Indeed, “‘by meeting the needs of the aging, namely, relief of loneliness and boredom, decent housing that has safety and convenience and is adapted to their age, security, well-being, emotional stability, and attention to problems of health, a charitable purpose is accomplished.’” Wittenberg, 782 N.E.2d at 488-89 (quoting Raintree Friends Hous., Inc. v. Indiana Dep’t of State Revenue, 667 N.E.2d 810, 814-15 (Ind. Tax Ct. 1996)). Furthermore, Indiana’s courts have upheld charitable exemptions in several cases … Nevertheless, neither the language of one case nor an apparent trend from several cases has established a per se rule that an assisted living facility that cares for the elderly is automatically considered exempt by the mere character of its deeds. Rather, as the Court has repeatedly explained, every exemption case stands on its own facts and, therefore, they are not susceptible to bright-line tests or other abbreviated inquiries. See, e.g., Jamestown Homes of Mishawaka, Inc. v. St. Joseph Cnty. Assessor, 914 N.E.2d 13, 15, (Ind. Tax Ct. 2009), review denied. Accordingly, the Foundation has not shown that the Indiana Board’s final determination is contrary to law merely because Autumnwood is an assisted living facility.”

Finding no “per se rule” that an assisted living facility that cares for the elderly is exempt, Judge Wentworth reviewed the specific facts of the case:

“The taxpayer has the burden to prove that both the Foundation and Miller’s lease arrangement is driven by a charitable purpose and not a profit motive. See Sangralea Boys Fund, 686 N.E.2d at 958-59. Although an entity’s for-profit status alone is not sufficient to show that a lease arrangement will result in private benefit, its status is germane. Cf. e.g., Spohn v. Stark, 150 N.E. 787, 788 (Ind. 1926) (finding income producing, rental property taxable when used and rented by the Indiana National Guard) with State Bd. of Tax Comm’rs v. Indianapolis Lodge No. 17, Loyal Order of Moose, Inc., 200 N.E.2d 221, 225 (Ind. 1964) (exempting dining room from property tax when it was used for both profit and exempt purposes). Given that the record in this case simply does not indicate whether Miller’s has a charitable purpose or a profit motive, the Court concludes that the Indiana Board’s finding that the Foundation failed to raise a prima facie case that Autumnwood is entitled to a charitable purposes exemption under Indiana Code § 6-1.1-10-16 is supported by substantial evidence.”

Tuesday, February 14, 2012

Senate Bill Limiting Calument Township Spending Moves to the House

"A state senator attempting to give Griffith relief from Calumet Township taxes said Tuesday that he’s still trying to achieve that goal.

State Sen. Brandt Hershman, R-Buck Creek, said he feels the relationship between the two governments “is a deeply significant problem that needs to be addressed,” but admitted there’s probably a better way to deal with the issue than what current legislation provides.

The bill limits the amount Calumet Township can spend on providing assistance to its needy residents to four and a half times the state average or around $63 per person. The Indiana Senate already approved the bill and moved the legislation to the Indiana House for further review. A House committee heard testimony but did not vote on the bill Tuesday."

Monday, February 13, 2012

Assessed Value of Agricultural Land Increasing

As reported by the Richmond Palladium:

Property tax increases likely

INDIANAPOLIS -- Indiana farmers likely will see property tax increases on farmland this year as the base rate for tax assessment jumps by $200 per acre for 2012 taxes.

Farmers should expect the base rates to continue to climb at least into 2015, based on the current formula.

An agreement reached in the Legislature on the farmland property tax formula ends in 2013, which has held down the base value by $200 per acre. Statewide reassessment also occurs in 2013.

The current higher base value for agricultural land is the result of several good farming years, based on a six-year rolling average under which the year with the highest value is dropped.

Farmland assessment for 2012 will be $1,500 per acre, up from $1,290 for 2011 taxes, said Larry DeBoer, Purdue University agricultural economics professor.

The Department of Local Government Finance used data from 2004-2009 crop years to determine the 2013 base rate of $1,630, DeBoer said. Because commodity prices have remained high and interest rates low, the base rate for taxes in 2014 will be about $1,760. For taxes in 2015, it will be about $2,030.

The six-year average and four-year lag also mean the high commodity prices and low interest rates in 2012 will first enter the tax formula in 2016 and will not drop out until 2022. 

"The base rate is likely to increase and remain high for a long, long time," DeBoer said.

Howard County to Auction Properties with Delinquent Taxes Online

"It’s not exactly a “fire sale” but Howard County is offering deep reductions on properties that have past-due real estate taxes.  Howard County will conduct a certificate sale on 455 properties during a live and online auction. The live auction is set for April 3 and the online auction will run from April 5-15.
The commissioners have set the price for the parcels at 10 percent of the amount owed or a minimum of $100."

Saturday, February 11, 2012

Board Finds Untimely Appraisal Insufficient to Raise a Prima Facie Case

"Mr. Rocco estimated the subject property’s market value as of a date more than a year after the relevant January 1, 2007 valuation date that applies to the assessment under appeal. And Short Homeplace did not offer any evidence to explain how Mr. Rocco’s opinion related to the subject property’s market value-in-use as of January 1, 2007. Thus, Mr. Rocco’s appraisal lacks probative value.  See O’Donnell 854 N.E.2d at 95.
The valuation date is not the only problem with Mr. Rocco’s appraisal. Despite describing his valuation approach as a sales-comparison‖ analysis, Mr. Rocco did not use comparable sales to estimate the subject property’s market value. Instead, Mr. Short hired Mr. Rocco to appraise the subject property using the assessments for the same seven properties that Mr. Short used in comparing Short Homeplace’s taxes to the taxes paid by other homeowners. While there might be circumstances under which generally accepted appraisal practices would permit using a comparable property’s assessment, instead of its sale price, in a sales-comparison analysis, it is not readily apparent what those circumstances would be. And neither Mr. Rocco nor Mr. Short did anything to address that question."

Board follows Tax Court Decision in Fuller Finding Taxpayer that Purchased Property After the Assessment Date Not Entitled to Homestead Credit

"Like the taxpayers in Fuller, DNK2 did not buy the subject property until after the assessment date for which it seeks a homestead credit and standard deduction. And DNK2 never used the property as a homestead. The Board therefore reaches the same result that it did in Fuller—DNK2 did not make a prima facie showing that it was entitled to the homestead credit or standard deduction."

Indiana's 12th Annual Property Tax Institute is March 23rd

12th Annual Property Tax Institute
Friday, March 23, 2012
ICLEF Conference Facility
230 East Ohio Street,5th Floor
Indianapolis, IN 46204
6 CLE / Also Qualifies for 6 CE Level I or II DLGF CE Credit


8:30 A.M. Registration & Coffee
8:40 A.M. Welcome & Course Objectives
-Thomas M. Atherton, Program Chair
8:45 A.M. Property Tax Procedures & Confidentiality
-Brent A. Auberry, Daniel R. Roy
9:45 A.M. Property Tax Ethics from the Indiana Board of Tax Review
-Hon. Carol S. Comer
10:45 A.M. Coffee Break
11:00 A.M. True Tax Value Really Means vs. Market Value
-David A. Suess
11:45 A.M. View from the Tax Court
-Hon. Martha B. Wentworth
12:15 P.M. Lunch Break (on your own)
1:15 P.M. Tricks, Traps and Anomalies in Indiana Property Taxes
-Randal J. Kaltenmark
2:15 P.M. Developments at the Department of Local Government Finance (DLGF)
-Commissioner Brian E. Bailey
2:45 P.M. Refreshment Break
3:00 P.M. Uniform Standards Professional Appraisal Practice (USPAP)
-Thomas M. Atherton & Nick A. Tillema
3:45 P.M. Personal Property Issues and Pointers
-Francina A. Dlouhy
4:30 P.M. Adjourn

Friday, February 10, 2012

Board Finds Property's Listing Price Sufficient to Raise a Prima Facie Case

"'True tax value may be thought of as the ask price of property by its owner, because this value more clearly represents the utility obtained from the property, and the ask price represents how much utility must be replaced to induce the owner to abandon the property.'  Manual at 2.  Thus, when reasonable marketing efforts are made to sell a property at a given price for a long period of time and those efforts are unsuccessful, it can be inferred that the market value-in-use of a property is something less than its asking price."

While the Board held that the Petitioner failed to raise a prima facie case that its property was over-valued for the March 1, 2009, assessment because the property was listed for an amount exceeding its assessed value for that year, the Board found that the Petitioner present some evidence that the property was over-valued for 2010:

"For 2010, however, the valuation date was March 1, 2010. 50 IAC 27-5-2(c). According to the properties’ listing history, the properties were offered for $650,000 as October 13, 2009, and reduced to $595,000 on January 1, 2010.  Exhibit 2The properties did not sell for this price and, in fact, the listing price was reduced again in 2011. Thus, the Petitioner presented some evidence that, as of the valuation date, the value of its properties was no more than $595,000. The Board therefore finds the Petitioner’s representative raised a prima facie case that the Petitioner’s properties were over-assessed for the 2010 assessment year."

Board Finds that the Assessor Failed to Meet its Burden to Prove the Property's Market Value-in-Use

The parties agreed that the Respondent had the burden of proof under IC 6-1.1-15-17:
"Both parties agreed this assessment increased more than 5% from 2008 to 2009 and both parties agreed the Respondent has the burden to prove the current assessment is correct. (Even though the subject property was remodeled and changed uses between March 1, 2008 and March 1, 2009.) The Board accepts the agreement on that point for this case."

The Board held that the Respondent failed to meet its burden:
"The Respondent sought to support the assessed value with general evidence about the remodeling, conversion from a medical office to a bank, adjusting effective age, and trending. While those factors probably were important for initial mass assessment purposes, in this appeal that evidence does not prove the property’s actual market value-in-use. The Respondent failed to make a prima facie case."

Thursday, February 9, 2012

Article: Clarksville residents paying $0 tax bills could affect government, school funding

"Kim Knott, superintendent of Clarksville Community Schools, showed the Clarksville Town Council two problems that could affect the bottom lines of both entities after the council’s meeting earlier this week.

A lower assessed value for the school corporation and the town — directly related to the closure of the Colgate-Palmolive Co. plant — and taxpayers who receive tax bills of $0 could cause both entities to lose revenue."

HB 1264 Addresses Little Calumet River Levee Funding

"House Bill 1264, co-sponsored by state Rep. Ed Soliday, R-Valparaiso, is in the Senate after it was approved by the House. It requires property owners in the Little Calumet River and Burns Waterway watersheds to pay an annual fee on property tax bills to fund ongoing maintenance. Owners of residential parcels will pay $45, agricultural $90, commercial $180 and industrial or utility $360."

Duneland School Board Contemplates Referendum

"Pletcher presented three options for a proposed referendum to boost the district's property tax levy by 33 cents, 25 cents or 22 cents per $100 of assessed value. The owner of a $178,800 home would pay $185 more annually with a 22-cent increase."

Tippecanoe County Anticipates On Time Property Tax Bills

"A few glitches had Tippecanoe County officials sweating the tax bill deadline, and it's still not a sure thing.  'We certified our assessments late, but the fact that we have the DLGF (hearing) next week shows that the turnaround time is still good,' Auditor Jennifer Weston said Wednesday."

Wednesday, February 8, 2012

Senate OKs Bill Adding School Board Member to Redevelopment Panels

"Redevelopment commissions use commercial property taxes to fund redevelopment projects, often infrastructure for incoming businesses like roads and sewers. Bill author Phil Boots, R-Crawfordsville, said school boards should have a voice, because those taxes otherwise would go to school districts, counties and other governmental entities within the same jurisdiction. Rep. Tim Brown, R-Crawfordsville, said school districts are most impacted of all of the governmental units by the redevelopment commissions and deserve a vote. He is sponsoring the bill in the House."

Board Finds Income Valuation Insufficient to Raise a Prima Facie Case

"Roger Curry did the income capitalization calculation that is shown on Petitioner Exhibit 11. The credibility of his work and valuation opinion is critical to the Petitioner’s case. Several things, however, negatively impact that credibility. He clearly has an interest in the outcome of this appeal because he is the Petitioner’s vice-president. ... Furthermore, the Petitioner failed to prove that the evidence it offered conforms to generally accepted appraisal principles. The failure involves all three major segments of this income capitalization approach: the effective gross income, the net operating income, and the 12% capitalization rate."

Board Holds Insufficient Evidence was Presented as to the Value of the Property where 'Muck Soil' Limited Property's Development

"The Petitioners’ witness testified that the property was not buildable and would require excavation and fill before any construction could occur. Milo testimony. The soil evaluation report supports the Petitioners’ contentions and the proposal from Heise Excavating shows the expense that would be incurred to remedy the problem. Petitioner Exhibits 2 and 3. There is no evidence, however, of the market value of the property with or without the fill. More importantly, there is no evidence that the property’s assessed value does not already reflect the value of the property in its current condition. Without the benchmark of the property’s market value as buildable, the cost of remedying the soil conditions has little probative value in establishing the property’s market value-in-use."

Tuesday, February 7, 2012

Public Hearing on the Board's Proposed Rule Noticed for March 15, 2012

The Indiana Board of Tax Review noticed the public hearing on its proposed amended rules for March 15, 2012 at 1:00 p.m., at the Indiana Government Center North, 100 North Senate Avenue, Room N1026, Indianapolis, Indiana

Tax Court Hearing Calendar for February

* * Please note:  All hearing dates and times are subject to change

February 13 - 10:00 a.m.
The Speedway Public Library v. Dept. of Local Government Finance
Robert B. Lutz, Lynne D. Hammer, Jonathan E. Lamb
Case No. 49T10-1103-TA-22
Oral argument
Rm. 413, State House, Indianapolis, IN

February 24 - 10:00 a.m.
Harsukh & Parul Bosamia v. Marion County Assessor
Finis Tatum IV, Jonathan E. Lamb
Case No. 49T10-1108-TA-53
Hearing on motion
Rm. 413, State House, Indianapolis, IN

February 27 - 10:00 a.m.
Wireless Advocates, LLC v. Indiana Dept. of State Revenue
Benjamin S.J. Williams, John D. Snethen, John P. Lowrey
Case No. 49T10-1109-TA-60
Hearing on motion
Rm. 413, State House, Indianapolis, IN

March 1 - 10:00 a.m.
Nick Popovich v. Indiana Dept. of State Revenue
John K. Gilday, Timothy A. Schultz, Lynne D. Hammer, Jonathan E. Lamb
Case No. 49T10-1010-TA-53
Hearing on motion
Rm. 413, State House, Indianapolis, IN

March 9 - 10:00 a.m.
Vern R. Grabbe v. Carroll Co. Assessor, Neda K. Duff
Vern R. Grabbe, pro se, John P. Lowrey
Case No. 49T10-1108-TA-51
Hearing on motion
Rm. 413, State House, Indianapolis, IN

Monday, February 6, 2012

2012 Senate Bills that Passed to the House

The following are excerpts of summaries of relevant Senate Bills that are now being considered by the House:


Real property reassessment. Requires the county assessor of each county before July 1, 2013, and before July 1 of every fourth year thereafter to prepare and submit to the department of local government finance (DLGF) a reassessment plan for the county. Specifies that the reassessment plan is subject to approval by the DLGF. Requires the DLGF to complete its review and approval of the reassessment plan before March 1 of the year following the year in which the reassessment plan is submitted by the county. Provides that subject to review and approval by the DLGF, the county assessor may modify a reassessment plan. Provides that the reassessment plan must divide all parcels of real property in the county into different groups of parcels. Requires that each group of parcels must contain at least 25% of the parcels within each class of real property in the county. Requires the assessor to submit land values to the county property tax assessment board of appeals by the dates specified in the county's reassessment plan. Requires the reassessment of the first group of parcels under a county's reassessment plan to begin July 1, 2014, and be completed on or before March 1, 2015. Specifies procedures for taxpayers to petition the DLGF for reassessment of parcels in a group and a schedule for completion of reassessment of parcels in a group. Provides that the notice of assessment that must be sent to taxpayers by assessing officials is in addition to any required notice of assessment included in a property tax statement. Specifies that the assessing official may provide the notice by mail or by using electronic mail that includes a secure Internet link to the information in the notice.


Proof of residency for homestead deduction. Provides that a county auditor may require an individual to provide evidence proving that the individual's residence is the individual's principal place of residence for purposes of the homestead standard deduction. Provides that the county auditor may limit the evidence that an individual may submit to a state income tax return, a valid driver's license, or a valid voter registration card showing that the residence for which the deduction is claimed is the individual's principal place of residence. Provides that if an individual's property is not eligible for the deduction because the county auditor has determined that the property is not the property owner's principal place of residence, the property owner may appeal the county auditor's determination to the county property tax assessment board of appeals.

County highway maintenance funding. Provides that a county may use property taxes and miscellaneous revenue deposited in the county general fund for the maintenance of county highways. (Current law permits property taxes to be used for highway maintenance only in an emergency and by unanimous vote of the county fiscal body, and the county general fund to be used only for county highway department employees' personal services.) . . .

Property tax issues. Provides that if a taxpayer wishes to have the income capitalization method or the gross rent multiplier method used in the initial assessment of the taxpayer's property, the taxpayer must submit the necessary information to the assessor not later than the March 1 assessment date. Specifies that the taxpayer is not prejudiced or restricted in filing an appeal, if the data is not submitted by March 1. Provides that a taxpayer filing a notice requesting a county property tax assessment board of appeals (county board) to review an assessment or deduction must pay to the county treasurer a filing fee of $50. Specifies that only one filing fee must be paid for a review if the appeal involves contiguous parcels. Specifies that a taxpayer is not required to pay the filing fee if the review concerns the taxpayer's homestead and the taxpayer will represent himself or herself before the county board. Provides that the filing fee shall be refunded to the taxpayer if: (1) the taxpayer and the assessing official resolve the issues in the review; (2) the county board gives notice of its determination; or (3) the maximum time elapses for the county board to hold a hearing or to give notice of its determination and the taxpayer initiates a proceeding for review before the Indiana board of tax review (Indiana board). Specifies that a power of attorney expires 45 days after receiving a final determination, refund, or credit in a proceeding or review, including any subsequent appeal from the final determination in the proceeding or review, or three years, whichever is earlier. Specifies that in the case of an assessment that is decreased by the Indiana board of tax review or the Indiana tax court, the taxpayer is not entitled to interest on the excess taxes paid by the taxpayer unless the taxpayer affirms, under penalty of perjury, that substantive evidence had been presented to the assessor or introduced by the taxpayer at a hearing before the county property tax assessment board of appeals. Provides that an appraisal may not be required by the county board or the assessor in a proceeding before the county board or in the preliminary informal meeting process involving the taxpayer and the assessor.


Local government financial matters. . . Specifies that a county may provide notices of property tax information by electronic mail that provides a secure Internet link for the recipient to obtain the information. Requires the county treasurer to record whether electronic mail to a person was undeliverable. Specifies that a monthly payment plan may include an automatic monthly deduction from a taxpayer's financial institution account or monthly payments made by written instrument or electronically. Specifies that the payment cycle for a property tax payment plan may be up to 12 months and may begin in December of the year preceding the year the taxes would be due under the May and November installment method and end in the following November. Clarifies that penalties do not apply if the amount due under a monthly payment plan is paid by the due date in May or November that is designated by the taxpayer. Provides that a real property parcel is not to be listed on a tax sale notice if the delinquent property taxes or special assessments are $25 or less. Provides that the interest rate owed on property tax refunds or when a taxpayer owes more property taxes because of an assessment increase after the tax due date, an appeal, or when collection has been enjoined by court order is equal to the rate established by the commissioner of the department of state revenue for refunds on excess state tax payments. Requires county treasurers and county auditors to attend training sessions approved by the state board of accounts. Provides that money in the county elected officials training fund may be used to provide this training. (Under current law, the fund is used to provide training to county recorders and surveyors.)


County options for delinquent property taxes. Provides that the fiscal body of a county may adopt an ordinance authorizing the county treasurer to accept a minimum bid on real property subject to sale for delinquent taxes equal to the lesser of: (1) the delinquent taxes, penalties, and other related costs; or (2) 75% of the gross assessed value of the real property. Applies statewide the authority that currently applies only in Lake County allowing the county auditor to remove real property from a tax sale if the county treasurer and the taxpayer agree to a mutually satisfactory arrangement for the payment of the delinquent taxes. Establishes a period during which a taxpayer who fails to make a payment under the delinquent property tax payment arrangement may not enter into another arrangement. Provides that the fiscal body of a county may adopt an ordinance to require waiver of interest and penalties added before January 1, 2012, on delinquent taxes and special assessments on real property in the county if: (1) all of the delinquent taxes and special assessments on the real property were first due and payable before January 1, 2012; and (2) before July 1, 2013, the taxpayer has paid all of these delinquent taxes and special assessments and has also paid all of the taxes and special assessments that are first due and payable after December 31, 2011. Requires the waiver of interest and penalties in these circumstances, notwithstanding any payment arrangement entered into by the county treasurer and the taxpayer.


Property tax exemption. Permits a nonprofit corporation serving the homeless that received a property tax exemption for the 2007, 2010, and 2011 assessment dates to file a late property tax exemption application for the 2008 and 2009 assessment dates.


Review of local government budgets. Requires all civil taxing units subject to nonbinding review to file the information required for the nonbinding review with the county fiscal body on or before September 1 of each year. Requires a county fiscal body to complete the reviews and issue nonbinding recommendations on or before October 1 of each year. Requires a taxing unit that is subject to binding review to submit its budget and levies for final approval on or before September 1 of each year. Requires a taxing unit submitting its budget and tax levies for either nonbinding review or final approval to also submit to the reviewing body a copy of the notice of budget estimates and tax levies published by the taxing unit. Provides that a political subdivision that is required to submit its proposed budget and property tax levy for final approval may make an additional appropriation only if the additional appropriation is also approved by the body that approved the political subdivision's proposed budget and property tax levy. Authorizes the department of local government finance (DLGF) to establish a three year pilot program concerning nonbinding review of budgets, property tax rates, and property tax levies. Provides that for a county to be eligible for designation as a pilot county, the county fiscal body must adopt a resolution and submit an application to the DLGF. Allows the DLGF to designate not more than three counties as pilot counties. Specifies that the following apply in 2013 and thereafter in a pilot county: (1) Each taxing unit in the pilot county must file with the DLGF the taxing unit's proposed budgets, property tax rates, and property tax levies. (2) When formulating the taxing unit's estimated budget, property tax rate, and property tax levy, each taxing unit shall consider estimated consequences of the circuit breaker property tax credits. (3) The DLGF shall prepare an analysis of the proposed budgets, property tax rates, and property tax levies submitted by taxing units in the pilot county and provide the analysis to the county fiscal body and to the fiscal body of each taxing unit in the pilot county. (4) Upon request by the county fiscal body, representatives of the DLGF shall appear before the county fiscal body to review the analysis. (5) The county fiscal body shall review the proposed budgets, property tax rates, and property tax levies of each taxing unit in the county and the total tax rate of each taxing district in the county, and shall issue a nonbinding recommendation to each taxing unit.


Technology equipment property tax exemption. Provides that the property tax exemption for qualified enterprise information technology equipment applies only to property located in a high technology district area designated by the fiscal body of the county or municipality. Specifies the procedure for the designation of such an area. Provides that an entity that leases qualified property for use in a facility or data center dedicated to computing, networking, or data storage activities is also eligible for the exemption. (Current law provides that only a business that operates such a facility is eligible for the exemption.) Requires that at least $10,000,000 must be invested in the facility or data center after June 30, 2009, by the entity entering into the agreement for the exemption and by the lessor of the qualified property (if the business is a lessee) and all lessees of qualified property.


State taxation. Specifies the assessed value for outdoor signs for the 2011 through 2014 assessment dates. Requires the commission on state tax and financing policy to study the assessment of outdoor signs. Specifies that the value of federal income tax credits under Section 42 of the Internal Revenue Code awarded after December 31, 2012, must be used for purposes of determining the assessed value of low income housing tax credit property. Permits the fiscal body of a city or town, or the county, in the case of an unincorporated area, to authorize the unit's redevelopment commission to establish a residential historic rehabilitation grant program. Permits the fiscal body to annually appropriate money for the grant program from the property tax increment resulting from any additional property taxes collected as a result of using the value of federal income tax credits in determining the assessed value of low income housing tax credit property. Separates the township assistance levy from the township's general fund levy, and provides for a levy based on a rate calculation that must be used to determine a township's assistance levy after 2012. Phases in the change through 2014. Freezes a township's township assistance rate for levy determinations after 2014. Permits a township to increase the township assistance levy only if there is a corresponding reduction in the township's general fund levy. Specifies that if the township is located in a county for which a local option income tax levy freeze is first imposed or increased, the township assistance fund levy remains the same. Provides that if the calculated maximum rate for a township for 2013 is greater than or equal to the 2012 rate, the assessed value growth quotient (AVGQ) applies for 2013 and thereafter. Provides that for other townships, the AVGQ applies after 2014, after the new rate is fully phased in. Provides a 100% property tax assessed value deduction for a solar power device used to generate electricity that is installed after December 31, 2011. Provides that a person leasing real property with a solar power device is eligible for the exemption if the person is subject to assessment for the solar power device. . .


Distressed political subdivisions. Provides that a political subdivision may file a petition with the distressed unit appeal board (board) seeking designation of the political subdivision as a distressed political subdivision, based on any one of several failures by the political subdivision to meet its financial obligations. Provides that either two unsuccessful referenda or effects from the credit for excessive property taxes that are greater than 75% (excluding debt levies) can be a basis for finding a political subdivision a distressed political subdivision. Specifies that the board may consider whether a political subdivision has exercised all of its local options. Provides that if the board designates a political subdivision as a distressed political subdivision, the board shall appoint an emergency manager for the distressed political subdivision. Provides that an emergency manager of a distressed political subdivision has broad powers to effect the financial rehabilitation of the distressed political subdivision. Provides that if a school corporation is a distressed school corporation and that while in that status the school corporation's superintendent is newly employed or its school board has a newly elected or appointed member, the school corporation may petition the distressed unit board for removal as a distressed school corporation. Provides that if a distressed school corporation receives emergency financial relief, the school corporation may not do any of the following without the approval of the board: (1) Acquire real property for school building purposes. (2) Construct new school buildings or remodel or renovate existing school buildings. (3) Incur a contractual obligation (except an employment contract for a new employee whose employment replaces the employment of a former employee) that requires an expenditure of more than $10,000. (4) Purchase or enter into an agreement to purchase personal property at a cost of more than $10,000. (5) Adopt or advertise a budget, tax levy, or tax rate for an ensuing budget year. Specifies that if the authority otherwise exists a school corporation may receive a loan with interest from the counter-cyclical revenue and economic stabilization (state rainy day) fund or the common school fund or an authorization to use unobligated reserves or other balances in other funds or to make fund to fund transfers. Reduces the number of members on the board to five: (1) the director of the office of management and budget; (2) the commissioner of the department of local government finance; (3) the state examiner of the state board of accounts; (4) the superintendent of public instruction; and (5) an individual appointed by the chair of the legislative council. Repeals obsolete provisions of the distressed unit appeals board statute. . . Repeals the law that allows a distressed political subdivision to appeal if the subdivision's property tax collections are reduced by at least 5% in a calendar year as a result of the application of certain tax credits. . . Repeals the following committees, commissions, and boards: . . . (13) Distressed unit appeal board. (14) Department of local government finance rule adoption committee.