Because the law applies to all pending appeals and because the
property’s assessed value for 2006 increased by more than 5% over the
property’s assessed value in 2005, the Board finds that the Respondent has the
burden of proof in this proceeding.
...
Here, the Respondent argues that the Petitioner’s property’s assessment
was correct for 2006 based on the property’s purchase price. Surface
testimony; Meighen argument. According to the Respondent’s witness, the
Petitioner purchased the property under appeal on March 31, 2005, for $300,000.
Id.; Respondent Exhibit E. There was no evidence that the purchase of
the property was anything other than a market transaction. The Petitioner’s representative
likewise admitted that the property was purchased in 2005 for $300,000. Smith
testimony. The purchase price of a property is often the best evidence of a
property’s value. See Hubler Realty Co. v. Hendricks County Assessor, 938
N.E.2d 311, 315 (Ind. Tax Ct. 2010) (finding that the Board’s determination
assigning greater weight to the property’s purchase price than its appraised
value was proper and supported by the evidence). While generally the 2006
assessment is to reflect the value of the property as of January 1, 2005,
pursuant to 50 IAC 21-3-3(a), local assessing officials “shall use sales of
properties occurring between January 1, 2004, and December 31, 2005, in
performing sales ratio studies for the March 1, 2006, assessment date.” Thus,
the purchase of the property on March 31, 2005, was sufficiently timely to be
probative of the property’s market value-in-use for the 2006 assessment year.
In Joyce Sportswear Co. v. State Board of Tax
Commissioners, 684 N.E.2d 1189 (Ind. Tax Ct. 1997), the Tax Court held that
“when a taxpayer petitions the State Board for review, the State Board is given
the power ‘to assess the property in question, correcting any errors which may
have been made.’”
According to the Court, “[t]his power gives the State Board the plenary
authority to reassess the property at a value higher than the one appealed by
correcting errors in the original assessment.” 684 N.E.2d at 1194. See also
Talesnick v. State Bd. of Tax Comm’rs, 693 N.E.2d 657, 661 (Ind. Tax Ct.
1998) (The State Board has the authority to raise the assessed value of
property on a taxpayer-initiated petition for review). While the Board no
longer “assesses” properties, its power to weigh the evidence presented and to
“correct any errors that may have been made and adjust the assessment… in
accordance with the correction” likewise provides the Board the authority to
increase the assessed value of property where the evidence shows the assessment
is in error and the value of the property is in excess of its assessed value. See
Hubler Realty Co. v. Hendricks County Assessor, 938 N.E.2d 311, 314 (Ind.
Tax Ct. 2010) (“When a taxpayer elects to challenge its assessment, it assumes
a certain degree of risk, as resolution of a property tax appeal may lead to an
increase in assessment.”) The Board therefore finds that the Respondent raised
a prima facie case the value of the Petitioner’s property for the 2006
assessment year was $300,000.
Once the Respondent raises a prima facie case, the burden
shifts to the Petitioner to rebut the Respondent’s evidence. See American
United Life Insurance Co. v. Maley, 803 N.E.2d 276 (Ind. Tax Ct. 2004).
Here, the Petitioner’s representative argues that the Petitioner’s property’s assessment
should be lowered because the assessor’s actions amounted to “sales chasing,”
which Mr. Smith claims is prohibited by Indiana’s assessing guidelines. Smith
testimony. Mr. Smith, however, failed to cite to any specific law or
regulation in support of this contention.
In Big Foot Stores, LLC v. Franklin Township Assessor, 919
N.E.2d 621 (Ind. Tax Ct. 2009), Judge Fisher found that “sales chasing” or “selective
reappraisal” is the “practice of selectively changing values for properties
that have been sold, while leaving other values alone.” 919 N.E.2d at 623 fn. 5
(citing County of Douglas v. Nebraska Tax Equalization and Review Comm’n, 635
N.W.2d 413, 419 (Neb. 2001)). Here, however, the Petitioner’s representative
only showed that the Petitioner’s property’s 2006 assessed value increased to a
value close to the property’s 2005 purchase price. The Petitioner presented no
evidence of the assessed values of other similar properties. The Respondent’s witness,
on the other hand, testified that the assessor changed the land value of all
properties in the Petitioner’s property’s neighborhood. Therefore there is no
evidence that the Petitioner’s property was increased in value to its purchase
price while other properties‟
values remained unchanged. Nor did the Petitioner’s representative present any
evidence that other properties were not similarly assessed close to their
market values. Instead, he focused on the degree to which the property’s assessment
increased between 2005 and 2006. Absent a showing that the Petitioner’s property
was somehow assessed differently than other similar properties, the Petitioner
has failed to raise any cognizable claim.
The Board notes that assessing properties at or near their
actual market values is the goal of Indiana’s market value-in-use system. See
P/A Builders & Developers v. Jennings County Assessor, 842 N.E.2d 899,
900 (Ind. Tax Ct. 2006) (recognizing that the current assessment system is a
departure from the past practice in Indiana, stating that “under the old
system, a property’s assessed value was correct as long as the assessment
regulations were applied correctly. The new system, in contrast, shifts the
focus from mere methodology to determining whether the assessed value is actually
correct”). The harm only comes when other properties are treated
differently. And there is no evidence in the record that that is the case here.
