Thursday, January 31, 2013

Revenue Reports Indiana Joining IRS in Providing Penalty Relief to Farmers and Fishermen

Indiana Joins IRS in Providing Penalty Relief to Farmers and Fishermen

Filing period extended to April 15, 2013

INDIANAPOLIS (Jan. 30, 2013) − The IRS has announced it will allow farmers and fishermen to file and pay their 2012 income taxes by April 15, 2013, due to processing issues. Indiana will follow the IRS policy and extend the due date for Indiana farmers and fishermen.
Normally, farmers and fishermen who choose not to make estimated tax installment payments are not subject to a penalty if they file their returns and pay the full amount of tax due by March 1. This year, due to late federal tax form updates, the IRS is extending that deadline to April 15, 2013.
Indiana will follow suit, allowing farmers and fisherman to file and pay their state taxes by April 15, 2013.

Herald-Angus Reports Tax Mess Still Causing Trouble in La Porte

From the La Porte Herald Angus:

Late and uncollected property tax payments have shorted area municipalities and school corporations millions of dollars in funding and cost them hundreds of thousands in interest.

Those are the latest numbers provided by local officials after experiencing six years of provisional tax bills since the county-wide property tax situation began, a situation county representatives say they are trying to turn around this year.

As of January, both major school systems in the county say they are owed $15 million or more still. Michigan City Area Schools is owed almost $16 million from 2008 to 2011, and La Porte Community Schools is putting its figure at around $15 million since 2008. And they are not alone. The city of La Porte has been out an estimated $7 million to $8 million while South Central Schools is short between $2.1 million and $1.6 million depending on the results of recent reconciled bill payments. Tri-Township Schools is looking at around $100,000 to $150,000.

Michigan City Controller Donna Pappas said the city is doing its own study on the lost revenue, but does not have any definite projections yet.

These figures do not take into account the effect of the circuit breaker tax caps, which are not yet known.

Michigan City Area Schools reported receiving only 46 percent of its expected tax draw in 2010-pay-2011. The city of La Porte’s lowest year was 2012 with only 54 percent. La Porte Community Schools collected only 59.8 percent that same year.

La Porte County Treasurer Nancy Hawkins said the county has been collecting about 10 percent less than usual in property taxes since the issue started in 2007, with the percentage of residents paying their bills dropping from between 93 and 95 percent before 2008 to between 83 and 85 percent today.

But nonpayment has not been the only issue. Delayed payments from tax bills have forced some districts to borrow money to meet salary, and then pay interest.

But county officials are hoping to solve this problem by the end of the year.

County treasurer Nancy Hawkins said the county has a tentative plan to send out a real property tax bill by Nov. 1 if the state gives permission.

Representative Tom Dermody (R-La Porte) is trying to move the legislation through during this congressional session to help the county’s plan work.

Star Reports Vuteq Offered Incentives for Expansion in Princeton

From the Indianapolis Star:

A supplier to automaker Toyota will expand its southern Indiana plant in Princeton and add 93 jobs by the end of the year.

Vuteq USA, which makes window frames and glass for Toyota vehicles, said today it will spend $4.3 million on new equipment in its plant, where 450 people already work.

The state Economic Development Corp. offered Vuteq up to $850,000 in tax credits to aid the expansion. Gibson County also is kicking in economic incentives.

Star Reports Legislature Seeks Funds for Roads

From the Indianapolis Star:

Indiana lawmakers frustrated by worsening revenues for roads considered three bills in the House Ways and Means Committee on Wednesday that could inject about $400 million annually into transportation and infrastructure projects.

Some of that would come from the 7 percent sales tax charged on fuel purchases but now sent to the state’s main checking account. And some would come from the portion of 18-cent-per-gallon excise tax now used for license branches and state police costs.

Rep. Ed Soliday, R-Valparaiso, proposed the bill that would capture 50 percent of the sales taxes charged on gas purchases. The money would be used for local roads funding but it would be distributed by the state.

Soliday said it was important for individual counties to take responsibility for their roads and raise taxes to fund them. However, he also said that some counties are better off than others and that it’s up the state to distribute money to counties that don’t have the capital to fund infrastructure.

“We need to be able to distribute the money in a way, and that’s where the state comes in, so that we can get money to those counties that are less affluent,” Soliday said. “We can’t just say, ‘Okay, Switzerland County, take care of your own problems, raise your own taxes.’ They’ve got 1,200 people. So, what kind of tax are they going to charge?”

Reps. Tom Saunders, R-Lewisville, and Todd Huston, R-Fishers, proposed bills that would shift some of the funding for the state police and the Bureau of Motor Vehicles from the gas tax revenues and to the state budget, freeing up more money for roads. Huston’s bill would take BMV funding out of the gas tax pool and Saunder’s bill would do the same with the state police.

Saunders says his bill will leave more gas tax money to the counties for their transportation needs.

“I just thought it made sense that we pay for government services out of state government money versus what should be going back to the locals,” Saunders said.

Gas tax money has either dropped or stayed constant over the past couple of years, which has caused a strain on county governments that need to fund roads and infrastructure projects.

Journal-Gazette Reports Revenue Opens Income Tax Filing Season

From the Fort Wayne Journal-Gazette

The Indiana Department of Revenue says it has opened this year’s income tax return filing season and has begun processing individual returns.

It took the steps Wednesday on the same day the Internal Revenue Service opened the federal season.

The agency says the General Assembly passed legislation providing for an Automatic Taxpayer Refund credit for the 2012 tax year. Taxpayers are eligible for the credit if they filed a full-year Indiana resident income tax return for tax year 2011 in a timely manner, including extensions, and if they do so for the 2012 tax year. They also must owe some tax to the state for 2012. The refundable credit is $111 per taxpayer or $222 for a married couple filing a joint return.

More information is available online at

NWI Reports Munster Schools Considering Referendum

From the Northwest Indiana Times:

The School Town of Munster wants to go directly to the voters for a tax increase to avoid laying off as many as 20 teachers, cutting programs, reducing custodial services and eliminating some health insurance benefits.

Superintendent Richard Sopko said the district would like to ask voters to consider raising taxes 19.9 cents per $100 of assessed valuation to generate an additional $3 million a year for seven years. The general fund referendum would assist the general fund budget, which mostly covers salary and benefits.

For a home valued at $244,835, the tax increase would be $253 more per year, or $21.04 per month. For a home valued at $300,000, the tax increase would be $324 more per year or $26.99 a month.

Two public forums are scheduled to give the community an opportunity to hear a presentation about the budget problems and discuss the issues. The sessions are set for 7:30 p.m. on Monday and Tuesday in the Munster High School auditorium.

The board is expected to vote on a tax increase Feb. 11. If approved, it could be on the ballot in May.

Last year, Munster school leaders considered a general fund referendum, taxing residents 22 cents per $100 of assessed valuation and raising $3 million a year for seven years. However, Sopko said the district decided against it because it didn't have the community's support to raise taxes.

Since that time, Sopko said the district launched an effort to educate the community about the general fund, and explain the school district's financial picture to the community. Sopko said he has held about 121 meetings talking to business leaders, politicians, service clubs, the Munster Education Foundation and residents about a tax increase.


Sopko said the School Town of Munster has cut $5.3 million over the last three years. It will face a $3.8 million deficit in the 2013-14 school year. He said cuts could include a reduction of 20 teachers, reducing custodial services by 30 percent, eliminating some health insurance benefits and reducing transportation costs.

"The state has a surplus of $2 billion and they must do something regarding these funding issues," Sopko said. "I'm an advocate of public education and the students in the Town of Munster and across this state deserve a good education. The state needs to devote more resources to education and to the task of educating our youth."

NWI Reports House Nixes Delay in On-Line Sales Tax Date

From the Northwest Indiana Times:

The Indiana House has rejected an attempt to delay when and other online-only retailers might have to start collecting the state's sales tax from customers.

House members in a voice vote Thursday kept July 1 as the date when online retailers would have to start charging Indiana's 7 percent sales tax. That would be six months earlier than planned under a deal former Gov. Mitch Daniels brokered with Amazon.

Republican Rep. David Wolkins of Winona Lake argued the tax requirement shouldn't start until Jan. 1 because the state has an obligation with Amazon.

Republican Rep. Tom Dermody of LaPorte says the Legislature wasn't part of that agreement and the deal is unfair to traditional retailers who must charge sales taxes.

The House could vote on the bill next week.

Petitioner's "Conclusory Opinion" Insufficient to Raise a Prima Facie Case

Excerpts from the Board's Determination follow:

Mr. Tridle’s evidence and contentions.

The assessment indicates that the subject property contains 3.21 acres. The buildings are assessed as being on one acre, and the remaining 2.21 acres are pasture. According to Mr. Tridle, the land portion of the property’s assessment should be reduced from $38,600 to $25,700. Tridle argument.

The improvements are also overvalued. The buildings are vacant and deteriorated. The siding is falling off some of the buildings, the roof areas of several buildings are falling apart, gutters and soffits are deteriorated, doors have fallen off, and there is water damage. Some buildings are falling in completely. The property also suffers from ongoing vandalism. While not relevant to the present appeal, the property has deteriorated even more since the assessment date. Tridle testimony; Pet’r Ex. 5.

Although the subject property is nearly worthless due to the severe deterioration, it might still be salvageable. Mr. Tridle therefore believes that improvement portion of the property’s assessment should be reduced from $29,300 to $24,240. He based that opinion on the work needed to bring the buildings up to acceptable standards. Tridle argument.

Indiana assesses real property based on its true tax value, which the Manual defines as “the market value-in-use of a property for its current use, as reflected by the utility received by the owner or a similar user, from the property.” 2002 REAL PROPERTY ASSESSMENT MANUAL at 2 (incorporated by reference at 50 IAC 2.3-1-2) (2009). A party’s evidence in a tax appeal must be consistent with that standard. See id. For example, a market-value-in-use appraisal prepared according to Uniform Standard of Professional Appraisal Practice (“USPAP”) often will be probative. See id.; Kooshtard Property VI, LLC v. White River Twp. Assessor, 836 N.E.2d 501, 506 n.6 (Ind. Tax Ct. 2005) reh’g den. sub nom. A party may also offer actual construction costs, sales information for the subject or comparable properties, and any other information compiled according to generally acceptable appraisal principles. MANUAL at 5.

Mr. Tridle offered nothing other than his conclusory opinion to support his claim that the subject land was assessed for more than its market value-in-use. He, however, did offer evidence of substantial deterioration in the subject buildings, which likely affected the property’s value. Of course, the property’s assessment already accounts for substantial deterioration. And Mr. Tridle did not offer any probative evidence to quantify the deterioration or to otherwise show that the assessment did not accurately reflect the property’s market value-in-use. He therefore failed to make a prima facie case for reducing the assessment.

Wednesday, January 30, 2013

Revenue Sustains Taxpayer's Protest Where Department Provided No Legal Support for its Position in Audit

Excerpts of Revenue's Determination follow:
Taxpayer is an out-of-state business doing business in Indiana. Taxpayer filed Indiana adjusted gross income tax ("AGIT") returns for the 2005, 2006, and 2007 tax years. Later, Taxpayer filed amended AGIT returns for those years. The Indiana Department of Revenue ("Department") conducted an audit for these years and determined that Taxpayer owed additional Indiana AGIT. The Department therefore issued proposed assessments for Indiana AGIT and interest.
Taxpayer protests the Department's determination that the two entities in question should be included in determining Taxpayer's 2005-07 Indiana AGIT. The Department's audit report provided a short explanation of its position, but did not refer to any statute or regulation upon which it based its determination. While IC § 6-8.1-5-1(c) provides that the notice of proposed assessment is prima facie evidence that the Department's claim for the unpaid tax is valid, in the instant case the audit report only states the Department's position. There is no legal reference provided for the Department's position.
While the Department's position might be correct, Taxpayer has provided a bare rebuttal of the Department's bare statement of position. Taxpayer has therefore met the burden imposed under IC § 6-8.1-5-1(c) regarding the inclusion of the two related entities in Taxpayer's 2005-07 AGIT amended returns.

Reporter Reports Lebanon Offers Abatement to Pro Logis and Subaru America

From the Lebanon Reporter:

Land that has been waiting for a developer for 12 years may soon be a flurry of construction activity after the Lebanon City Council approved a tax abatement for developer Pro Logis and client Subaru America at Monday’s meeting.

Subaru’s interest in the property, off Interstate 65 behind Hattie B. Stokes Elementary, was announced for the first time Monday night.

“You’ve had this piece of ground for 12 years, and it was always set up for this type of building,” Lebanon Mayor Huck Lewis said Monday. “It’s ready to go. All the utilities are there, and everything is set.”

Herald-Angus Reports Porter County Approves Creation of Economic Development Office

From the La Porte Herald-Angus:

The La Porte County Council has approved creating an Economic Development Office.

Last minute changes were made to the 2013 La Porte County budget by the La Porte County Council at Monday’s special meeting. The county general fund had earlier been $28,000,000 in the hole.

An amount of $135,000 was added to the 2013 budget for the Economic Development Project.

The La Porte County Commissioners presented their mission for the creation of the Economic Development Office at a workshop held before the council meeting.


The amount proposed was reduced on Monday before the workshop by $40,000.

The request brought before the board for the Economic Development Project was $180,000. The broken down assessment stated $75,000 was for full consulting services advised by Matt Reardon for the business projects presented; $20,000 for financial consultant Karl Cender’s work to economic development strategies, tax incentives and TIF calculations; $40,000 for web design; and $45,000 for travel, advertising and promotion.

Councilman Earl Cunningham motioned a 25 percent reduction of the proposed amount to have $135,000 added to the 2013 Budget for the Economic Development Office.

Cunningham said the amount would fund the project for the first nine months and if it is proven essential to the county, then the council could allocate $45,000 from the riverboat fund.

The motion passed with five councilmen in favor and one against.

The council also reduced the La Porte County Recorder’s budget by giving her $182,000 less for the 2013 budget than in her previous budget in 2012. Recorder Barbara A. Dean, only if she decides, will extract the amount from the Recorder’s Perpetuation Fund to pay the salaries of the employees.

The Perpetuation Fund, currently holding $486,000, can only be used and approved by the Recorder for any means she feels fit to preserve the records.


NWI Reports Property Mistakenly Given Zero Assessed Value

From the Northwest Indiana Times:

A local family recently got a notice from Lake County tax officials that sounds like a dream come true.

Rachelle Ruge-Bernard said the government notice stated her 11-year-old, 1,700-square-foot, three-bedroom, two-bathroom house is now assessed to be worth nothing — that's zero dollars — for purposes of calculating her next property tax bill.

But she has filed paperwork with the Center Township assessor's office to correct this mistake and have the county raise her assessment to the proper amount for the second time in five years.

"I think they are ridiculous for not doing their job, but I don't want to be penalized," said Ruge-Bernard, a Gary teacher.

County Assessor Hank Adams, whose office oversees the work of the county's independent elected township assessors, said this week, "There is a screw-up somewhere. I think the reassessment picked up (erroneous data) she had five years ago. She shouldn't worry about it. She won't have to pay anything extra."

Center Township Assessor Kristie Dressel said Tuesday she wanted to thank Ruge-Bernard for bringing the miscue to her attention and that they are working to correct it immediately so the family's assessment is accurate by the time tax bills go out later this spring.

Dressel said it is one of many appeals that typically crop up in the wake of a general reassessment, which was just concluded.

However, most reassessment complaints revolve around property being valued too highly for tax purposes. Dressel said it is unusual for someone, like Ruge-Bernard, to ask for their assessment to be increased.

She said the fault lies with a private firm given the mission of reinspecting and remeasuring every residential, business and agricultural building in the township, which includes the eastern half of Cedar Lake and most of Crown Point, in the search for new construction since the last reassessment eight years ago.

See the full story here:

Tribune Reports South Bend Finances "Stable"

From the South Bend Tribune:

County Auditor Peter Mullen has good news -- the county's financial outlook is stable, as rated by New York and London-based ratings company Fitch Ratings.
Mullen said Tuesday he received word from Fitch that the county has been ranked "AA-." According to a release from Fitch, the outlook for the county's financial status is stable, reaffirming the same rating from 2012.
"The rating reflects the county's sound overall financial operations, featuring active management to align revenues and expenditures in the face of legislation affecting property tax revenues, strong reserves and conservative budgeting," stated a release from Fitch.
Mullen said he was thankful for the leadership of the county commissioners and county council members during the tough economic times of the past few years.
"As you may recall, up until three years ago we were rated 'negative,'" Mullen said in a message to the commissioners and council members.
The ratings report noted sound finances, economic benefits from the presence of the University of Notre Dame and a moderate debt profile (as opposed to high amounts of debt) all contributed to the stable AA- rating.
"A key credit strength is the county's ability to yield solid reserve levels despite revenue volatility associated with the state's 'circuit breaker' (property tax caps) legislation and state disbursements," the release said.
The report also noted that the county has maintained good cash reserves.

Tribune Reports Counties May Lose Control of Wheel Tax

From the Kokomo Tribune:

They’ve tried three times to establish a wheel tax in Miami County, but the road-funding measure never found the votes to pass.
The Miami County Council is where the impasse lies.
The last time the idea was broached, in 2005, it failed on a 3-2 council vote. It needed four votes to pass.
Now state legislators want county councils to share the wheel tax decision with cities and towns.
State Reps. Mike Karickhoff, R-Kokomo, and Bill Friend, R-Macy, have proposed putting the decision in the hands of a county income tax council, a fiscal body created by the Indiana General Assembly in 1984 to decide local income tax issues.
A tax council, as it’s called, is actually a series of votes by different elected fiscal bodies, with each body controlling a specific percentage of the overall vote.
For instance, in Howard County, where upwards of 60 percent of the population lives in the city of Kokomo, the city would control a similar majority of the vote. Greentown and Russiaville’s respective town councils would control much smaller percentages of the overall vote.
But the measure, HB1117, is due up for a hearing in front of the House Ways and Means Committee today, and it has the potential to change the prospects of establishing a wheel tax in the 45 counties currently without one.
“You have county councils that have control of the wheel tax, but you have counties with a city where most of the traveled road miles are concentrated, and those cities aren’t empowered to access that wheel tax,” Karickhoff said Tuesday.
“Then you have county councils which want the wheel tax as much as the city councils and town boards do, but those county council members only want local control right up to the point they have to vote to raise taxes,” he said.
Counties are allowed to impose two separate, but linked, taxes, on top of the state vehicle excise taxes motorists pay annually.
The wheel tax, which can be imposed on any vehicle, including buses and semitrailers, can range from $5 to $40 per vehicle.
The excise surtax, which can be imposed on passenger vehicles, motorcycles and light trucks, and has to be passed jointly with a wheel tax, can be anywhere from 2 percent to 10 percent of a vehicle’s state excise tax, or a specific dollar amount ranging from $7.50 to $25.
Both taxes together are usually referred to as a wheel tax.
Howard County and Tipton County already have the wheel tax.
State officials estimate another $73 million could be raised for local roads if counties without a wheel tax go ahead and adopt one.
Karickhoff said he understands that counties might not want to give up total control over the wheel tax vote, but the bill would leave one element of control completely in the hands of county councils.
In counties where the wheel tax already is in effect, the county council would still be able to decide, unilaterally, to eliminate or lower the tax.

Rich James Argues Time for Lake County Income Tax

From the Northwest Indiana Times:

Since 2007, Lake County governmental units have been in a financial free-fall.
It’s not a pretty picture. It’s government at its worst. And there is plenty of blame to pass around.
The warring politicians have hurt local government and the people it serves while protecting their own political images.
It’s a war that started well before the 2007 General Assembly froze local levies until Lake County adopts a local income tax.
What that means is that while costs go up for all units of local government, there is no new money.
For many years prior to 2007, Lake County legislators have been telling their counterparts back home that if the county doesn't help itself, don’t bother looking for help from the state.
In other words, adopt the income tax.
The lack of a tax is about to take on new proportions.
State Sen. Luke Kenley, R-Noblesville, chairman of the Senate Appropriations Committee, essentially said that if Lake County doesn't adopt a tax, the state will halt its $10 million annual funding for the Northwest Indiana Regional Development Authority.
The RDA has been a godsend for Northwest Indiana. Gary/Chicago International Airport expansion, Lake Michigan shoreline development and transportation projects are among those dependent on the RDA money.
The Lake County Council voted for the tax a few years back, but the county commissioners vetoed the ordinance. The council lacked the necessary fifth vote to override the veto.
The makeup of the council since has changed, boosting hope that there might be five votes to override a commissioners’ veto.
While I still think the state has no business forcing us to adopt a tax, it’s time to cry “uncle.”
Northwest Indiana legislators know there won’t be money for the RDA or other projects until we help ourselves.
As distasteful and politically sensitive that it is, it’s time, as Batistatos said, to “pull the trigger.”
Failure to do so has a negative impact on growth and quality of life. Sadly, it has for many years. We are cannibalizing ourselves.
It should be done soon so the Legislature can act on Northwest Indiana requests, knowing we adopted the tax.
It is time for the county councilmen and commissioners to put progress ahead of politics.

Board Finds Petitioner's Comparable Sale and Assessment Information Insufficient to Support a Reduction in Property's Value

Excerpts from the Board's Determination follow:

The Petitioner first presented sales disclosure forms for the 2011 and the 2012 sale of a property located on the same street as the subject properties. The Petitioner contends that the sales show a downturn in the market and the property’s sale prices have a negative impact on the value of his properties. However, both sales of the property occurred outside the time frame used for the March 1, 2010. 50 IAC 27-3-2 states that “county assessors shall use sales of properties occurring after January 1, of the calendar year immediately preceding the March 1 assessment date in performing value calibration analysis and sales ratio studies under this article for the county. For example, sales beginning on January 1, 2009, shall be used for the March 1, 2010, assessment.” Here, the first sale of the property occurred on September 9, 2011 – eighteen months after the March 1, 2010, valuation date. The second sale occurred on March 9, 2012 – two years after the valuation date. For the same reason, the sales of the four multi-family properties submitted as Petitioner Exhibit C are not probative of the subject properties’ values because all of the sales took place in 2012. Because the Petitioner made no attempt to relate the various sale prices to the subject properties’ market value-in-use as of the proper valuation date, Mr. Potter’s comparable sales have little probative value.

In addition, the sale of 2126-2136 Cliburn in 2011 was a sheriff’s sale and the sale in 2012 was part of a bulk sale from the bank that purchased the property at the sheriff’s sale. In some cases, convincing evidence has established that forced sales dominate a particular market. Under those circumstances, even forced sales can be relevant. See Lake County Assessor v. U. S. Steel Corp, 901 N.E. 2d 85, 91-92 (Ind. Tax Ct. 2009) (finding the Board did not err in relying on bankruptcy sales where the taxpayer proved such sales were the market norm in the steel industry.) Here, however, the Petitioner did not prove that distress sales were the norm for the subject properties’ neighborhood.

The Petitioner also submitted assessment information for three comparable properties located on public streets. 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. The “determination of whether properties are comparable shall be made using generally accepted appraisal and assessment practices.” Id.

In his assessment analysis, the Petitioner used data from Marshall Swift and American Crushing to estimate a value of $4,500 for each parcel for their lack of city utilities. Yet the Petitioner failed to sufficiently explain his valuation method. Mr. Potter estimated a value reduction of $5,475.69 under Marshall and Swift and $6,388.89 based on data provided by American Crushing, or an “average value reduction” of $5,932 for water and sewer services. Attachment to Board Exhibit A. In addition, he estimated a “loss of income to Scavenger Service” of $1,500. Id. From those “losses in value,” Mr. Potter estimated a value reduction of $8,333 and a “total value reduction” $14,226. Id. The Board is unsure how these values were reached. Moreover, Mr. Potter failed to show that the amortized cost of installing water and sewer lines was equal to the value to the properties of having city control of those water and sewer lines. And the Petitioner’s assumption that city waste disposal services was worth $1,500 was wholly unsupported by any evidence. Thus, because “it is the taxpayer's duty to walk the Indiana Board . . . through every element of the analysis,” the Petitioner’s cost analysis is given little probative weight. See Indianapolis Racquet Club, Inc. v. Washington Township Assessor, 802 N.E.2d 1018, 1022 (Ind. Tax Ct. 2004).

The Petitioner also applied adjustments for the differences between the subject properties and his comparable properties for their locations and the size of their living areas. But again these adjustments are unsupported by probative evidence. For example, on 3619 West Thornhill Circle, the Petitioner deducted $10,000 for its “inferior location” and on for 3002 Butterfield Court and 2018 Bridgewater Circle, the Petitioner deducted $15,000 and $18,000 respectively for their “superior locations.” The same may be said regarding the Petitioner’s adjustments for minor differences in size between the properties. Mr. Potter reports that the duplex at 3619 West Thorndale is 32 sq.ft. smaller than his duplexes, but subtracts $1,600 from the assessed value of the smaller structure. More importantly, Mr. Potter provided no evidence that 32 sq.ft. of living space is worth $1,600. Statements that are unsupported by probative evidence are conclusory and of little value to the Board in making its determination. Whitley Products, Inc. v, State Board of Tax Commissioners, 704 N.E.2d 1113, 1119 (Ind. Tax Ct. 1998).

Finally, the Petitioner’s evidence shows that his “comparable” properties were assessed at $151,300, $161,500, and $157,900, respectively, in 2010. Therefore, contrary to the Petitioner’s contentions, Mr. Potter’s comparable properties’ assessed values do not support a finding that his properties were over-assessed in 2010. And, in fact, support the properties’ assessed values of $150,500.

Ultimately, the Petitioner’s issue is with the subdivision’s location on a “private drive” and the lack of city services the properties receive as a result of that designation. However, that was a choice the developer of the subdivision made that was memorialized in the properties’ covenants years before the Petitioner purchased the subject properties. While the Petitioner may be unhappy with that designation, the classification of Cliburn Road as a private drive was public knowledge at the time of his purchase. Regardless, the Board has no jurisdiction over the provision of city services to the Petitioner’s properties.

Tuesday, January 29, 2013

DLGF Issues Guidance on Soil Productivity Factors


TO:                 Assessing Officials and Vendors

FROM:           Barry Wood, Assessment Division Director

RE:                 2013 Soil Productivity Factors

DATE:           January 29, 2013

In 2012, as part of the March 1, 2012 statewide general reassessment, the Department of Local Government Finance (the “Department”), issued guidance regarding updated Soil Productivity Factors that were to be used for the reassessment (see and  The 2012 Indiana General Assembly passed legislation delaying the implementation of the updated factors (see  Specifically, Indiana Code 6-1.1-4-13 (b)(2), was amended to read:

As assessing officials prepare for the March 1, 2013 assessment date, there is a possibility that legislation may continue to delay the implementation of the updated Soil Productivity Factors, require different factors, or change the formula for updating the factors.   Legislation has been introduced and heard in legislative committee hearings last week.  Since the legislature is required to adjourn by April 29, 2013, and some annual adjustment ratio studies may have been submitted and approved by that date, until the Indiana Code is changed, assessing officials and vendors should proceed with using the factors previously introduced by the Department for the March 1, 2012 assessment date (see  However, depending on legislative action and timing, assessing officials and vendors should be prepared to possibly retroactively change productivity factors and subsequent values.

Questions on this memorandum may be directed to Barry Wood, Assessment Division Director, at, or (317) 232-3762.

IBJ Reports Tax Credits Approved for Accelerated Tanks and Trucks Investment in Fort Wayne

From the Indianapolis Business Journal:

Accelerated Tanks and Trailers, a division of a Carmel-based company, plans to open a Fort Wayne manufacturing plant that could bring about 300 new jobs to northeast Indiana by 2016.

The division of Carmel-based C&J Services and Supplies Inc. said it will spend more than $4 million to lease and equip 100,000 square feet of space in an existing Fort Wayne building that it will upgrade by 2015.

Hiring has already started at average annual wages of $48,000.

The company has been approved for $2.55 million in conditional tax credits and job-training funds from the Indiana Economic Development Corp. The city of Fort Wayne will consider additional tax breaks.

NWI Reports Valparaiso Approves Budget Plans

From the Northwest Indiana Times:

A fairly routine start-of-the-year meeting for the City Council involved approvals for spending more than $3 million in various funds.

The biggest was Valparaiso's budget for its share of the Porter County economic development income tax totaling $2.44 million. The biggest share of that was $550,000 set aside for employee health care expenses.
City Administrator Bill Oeding said $50,000 will set up a safety net to help employees whose claims exceed their coverage under the new plan that went into effect Jan. 1.

The rest will be a reserve to cover any claims left over from the 2012 self-insurance plan the city previously had. The city had an unusual number of health claims in 2012 that doubled the budgeted amount for the program and was one of the factors that led to the new insurance plan.

The EDIT budget once again sets aside $300,000 for the city's public transportation system to pay the local share of operating the V-Line intracity buses and the ChicaGo Dash weekday express commuter service to Chicago's Loop.

The same amount is set aside for pathways and sidewalks, and $147,000 will go to the downtown facade grant program. Of the latter amount, $47,000 is carried over from 2012 for projects that were approved but not completed before the end of the year.

The council also approved spending the $300,000 from the redevelopment commission's tax increment financing replacement levy for the capital equipment fund. This money is used to pay for vehicles and equipment for the police, fire and public works departments.

The budget for the money from the parking fees and fines was approved at $99,500, while another $105,000 was approved from the firefighting fund to pay for code inspections by firefighters. Both funds are self-supporting.

Herald-Journal Reports White County Hires HJ Umbaugh to Assist with Tax Levies

From the Monticello Herald-Journal:

The White County Council on Monday approved hiring the consulting firm HJ Umbaugh & Associates to help assist with tax levies.
Umbaugh, which takes clientele that are mostly governmental units and has done past work with the county, had a representative in attendance at the special meeting Monday morning.

NWI Reports Munster School District Considering General Operating Fund Referendum

From the Northwest Indiana Times:

The School Town of Munster is holding two public forums as it considers seeking a General Operating Fund referendum.

The forums are at 7:30 p.m. Feb. 4 and 5 in the Munster High School Auditorium.

An overview of the need for the referendum and general financial considerations will be presented by Superintendent Richard Sopko.

Additionally, London Witte Group LLC, will provide a third-party analysis about the referendum process and provide historical and project analysis to illustrate the school district's need for a referendum tax levy in the general fund.

School Board President John Friend will speak about the need for community members to share their views to assist the board of school trustees to determine whether to proceed.

After Friend's portion of the program, residents will be able to comment in support of or against the referendum.

If Munster voters vote in a referendum, it will mark the fifth time a local school district has gone directly to taxpayers to ask for more money. In Boone Township, despite some concern expressed by residents and business owners regarding potentially higher taxes, the School Board last week approved a general fund referendum. The referendum will be on the ballot in May.

Last May, voters in the Duneland School Corp. in Chesterton approved a $39.9 million seven-year referendum to offset a funding deficit. Voters approved a 22-cent tax increase per $100 of assessed property value for seven years to aid the district's operating fund. The measure passed with 50.95 percent of the vote — a difference of just 153 votes.

In May 2011, Crown Point residents approved a $35 million general referendum. And in November 2011, Lake Central School Corp. voters approved a $160 million construction referendum to rebuild Lake Central High School and Protsman Elementary School. It was the second time the issue was put before voters. November's victory represented years of discussion about growing enrollment, overcrowding and aging facilities.

Munster's Sopko said several months ago the district was seeking an increase of 22 cents per $100 of assessed valuation to raise about $3 million each year for seven years. He said that would translate to a homeowner whose house were valued at $220,000 facing an annual property tax increase of about $168.

School districts have complained annually about changes in the funding formula and cuts in kindergarten through 12th-grade education that have forced districts to lay off teachers and paraprofessionals such as teachers' aids, and eliminate programs.

NWI Reports House Backs Porter County Commissioners in Tax Dispute

From the Northwest Indiana Times:

The Indiana House approved legislation Monday intended to end a dispute between the Porter County Council and the county commissioners over who has the authority to spend local income tax revenue.

The House sided with the commissioners and voted 97-0 for House Bill 1077, designating the county commissioners as the governing body authorized to transfer money from a county income tax.

If also approved by the Senate and signed into law, the legislation would firmly reject an unprecedented claim by the County Council that state law authorizes it to spend the money without the consent of the three commissioners.

State Rep. Ed Soliday, R-Valparaiso, the sponsor of the proposal, said the measure should make clear the procedure for spending the money and prevent a lawsuit between the two county governing bodies.

"It's a check and balance, nobody gets to do it by themselves," Soliday said. "The commissioners recommend, they can transfer the money; they can't spend it unless the council appropriates it."

State Sen. Ed Charbonneau, R-Valparaiso, and state Sen. Karen Tallian, D-Ogden Dunes, are set to shepherd the proposal through the Senate.

Star Reports Pearl Pathways Offered Tax Credits for Investment in Indianapolis

From the Indianapolis Star:

A life sciences company plans to lease a Downtown Indianapolis facility, adding “up to 38” new jobs by 2016.

Indianapolis-based Pearl Pathways provides clinical, regulatory and quality compliance services for the life sciences industry, according to a release today from the Indiana Economic Development Corp.

The company will invest $355,000 to lease and equip a 2,000 square-foot facility located at 29 E. McCarthy St., the release states. Officials plan to move into the new facility in March and intends to hire additional specialists in regulatory affairs, quality compliance and clinical trials.

The IEDC offered Pearl IRB LLC up to $750,000 in conditional tax credits and up to $75,000 in training grants based on the company's job creation plans, the release states. “These tax credits are performance-based,” the release states, “meaning until Hoosiers are hired, the company is not eligible to claim incentives.”

Star Reports City-County Council Approves Midtown TIF District in Indianapolis

From the Indianapolis Star:

The council’s approval of the Midtown tax-increment financing (TIF) district came after a debate over whether to include the Broad Ripple parking garage within its boundaries.

Now under construction, the garage could provide an estimated $4?million to $5 million in borrowing power to kick-start projects elsewhere in the district, supporters say.

The council opted to keep the garage in the TIF district, rejecting Democrat Zach Adamson’s bid to remove it.

In a TIF district, the city generally collects the growth in property taxes that results as the tax base expands. The money supports new development and improvements within the district. But government entities that receive property tax proceeds wouldn’t benefit from higher tax collections for up to 25 years.

The Midtown district will connect commercial and industrial areas between Fall Creek and Broad Ripple, including those in Meridian-Kessler and Mapleton-Fall Creek.

Star Reports City-County Council Approved Tax Hike for Rental Cars and Event Tickets in Indianapolis

From the Indianapolis Star:

Prepare to pay more when you rent a car in Marion County or spring for tickets to Pacers and Colts games.

Tax increases approved Monday by the City-County Council will add a couple of dollars to the cost of a car rental and will tack another 4 percent onto ticket prices for events at Downtown sports venues and the Indiana Convention Center.

Democratic President Maggie Lewis and other council leaders had agreed to the tax increases earlier this month in a bipartisan budget agreement with Republican Mayor Greg Ballard.

But the votes on the two taxes — 16-12 both times, with eight Democrats and eight Republicans voting in favor — made for tough decisions among council members who participated. Some negotiated with caucus leaders behind the scenes before the meeting to decide how the votes would fall, guaranteeing enough for passage.

“Frankly, proposals 23 and 24 make me want to throw up,” said Republican Robert Lutz, summing up the views of many on both sides of the aisle. He voted against the car rental tax increase but in favor of the admissions tax increase, which applies to tickets for events at Lucas Oil Stadium, Bankers Life Fieldhouse, Victory Field and the convention center, all run by the city’s Capital Improvement Board.

Democrat Pam Hickman, before voting for the car rental tax hike, said: “In the end, I will vote for this because it is the only other alternative the mayor gave us.”

Ballard issued a statement applauding the council for the “difficult but necessary votes to strengthen the fiscal position of our city.”

The increases will create a new stream of revenue to compensate Indianapolis public safety agencies for providing police and fire coverage at CIB facilities. Public safety will get the full proceeds the first year (estimated at $6.7 million) and 25percent after that.

After the first year, the remaining 75 percent of the proceeds from the tax increases will go to the CIB’s budget.

The council voted to increase the admissions tax to 10 percent from 6 percent. That tax doesn’t apply to nonprofit and educational groups, which are exempt.

And the council increased the local auto rental excise to 6 percent from 4 percent. (That will make the total local and state taxes paid by customers 17 percent, plus existing extra fees for cars rented at the airport.)

See the full article here:

Senator Leising Issues Release Regarding Senate's Passage of Soil Productivity Bill

Sen. Leising: Bill Preventing Nearly $60 Million Tax Increase Passes Senate

STATEHOUSE (Jan. 29, 2013) — The full Senate today approved State Sen. Jean Leising’s (R-Oldenburg) legislation to prevent an estimated $57 million property tax increase on Indiana farmers. Senate Bill 319 passed the Senate 48-0 and now moves to the House of Representatives for further consideration.

Leising said her bill would delay, for an additional year, the implementation of new 2012 soil productivity factors proposed by the Department of Local Government Finance (DLGF) and used to assess farmland property taxes — meaning the soil productivity factors used for the March 1, 2011, assessment date will be used again for the March 1, 2013, assessment date.

“This legislation is all about helping the 62,000 farmers and their families in our state and, in part, promoting agriculture, which is at the heart of Indiana’s economy,” Leising said. “The 2012 proposed soil productivity factors could cause a 15 to 45 percent increase in property tax payments for these residents, depending on which counties they call home. I’m afraid that could put some of our hard-working farmers out of business at a time when they may already be struggling because of last summer’s drought.”

SB 319 would also require the DLGF, with the Purdue University College of Agriculture, to submit a report on proposed soil productivity factors by Nov. 1, 2013, to the General Assembly for consideration.

For more information on SB 319, click here.

Revenue Issues Release Re: Online Filing, a New Credit and Extended Hours

Contact: Bob Dittmer, APR
(317) 234-3793

Indiana Tax Season Opens

Online Filing, a New Credit, and Extended Customer Service Hours Available

INDIANAPOLIS (Jan. 29, 2013) – The Indiana Department of Revenue (and the IRS) will open the 2013 filing season and begin processing individual income tax returns Jan. 30. The Indiana Department of Revenue encourages taxpayers to electronically file their federal and state return and take advantage of the new Automatic Tax Refund credit available to Hoosiers. The department also will extend its customer service hours to accommodate taxpayer needs. 

Indiana freefile

Starting Jan. 30, Indiana offers Indiana freefile (INfreefile) for those qualified to file their federal AND state taxes online for free. Nearly 1 million Hoosier taxpayers qualify to file taxes for free through INfreefile!  

Taxpayers should visit  to see if they qualify for INfreefile based on the vendors’ options. If they qualify, all taxpayers have to do is click the vendor of their choice and complete their tax returns online. It’s that simple!

If taxpayers don’t qualify for INfreefile, they will need to pay for e-filing their federal and state tax returns using one of many vendors who offer these services.

There are many advantages to electronically filing:
  • Faster refunds—e-filed returns are processed in less than 2 weeks, while a paper return can take up to 10 weeks
  • Better security—fewer people see your information
  • Get more or pay less—e-filing software may suggest credits and deductions you might not have known about
  • Better accuracy—electronic returns have a 2% error rate versus 20% for paper returns
Automatic Taxpayer Refund Credit

The Indiana General Assembly passed legislation providing for an Automatic Taxpayer Refund (ATR) credit for tax year 2012.

Taxpayers will be eligible for the credit if they meet the following qualifications:
  • Have timely filed (including extensions) a full-year Indiana resident income tax return for tax year 2011
  • Timely file (including extensions) a full-year resident Indiana income tax return for tax year 2012
  • Owe some tax to the state for 2012 (have a modified state tax liability)
The refundable credit authorized for 2012 is $111 per eligible taxpayer ($222 for an eligible married couple filing a joint return). Dependents are not eligible to claim the ATR unless they are filing their own state tax return.

For more information about the ATR credit, visit

Hours of Operation Changes for the Season

To better serve taxpayers, the department has extended its customer service office hours during the tax season:
  • February through April: Monday through Thursday, 7:30 a.m. to 5:30 p.m. (EST) and Friday 8 a.m. to 4:30 p.m. (EST)
If taxpayers have any questions regarding their individual income tax returns, they should contact the department at (317) 232-2240 or visit

Public Access Counselor Finds Marshall County Assessor Did Not Violate Public Access Laws in Denying Taxpayer Gross Rent Multiplier Information

Excerpts of the Public Access Counselor's Determination follow:

The APRA states that a public agency may not disclose records that are "declared confidential by state statute." I.C. § 5-14-3-4(a)(1). I.C. § 6-1.1-35-9 provides the following regarding certain confidential information:

Sec. 9. (a) All information that is related to earnings, income, profits, losses, or expenditures and that is:

(1) Given by a person to:

(A) an assessing official;

(B) an employee of an assessing official; or

(C) an officer or employee of an entity that contracts with a board of county commissions or a county assessor under IC 6-1.1-36-12; or

(2) acquired by:

(A) an assessing official;

(B) an employee of an assessing official; or

(C) an officer or employee of an entity that contracts with a board of county commissioners or a county assessor under IC 6-1.1-35-12;

in the performance of the person’s duties; is confidential. The assessed valuation of tangible property is a matter of public record and is thus not confidential. Confidential information may be disclosed only in a manner that is authorized under subsection (b), (c), (d), or (g).

Confidential information may be disclosed during the course of a judicial proceeding in which the regularity of an assessment is questioned. See I.C. § 6-1.1-35-9(d); See also Opinion of the Public Access Counselor 09-FC-154. An assessing official or an employee of an assessing official shall immediately be dismissed from that position if the person discloses in an unauthorized manner any information that is classified as confidential under section 9. See I.C. § 6-1.1-35-11. Further, if a county or township official or an employee of such an official or board discloses in an unauthorized manner information that is classified as confidential under section 9, a person who owns property which the information pertains to may recover liquidated damages in the amount of five-hundred dollars ($500); or the person’s actual damages resulting from the unauthorized disclosure. See I.C. § 6-1.1-35-12. Finally, a public employee or official who knowingly or intentionally discloses information classified as confidential by state statute commits a Class A infraction. See I.C. § 5-14-3-10.

The County has provided that it utilizes the actual income approach on sold rental properties to arrive at the GRM for specific areas/types of properties in the county. Upon receiving the actual income received by each landlord, the Assessor divides the Sales Price of the property by the Income to determine the GRM. There are three components in the calculation of value using the income approach; the GRM, Assessed Value, and Income. The Assessed Value divided by the GRM equals the Income received by the landlord. There is no dispute that the income from the rental property is considered to be
confidential pursuant to I.C. § 6-1.1-35-9. The Assessor has provided that the Assessed Value of the property is readily available via the County’s website. Thus, if the GRM were also to be provided, one would be able to determine the Income for each property, which the Assessor is prohibited from doing. Thus, as applied specifically to the Assessor under the facts presented, it is my opinion that the Assessor would be prohibited from providing you with the GRM in light of the other information that is already made available by the County. As such, it is my opinion that the Assessor did not violate the APRA in response to your request. See also Opinion of the Public Access Counselor 10- FC-242.

See the full order here:

The PAC decision 10-FC-242 referenced above has a similar albeit briefer finding:

The APRA prohibits public agencies from releasing records declared confidential by state statute. I.C. § 5-14-3-4(a)(1). Under I.C. § 6-1.1-35-9, “[a]ll information that is related to earnings, income, profits, losses, or expenditures” that is given by a person to an assessing official is confidential. Accordingly, the Assessor denied you access to income information relating to rental properties in St. Joseph County. In my opinion, the Assessor is required by statute to keep such information confidential. I understand your argument that the income information is often voluntarily released by landlords who advertise it to the public. However, some landlords may choose not to release the information, even if they have done so in the past. Moreover, even if they release it to the public voluntarily through other sources, that does not relieve the Assessor of its statutory duty to keep such information confidential. The APRA provides criminal penalties for public officials and employees who knowingly or intentionally disclose
information classified as confidential by state statute. See I.C. § 5-14-3-10(a).

Consequently, in my opinion the Assessor has not violated the APRA by denying you access to the properties’ income information.

Board Finds Insufficient Evidence Sale was Arms' Length Transaction to Support Reduction in Property's Assessed Value

Excerpts of the Board's Determination follow:

The Petitioners first contend that their property was over-valued for 2010 based on their purchase of the subject property for $10 on June 30, 2004. Nickell testimony; Petitioner Exhibit 9. The sale of the subject property is often the best evidence of the 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). The Petitioners, however, bought the subject property almost six years prior to the relevant March, 1, 2010, valuation date. The Petitioners needed to explain how the sale price related to the subject property’s value as of March 1, 2010. The Petitioners failed to relate their June 30, 2004, purchase price to the March 1, 2010, valuation date, and the purchase of the property alone is insufficient to prove that his property was over-valued for the 2010 assessment year. See Long, 821 N.E.2d at 471.

Furthermore, even if the Petitioners had related the purchase price to the relevant valuation date, the Board doubts that the Petitioners purchase amount was a reliable indicator of the subject property’s market value-in-use. As explained in the Manual, market value is:

“The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

 The buyer and seller are typically motivated;
 Both parties are well informed and advised and act in what they consider their best interests;
 A reasonable time is allowed for exposure in the open market;
 Payment is made in terms of cash or in terms of financial arrangements comparable thereto;
 The price is unaffected by special financing or concessions.”

MANUAL at 10.

Here, it is questionable whether the buyer and seller were typically motivated, since it appears that the subject property was overlooked in the sale of the main property, and the previous owner simply wanted the Petitioners to take it over. More importantly, the subject property was not exposed to the open market. Thus, even without the valuation date disparity, the Board would not view the Petitioners’ purchase price as a reliable indicator of the subject property’s market value-in-use.

The Petitioners further argue that a 90% influence factor for restrictions should be applied to the subject property. Nickell testimony; Petitioner Exhibit 2. An “influence factor” is a multiplier “that is applied to the value of land to account for characteristics of a particular parcel of land that are peculiar to that parcel.” GUIDELINES, glossary at 10; see also, GUIDELINES, ch. 2 at 56. Both parties agree that the subject property is in fact peculiar; however, the Petitioners needed to go one step further to make a prima facie case—they needed to offer probative, market-based evidence as to what a more accurate valuation would be. Talesnick v. State Bd. of Tax Comm’rs, 756 N.E.2d 1104, 1108 (Ind. Tax Ct. 2001).

Palladium-Item Argues Governor Should Rethink Tax Cut

From the Richmond Palladium-Item:

Wayne County’s three representatives to the Indiana General Assembly, Republicans all, are taking a wait-and-see approach to Gov. Mike Pence’s pledge of a 10 percent across-the-board cut in the state’s income tax rate that would return $500 million over two years to taxpayers.

Did we mention these are members of the new governor’s own party?

At Friday’s Wayne County Legislative Forum, hosted by the Indiana University East Alumni Association, state Sen. Allen Paul of Richmond, Rep. Tom Saunders of Lewisville, and newly seated Rep. Dick Hamm of Richmond all sounded a little like veteran senior statesmen counseling a freshman governor on the perils of cutting revenues before the state can gain a solid measure on uncertain costs.

While Pence understandably wants to make his mark, entering office in his first year and dropping Indiana’s already comparatively low 3.4 percent income tax rate to around 3 percent, this could ultimately prove an unwise course of action.

The governor, in his recent and first State of the State address, essentially chided legislators with his remarks, “Let’s be honest with our fellow Hoosiers, we can afford to do this.”

Honesty is, as they say, the best policy.

Everybody prefers paying fewer rather than more taxes. That is clearly one bit of honesty our local legislators can understand and respect.

But honesty also demands that a new governor itching to grant a tax break from the substantial $1.4 billion surplus left by his predecessor, Mitch Daniels, needs to look at the bigger picture. The former governor already provided each Hoosier an average $111 refund for 2012, his final year in office. He was entitled to; the surplus was accrued on his watch, during his eight years as governor.

We hope that Mike Pence, if he elects to do so, will enjoy that many years as governor and will similarly maintain Indiana’s books squarely in the black.


As Hoosiers, we can argue and disagree over just how much impact leaner state spending has had on critical government services like education, or the state’s Department of Child Services. There has clearly been an impact.

But the higher and firmer ground going forward would be for the new governor to balance any tax cut on his own future performance, not his predecessor’s past performance.

Republicans have strengthened their majorities in both chambers of the legislature. That means they can do pretty much what they want. For the sake of the state and an uncertain future, the prudent course is a conservative one until such time, perhaps even a year from now but certainly within Pence’s first term, Indiana can demonstrate the surplus revenues to provide an income or other tax cut.

See the full article here: