Friday, September 28, 2012

Board Finds House Entitled to 'Model Residence' Deduction

The Petitioners argue that the county erred when it denied the model residence deduction on 636 Musket Drive in 2008. Robinson testimony; Carmin argument.

Indiana Code § 6-1.1-12.6-2 grants a “deduction from the assessed value of the model residence in the amount of fifty percent (50%) of the assessed value of the model residence” for one year while the residence is assessed as a partially completed structure and for up to three years after the model residence is first assessed as a completed structure. Ind. Code § 6-1.1-12.6-2. The deduction is terminated if the property is sold “after the assessment date of that year, but before January 1 of the following year” to a person that does not continue to use the property as a model residence. Id.

Indiana Code defines a “model residence” as “real property that consists of a single family residence…that: (1) has never been occupied as a principal residence; and (2) is used for display or demonstration to prospective buyers or lessees for purposes of potential acquisition or lease of a similar type residence, townhouse, or condominium on: (A) the same property; or (B) other property.” Ind. Code § 6-1.1-12.6-1(a). The term “property” does not include any of the land on which the residence is located. Ind. Code § 6-1.1-12.6-1(b). The “owner‟s regular office space may not be considered a model residence…” Id. However, the statute “does not prohibit the use of the garage or other space in the real property: (1) to store or display material used to promote the real property or other similar properties; or (2) as a space for meetings with prospective buyers or lessees.” Ind. Code § 6-1.1-12.6-1(c).

While Indiana Code § 6-1.1-12.6-1, as enacted, only applied to assessment dates “in 2009 or a later year,” P.L. 167-2009 was passed the following year to retroactively extend the deduction to the 2008 assessment year. Respondent Exhibit F. Prior to its expiration in 2011, Indiana Code § 6-1.1-12.6-2.1(a) applied to a model residence “that is first assessed as: (1) a partially completed structure; or (2) a fully completed structure; for the assessment date in 2008 and was still a model residence on January 1, 2009.” Ind. Code § 6-1.1-12.6-2.1(a) (expired January 1, 2011). The “owner of a model residence is entitled to a deduction from the assessed value of the model residence in the amount of fifty percent (50%) of the assessed value of the model residence for the 2008 assessment date.” Id.

Here, Mrs. Robinson testified that the property under appeal is a single-family residence located on lot 31 in the Greenbrier Knolls subdivision. Robinson testimony. According to Mrs. Robinson, the Petitioners in the normal course of their business develop and build homes in the Greenbrier Knolls, Deer Run, and Greenbrier Meadows subdivisions. Id. Further, Mrs. Robinson testified, the subject house was completed and assessed on March 1, 2008. Id. The house was unoccupied; there was literature on the various styles and types of homes available for construction by the Petitioners on display in the house; and the house was used as a “model home” until it sold on February 5, 2010. Id.; Petitioner Exhibits 7 through 14. Six of the ten homes sold by the Petitioners in 2009 and 2010 resulted from prospective buyers touring the property to view the Petitioners‟ quality of workmanship. Id.

The Respondent, however, argues that the Petitioners’ property is a “spec” home; rather than a model residence. Sharp testimony. While the statute is “vague” on the definition of model residence, Mrs. Sharp argues that a model home represents the type and style of house that will be built in a neighborhood. Sharp testimony. According to Mrs. Sharp, a model home will have signage in the front yard that publishes the normal hours the property can be viewed and there is a person on-site to answer questions and sell similar houses on other lots in the neighborhood. Id.; Respondent Exhibit C. Mrs. Sharp testified that a model home is landscaped and the house is furnished. Sharp testimony. Moreover, a model home is typically the last house sold in the neighborhood and it sells at a significantly reduced price. Sharp testimony. To the contrary, Mrs. Sharp argues, a “spec” home is built by a builder with the expectation of finding a buyer to sell it to. Id. According to Mrs. Sharp, the Petitioners‟ property is just an empty house in a neighborhood, with a for-sale sign in the yard that required an appointment to view. Id.; Respondent Exhibit B.

Indiana Code § 6-1.1-12.6-1 does not require a “model residence” to have signage in the yard, posted business hours, a salesperson on-site, or landscaping or furnishings to qualify for the model residence deduction. The statute merely states that the property must be a single family residence that has never been occupied as a principal residence, that is used for display or demonstration to prospective buyers. “When faced with a question of statutory interpretation, this Court looks first to the plain language of the statute. Where the language is unambiguous, the Court has no power to construe the statute for the purpose of limiting or extending its operation.” Joyce Sportswear Co. v. State Bd. of Tax Comm’rs, 684 N.E.2d 1189, 1192 (Ind. Tax Ct. 1997), review denied. While signage, landscaping and on-site sales personnel may make it easier to determine that a property is a “model residence,” nothing in the statute requires such amenities. More importantly, while such amenities may be common with larger home-builders, there was no evidence that small companies exhibit or display their models in the same manner.

Here, the undisputed evidence shows that the Petitioners‟ property located at 636 Musket Drive was a single-family residence; it was not occupied as a primary residence until after it was sold on February 5, 2010; and the house was shown to at least six prospective buyers in 2009 and 2010 resulting in a contract for the Petitioners to build other houses in the neighborhood. Therefore, the Board finds that the Petitioners are entitled to the model residence deduction on the subject property for the 2008 assessment year.

Morristown Passes 2013 Budget

From the Shelbyville News:

Elimination of Parks Tax Impacting Parks' Budget in Boone County

From the Lebanon Reporter:

Park and recreation departments in Boone County have been stunned by a Boone County Council decision to revoke a county park tax.
“It’s cutting a big chunk out of our budget,” Lebanon Park Board President Laurie Gross said Monday. “I don’t think they understood the impact that money has on the parks; it has a huge impact on us.”
Advance, Jamestown, Lebanon, Thorntown and Zionsville all have parks, although Advance doesn’t collect a park and recreation department tax.

Indiana Automotive Fasteners Granted Abatement for Expansion in Greenfield

From the Greenfield Daily Reporter:

Plans for expansion at one of Hancock County’s largest manufacturers are moving forward thanks to an incentive package from local officials that will strengthen the company’s ties to Greenfield.

Greenfield City Council on Wednesday approved a 10-year tax abatement on $15 million in personal property investment for Indiana Automotive Fasteners.

In exchange for a tax break of nearly $900,000 over 10 years, the auto parts manufacturer will invest in new equipment and add 25 jobs over the next three years, according to company spokespersons.

Editorial Claims Unified Government will Save Taxes in Vanderburgh County

From the Evansville Courier & Press:

Taxes. The city of Evansville has lost more than 11% of its residents in my lifetime, from 132,000 to 117,000. In that time, dozens of large, innovative, taxpaying businesses left, too. Blight is obvious along Lloyd Expressway, Riverside Drive, Kentucky Avenue.
Yet, streets must be paved, cemeteries tended, traffic lights must work. Most of all, police and fire professionals deserve excellent pay, training and equipment — even with no tax base.
City and county taxes will increase rapidly without unification. Unifying for efficient governance can save us from this problem.
Unified government will save money for rural and urban areas while improving services.
A single voice will attract business and business investment. All taxes, city and county, will go up if we cling to our dysfunctional, status quo, go-it-alone outlook.
The unification plan will not raise taxes. Read the plan (viewable at You will find efficiencies and you will not find tax increases. Unification merges our elected leaders into a single taxing unit, rather than two taxing units. For taxpayers, fighting off one group is easier than fighting off two.
Vote Yes for low taxes. Vote Yes to fund and equip our police and fire departments. Vote Yes for a single elected taxing entity. Vote Yes to eliminate attorneys: Currently city attorneys spend your money arguing with county attorneys who are spending your money to argue with city attorneys. Yikes.
We are running this community like a dysfunctional family, living in the same house but our parents not working as a team. Vote Yes for Unification and sanity.

Jackson County Council Cuts $575,000 from General Fund

From the Seymour Tribune:

Jackson County Council members spent the better part of Wednesday whittling nearly $575,000 in general fund budget requests for 2013.

When the shavings settled at the end of a nearly seven-hour session, next year’s budget of $11,268,335 was just several thousand dollars under projected revenue in 2013.

At least one council member expressed his concerns that it wasn’t enough of a cushion.

“I think we need to have more,” Brian Wheeler said during the meeting in the county extension office conference room.

He suggested the council reconsider the idea of giving county employees a 3 percent pay raise.

Council member Brian Thompson said the council could still make budget cuts through Oct. 17, when the budget comes up for final adoption.

Earlier in the day, council member Greg Prange said he also had concerns about the pay increase.

Madison County Council Presents $39 Million Budget Proposal

From the Anderson Herald-Bulletin:

The face of county government could change next year under a $39 million budget proposed by the County Council for fiscal 2013.

A public hearing on the spending plan will be held in the Madison County Government Center at 6 p.m. today.

Among key changes is a proposal to strip the Madison County Board of Commissioners of its support staff; eliminate the Central Records Department and reassign those duties in the County Clerk’s office; and remove nine of 10 courthouse security positions.

Two County Commissioners — who plan to testify tonight in hopes of reinstating at least some of their staff — complained Thursday that the cuts seemed designed to punish.

South District Republican Commissioner Steffanie Owens said the council’s proposed budget would eliminate the position of office manager, currently held by Linda Smith, and two other support staff. Smith is also the Republican candidate for County Auditor.

“I can only take the attack on the commissioners’ budget personally,” Owens said of the council’s proposed cuts. “Their goal isn’t to save money, it’s to be vindictive and vicious.”

The commissioners and council have been locked in a power struggle since February when the council eliminated the wheel tax, which helped finance road projects. Then, in early April, the council’s four member Republican majority declared a fiscal emergency, saying the county faced a $5.8 million deficit, and eliminated jobs in the Information Technology Services department, on the commissioner’s staff and in the voter registration office.

The commissioners filed a lawsuit against the council, arguing that those actions interfered with the commissioners’ ability to serve as the county executive, and caused irreparable harm to public safety.


State Cigarette Tax Saves West Lafayette from Loan

From the Lafayette Journal and Courier:

Tobacco users came to the rescue of West Lafayette.

The state released money from the state’s cigarette tax earlier than normal, making an ordinance for a $268,630 loan to cover police and fire pension payments to the old pension plan unnecessary.

“I didn’t believe I’d have the state pension relief payment, which is due in early October,” Clerk-Treasurer Judy Rhodes said Thursday after the West Lafayette City Council’s precouncil meeting.

Rhodes said the city needed the funds in its accounts in time to make the payment. That would have required a loan, which would have been repaid before the end of the year.

“I asked for a temporary loan ... on last Thursday. Lo and behold, on Monday, it landed,” she said, referring to revenue from the cigarette tax. The amount was more than enough to cover the pension payment, she said.


Fremont Plastics Requests Abatement for Expansion in Fort Wayne

From the Fort Wayne Journal-Gazette:

Fremont Plastics Inc. plans to invest $1.37 million to expand its factory and add new equipment as it creates four new jobs.

The Fremont Redevelopment Commission today approved the project, which includes a 10,000-square-foot addition to the company’s existing operation at 500 W. Water St. The addition is expected to cost $700,000.

The company, which employs 26, also plans to spend $668,000 on new equipment. Fremont Plastics’ website is under construction, but it lists sterile and non-sterile medical trays as a category. Company and town officials couldn’t be reached late today.

The manufacturer’s request for a tax abatement is scheduled to be considered by the Fremont Town Council on Oct. 16, said Jessica Christen, who works for the Steuben County Economic Development Corp.

Allen County Sheriffs Win Budget Appeal

From the Fort Wayne Journal-Gazette:

About 90 Allen County Sheriff's Department employees attended a portion of today's county budget appeals, silently showing support for Sheriff Ken Fries, who received more than $800,000 in additional funding.

During last week's meeting, the County Council issued a list of suggested cuts to the sheriff's budget, including reducing sworn officers, reducing the number of inmates, reducing the number of cars and using civilians as bailiffs, who could also serve civil documents to the public instead of using officers.

Several appeals were granted Thursday after County Auditor Tera Klutz announced the county would be receiving an unexpected $1 million in tax money.

The county will receive about $800,000 more in county income taxes and $238,000 more in county economic development taxes than were originally estimated in the 2013 budget, Klutz said.

The council agreed to approve the following appeals -- sheriff's department for $827,007; county commissioners, $54,731; Homeland Security, $6,659; and coroner, $24,506.

They denied appeals to the Consolidated Communications Partnership (911 call center) for $21,212 and to the Parks and Recreation Department for $8,436.

Several departments, including the highway, prosecuting attorney and Wayne Township trustee, withdrew their appeals.

Glaze Tool and Engineering Seeks Abatement for Investment in New Haven

From the Fort Wayne News-Sentinel:

A proposed $185,000 investment would create three jobs at a New Haven tool and die shop.
Glaze Tool and Engineering, 1610 Summit St., currently employs 23 people with average salaries of about $51,750. But the new manufacturing equipment would allow the 38-year-old company to add three more workers: two machinists earning about $35,000 annually and a tool and die employee paid about $65,000, according to a tax abatement application filed with the Allen County Department of Planning Services.
Abatements temporarily reduce the taxes paid on new buildings and equipment. If County Council approves the request next month, the company's taxes would be lowered $7,000 over five years.
Glaze produces products for the automotive, food, medical, heavy equipment and other industries, and also designs and builds special machines. It had about $2.5 million in sales last year.
The new equipment is expected to be installed by November, with the new employees in place by next June.

Editorial Calls for Support of Proposed Budget in Fort Wayne

From the Tom Henry, Fort Wayne Mayor in the Fort Wayne Journal-Gazette:

Fort Wayne’s proposed 2013 budget is balanced and continues the city’s emphasis on leadership, fiscal discipline and building a stronger and more competitive city.

With each budget proposed by my administration, we have kept finances strong while continuing to provide quality services to residents.

Our 2013 budget is a continuation of our commitment to utilizing resources in the most effective way possible and positioning our community to be a place that is built for success.

I appreciate the hard work of our division heads and all city employees as we work together to make our city the best it can be.

Fiscal highlights

•City has maintained a solid cash reserve – 10 percent of the city’s operating budget.

•City has come under budget every year in my administration.

•Through innovation and best practices, nearly $17 million in savings since 2008. Examples include health care and joint purchasing.

We realize that with any budget, difficult decisions have to be made. Since 2008, the city has provided taxpayers with $60 million in property tax relief as a result of property tax caps and levy cuts.

As a result of past relief efforts, our proposed budget calls for the city to utilize the state’s allowable tax levy, which would preserve funding for essential services residents have come to expect such as leaf pickup, snow removal and street sweeping. The owner of a $100,000 home would see an increase of $2 per month. This would affect 60 percent of homes in the city that have not reached the tax cap. The remaining 40 percent of homeowners who’ve reached the tax cap would not see an increase.

The proposed budget also places a strong emphasis on maintaining our cash reserve. By keeping our savings at 10 percent of the operating budget, we are in better position to deal with unanticipated emergencies such as this past summer’s wind storm that resulted in $1.5 million in damages.

Fort Wayne is viewed by our peers as a leader in fiscal management and meeting the needs of residents. Past and ongoing efforts place us in a healthier financial position than numerous other cities across Indiana. Nevertheless, the changing economic landscape requires planning to ensure Fort Wayne remains a vibrant community with the means to serve its residents, secure investment and achieve its goals.

To be better positioned for the future and meet challenges, I launched the Fiscal Policy Project earlier this year. Led by a group of experts, the objective is to gain a full understanding of fiscal conditions and assist in building for the future to keep Fort Wayne competitive. This approach will help us meet coming challenges. We look forward to working with City Council to move our city ahead in the most effective way possible. 

Elkhart County's Tax Sale Auction Scheduled for Tuesday

From the Elkhart Truth:

Elkhart County's auction for properties that have back taxes owed to the county is less than a week away.

As of Thursday, there were 1,175 pieces of land listed for the upcoming property tax sale, which will begin at 10 a.m. Tuesday. The properties have back taxes adding up to $7.1 million.

Elkhart County Treasurer Larry Ernest said the county started off with roughly 1,600 parcels up for auction, but some landowners have paid their taxes to remove their properties from the sale. Ernest noted that landowners have until noon Monday to get up to date on their property taxes using cash or a certified check.

The tax sale will be held at the Elkhart County Administration Building, 117 N. Second St., Goshen.

To see a list of the properties up for sale visit

Revenue Finds Taxpayer's Evidence Insufficient to Support Finding Charge Included Service Fee

Taxpayer is an Indiana corporation engaged in the business of building and remodeling apartment complexes. Taxpayer bills its customers on a "lump sum" contract basis. After an audit, the Indiana Department of Revenue ("Department") determined that Taxpayer owed use tax and assessed interest for the tax years 2008 and 2009. Taxpayer purchased items for installation in the apartment complexes. The Department found that Taxpayer had neither paid sales tax at the time of purchase nor remitted use tax to the Department on these purchases. Taxpayer protests this imposition of use tax and interest. An administrative hearing was conducted, and this Letter of Findings results. Further facts will be provided as required.

Taxpayer maintains that use tax is being imposed on an intercompany payment of $17,268.76, on p.5 of audit report. Taxpayer initially claimed that this amount was paid to a related entity of Taxpayer to reimburse the related entity for "furniture that was supposed to be for [Taxpayer]. The purchase was made with tax at Walmart as a retail sale." Subsequently, Taxpayer stated:
I am providing sales receipts via credit card statements for the items in the invoice from [related entity]....

The total of the items notated add up to less than [the] total of the invoice from [related entity]. The remaining balance was a service charge for decorating, labor for picking the items up, ordering them, and coordinating them. This fee is typical, if not less than competitors, for picking out the furniture, technology, and office furniture. It was also a service, with no sales tax applied.

Based upon the documentation presented, Taxpayer and the related entity vendor engaged in a transaction for the transfer of tangible personal property that is subject to sales and/or use tax. The invoice presented by Taxpayer demonstrates that Taxpayer paid a single unitary amount of $17,268.76 for a list of various pieces of furniture. Thus, this invoice did not reflect that a "decorating service fee," or any other "service fee," was charged. Services that are performed as part of a retail "unitary transaction" are subject to sales and use tax. IC § 6-2.5-1-2(b). A retail "unitary transaction" is one in which items of personal property and services are furnished under a single order or agreement and for which a total combined charge or price is calculated. IC § 6-2.5-1-1(a). A unitary transaction includes all items of property and services for which a total combined selling price is computed irrespective of the fact that the cost of services, which would not otherwise be taxable, is included in the selling price. 45 IAC 2.2-1-1(a).

Given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayer met its burden of proving that the Department's assessment was wrong. Taxpayer's obligation to pay sales or use tax arose at the time of Taxpayer's purchase of the furniture from related entity vendor. Since Taxpayer did not pay sales tax on the invoice at the time of its purchase, use tax is properly imposed.

The Department imposed use tax for the "materials portion" of a transaction (audit report p. 4, referenced as check no. 179, in the amount of $21,837.00) on which Taxpayer did not pay sales tax at the time of the retail transaction. Taxpayer asserts that the Department has assessed use tax on a transaction which represented only "labor" or "services charges." Taxpayer maintains that the transaction in question did not involve the transfer of any tangible personal property. Taxpayer states that the transaction in question represented an amount paid to the telephone company for it to move a telephone pole from the middle of an access road to the outside edge of the parking lot at one of Taxpayer's apartment complex construction sites.

As noted previously, the Department notes that the burden of proving a proposed assessment wrong rests with the person against whom the proposed assessment is made, as provided by IC § 6-8.1-5-1(c).
During the hearing, Taxpayer presented additional documentation to demonstrate the nature of the transaction in question. Based upon this additional documentation, Taxpayer has presented sufficient documentation to demonstrate that the transaction in question did not represent the transfer of tangible personal property, but represented "service charges" to move a telephone pole. Therefore, Taxpayer has provided sufficient evidence to establish that the transaction in question was not subject to sales and use tax.

Editorial Calls for Action on TIF District in Indianapolis

From the Indianapolis Star:

There's a time for study and there's a time for action when it comes to tax-incremental financing, and the time for both is now.

Skeptics are right to call for a general assessment of this significant tool of commercial revitalization. But two and possibly three specific projects show a great deal of merit, and the City-County Council has waited long enough to give investors a yes or no.

The Metropolitan and Economic Development Committee is scheduled to vote Friday on Proposal 15, which it approved and amended in August but was instructed to reconsider by the full council.

Unfortunately, Mayor Greg Ballard's efforts to expand the Downtown TIF district to include sections of Massachusetts and Indiana avenues has been delayed by protracted discussions that have developers and neighborhoods in limbo.

TIFs lock in property tax levels for a period and retain some of the revenue within the target area. Used well, they replenish blighted and stagnant areas. Critics say they deprive schools and libraries of needed funds -- and that, in Indy's case, they have been pushed through without enough public input or cost-benefit analysis.

The latter complaints also have a partisan tinge and are moot when it comes to Proposal 15. Many months of deliberations have accrued, and the projects pass muster.

Mass Ave. involves replacing a fire station, which doesn't pay taxes, with private enterprise. The 16-Tech venture would make Indiana Avenue a life-sciences corridor, harboring one of the city's most promising industries.

Meanwhile, merchants, community leaders and elected officials in the Midtown area stretching several miles north of 16th Street seek TIF inclusion for grass-roots rejuvenation of a sector that is diverse, viable but in many parts struggling. They have much to offer a city that has not done well by its neighborhoods, and they ask a fraction of what Downtown developers are used to in terms of tax help.

Responding to a study commission report, the council has committed to taking a hard look at TIFs overall. That mission need not conflict with the current task: End the delay and approve Proposal 15 before the investors walk away; and let the Midtown stakeholders have their shot.

Thursday, September 27, 2012

Board Finds Taxpayer's Failure to File Amended Personal Property Tax Return Barred Taxpayer's Attempts to Appeal Taxes on RV

While acknowledging they owe taxes on the RV, the Petitioners contended their current tax liability is too high. To the extent that the Petitioners propose to contest their taxes, as opposed to the property’s assessment, the Board lacks jurisdiction to hear their claim. The Board is a creation of the legislature and has only the powers conferred by statute. Whetzel v. Dep’t of Local Gov’t Fin., 761 N.E.2d 904, 908 (Ind. Tax Ct. 2001) (citing Matonovich v. State Bd. of Tax Comm’rs, 705 N.E.2d 1093, 1096 (Ind. Tax Ct.1999)). The Board therefore must address appeals from determinations made by local assessing officials or county PTABOAs that concern property valuations, property tax deductions, property tax exemptions, or property tax credits. Ind. Code § 6-1.5-4-1(a). By contrast, no statute authorizes the Board to review the propriety of local tax rates.

The most applicable statute in this appeal, Ind. Code § 6-1.1-3-7.5, provides:

(a) A taxpayer may file an amended personal property return, in conformity with the rules adopted by the department of local government finance, not more than six (6) months … after the later of the following:
(1) The filing date for the original personal property tax return, if the taxpayer is not granted an extension in which to file under section 7 of this chapter.
(2) The extension date for the original personal property tax return, if the taxpayer is granted an extension under section 7 of this chapter.
(b) ****
(c) If a taxpayer wishes to correct an error made by the taxpayer on the taxpayer’s original personal property tax return, the taxpayer must file an amended personal property tax return under this section within the time required by subsection (a). A taxpayer may claim on an amended personal property tax return any adjustment or exemption that would have been allowable under any statute or rule adopted by the department of local government finance if the adjustment or exemption had been claimed on the original personal property tax return.

The Petitioners timely filed their Form 101 and did not attempt to amend that original return within six months as allowed by Ind. Code § 6-1.1-3-7.5. The mandatory language of subsection (c) is clear and unambiguous. A clear and unambiguous statute must be read to ‘mean what it plainly expresses, and its plain and obvious meaning may not be enlarged or restricted.’” Indianapolis Historic Partners v. State Bd. of Tax Comm’rs, 694 N.E.2d 1224, 1227 (Ind. Tax Ct. 1998) (quoting Department of State Rev. v. Horizon Bancorp, 644 N.E.2d 870, 872 (Ind. 1994)). The Petitioners missed the opportunity to amend their return.

The Petitioners brought this matter to the Board as a Form 131 appeal. That process is governed by Ind. Code § 6-1.1-15 and is for taxpayers who appeal an action of a local assessing official. Such actions include a local assessing official placing an assessment on personal property when a taxpayer failed to file a property tax return, or a local assessing official making a change to a return filed by a taxpayer. In this appeal, however, no local assessing official took action to change anything about the original return. Accordingly, the appeal process described in Ind. Code § 6-1.1-15 does not provide an avenue to the remedy the Petitioners seek.

DLGF Proposes Rule Regarding File Formatting Requirements for Oil and Gas Assessments


Notice of Intent to Adopt a Rule
LSA Document #12-548

Under IC 4-22-2-23, the Department of Local Government Finance intends to adopt a rule concerning the following:

OVERVIEW: Amends 50 IAC 26-20-7 concerning file formatting requirements for oil and gas assessments. Amends 50 IAC 26-20-8 concerning file formatting requirements for real and personal property tax data. Statutory authority: IC 6-1.1-31-1; IC 6-1.1-31.5-3.5.

For purposes of IC 4-22-2-28.1, the Small Business Regulatory Coordinator for this rule is:
David Marusarz
Department of Local Government Finance
Indiana Government Center North
100 North Senate Avenue, Room 1058(B)
Indianapolis, IN 46204
(317) 233-6770

For purposes of IC 4-22-2-28.1, the Small Business Ombudsman designated by IC 5-28-17-5 is:
Eric P. Shields
Indiana Economic Development Corporation
One North Capitol, Suite 700
Indianapolis, IN 46204
(317) 234-3997
Resources available to regulated entities through the small business ombudsman include the ombudsman's duties stated in IC 5-28-17-5, specifically IC 5-28-17-5(9), investigating and attempting to resolve any matter regarding compliance by a small business with a law, rule, or policy administered by a state agency, either as a party to a proceeding or as a mediator.

DLGF Publishes Final Rule on Capitalization Tables for Golf Course Assessments


Final Rule
LSA Document #12-274(F)


Adds 50 IAC 29 to establish uniform income capitalization tables and procedures to be used for the assessment of golf courses. Effective 30 days after filing with the Publisher.

Revenue Finds Automobiles Picked up and Delivered Out of State after Servicing Not Subject to Indiana Sales Tax

Taxpayer, a sole proprietorship, operates an auto repair business where Taxpayer repairs, rebuilds, and restores vehicles that are owned by Taxpayer's customers. Taxpayer also is a retailer of used vehicles.

Taxpayer argues that the Department has assessed sales tax on seven transactions that are not subject to Indiana sales tax. Taxpayer states that for these transactions "the customers' vehicles were picked up by the taxpayer out-of-state, [taxpayer] performed repairs [to the vehicles] in Indiana, and then the taxpayer delivered back the vehicles to its customers out-of-state." Thus, Taxpayer maintains these repair transactions are not sourced to Indiana, but are sourced to the states where the out-of-state delivery occurred.

The question of whether a customer "has exercised the right to ownership" is the test for the imposition of use tax. See IC § 6-2.5-3-2(a) (imposing the use tax "on the storage, use, or consumption of tangible personal property in Indiana.") See IC § 6-2.5-3-1(a) (defining "use" as "the exercise of any right or power of ownership over tangible personal property.") However, this situation is not the Department assessing use tax on the purchaser, but is the Department assessing sales tax on the retail merchant. This question of whether a customer "has exercised the right to ownership" is not the appropriate consideration for requiring a retail merchant to collect and remit Indiana sales tax for a sales transaction.

The general sourcing statute for retail merchants to determine if the retail merchant's transaction is subject to Indiana sales tax is found at IC § 6-2.5-13-1. If, pursuant to IC § 6-2.5-13-1, the sale is sourced to Indiana, the retail merchant must collect and subsequently remit sales tax at the time of the sale based on the gross retail income received by the retail merchant, unless the purchaser presents the retail merchant with an exemption certificate. For the transactions in question, a transaction where "the product is not received by the purchaser at a business location of the seller," the retail merchant is to source the sale of its product "to the location where receipt by the purchaser... occurs." IC § 6-2.5-13-1(d)(2). "Receipt" is defined as "taking possession of tangible personal property [or] making first use of services... whichever comes first." IC § 6-2.5-13-1(a). Thus, these repairs transactions that include the sales of repair parts will be sourced to the location where "the purchaser" either first "takes possession of the tangible personal property" or first "makes use of the services." The statute focus is on the "purchaser" and not on the retail merchant.

For these type transactions–where the out-of-state customer's property is imported into Indiana by the retail merchant, is repaired by retail merchant, and is delivered by the retail merchant to the out-of-state customer–the purchaser neither first "takes possession of the tangible personal property" nor first "makes use of the services" until the property is delivered to and accepted by the customer. If this property is delivered to and accepted by the purchaser at a place outside of Indiana, then the sales transaction, for purposes of sales tax, is sourced to the state of delivery.

Taxpayer protested the assessment of sales tax on seven transactions that it asserts represent these type of transactions where the repaired property was delivered to the out-of-state customer at a location outside of Indiana. During the course of the protest, Taxpayer submitted additional documentation, for three of the transactions, to show that the repaired property was delivered to the out-of-state customer at a location outside of Indiana. The Department is prepared to accept this documentation, for this one time only, for the following transactions:

9/17/2008 transaction, audit report p. 5, in the amount of $9,394.00;
8/17/2009 transaction, audit report p. 6, in the amount of $800;
2/1/2009 transaction, audit report p. 6, in the amount of $51,867.00.

However, Taxpayer is on notice that this documentation may not suffice for future transactions and more detailed records need to be retained for any of these type of transactions to be sourced to the out-of-state delivery locations in the future. Additionally, Taxpayer's protest, as to the other four transactions in question, for which additional delivery documentation was not presented, is denied.

Deadline to Appeal Assessments Approaches in Knox County

From the Vincennes Sun Commercial:

County property owners have just a few more days to appeal their assessed values.

Assessor Cathy Lane said the deadline to appeal the Form 11 that went out to area property owners in August is Monday.

Form 11 isn’t a property tax bill; those will be sent out later. The form is a rundown of the amount at which a property has been assessed. They are traditionally sent out ahead of property tax bills so any obvious mistakes in assessment or calculation can be remedied before a county’s tax rate is set.

Determining how much a property owner will pay can’t be gleaned from Form 11 alone, Lane said. County officials don’t often know themselves until area property owners begin receiving their bills because the tax rate is set by state officials after all the taxing entities have submitted their budgets.

But the Form 11, Lane said, is helpful to both the county and property owners. Home and commercial property owners can remedy mistakes in assessment before the actual bill arrives. Appeals and adjustments made after the bill has gone out mean less money for local governments, schools, public libraries and other taxing units.

The more quickly a mistake can be found and fixed, the better off everyone is, Lane said.

The first property tax bills were sent out in April, and Lane’s office in the weeks that followed was full of people disputing what a totally new county-wide assessment claimed their properties were worth.

But many of the problems, she said, were due to minor mistakes that were remedied rather quickly in her office.

Since the Form 11 went out, some 300 more appeals have been heard, but Lane said about 95 percent of those she was able to fix with a little tweaking here and a little tweaking there. The majority of the mistakes, she said, are due to human error, a mere mistake in data entry, if you will.

“Most everyone, after everything is explained to them and all the mistakes are fixed, walk out of here believing their assessments are fair,” she said.

Due to a change in the way the state calculates property values, Lane said several property owners saw the value of improvements go up while land values went down slightly. The overall total, however, should be about the same, she said.

Commercial land values, on the other hand, went up as did the value of farm ground.


The assessor’s office can be reached by calling 812-885-2513.

Vanderburgh County Consolidation Debate Focuses on Taxes

From the Evansville Courier & Press:

It's one sentence in a 26-page plan for consolidating Evansville and Vanderburgh County governments, but a televised debate Wednesday night gave voters a glimpse of the arguments it could spark if they say yes to merger.
"Any increases or decreases in Tax Rates that are the direct result of this Plan shall be phased in over a three (3) year period, beginning with the year 2015," says the Plan of Reorganization at the center of the referendum vote to be held Nov. 6.
A consolidated government's first election would be held in 2014.
The phase-in provision, Winnecke said, was intended to do two things.
It is a reference, the mayor said, to the expenses of 15 local government agencies already administered and jointly funded by city and county governments.
"The sharing of those will be phased in over a three-year period (if consolidation is approved)," he said.
The joint agencies are funded in most cases using ratios determined decades ago by each local government's executives. The phase-in provision means their costs will be "equalized," Winnecke said.
The phase-in provision — Article 7.1.1 in the reorganization plan — also was intended as a safeguard in case future mayoral administrations and Common Councils prove themselves to be big spenders unconstrained by frugality or prudence. Such elected officials, Winnecke said, "may have a less conservative view on how to spend money."
But the phase-in provision doesn't actually say any of that.
See the full article here:

Greenwood Board Deems Use of TIF Funds for Pool Allowable

From the Johnson County Daily Journal:

A Greenwood board has decided it would be allowed to spend economic development money on a new pool, although it hasn’t yet agreed to do so.

The Greenwood Redevelopment Commission voted unanimously Tuesday that it can spend tax dollars from a tax-increment financing district on a $10 million aquatic center at Freedom Park. The board did not actually vote on whether to spend that money on the pool project and won’t consider that issue until next month.

Two attorneys said the redevelopment commission needed to take the vote since the city already has been spending tax district money outside the redevelopment zones.

In light of the pool proposal, a Clark-Pleasant school district attorney and an Old Town resident who opposes the project’s cost recently called the practice into question.

Anderson City Courts Shift Money from Probation

From the Anderson Herald-Bulletin:

With a budget proposed to close an estimated $1.5 million deficit, many city departments have had to make changes. That was evident in hearings Tuesday with proposed layoffs in the police and fire departments, and again Wednesday in the first department on the agenda.

In the city courts, funding was moved from probation to courts. That change sees court funding going from $472,675 last year to a proposed $689,805 this year, and probation from $358,507 to $163,179.

The proposed city budget accounts for a $1.3 million property tax revenue loss during 2012. Added to the general fund under the board of works is $1.2 million to address the absence of funding from the wheel tax, according to the mayor’s office.

The mayor’s budget requested slightly more funding, a little over $1,000, for 2013, mainly because of an increase in insurance costs and costs for supplies taken out of the controller’s budget and put into department budgets.

The proposed budget addresses a 15 percent increase in healthcare for all city departments.

The city budget hearings have concluded, but an initial reading of the budget will be held Oct. 11. The final reading, to decide on the budget, will be held Oct. 23.

Lafayette Council to Consider 2013 Budget and Ordinance to Authorize Bonds

From the Lafayette Journal & Courier:

Lafayette’s City Council has a full agenda planned for its Monday meeting, and the council waded through the items during its caucus meeting Wednesday night.

Monday’s meeting will begin with Lafayette residents’ opportunity to give their input into the proposed 2013 budget. The public hearing portion of the meeting gives residents the opportunity to comment on the proposed budget and related salary ordinances.

The council then has several ordinances for consideration on final readings. Chief among them are ordinances that would annex the area south of McCarty Lane, east of Creasy Lane, north of Haggerty Lane and west of Veterans Memorial Parkway into the city.

The council also will consider an ordinance authorizing tax incremental finance bonds of up to $6.5 million to help MetroNet, an Evansville-based company, install fiber-optic Internet, television and phone service directly to residences.

The bonds do not have any liability to the city, and the TIF fund generated from the increased assessed value of the fiber-optic lines would go to MetroNet to repay the bonds. Most of the $60 million project is being funded through the company’s private investors.

The council meeting begins at 7 p.m. Monday in the council chambers at City Hall, 20 N. Sixth St., Lafayette.

Miami County Considering Selling Land for $1 in Commissioner's Sale

From the Kokomo Tribune:

Miami County commissioners are considering selling land parcels for just $1 in an aggressive effort to get properties with delinquent taxes into the hands of tax-paying citizens and back onto the county’s payroll.

The proposal comes after a recent tax sale in which only 48 properties with unpaid taxes were purchased out of 192 up for sale. The auction brought in nearly $77,000.

Now, commissioners want the remaining 144 properties — which have a total $446,500 in unpaid property taxes — to be sold at a commissioner’s sale slated for January, and they said they’re willing to take extreme measures.

“We’re going to get drastic,” Commissioner Craig Boyer said Monday. “There’s too many properties that have come up time and time and time again. We’re going to get these properties back into taxation, and this is the only way this is going to work — to be aggressive and get it done.”

Boyer said he believes the $1 price will entice people to purchase the properties, some of which contain dilapidated structures that need to be fixed or torn down.

At last year’s sale, commissioners set the starting purchase price at 10 percent of the total unpaid property taxes on each parcel.

Commissioners also said they would likely attach a small fee to each property to cover the county’s auction and advertising expenses.

“We’re not worried about getting the back taxes on these properties,” said Commissioner Josh Francis. “As long as our expenses are covered, we’re good. We just want these back on the payroll.”

Before the sale takes place, Boyer said commissioners would pass an ordinance banning anyone with delinquent taxes in the county from participating in the commissioner’s sale.

Francis also suggested notifying property owners adjacent to up-for-sale parcels about the commissioner’s sale.

“We want to make sure they know about it, because they’re the ones most likely to buy these properties that are continually coming up for sale,” he said.

Debbie Cunningham, land deputy in the auditor’s office, said the county could also hold an online auction for any properties not purchased during the commissioner’s sale.