From the Northwest Indiana Times:
Lake Auditor Peggy Katona said Monday she will give homeowners until the end of January to file paperwork needed to retain their property tax credits.
Katona said she is extending -- by a month -- the Dec. 31 deadline the state set for residents to complete the pink one-page forms that have been sent to homeowners the last three years.
She said there were reports of homeowners attempting to enter the Lake County Government Center in Crown Point Monday morning to fill out the forms. The Center is closed until Jan. 2.
The state is requiring owners to provide their names, addresses, Social Security numbers, driver's licenses or state-issued identification card number, passport or work visa and sign the form, certifying they are eligible for the reduction of property's assessed value by as much as $45,000 in addition to a supplemental deduction.
The survey is required to create a statewide database that will ensure no one is receiving more than the single credit the law allows for a person's primary residence. Vacation homes and rental properties are ineligible for the credit.
Katona and Porter County officials said in November that 38,000 homeowners had yet to file their forms. The state has demanded that counties crack down on those who fail to fill out the form and verify their homestead eligibility. They face a significant tax increase if the homestead credit is removed.
http://www.nwitimes.com/news/local/lake/lake-auditor-grants-reprieve-for-late-homestead-filers/article_aa30d95a-cf85-5bcc-839c-208315297b94.html
Monday, December 31, 2012
Homeowners Rush to File for Homestead Deduction
From the Indianapolis Star:
If you happen to drop past your county courthouse today, you might notice long lines.
The reason is a rush of homeowners
stopping by auditors' offices to verify records for their homestead tax deductions.
stopping by auditors' offices to verify records for their homestead tax deductions.
...
But a spokeswoman for the Indiana Department of Local Government Finance says it's OK to mail in the form to your local auditor's office as long as it's post-marked today.
says it's OK to mail in the form to your local auditor's office as long as it's post-marked today.
But that won't be the last chance. Homeowners who have received the deduction previously but who fail to submit the form will receive a notice early next year of potential termination of the deduction -- along with instructions detailing how to reinstate it, said Jenny Banks, the DLGF spokeswoman.
State officials four years ago asked county officials to send out forms to homeowners seeking verification of information. The goal was to curtail the numbers of people receiving tax credits on homes that were not their primary residences. People who do not verify their records run the risk of losing their homestead deductions -- and paying hundreds more in property taxes as a result.
that were not their primary residences. People who do not verify their records run the risk of losing their homestead deductions -- and paying hundreds more in property taxes as a result.
Most counties now have sent forms three consecutive years -- sending out repeat forms only to those people who have not already filled them out properly and returned them.
...
The homestead deduction is $45,000 on houses with an assessed value of $90,000 or more, according to state law, and 60 percent of the gross assessed value of houses under $90,000, according to the Indiana Department of Local Government Finance. Homeowners can receive an additional 35 percent of the remaining assessed value through the supplemental homestead deduction.
with an assessed value of $90,000 or more, according to state law, and 60 percent of the gross assessed value of houses under $90,000, according to the Indiana Department of Local Government Finance. Homeowners can receive an additional 35 percent of the remaining assessed value through the supplemental homestead deduction.
IBJ Calls for Pence to "Ditch the Tax Cut"
From the Indinapolis Business Journal:
Incoming Indiana Gov. Mike Pence may have spent a decade as a U.S. representative. But he is a neophyte when it comes to managing the state budget—unlike legislative warhorses such as Speaker of the House Brian Bosma and Sens. David Long and Luke Kenley.
We bring up the three—who, like Pence, are Republicans— because they’ve all reacted skeptically to his push to give Hoosiers a fat tax break, a proposal that was the centerpiece of his successful gubernatorial run.
...
On the surface, Pence has a compelling argument for why lawmakers should pull the trigger on a 10-percent reduction in personal income taxes, a move that would cost $500 million a year. While crisscrossing the state in his pickup truck campaigning, he emphasized that Indiana is sitting on $2 billion in reserves, the largest cushion in its history.
But what Pence doesn’t acknowledge are the unprecedented fiscal uncertainties hanging over the state—including costs from the full phase-in of federal health care reform, and potential lost gambling revenue caused by new casino competition in Ohio and Illinois.
...
Normally, it’s admirable for a candidate to try to follow through on his pledges once he wins office. But in this case, the cool reception Pence is getting from voters and fiscal experts in the Legislature should serve as a wake-up call.
Sure, Pence would take some flak for setting aside his call for a tax cut. But unlike the long-term fiscal trouble he could cause by pressing ahead, the fallout would be fleeting.•
See the full article here:
http://www.ibj.com/article?articleId=38723
Incoming Indiana Gov. Mike Pence may have spent a decade as a U.S. representative. But he is a neophyte when it comes to managing the state budget—unlike legislative warhorses such as Speaker of the House Brian Bosma and Sens. David Long and Luke Kenley.
We bring up the three—who, like Pence, are Republicans— because they’ve all reacted skeptically to his push to give Hoosiers a fat tax break, a proposal that was the centerpiece of his successful gubernatorial run.
...
On the surface, Pence has a compelling argument for why lawmakers should pull the trigger on a 10-percent reduction in personal income taxes, a move that would cost $500 million a year. While crisscrossing the state in his pickup truck campaigning, he emphasized that Indiana is sitting on $2 billion in reserves, the largest cushion in its history.
But what Pence doesn’t acknowledge are the unprecedented fiscal uncertainties hanging over the state—including costs from the full phase-in of federal health care reform, and potential lost gambling revenue caused by new casino competition in Ohio and Illinois.
...
Normally, it’s admirable for a candidate to try to follow through on his pledges once he wins office. But in this case, the cool reception Pence is getting from voters and fiscal experts in the Legislature should serve as a wake-up call.
Sure, Pence would take some flak for setting aside his call for a tax cut. But unlike the long-term fiscal trouble he could cause by pressing ahead, the fallout would be fleeting.•
See the full article here:
http://www.ibj.com/article?articleId=38723
Revenue Finds Taxpayers to be Indiana Residents for Income Tax Purposes
Taxpayers (also referred to as "Husband" and/or "Wife") are individuals with a current Florida address. Taxpayers own a house in Indiana. Taxpayers also possess tangible personal property, including automobiles, in Indiana and the automobiles are properly titled and registered at the Indiana Bureau of Motor Vehicles. Additionally, Husband incorporated an Indiana company in 1999 and has been the president of the company since. The company was eventually acquired by a multinational company and became a subsidiary of that multinational company. Husband continues to work for the company as the president of that subsidiary located in Indiana.
In late 2008, Taxpayers purchased another house and additional vehicles in Florida. Subsequently, Taxpayers applied for the Florida homestead exemption for the Florida house and their Florida drivers' licenses. On April 15, 2009, Taxpayers timely filed their married-filing-jointly Indiana income tax return, IT-40 PNR, for the 2008 tax year. Taxpayer, however, did not file their 2009 Indiana income tax return. As a result, the Indiana Department of Revenue ("Department") issued a proposed assessment based on the best information available.
…
In this instance, Taxpayers claimed that they are not required to file Indiana income tax for 2009 tax year and are not responsible for 2009 Indiana income tax because they became Florida residents in late 2008. To support their protest, Taxpayers provided additional documentation, including copies of Taxpayers' Florida drivers' licenses and excerpts of their federal and state returns showing [a] Florida address. Taxpayers also submitted a letter, dated May 5, 2010, from the county Auditor's Office where Taxpayers' Indiana residence is located, acknowledging that Taxpayers wanted to file their homestead credit in Florida, as well as an e-mail correspondence regarding their October 5, 2010, request. Additionally, Taxpayers offered a copy of their membership certificate to a Florida golf & country club and copies of the monthly statements (bills). Taxpayers further submitted copies of their 2008 and 2009 Florida property tax statements, showing that they were allowed a homestead credit for 2009 in Florida.
Taxpayer is mistaken. Upon reviewing Taxpayers' documentation, its documentation demonstrates that they purchased a residence in Florida, properly insured, and filed their homestead credit in Florida beginning 2009. However, the county Auditor's Office in Indiana was not informed until May 5, 2010, and, thus, the homestead exemption for Taxpayers' Indiana residence remained for 2009 tax year. Additionally, Taxpayers have obtained Florida drivers' licenses and possibly purchased and owned automobiles in Florida. However, Taxpayers also retained their Indiana automobiles and their Indiana drivers' licenses. Thus, the question remains–whether, for the tax year at issue, Taxpayers were domiciled in Indiana and, therefore, considered as Indiana residents.
… Husband continued to work as the president of the same company located in Indiana for the tax year at issue. Husband claimed that, for 2009, he worked from his Florida residence. But, in the company's filings with the state of Indiana, Husband remained at the same Indiana residence. The nature of Husband's employment requires Husband to maintain his contacts in Indiana, to carry an Indiana phone number, and to return to Indiana to perform certain necessary tasks.
Additionally, … Taxpayers here continue to own their Indiana home and tangible personal property including automobiles, which were properly registered with Indiana BMV. Taxpayers' Indiana address continues to be used for their important banking activities. For example, Taxpayers joined the golf & country club in Florida in late 2008 and the monthly statements (bills) for the 2009 tax year at issue were mailed to their Indiana residence. Wife made a payment by personal check, listing Taxpayers' Indiana residence as the address. Additionally, Taxpayers' documentation demonstrates that they spent some time in Florida during 2009; they also returned to Indiana several times during 2009 to be with family members.
As discussed above, "resident" includes any individual who was domiciled in this state during the taxable year. IC § 6-3-1-12(a). "A change of domicile requires an actual moving with an intent to go to a given place and remain there. It must be an intention coupled with acts evidencing that intention to make the new domicile a home in fact.... [T]here must be the intention to abandon the old domicile; the intention to acquire a new one; and residence in the new place in order to accomplish a change of domicile." State Election Bd. v. Bayh, 521 N.E.2d, 1317-18. Thus, given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayers met their burden of proof.
Finally, Taxpayers also argued that they did not have any Indiana sourced income, but the Department is not able to agree. Assuming that for 2009 Taxpayers effectively changed their domicile from Indiana to Florida, Taxpayers' documentation shows that Husband continues to work for the company located in Indiana as the president of the company. The company's filings to the state of Indiana for the year at issue listed that Husband resided in the Indiana residence. Thus, based on the information available to the Department, Husband worked in Indiana and Husband's compensation received from the company would have been Indiana source income and subject to Indiana income tax pursuant to above referenced Indiana law and regulations.
In short, Taxpayers remain obligated to file their 2009 Indiana income tax return and their income is taxable in Indiana.
Where Respondent had Burden, Board Finds Assessor Failed to Support Property's Assessed Value
The Respondent’s witness first argues that the Petitioner’s property was valued correctly based on the sale price of a former Ritters frozen custard store, which was purchased vacant and remodeled as a Starbucks coffee shop. Surface argument. In making this argument, the Respondent’s witness essentially relies on a sales comparison approach to establish the market value-in-use of the property. See MANUAL at 3 (stating that the sales comparison approach “estimates the total value of the property directly by comparing it to similar, or comparable, properties that have sold in the market.”) In order to effectively use the sales comparison approach as evidence in a property assessment appeal, however, the proponent must establish the comparability of the properties being examined. Conclusory statements that a property is “similar” or “comparable” to another property do not constitute probative evidence of the comparability of the properties. Long, 821 N.E.2d at 470. Instead, the proponent must identify the characteristics of the subject property and explain how those characteristics compare to the characteristics of the purportedly comparable properties. Id. at 471. Similarly, the proponent must explain how any differences between the properties affect their relative market values-in-use. Id.
Here, Mr. Surface merely observed that the “comparable” property was a Ritters frozen custard shop before closing and being reopened as a Starbucks. However, it is not clear that a property is comparable to the subject property simply because it is a fast food restaurant. The property’s size, location, visibility, traffic and access would all play a major role in the value of a commercial property. As the Indiana Tax Court stated in Fidelity Federal Savings & Loan v. Jennings County Assessor, 836 N.E.2d 1075, 1082 (Ind. Tax Ct. 2005), “the Court has frequently reminded taxpayers that statements that another property ‘is similar’ or ‘is comparable’ are nothing more than conclusions, and conclusory statements do not constitute probative evidence. Rather, when challenging an assessment on the basis that the comparable property has been treated differently, the taxpayer must provide specific reasons as to why it believes the property is comparable. These standards are no less applicable to assessing officials.” 836 N.E.2d at 1082 (citations omitted and emphasis added).
The Respondent also argues that the subject property is assessed correctly based on the assessed values of four other McDonalds restaurants in the county. Pursuant to Indiana Code § 6-1.1-15-18(c), “To accurately determine market-value-in-use, a taxpayer or an assessing official may … introduce evidence of the assessments of comparable properties located in the same taxing district or within two (2) miles of a boundary of the taxing district…” Ind. Code § 6-1.1-15-18. In support of its contention, the Respondent submitted property record cards for the subject property and the other McDonalds restaurants. But the property record cards provide no way to compare the assessed values of each of the properties. The subject property’s land value is based on $80,000 an acre with a 125% influence factor; and the comparable properties’ land values ranged from $375,000 an acre to $675,000 an acre – which only supports a finding that different neighborhoods have different land values. Similarly, the building on the subject property was assessed for $565,400; whereas the buildings on the “comparable” properties ranged from $219,000 to $515,700, with no explanation of how the assessor arrived at any of the values. Because the assessor chose not to apply one of the Guidelines models to any of the properties, the Board cannot compare the assessed values of the structures. Thus, the assessed values of the other McDonalds restaurants do not support a finding that the Petitioner’s property was assessed like other properties. Moreover, “the determination of whether properties are comparable shall be made using generally accepted appraisal and assessment practices.” Ind. Code § 6-1.1-15-18. As noted above, a property’s size, location, visibility and access all play major roles in the value of a commercial property. Thus, without evidence that the McDonalds restaurants were similarly located with similar visibility, access and traffic, simply pointing to another McDonalds’ assessment is insufficient to prove the assessment was correct.
There is little question that, had the Petitioner had the burden of proof in this appeal, the case presented by its representative would have fallen far short of the burden to prove the Petitioner’s property’s assessment was in error. As discussed above, however, Indiana Code § 6-1.1-15-17.2 places the burden of proof on an assessor when the assessed value of a property increases by more than five percent between assessment years. Where the assessor fails to support the assessment at issue with probative evidence, the taxpayer has no duty to support its claims with substantial evidence unless it seeks a lower value for the property than the previous year’s assessment. See e.g. Lacy Diversified Indus. v. Department of Local Government Finance, 799 N.E.2d 1215, 1221-1222 (Ind. Tax Ct. 2003) (holding that where a taxpayer with the burden fails to support his claim with probative evidence, the Respondent’s duty to support the assessment with substantial evidence is not triggered).
Saturday, December 29, 2012
Revenue Finds Taxpayer's Documentation Insufficient to Support Claim Charges were for Labor or that Sales Tax had been Paid
Taxpayer is a partnership which owns and operates a restaurant/bar in Indiana. In 2011, the Indiana Department of Revenue ("Department") conducted a sales/use tax audit of Taxpayer. Pursuant to the audit, the Department determined that Taxpayer failed to pay sales tax or self-assess use tax on tangible personal property it purchased and used in the course of its business activities, including capital assets in Taxpayer's depreciation schedule. The audit concluded that Taxpayer did not maintain proper records showing that sales tax was paid on these purchases. As a result, the Department assessed additional use tax and interest.
…
A. US Bar Remodel.
The Department's audit assessed Taxpayer use tax on "US Bar Remodel" in the amount of "$13,438" because Taxpayer failed to provide documentation to show that the sales/use taxes were paid.
Taxpayer claimed that the line item of "US Bar Remodel" in the amount of "$13,438" consists of seventeen (17) transactions and most of the transactions were payments for "Labor." Thus, Taxpayer asserted that it was not responsible for the sales/use tax because "Labor" is not subject to sales/use tax. Taxpayer also maintained that it was not responsible for the use tax on transactions involving materials used by its contractors because the contractors paid the sales tax. To support its protest, Taxpayer referred to the Workpaper, listing the break-down of the seventeen (17) names of individuals/companies in this category. Taxpayer also pointed to the copies of invoices/statements to support its protest.
Upon reviewing Taxpayer's documentation, the Department is not able to agree. First, Taxpayer's Workpaper listed seventeen (17) transactions/payments in this category but it only provided fifteen (15) statements/invoices. Thus, the total amount claimed in this category could not be substantiated and verified. Also, upon further review of the invoices/statements, several statements/invoices showed that the charge for labor and the charge for materials were not separate. Those transactions thus are considered as unitary transactions and the total amount of each of those transactions are taxable under IC § 6-2.5-1-1(a) and 45 IAC 2.2-1-1(a). Additionally, the Department's audit summary listed that Taxpayer purchased "US Bar Remodel" on July 1, 2010; however, none of the 15 statements/invoices were dated July 1, 2010. Rather, the 15 transactions/payments were dated variously after July, 2010 (from August 2, 2010 through December 30, 2010).
Thus, given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayer has met its burden demonstrating that the Department's assessment is incorrect.
B. Kitchen Equipment.
The Department's audit assessed Taxpayer use tax on "Kitchen Equipment" in the amount of "$11,438" because Taxpayer failed to provide documentation to show that the sales/use taxes were paid. Taxpayer, to the contrary, stated that it paid sales tax to the supplier at the time of the purchases. Taxpayer provided three (3) copies of the invoices to support its protest.
Upon reviewing Taxpayer's documentation, the Department is prepared to agree that Taxpayer's documentation is sufficient to demonstrate that it purchased kitchen equipment from the same vendor to which it paid sales tax at the time of its purchases. Thus, Taxpayer is not responsible for the use tax pursuant to IC § 6-2.5-3-4 and 45 IAC 2.2-3-14.
C. Improvements.
The Department's audit assessed Taxpayer use tax on "Improvements" in the amount of "$31,176" because Taxpayer failed to provide documentation to show that the sales/use taxes were paid. Similar to the explanation provided in Category A, Taxpayer claimed that it was not responsible for some sales/use tax for the same reasons.
Upon reviewing Taxpayer's documentation, the Department is not able to agree. First, Taxpayer's Workpaper simply stated that there was "no detail general journal entry" to account for a transaction in the amount of "$3,886.69." Similar to Category A, Category C of Taxpayer's Workpaper also consists of various transactions/payments with different vendors on various dates which cannot be substantiated or verified. Specifically, Taxpayer claimed a depreciation deduction concerning the capital asset purchase for "$31,176" but it could not reconcile its records. Given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayer has met its burden demonstrating that the Department's assessment is not correct.
C. TV.
The Department's audit assessed Taxpayer use tax on "TV-XXX," in the amount of "$1,188" because Taxpayer did not have documentation to show that sales/use tax was paid at the time of the purchase.
Taxpayer's Workpaper stated that this "$1,188" purchase consists of two (2) payments: (1) $962.99 for a television, including sales tax, and (2) $225 was a payment to an individual for installing the television. Taxpayer maintained that since Taxpayer paid the sales tax on the television purchase and the $225 payment was paid for a non-taxable service, the Department's audit erroneously assessed sales/use tax on "TV- XXX."
Upon reviewing Taxpayer's documentation, however, the Department is not able to agree. The Department has no doubt that Taxpayer purchased a television for $962.99 which included sales tax. That receipt, however, can only support the fact that Taxpayer purchased a television for $962.99 and paid the sales tax on that purchase; that receipt alone is not sufficient to support the claimed "$1,188" purchase. Thus, given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayer has met its burden demonstrating that the Department's assessment is not correct.
E. TV & Wall Mount.
The Department's audit assessed Taxpayer use tax on "TV & Wall Mount XXX" in the amount of "$2,732" because Taxpayer did not have records showing that sales/use tax was paid at the time of the purchase.
Taxpayer's Workpaper stated that this "$2,732" purchase consists of five (5) payments, one of the payments of which was a television purchase (including sales tax) and the remaining four (4) payments were payments to two individuals who performed the installation. Taxpayer thus maintained that the Department's audit erroneously assessed sales/use tax on "TV & Wall Mount XXX" because it paid the sales tax on the television purchase and the remaining payments were paid for non-taxable services.
Upon reviewing Taxpayer's documentation, however, the Department is not able to agree. Similar to the discussion in Category D, the Department has no doubt that Taxpayer paid sales tax on its purchase of a television. That receipt alone, however, can only support the fact that Taxpayer purchased that television for $1,205.44, which included the sales tax. In the absence of other documentation, that receipt alone is not sufficient to support the claimed "$2,732" purchase. Thus, given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayer has met its burden demonstrating that the Department's assessment is not correct.
F. Sound System.
The Department's audit assessed Taxpayer use tax on "Sound System" in the amount of "$3,221" because Taxpayer did not provide any documentation showing that sales/use tax was paid at the time of the purchase.
Taxpayer claimed that this "$3,221" sound system consists of four (4) payments to contractors (individuals/companies) who installed the sound system for Taxpayer. Taxpayer did not dispute three out of the four payments were subject to sales/use tax. Rather, Taxpayer asserted that the forth payment in the amount of "$1,723.29" was made to a contractor who paid sales tax on the materials. Taxpayer thus maintained that it was not responsible for the use tax because the contractors paid the sales tax on the materials and "Labor" was not subject to sales/use tax.
Upon reviewing Taxpayer's documentation, the Department is not able to agree. First, similar to its explanation in Category A and C, Taxpayer's Workpaper listed four payments in this categories but it only provided one invoice in the amount of "$1,723.29." Thus, the total amount designated in this category cannot be substantiated and verified. Additionally, the Department's audit summary listed that Taxpayer purchased this line item on August 21, 2008; Taxpayer's documentation showed that the payment was made on October 13, 2008. Thus, given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayer has met its burden demonstrating that the Department's assessment is not correct.
G. Server Station.
The Department's audit assessed Taxpayer use tax on "Server Station" in the amount of "$10,421" because Taxpayer did not pay sales/use tax.
Taxpayer claimed that this "$10,421" purchase consists of five (5) payments. Taxpayer stated that, among the five payments, the first two payments were made to a vendor who worked on the server station and the vendor paid sales tax for the materials used at the time of the purchases. Taxpayer stated that the third and forth payments were two installment payments for purchases of tangible personal property which sales tax was paid at the time of the purchases. Taxpayer further stated that the fifth payment was paid to an individual contractor and it did not dispute the assessment on that transaction.
Upon reviewing Taxpayer's documentation, the Department is not able to agree. First, Taxpayer's Workpaper listed five payments in this category, but it only provided four invoices. Although Taxpayer did not dispute the fifth transaction, the total amount claimed in this category cannot be substantiated and verified without the documentation of the fifth transaction. Additionally, the Department's audit summary listed that Taxpayer purchased this line item on March 13, 2008, but the five payments in Taxpayer's Workpaper fell on multiple different dates. The discrepancies in this category cannot be reconciled based on the documentation provided. Thus, given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayer has met its burden demonstrating that the Department's assessment is not correct.
H. Other 2008 Asset Additions.
Taxpayer's Workpaper designated the Department's audit assessments on "Bar," "Flooring," "Alarm System," "Equipment," and "Leasehold Improvement" as "Other 2008 Asset Additions" in its protest. Taxpayer provided a summary, claiming that it was not responsible for some of the use tax because its contractors/vendors paid the sales tax on the materials used and/or certain payments were made for "Labor," which were not subject to sales/use tax.
Upon reviewing Taxpayer's documentation, the Department is not able to agree. Taxpayer is reminded that it is required to maintain adequate records so the Department can determine the proper amount of Taxpayer's tax liability. IC § 6-8.1-5-4(a). "The records... include all source documents necessary to determine the tax, including invoices, register tapes, receipts, and canceled checks." Id. Taxpayer's summary simply referred to check numbers, dates, memo of the checks, and amounts of the check payments. While the audit assessed Taxpayer use tax on "Bar," "Flooring," "Alarm System," "Equipment," and "Leasehold Improvement," Taxpayer's summary failed to explain and support the payments were for "Bar," "Flooring," "Alarm System," "Equipment," and "Leasehold Improvement." For example, the audit assessed use tax on "Bar" in the amount of "$10,155." Taxpayer's summary failed to explain which payments were made relating to "Bar" in the amount of "$10,155." Specifically, Taxpayer provided two (2) invoices to demonstrate the purported costs of modification for "Bar." However, the aggregate amount of these two invoices was $7,451.81, not the listed "$10,155." Thus, given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayer has met its burden demonstrating that the Department's assessment is not correct.
Friday, December 28, 2012
Monroe County Auditor Extends Date for Filing for Homestead Deduction
From the Bloomington Herald-Times:
Monroe County will accept homestead tax deduction verification filings through Friday, Jan. 4.
Monday had been announced as the last day to do so, but the county auditor’s office will be closed that day, which is New Year’s Eve. With that closure, coupled with the closing Wednesday because of the blizzard, officials decided to be flexible and allow folks a few extra days to get the paperwork done.
“We’ll work with the taxpayers,” Auditor-elect Steve Saulter said Thursday. “We’re here to help.”
Property owners who do not file a Homestead Verification Form with the county auditor by Jan. 4 will lose a substantial credit on their property bill.
At the Monroe County Council meeting Thursday night, council member Marty Hawk raised some concerns about the move, pointing to state code IC 6-1.1-37-10, which reads that “if any due date falls on a Saturday, a Sunday, a national legal holiday recognized by the federal government, or a statewide holiday, the act that must be performed by that date is timely if performed by the next succeeding day that is not a Saturday, a Sunday, or one (1) of those holidays.”
, or a statewide holiday, the act that must be performed by that date is timely if performed by the next succeeding day that is not a Saturday, a Sunday, or one (1) of those holidays.”
If New Year’s Eve qualifies as a statewide holiday, following that code could shift the deadline from Monday to Wednesday, but not to Jan. 4.
But according to county council President Geoff McKim, while state statute does not allow a county auditor to extend deadlines, it does give auditors some enforcement flexibility for those who miss deadlines.
for those who miss deadlines.
The verification forms were mailed to property owners with their tax bills, but because those bills are sent to mortgage companies, some property owners might not have received them.
Any property owner in Indiana can claim a homestead credit for their primary place of residence. Vacation and rental homes do not qualify for the homestead credit.
A property owner can visit paymonroe.com to tell whether he or she has received the homestead credit on previous tax bills. However, the site does not indicate whether a homestead verification form has been filed. That can only be verified through the auditor’s office.
Residents with questions may call 349-2510. Due to a high volume of calls, residents may be asked to leave a message.
People may also request their status by emailing Saulter at ssaulter@co.monroe.in.us.
Additional information on homestead credits is available on the Indiana Department of Local Government Finance’s website atwww.in.gov/dlgf/8455.htm.
Finance’s website atwww.in.gov/dlgf/8455.htm.
Editorial Argues TIF Statute Should be Retooled for Benefit of All
From the South Bend Tribune:
Tax Increment Financing has been available to cities, towns and counties in the state of Indiana for several decades. In that time, with regard to the types of project being financed, the use of TIF funds has expanded considerably.
The program originated as a means to finance public infrastructure to encourage private development. St. Joseph County, for example, used TIF funds to provide sewer service to the I/N TEK steel plant in New Carlisle. The plant then created jobs, which in return has provided new property tax revenue to the county from the business and additional income taxes from the employees. Also, the South Bend wastewater facility acquired a major revenue client that helps pay for industrial wastewater treatment. When the infrastructure is paid off, the district can be dissolved and the property tax captured by the TIF can be released to the county general fund.
For the sake of clarity, it should be noted that TIF captures property tax revenue only on growth in the tax base. The levy on the valuation of property at the time the district is created is distributed to taxing units based on the formula that applies outside TIFs.
The size of a TIF may be small and focused geographically, such as the South Bend Medical TIF which includes Memorial Hospital and the South Bend Clinic, or it may be large in square area such as the South Bend Airport TIF, which extends from the farthest western and northern boundaries of the city to the southeast area known as the Studebaker Corridor.
In all, the aforementioned South Bend TIF districts plus Eddy Street Commons/Triangle TIF and several others, TIF districts consume about 40 percent of the city of South Bend's geographic area.
As an appointed member of the South Bend Redevelopment Commission, I appreciate having financing tools such as TIF districts as a means to assist future development. At the same time, as a member of the South Bend Common Council I am concerned about the large area the city encompasses.
1. Generally, there is the question of how we allocate the costs of providing basic city services to the 40 percent of the city which captures all the levy on new assessments for use exclusively within the districts. (The basic city services are, for the sake of this discussion, police, fire and government administrative costs. These are considered operation costs and not available for TIF dollars unless released to the city general fund by an act of the Redevelopment Commission.)
2. More specifically, we have a circumstance where many areas in TIF districts are provided new streets, sidewalks and curbs as part of the improvements. But, residents in need of sidewalk and curb improvements in front of homes not in a TIF area are told by the city that it is their responsibility. (The city is considering a curb and sidewalk program for the future but as yet hasn't authorized or funded it).
3. The life of TIF districts and the expanding types of uses for TIF dollars are also issues. As stated earlier, the original intent was for TIF revenue to finance infrastructure projects that support private development. In South Bend, those uses now include a parking garage on private land, a public relations effort at branding and support for nonprofit museums. All of these may be worthy, but my concern is that as TIF revenues continue to grow and expenses expand, we may never see the TIFs dissolved and new revenues returned to the general fund. (The Airport TIF, under the original statute, does not have a sunset provision -- a date at which it will expire. Some newer TIF districts are sunset by statute and all TIF districts may be closed provided that they have no outstanding obligation to which the district's revenues are pledged.)
A basic truism about government dollars is that there will always be a real or perceived need for those funds.
If we are going to continue with the South Bend model as described, we will sooner or later have to address the aforementioned concerns. Some TIF dollars will need to be allocated to provide basic services. Some TIF dollars could, once released, help address a curb and sidewalk program outside the TIF.
South Bend officials may have to limit the length of the new TIF districts to the term of the original bond and require release of TIF dollars to the city general fund on an annual basis rather than waiting to dissolve the district when revenues exceed obligations.
In light of these concerns, Indiana's General Assembly should look again at its statute which allows a TIF district to exist for 25 years or more, providing no new dollars to a city's general fund during that time. Even if there is significant growth outside the TIF districts (which is not the case in South Bend), TIF can result in attractive projects within the districts and a lot of unaddressed problems of outside them.
http://www.southbendtribune.com/news/opinion/sbt-retool-indianas-tif-statute-for-the-benefit-of-all-20121228,0,3549284.story
Tax Increment Financing has been available to cities, towns and counties in the state of Indiana for several decades. In that time, with regard to the types of project being financed, the use of TIF funds has expanded considerably.
The program originated as a means to finance public infrastructure to encourage private development. St. Joseph County, for example, used TIF funds to provide sewer service to the I/N TEK steel plant in New Carlisle. The plant then created jobs, which in return has provided new property tax revenue to the county from the business and additional income taxes from the employees. Also, the South Bend wastewater facility acquired a major revenue client that helps pay for industrial wastewater treatment. When the infrastructure is paid off, the district can be dissolved and the property tax captured by the TIF can be released to the county general fund.
For the sake of clarity, it should be noted that TIF captures property tax revenue only on growth in the tax base. The levy on the valuation of property at the time the district is created is distributed to taxing units based on the formula that applies outside TIFs.
The size of a TIF may be small and focused geographically, such as the South Bend Medical TIF which includes Memorial Hospital and the South Bend Clinic, or it may be large in square area such as the South Bend Airport TIF, which extends from the farthest western and northern boundaries of the city to the southeast area known as the Studebaker Corridor.
In all, the aforementioned South Bend TIF districts plus Eddy Street Commons/Triangle TIF and several others, TIF districts consume about 40 percent of the city of South Bend's geographic area.
As an appointed member of the South Bend Redevelopment Commission, I appreciate having financing tools such as TIF districts as a means to assist future development. At the same time, as a member of the South Bend Common Council I am concerned about the large area the city encompasses.
1. Generally, there is the question of how we allocate the costs of providing basic city services to the 40 percent of the city which captures all the levy on new assessments for use exclusively within the districts. (The basic city services are, for the sake of this discussion, police, fire and government administrative costs. These are considered operation costs and not available for TIF dollars unless released to the city general fund by an act of the Redevelopment Commission.)
2. More specifically, we have a circumstance where many areas in TIF districts are provided new streets, sidewalks and curbs as part of the improvements. But, residents in need of sidewalk and curb improvements in front of homes not in a TIF area are told by the city that it is their responsibility. (The city is considering a curb and sidewalk program for the future but as yet hasn't authorized or funded it).
3. The life of TIF districts and the expanding types of uses for TIF dollars are also issues. As stated earlier, the original intent was for TIF revenue to finance infrastructure projects that support private development. In South Bend, those uses now include a parking garage on private land, a public relations effort at branding and support for nonprofit museums. All of these may be worthy, but my concern is that as TIF revenues continue to grow and expenses expand, we may never see the TIFs dissolved and new revenues returned to the general fund. (The Airport TIF, under the original statute, does not have a sunset provision -- a date at which it will expire. Some newer TIF districts are sunset by statute and all TIF districts may be closed provided that they have no outstanding obligation to which the district's revenues are pledged.)
A basic truism about government dollars is that there will always be a real or perceived need for those funds.
If we are going to continue with the South Bend model as described, we will sooner or later have to address the aforementioned concerns. Some TIF dollars will need to be allocated to provide basic services. Some TIF dollars could, once released, help address a curb and sidewalk program outside the TIF.
South Bend officials may have to limit the length of the new TIF districts to the term of the original bond and require release of TIF dollars to the city general fund on an annual basis rather than waiting to dissolve the district when revenues exceed obligations.
In light of these concerns, Indiana's General Assembly should look again at its statute which allows a TIF district to exist for 25 years or more, providing no new dollars to a city's general fund during that time. Even if there is significant growth outside the TIF districts (which is not the case in South Bend), TIF can result in attractive projects within the districts and a lot of unaddressed problems of outside them.
http://www.southbendtribune.com/news/opinion/sbt-retool-indianas-tif-statute-for-the-benefit-of-all-20121228,0,3549284.story
Revenue Finds Acetone to Clean Printing Blankets Was "Acquired and Directly Consumed in the Direct Production of Taxpayer's Plastic Products"
Taxpayer is a business which has one Indiana location and which manufactures plastic containers and accessories. Taxpayer makes plastic containers primarily for the food industry. Taxpayer provides design, engineering, prototyping, packaging, and printing services.
...
Taxpayer prints both designs and text on its plastic containers. Taxpayer prints the designs and words by means of an offset printing process in which the inked design is transferred from a printing plate to a "rubber blanket" and then to the printed surface. According to Taxpayer's representative, the "rubber blanket" is used because it most effectively prints irregular, plastic surfaces.
The Department's audit report explains further:
If the [rubber] blankets are not cleaned regularly the print on the container is not clear. The [T]axpayer stops the printer, removes the printing blanket then manually cleans the blanket with a pad or b[r]ush and acetone then places the blanket back into printer. This cleaning activity takes place on the line and production is stopped while they clean the blanket. The [T]axpayer states it takes about 5 minutes to clean a printing blanket on line and return to the machine for production. The [T]axpayer believes that the acetone, pads, and brushes to clean the blankets along with the gloves to handle the acetone are exempt. This acetone was purchased from Sherwin-Williams and sales tax was paid at the time of purchase, no credit was given in the [audit] sample for the sales tax paid to [] this vendor.
…
The issue is whether the acetone consumed in cleaning Taxpayer's printing blankets "has an immediate effect on the article produced" and if the acetone "is an essential and integral part of an integrated process which produces tangible personal property." 45 IAC 2.2-5-12(d)(1). In arriving at a decision, it should be noted that 45 IAC 2.2-5-10(g) states in part:
The fact that particular property may be considered essential to the conduct of the business of manufacturing because its use is required either by law or by practical necessity does not, of itself, mean that the property "acts upon and has an immediate effect on the tangible personal property being processed or refined". Instead, in addition to being essential for one of the above reasons, the property must also be an integral part of an integrated process which produces tangible personal property.
The Department agrees that use of the acetone to clean the printing blankets is "essential to the conduct of the manufacturing," but whether or not the acetone is "necessary" does not resolve the issue of whether or not the acetone is subject to tax. As stated in 45 IAC 2.2-5-10(g), in order to determine that the acetone is exempt "the property must also be an integral part of an integrated process which produces tangible personal property."
Taxpayer argues that its use of the acetone in its printing process is identical to the use of the acetone in Guardian Automotive. In that case, the petitioner processed the paint masks "in synchronization with the manufacturing process. Guardian, 811 N.E.2d at 981. Taxpayer explains that "[d]uring the printing process it is necessary to clean the printing blankets from time to time depending on several process factors."
Starting with the premise that all tax exemption provisions, is strictly construed against exemption from the tax, Tri-States, 706 N.E.2d at 283, but that an exemption must "not be construed so narrowly that it does not give effect to legislative intent," General Motors, 578 N.E.2d at 404, the Department is prepared to agree that Taxpayer has sufficiently established that the acetone is an "integral part of an integrated process which produces tangible personal property." 45 IAC 2.2-5-10(g). See also Letter of Findings 05-0321 (December 28, 2006). In Taxpayer's case, the use of the acetone is sufficiently distinguished from the routine use of cleaning supplies commonly found and used during various manufacturing processes to permit a conclusion that the acetone falls under the exemption set out at IC 6-2.5-5-5.1(b); the acetone is acquired and directly consumed in the direct production of Taxpayer's plastic products.
DLGF Publishes its 2013 Assessment Calendar
MEMORANDUM
TO: Assessing Officials
FROM: Brian E. Bailey, Commissioner
RE: 2013 Assessment Calendar
DATE: December 28, 2012
Listed below are key dates for assessing officials. The main goal for the Department of Local Government Finance (“Department”) and for local officials in 2013 will continue to be on-time tax bills.
Dates may change by action of the General Assembly. Since deadlines occurring on a Saturday, Sunday or legal holiday are effective on the next business day (IC 6-1.1-37-10; IC 36-2-15-4 (Assessor), 36-2-9-4 (Auditor), and IC 36-2-10-5 (Treasurer) the timeline below was modified to reflect the last business day on which the activity can be accomplished.
January 15: Annually assessed mobile home assessment date. IC 6-1.1-1-2.
February 15: Annually assessed mobile home assessments with current year taxes payable should be turned over to the county auditor in preparation for tax billing.
March 1: Assessment date and valuation date for all tangible property except annually assessed mobile homes under IC 6-1.1-7. IC 6-1.1-1-2.
March 1: Last date a real property assessment can be increased for undervalued or omitted property for the assessment date three years prior to March 1 (March 1, 2010-2012). IC 6-1.1-9-4; for personal property, IC 6-1.1-9-3.
April 25: Last day for county treasurer to mail 2012-pay-2013 tax bills (must be mailed at least fifteen [15] days before the first installment is due). IC 6-1.1-22-8.1(c).
May 1: Although there is no statutory date for the submission of the county’s ratio study as part of the annual adjustment process, in order to ensure on-time billing for 2013-pay-2014, it is strongly recommended the ratio study be submitted by this date.
May 10: Last day a claim for refund may be filed for the May installment three (3) years prior (2010-2012) as a result of a Correction of Error (Form 133). IC 6-1.1-26-1.
May 10: First installment of 2012-pay-2013 property taxes due. IC 6-1.1-22-9.
May 15: Last day to file a personal property return unless an extension has been granted by the assessing official. 50 IAC 4.2-2-2; IC 6-1.1-3-7(b).
May 15: Last day an amended personal property return may be filed for the March 1, 2012 assessment date (twelve [12] months from the later of the following: the filing date for the original property tax return if the taxpayer is not granted an extension, or the extension date for the original personal property return if the taxpayer is granted an extension). IC 6-1.1-3-7.5(a).
May 15: Last day to assess personal property that was not reported by the taxpayer ten (10) years prior to the current year’s filing deadline (2003-2012). IC 6-1.1-9-3.
May 15: Last day a current year not-for-profit exemption application may be filed with the county assessor. IC 6-1.1-11-3.
June 3: Although there is no statutory date for approval of the county’s ratio study, in order to ensure on-time billing for 2013-pay-2014, it is strongly recommended the ratio study be approved by this date.
June 28: The county assessor must submit to the Department a “cyclical reassessment” plan. IC 6-1.1-4-4.2(a).
July 1: Last day for the county assessor to deliver the real estate book (i.e., roll 2013-pay-2014 gross assessed values) to the county auditor. IC 6-1.1-5-14. This means that the county assessor and county auditor roll and balance values.
July 1: Last day for the county assessor to deliver the personal property assessment data to the auditor. IC 6-1.1-3-17(b).
August 1: Last day for county auditor to certify net assessed values to the fiscal officer of each political subdivision of the county and to the Department. IC 6-1.1-17-1.
September 16: Last day for a township assessing official to make a change on a personal property return filed on or before May 15 of the current year and notify the taxpayer of the change. If the return was filed after May 15, the assessing official has four (4) months from the day of filing to make a change and give notice. IC 6-1.1-16-1(a)(1).
October 30: Last day for a county assessor or a property tax assessment board of appeals to make a change on a personal property return filed on or before May 15 of the current year and notify the taxpayer of the change. If the return was filed after May 15, a county assessor or a property tax assessment board of appeals has five (5) months from the day it is filed to make a change and give notice. IC 6- 1.1-16-1(a)(2). These time limitations apply to the review function of the property tax assessment board of appeals, but not the appeal function under IC 6-1.1-15. 50 IAC 4.2-3.1-7.
November 4: Last day for filing an exemption application by an owner and for approval by the property tax assessment board of appeals of the application if the county auditor did not give notice to the owner of his or her failure to apply. (First Monday in November, per statute.) IC 6-1.1-11-5(d).
November 12: Last day a claim for refund may be filed for the November installment three (3) years prior (2010-2012) as a result of a Correction of Error (Form 133). IC 6-1.1-26-1.
November 12: Second installment of 2012-pay-2013 taxes due. IC 6-1.1-22-9.
December 31: Last day to file a disaster petition, issue a reassessment order, and make an adjustment for a disaster petition for the March 1, 2012 assessment date, and last day to file a petition for reassessment of permanently flooded land for the March 1, 2012 assessment date. IC 6-1.1-4-11; IC 6-1.1-4-11.5.
If you have any questions about the assessment calendar, please contact your Assessment Division Field Representative or call (317) 232-2773. A full list of assessment field representatives is available at http://www.in.gov/dlgf/files/Field_Rep_Map_-_Assessment.pdf.
http://www.in.gov/dlgf/files/121228_-_Bailey_Memo_-_2013_Assessment_Calendar_Memo_(final).pdf
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