Friday, May 31, 2013

Tax Court Schedules Two Appeals for Hearing in June

Monroe County Assessor v. Kooshtard Property I, LLC (View)
Friday, June 07, 2013 10:00 AM - 11:00 AM

The County Assessor challenges whether the Indiana Board of Tax Review abused its discretion in determining that the taxpayer met its burden of proof at the administrative level demonstrating that its assessment was erroneous.

State House, Room 413
Indianapolis, IN 46204

Joseph and Jeanne Hutcherson v. Hamilton County Assessor (View)
Friday, June 14, 2013 10:00 AM - 11:00 AM

This is a hearing on Respondent's Motion to Dismiss.

For a description on the merits of the case see the Tax Summaries at

Revenue Allows Supplemental Audit Despite Taxpayer's Failure to Cooperate in Initial Audit

Excerpts of Revenue's Determination follows:

Taxpayer operated taverns at three different locations. The Department's audit found that Taxpayer had failed to maintain records sufficient to determine Taxpayer's various tax liabilities. Additionally, the audit found that Taxpayer had operated its businesses more than three days each week and – contrary to Taxpayer's earlier representation – did have employees working at the tavern locations. Taxpayer protested the assessment of additional sales, withholding, and food and beverage tax. That protest is addressed in a separate Letter of Findings.

Besides the assessment of additional business tax, the audit also found that Taxpayer owed additional Indiana individual income tax. As stated in the audit report, "[D]ue to a lack of cooperation by the [T]axpayer and the failure to provide records, estimates are being made based on average sales from the 2007 Census Bureau at"
Indiana law provides that, "If the department reasonably believes that a person has not reported the proper amount of tax due, the department shall make a proposed assessment of the amount of the unpaid tax on the basis of the best information available to the department." IC § 6-8.1-5-1(b). Even a cursory review of the audit's report reveals that the original records provided by Taxpayer were insufficient and that the Department was fully justified in making the income tax assessment it did.
It should be pointed out that, "Every person subject to a listed tax must keep books and records so that the department can determine the amount, if any, of the person's liability for that tax by reviewing those books and records." IC § 6-8.1-5-4. In addition, IC § 6-8.1-5-4(c) provides that, "A person must allow inspection of the books and records and returns by the department or its authorized agents at all reasonable times." IC § 6-8.1-5-4(c).
Taxpayer maintains that the business assessment overstated his individual income. During the business tax protest, Taxpayer belatedly provided documentation which it asserted would result in a decrease in the amount of business tax owed. Although the Letter of Findings made no determination as to the amount of business tax owed, the Department agreed to review the supplemental documentation and to adjust the business tax assessments as warranted.
As with the business tax liabilities, it is Taxpayer's responsibility to establish that the existing individual income tax assessment is incorrect. As stated in IC § 6-8.1-5-1(c), "The notice of proposed assessment is prima facie evidence that the department's claim for the unpaid tax is valid. The burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made." Indiana Dep't of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463, 466 (Ind. 2012); Lafayette Square Amoco, Inc. v. Indiana Dep't of State Revenue, 867 N.E.2d 289, 292 (Ind. Tax Ct. 2007).
The disputed income tax stems directly from Taxpayer's failure and inability to maintain or supply the necessary records during the initial audit. Taxpayer has failed to meet its burden under IC § 6-8.1-5-1(c) of demonstrating that the original tax assessment is "wrong." Nonetheless, The Department's Audit Division is requested to review the supplemental information and to make whatever adjustment to the individual income tax assessment as it deems warranted

IndyPolitics Reports Indianapolis Considers Homestead Tax Credit Phase Out

From IndyPolitics.Org:

As city officials look at what to  in order to help close a budget shortfall, one possibility that is emerging is a phase out of the Homestead tax credit instead of its outright elimination.

Herald-Tmes Reports Monroe County Auditor Hopes to Hire Financial Consultant

From the Bloomington Herald-Times:

Monroe County might see another temporary financial contractor join its ranks.  

Just two weeks after approving the hiring of Michele Huston as a contract financial analyst for the Monroe County Council during this year’s budget season, the Monroe County Board of Commissioners will consider the hiring of a financial consultant, this one in the Monroe County auditor’s office.  

Auditor Steve Saulter will present a contract to the commissioners today to hire Bob Purlee, a former Indiana Department of Local Government Finance employee, who will assist the auditor’s office during the 2014 budget process.  

Purlee will review the tax rates by helping the office complete the steps required by the state, and by providing training for members of the auditor’s staff. The contract is for $125 per hour for services on a case-by-case basis.  

The temporary financial consultant will not perform the same function as the financial analyst in the council office, Saulter said.

Huston will help with the annual budget hearing process by preparing financial data, attending hearings and providing real-time data, generating reports and making the budget data available through electronic means, according to the initial job description unanimously approved by the council in March.

Both jobs will provide a temporary fix as Saulter works to restructure his office.


See the full article here:

Journal & Courier Report Lafayette Companies' Tax Abatements Under Scrutiny

From the Lafayette Journal & Courier:

Three businesses will have to explain why they haven’t added all the jobs they promised when they received tax abatements from the city of Lafayette.

The city council is evaluating whether 37 tax breaks awarded to 16 employers are in compliance with their commitments.

During a caucus meeting Wednesday night, councilmen Ron Campbell and Steve Meyer asked for more information about those that have not hired the number of employees pledged.

“I want to look back at their past abatement compliance history, even if the abatement has expired,” Meyer said.

The three companies, Castle Coch, which built the Warehouse of Lafayette; McKinney Corp.; and Rea Magnet Wire Co., have made good faith efforts, said Dennis Carson, economic development director.

“The commitments were made at a certain point in time and things have changed,” Carson said. “You have companies like SIA that can’t build them fast enough, and some companies aren’t getting orders to build anything.”


The tax breaks are designed to entice businesses to make investments in land, buildings or equipment, and to create jobs.

The council will vote on the compliance issue during its Monday meeting at 7 p.m. in City Hall at 20 N. Sixth St.

Star-Press Reports Delaware County Likely to Reject Wind Farm Request for Abatement

From the Muncie Star-Press:

The chairman of the city-county plan commission isn’t the only local government official who is not ready to welcome wind farms to Delaware County.

E.ON Climate & Renewables this week canceled an appearance before the council, from which it was scheduled to ask for property tax abatement for a wind farm.

The reason?

“In my opinion, they pulled the request off the table until a later date yet to be determined because I think they are pretty well tuned in to what the council’s actions would be,” council member Mike Jones told The Star Press. “Again, in my opinion, trust me, the council will most likely turn it down, most likely unanimously.”

He told about 125 wind farm opponents at a meeting Tuesday night in Selma Elementary School that E.ON has told the county’s tax abatement committee that without tax abatement “they are out of here.”

Jones disclosed during the meeting that he lives on the fringe of the proposed wind farm, as does council member Rick Spangler. Council President Kevin Nemyer lives “in the heart of it,” Jones added.

E.ON is hoping to build 22 to 29 wind turbines in an area bounded by Country Club Road, the Randolph County line, Ind. 32 and Albany at a cost of more than $100 million, Jones and County Commissioner Sherry Riggin told the crowd.

The company also plans to construct another 30 or so wind turbines at a cost of more than $100 million in Randolph County as part of the same project.

Jones and Nemyer sit on county council’s tax abatement committee, along with Dewayne Richmond and Fred Martin. The fifth seat is currently vacant.

See the full article here:

Journal-Gazette Reports Kraft Foods Seeks Abatement for Investment in Kendallville

From the Fort Wayne Journal Gazette:

Kraft Foods plans to invest $5.5 million in new equipment for its Kendallville operation, according to paperwork filed with city officials.

The machinery will increase flexibility and reduce transition times for the company’s marshmallow packing line. The operation, which employs 390, produces marshmallows and caramels.

No new jobs will be created with the investment.

Kraft is asking for a tax abatement on the project. Kendallville City Council is scheduled to introduce and vote on the request Tuesday. The projected tax saving was not available.

Star Reports Indianapolis Considers Abatement Requests for FedEx and MS Georgetown Projects

From the Indianapolis Star:

FedEx says it wants to expand its Southwestside sorting hub at a cost of $34 million, the second local expansion notice this month from the package express giant.

The Memphis-based company plans the 328,000-square-foot warehouse and distribution center on 59 acres at 5800 S. Raceway Road. The site is just south of Indianapolis International Airport.

The sorting hub will be used by FedEx SmartPost, a division of FedEx that delivers low weight, business-to-customer mailings through the U.S. Postal Service, the company said in a property tax abatement request to the city.

FedEx said it has run out space in its existing 180,000-square-foot SmartPost facility in Decatur Township. The 51 people who work at that facility will be transferred to the new building and an additional 15 workers will be hired by 2014 at an average wage of $15.53 an hour.

Earlier this week FedEx started construction on a $40 million package distribution center in Zionsville.

The city Metropolitan Development Commission will hold a preliminary vote next week on granting property tax abatement for the Southwestside project. The abatement is worth about $3 million to FedEx.

The commission also will consider granting $468,000 in property tax abatement to MS Georgetown LLC, a subsidiary of Mainstreet Property Group, for a proposed 100-bed skilled nursing and assisted living facility near 56th Street and Georgetown Road. The developer wants to build the 65,000-square-foot facility on seven vacant acres at a cost of $9.25 million. About 80 employees will be hired to staff the facility, at an average wage of $17.30 an hour.

Board Finds Taxpayer Raised a Prima Facie Case for Reduction with Appraisal

Excerpts of the Board's Determination follow:

Here, the Petitioner submitted a market value appraisal prepared by Jeffrey R. Vale, MAI and Indiana certified appraiser, and William L Eenshuistra, an Indiana certified general appraiser, who attested they prepared the appraisal in accordance with USPAP using the income approach and sales comparison approach. The appraisers estimated the value of the property to be $1,125,000 as of January 1, 2009. An appraisal performed in conformance with generally recognized appraisal principles is often enough to establish a prima facie case that a property’s assessment is incorrect. See Meridian Towers, 805 N.E.2d at 479. The Petitioners’ appraiser, Mr. Vale, testified that the market was fairly poor in 2010; “so values either stayed the same or potentially dropped a little bit.” Mr. Vale’s testimony was supported by the county’s trending factor. Therefore, the Board finds that the Petitioners provided some evidence to relate their January 1, 2009, appraised value to the March 1, 2010, assessment date. Thus, the Board finds that the Petitioners raised a prima facie case that their property’s assessed value should be reduced to $1,125,000 for the March 1, 2010, assessment date.


Once the Petitioners established a prima facie case, the burden shifted to the Respondent. See American United Life Insurance Co. v. Maley, 803 N.E.2d 276 (Ind. Tax Ct. 2004). To rebut or impeach the Petitioners’ case, the Respondent has the same burden to present probative evidence that the Petitioners faced to raise a prima facie case. Fidelity Federal Savings & Loan v. Jennings County Assessor, 836 N.E.2d 1075, 1082 (Ind. Tax Ct.2005).

Here, the Respondent’s representative contends that the Petitioners’ property was properly valued in 2010 based on the sales of comparable properties. Respondent Exhibits 1, 4-13. In making this argument, Ms. Ooms essentially relies on a sales comparison approach. 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 two properties. Long v. Wayne Township Assessor, 821 N.E.2d 466, 470 (Ind. Tax Ct. 2005). 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.


In support of her argument, Ms. Ooms submitted sales information for two shopping centers and three retail properties. The Respondent’s witness, however, made no attempt to show how the properties compared to the subject property and she presented nothing to explain how any differences may have affected the properties’ values. Thus, the Respondent’s evidence was too superficial to be probative of the subject property’s market value-in-use. See Long, 821 N.E.2d at 471-72 (Ind. Tax Ct. 2005) (holding that sales data lacked probative value where taxpayers failed to explain how the characteristics of their property compared to the characteristics of purportedly comparable properties or how any differences between the properties affected their relative market values-in-use).


The Respondent also argued that the property sold in October of 2006 for $1.8 million. But the sale occurred over three years prior to the March 1, 2010, valuation date. Because the Respondent failed to relate the property’s 2006 purchase price to the property’s market value-in-use as of March 1, 2010, the evidence is insufficient to rebut the property’s appraised value.


Finally, the Respondent argued that the appraisers' comparable properties were not similar to the subject property. But it is not enough to simply point to flaws in the Petitioners' evidence or assert that the property was assessed correctly. The Respondent must bring forth evidence justifying its decision and make an authoritative explanation of its determination. See Meridian Towers East & West, 805 N.E.2d at 479; Miller Structures, Inc. v. State Bd. of Tax Comm’rs, 748 N.E.2d 943, 948 (Ind. Tax 2001). Having failed to do so, the Respondent fell short of its burden and failed to rebut the Petitioners‟ prima facie case.


Thursday, May 30, 2013

Revenue Abates Penalty Where Taxpayer Had No History of Making Payments with Insufficient Funds

Excerpts of Revenue's Determination follow:

Taxpayer made payments weekly through an automatic electronic funds transfer. Two of the electronic funds transfers were returned for insufficient funds. The Department assessed a penalty according to IC § 6-8.1-10-5, which states:

(a) If a person makes a tax payment with a check, credit card, debit card, or electronic funds transfer, and the department is unable to obtain payment on the check, credit card, debit card, or electronic funds transfer for its full face amount when the check, credit card, debit card, or electronic funds transfer is presented for payment through normal banking channels, a penalty of ten percent (10 percent) of the unpaid tax or the value of the check, credit card, debit card, or electronic funds transfer, whichever is smaller, is imposed.
. . .
(d) If the person subject to the penalty under this section can show that there is reasonable cause for the check, credit card, debit card, or electronic funds transfer not being honored, the department may waive the penalty imposed under this section.
(Emphasis added)

Taxpayer shows that there was reasonable cause for the electronic transfers not being honored. The payments were satisfied within a few days after they were returned. Additionally, Taxpayer does not have a history of making payments with insufficient funds and quickly paid the amount due.

Banner Graphic Reports Putnam County Budget Shortfall Ends in Good News

From the Greencastle Banner-Graphic:

Prior to the start of the official business at Tuesday's Putnam County Council meeting, president Darrell Thomas addressed the concerns of county officials and employees who had been told recently of a possible major budget shortfall.

"You were all alerted on Friday that we had potential for a financial crisis, that we might be $300,000 short in our budget," Thomas said. "In the meantime, today, we got answers from people in Indianapolis."

Those answers came in the assurance by the state that the funds were not gone. They were just in a different fund.

While the county general fund was advertised at $6.8 million for 2013, when the budget finally came in from the state this month, the figure was $6.5 million.

Through the hand wringing and double-checking that ensued, auditor Lorie Hallett eventually discovered the $212,000 was not gone, it was now in the separate County Adjusted Gross Income Tax (CAGIT) fund.

"So, yes, they cut the county general by $200-some-thousand, but the extra money is there in CAGIT," Hallett told the Banner Graphic.

CAGIT money had previously been figured as part of the general fund, but the state now treats it as a separate fund. While this change was communicated to former auditor Stephanie Campbell in 2012, the message was lost in the changeover to Hallett as auditor.


See the full article here:

Herald-Times Reports Monroe County Residents Speak Against Adding 1% Food and Beverage Tax

From the Bloomington Herald-Times:

Residents of Monroe County expressed their disapproval Wednesday of a proposed food and beverage tax that would fund an expansion of the convention center in downtown Bloomington, doubting the county at large would benefit from the influx of tourism jobs and out-of-town money that proponents of the measure have touted.

More than a dozen people came to the Ellettsville Fire Station to speak before Monroe County Council member Marty Hawk, Ellettsville Town Council President Dan Swafford and Monroe County Commissioner Patrick Stoffers. The sentiment leaned heavily against a 1 percent sales tax on food and beverage items that the county council is considering as a levy to support the expansion of the Bloomington/Monroe County Convention Center.

People who do not live within Bloomington’s city limits said they saw the convention center as more of a Bloomington entity and did not seem to support a tax that would affect the entire county, especially if the facility can’t bring in the additional events officials are anticipating. Visit Bloomington director Mike McAfee said at the meeting that the city turns away about 40 events a year because of a lack of space in the convention center and surrounding hotels.

McAfee estimated an expanded convention center could bring about $15 million in additional revenue to the county per year. But there were concerns about how many of the people attending these new events will be local and will not spend money on a hotel or do much other extra spending. There was also a sentiment that a food and beverage tax for this particular project was government stepping outside of its realm to create something the free market wouldn’t.

See the full article here:

Herald-Bulletin Reports Anderson Township Trustee Meeting Turns Contentious

From the Anderson Herald-Bulletin:

A disagreement between the Anderson Township trustee and her board turned contentious Wednesday night when two board members stormed out of a meeting.

Eventually, Richard Symmes and Elvis Jones returned to the meeting and apologized, but the board members made it clear they don’t approve of how Trustee Brenda Jones is running the township.

The argument stemmed from financial problems with the trustee’s budget. Property taxes are the largest single source of revenue for the office. Payments arrive in January and June. As Anderson continues to lose taxpaying residents, the office has found it harder and harder to balance the budget.

For the past several years, the trustee’s annual budget has been stable, just over $500,000. The board sets the trustee’s budget and approves all expenditures, but the trustee oversees the day-to-day administration of the office.

Elvis Jones, Symmes and board president Aaron Higgins told Jones they disagreed with her decision to appoint deputy trustee Joanna Arias, who makes $30,000 a year, according to meeting minutes. Jones said she’s allowed to appoint her own deputies, but the board countered that they should be setting the wages for the deputies. All four are Democrats.

By the end of the meeting, the four agreed on extending a line of credit with a bank to take care of operating expenses, but Symmes, who replaced deceased board member Larry Burns three months ago, said he doesn’t want to make a habit of “borrowing and paying back.”

“That’s not a good way to get ahead of this problem,” Symmes said.

Palladium-Item Reports Wayne County Tax Abatement Committee to Meet Wednesday

From the Richmond Palladium-Item:

The Wayne County Council’s Tax Abatement Committee will meet at 10:30 a.m. Wednesday.

The meeting will be in the commissioners’ conference room in the Wayne County Administration Building, 401 E. Main St. in Richmond.

The purpose of the meeting is to review compliance forms. Councilman Tony Gillam is the tax abatement committee chairman.

The meeting is open to the public.

NWI Reports Hobart Sets Abatement Hearing for Proposed Medical Center

From the Northwest Indiana Times:

A proposed medical/office center is closer to obtaining tax abatement from the city.
The City Council on Wednesday unanimously decided to designate property at 6188 Marcella Blvd. as an economic revitalization area.
City Attorney Anthony DeBonis said it's the first of two steps necessary to approve a tax abatement request for the $2.2 million project.
The request now moves to a public hearing set for June 19. The council asked a representative for the proposed center to be prepared to provide additional details about the project during that meeting.
If the plans advance, a 28,000-square-foot medical/office building, which would be called Hobart Square, would be constructed on 2.2 acres on Marcella Boulevard.
See the full article here:

Wednesday, May 29, 2013

Herald-Times Reports State Changes Affect Monroe County's "Bottom Line"

From the Bloomington Herald-Times:

The Monroe County Council could have issues with its budget, thanks to actions from the Indiana General Assembly.

Changes in the inheritance tax and raises for probation officers passed earlier this year, respectively reducing income and increasing spending for the county in 2014.

In 2012, the legislature decided to phase out the inheritance tax over a 10-year period. However, the 2013 Indiana state budget, signed into law by Gov. Mike Pence on May 9, included a provision that repealed inheritance tax effective Jan. 1.

For Monroe County, losing this revenue means a loss of about $300,000, according to Geoff McKim, president of the Monroe County Council. The county could still see some money if a person died before Jan. 1 and his or her estate was not settled, but the council will assume the revenue from inheritance tax will be nothing.

However, levy growth of about 2.6 percent, or about $392,000, will cover the loss of the inheritance tax, though it may rearrange the county’s plans for some budget items.

“That’s the levy growth that we use to fund raises,” McKim said. “So this is the consequence of the accelerated termination of the inheritance tax.”

The 2013 budget passed by the council included expenditures from the general fund of $29,603,950, though revenues for the year were expected to be $29,328,158 — a shortfall of about $275,000.

See the full article here:

Herald-Times Reports Food and beverage tax still under consideration in Monroe County

From the Bloomington Herald-Times:

An agreement between Monroe County and the city of Bloomington on the proposed 1 percent food and beverage tax is still being debated.

Michael Flory, attorney for the Monroe County Council, said that representatives of the city and the county are working on the agreement that would govern the revenue raised by a food and beverage tax, trying to address concerns raised by members of the county council and Bloomington city officials.

The council has been debating the tax since February.

State legislation allows the council to implement a tax on items purchased in restaurants and bars in order to raise money for a conference center, convention center or other tourism related activity. The tax would not be on items purchased in grocery stores, and would tentatively go toward an expansion of the Bloomington/Monroe County Convention Center.

The legislation specifies that tax revenue raised in the city goes to the city, and all other money raised in the county goes to the county.


There will be at least two more opportunities for public input on the tax.  A public forum on the proposed tax, hosted by Hawk, Monroe County Commissioner Patrick Stoffers and Ellettsville Town Council member Dan Swafford, will be held today at 6 p.m. at the Ellettsville Fire Station, 5080 West Ind. 46.

A second public hearing for the food and beverage tax will be on June 11 during the scheduled Monroe County Council meeting in the Nat U. Hill Meeting Room at the Monroe County Courthouse.

Marion County Notices Public Meeting of Homestead Tax Credit Commission

First Public Meeting of Bi-Partisan Homestead Tax Credit Commission Slated for May 29th
INDIANAPOLIS –The first public meeting of the Homestead Tax Credit Commission is scheduled for May 29th at 6:00 p.m. at the Perry Township Educational Center.  The bi-partisan study group was created by Council Ordinance May 13th to evaluate the impact of the Local Homestead Tax Credit on the city and property owners. Five additional public hearings will be scheduled across the county through the end of June; the Commission will submit its recommendation to the Council by July 15, 2013.
“This commission provides a common-sense, bi-partisan approach to evaluating the implications of the local homestead credit on future budget planning.” said Mayor Greg Ballard.
“This commission fulfills one of the action steps the Council and Mayor agreed to in finalizing the 2013 budget,” said City-County Council President Maggie Lewis. “It will provide the opportunity for councillors and our constituents to get a better understanding about the Homestead Credit and the potential impact of eliminating it on the financial being of all parties involved, including homestead owners, the city-county government, townships, excluded cities, schools, libraries, public transportation corporations and Marion County Health and Hospital Corporation. We encourage all citizens to participate in this community discussion.”
The 10-member Commission is co-chaired by Jim Steele and Beth Henkel. The Commission also comprises four City-County Councilors, a representative from the Metropolitan Indianapolis Board of Realtors (MIBOR), a representative of civil government units that receive property taxes, a County Commissioner and a designee of the City Controller.
More information about the Homestead Tax Credit Commission, its formation and membership can be found here.

DLGF Publishes Memorandum on Controlled Projects


TO:         All Political Subdivisions

FROM:  Micah G. Vincent, Commissioner

RE:          Controlled Projects

DATE:    May 29, 2013

On May 9, 2013, Governor Mike Pence signed into law House Enrolled Act 1116 (“HEA 1116”). Sections 8, 9, 10, and 19 of HEA 1116 introduce changes affecting controlled projects. This memorandum addresses these changes, which take effect July 1, 2013. Please note that this memorandum is intended to be an informative bulletin, not a substitute for reading the law.

Section 8 adds IC 6-1.1-20-0.5, which applies to a preliminary determination to issue bonds or enter into a lease made after June 30, 2013. In determining whether a project is a controlled project and whether the petition and remonstrance process or the referendum process applies to the project, the cost of the project does not include expenditures for the project that will be paid from donations or other gifts:

                (1) that are received by the political subdivision; and
                (2) for which the political subdivision adopts an ordinance or resolution pledging that the donations or other gifts will be used exclusively for expenditures on the project’s costs.

Section 9 amends IC 6-1.1-20-3.1 (which governs the controlled project petition and remonstrance process) to eliminate the subdivision governing high school buildings and to incorporate this content into another subdivision, which now requires use of the petition and remonstrance process for controlled projects involving elementary school buildings, middle school buildings, high school buildings, or other school buildings for academic instruction to be used for any combination of kindergarten through grade 12 and that will not cost more than $10,000,000.  Through section 10 of HEA 1116, similar changes are made to IC 6-1.1-20-3.5 (which governs controlled projects subject to referendum) so that now the referendum process applies to controlled projects involving elementary school buildings, middle school buildings, high school buildings, or other school buildings for academic instruction to be used for any combination of kindergarten through grade 12 and that will cost more than $10,000,000. Please note, all other controlled projects continue to be governed by the $12,000,000 threshold.

Non-code section 19 provides that the amended versions of IC 6-1.1-20-3.1 and IC 6-1.1-20-3.5 apply only to a controlled project for which the proper officers of a political subdivision make a preliminary determination under IC 6-1.1-20 after June 30, 2013. This non-code section expires January 1, 2016.

Board Finds Respondent Failed to Sufficiently Support Assessed Value

Excerpts of the Board's Determination follow:

Both parties agreed the Respondent has the burden to prove the assessment is correct because the disputed 2011 assessment increased by more than 5%.


An appeal can be initiated within 45 days after the Notice of Assessment (Form 11). Ind. Code § 6-1.1-15-1(c). In this case the Form 11 was dated December 9, 2011. This notice informed the taxpayers their deadline was January 23, 2012. It even informed the Petitioners they would not be able to file an appeal based on their tax bill. The Petitioners filed a Notice to Initiate an Appeal (Form 130) on January 13, 2012. Some copies of the Form 130 show a second date stamp, June 22, 2012. This later date is clearly not when the appeal process was initiated because the PTABOA determination is dated May 10, 2012. Neither party explained the later date stamp. Furthermore, in this case the time for initiating the appeal process has nothing to do with the tax bills that were mailed on April 6, 2012. The Respondent’s specious argument on this point simply disregards the express deadline stated on the Form 11 and the earlier file mark on the Form 130. The Form 130 clearly was filed within the time allowed.


Appeal petitions to the Board can be filed not later than 45 days after the Form 115 is mailed. Ind. Code § 6-1.1-15-3(d). The PTABOA’s Form 115 is dated May 10, 2012. The Board did not receive the Petitioners’ Form 131 until June 26, 2012. The envelope in which it was mailed, however, is postmarked June 22, 2012. The postmark date on an appeal sent by first class United States mail is considered prima facie evidence of the date of filing. 52 IAC 2-3-1(c). May 10 to June 22 is less than 45 days. Therefore, the Petitioners’ Form 131 was filed within the time allowed.



A substantial amount of the Respondent’s case related to how the mass appraisal system and annual trending is supposed to work, as well as how the Respondent met those responsibilities. The Respondent implied that the subject assessment draws validity from the fact that the disputed assessment is within an acceptable range for mass appraisals. An appeal of an individual assessment, however, is an entirely different thing. The Respondent provided no authority or substantial explanation for the conclusion that there is an acceptable range for establishing the value of property for the purposes of this appeal. Accordingly, this argument is of no probative value when determining whether the current assessment is correct.


According to the Respondent, the disputed assessment was computed using the cost approach. The assessor, however, offered no details about how it was applied. The back of the property record card, which presumably showed the calculations used in the cost approach, was not entered into the record. The Respondent merely offered conclusory statements that the cost tables are “good and accurate” as support for her assessed value. This sort of evidence, however, does not prove that the assessed value actually is a correct market value-in-use for the subject property. See Whitley Products, Inc. v. State Bd. of Tax Comm’rs, 704 N.E.2d 1113, 1119 (Ind. Tax Ct. 1998).


The Respondent correctly pointed out that the gross rent multiplier is the preferred method for valuing rental properties with fewer than four units. Ind. Code § 6-1.1-4-39(b). But the Respondent presented no GRM calculation in support of the assessment. Instead, she testified that using a GRM of 72 results in a property value of $43,200 and a GRM of 65 produces a value of $39,000. The Respondent, however, offered no explanation as to how a value of either $43,200 or $39,000 supports the current assessment of $30,900. The range of GRM numbers (from 72 down to 20) used in the Respondent’s examples were not explained or substantiated in any way. Furthermore, the Respondent acknowledged she did not know the rental income for the subject property. She used an assumed income of $600 per month, based on income received by other rental properties. The Respondent did not identify these other properties or show how they are comparable to the Petitioners’ property. Merely offering conclusory statements that a property is “similar” or “comparable” to another property does not constitute probative evidence. Long, 821 N.E.2d at 470. The Respondent was “responsible for explaining to the Indiana Board the characteristics of [the] property, how those characteristics compared to those of the purportedly comparable properties, and how any differences affected the relevant market value-in-use of the properties.” Id. at 471. In this appeal, the Respondent failed to offer any meaningful comparison between the subject property and those that were the basis for the assumption about monthly income. Where the other properties are not specifically identified and no meaningful comparison is even attempted, this kind of evidence has no probative value. Id. Therefore, the Respondent’s speculative testimony about various values purportedly based on GRM methodology has no probative value.


NWI Reports Dire Budget Prediction Tables Porter County Funding Requests

From the Northwest Indiana Times:

A $1.5 million request for funding for a new park building was among the proposals tabled Tuesday by the Porter County Council after the group learned the county is already operating in the red with more than half of the year to go.
Porter County Auditor Bob Wichlinski said the shortfall is currently $14 million, but he explained that figure is largely clerical and will be much less once future factors are figured in, such as the recent collection of tax dollars.
The figure did serve to grab the attention of the County Council, particularly Jim Biggs, R-1st, who has been voicing concern about the impact of such big ticket items as round-the-clock medical service at the jail, the opening of the third pod at the jail and longterm funding for E-911.
He again called Tuesday for the Porter County Board of Commissioners to initiate a comprehensive operations plan to identify the county's capital needs, such as new buildings and renovations, for the next three to five years. The county can't continue making decisions on major projects without fulling understanding the ramifications, he has said.
"This is the time to be cautious," Biggs said.
Councilman Dan Whitten, D-at large, agreed on the need for more financial planning and said the county must become more conservative and prioritize its spending.
"We have to really be on top of our game," he said.
A hotly debated request that narrowly won approval Tuesday was for $225,250 to allow Wichlinski to continue a crackdown on homestead deduction violators, an effort that has already generated $1.6 million.
Part of the concern with the effort is its reliance on consultants.
Wichlinski has said that after concluding the crackdown on single-family home violators, he now hopes to pursue owners of multiunit residential buildings. He has identified 800 such properties in suspected violation.
The homestead deduction is limited to a taxpayer's primary residence.
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Journal-Gazette Reports Fort Wayne Council Weighs Paths for Repairing Budget Woes

From the Fort Wayne Journal-Gazette:

City Council members have two paths to solving the city budget crisis, but the administration Tuesday said one path – which avoids an income tax hike – is fraught with problems.

Councilmen Russ Jehl, R-2nd, and Mitch Harper, R-4th, two weeks ago proposed an “alternative framework” for plugging the gap between the city’s expenses, the amount of revenue it expects and the amount of cash officials want to have as reserves. Mayor Tom Henry’s administration says there’s an $11 million gap, and on Tuesday presented its response to the Jehl-Harper proposal.

Jehl said afterward both proposals have much in common.

“I think we’re relatively close, and I especially appreciate them laying the numbers out,” Jehl said.

Harper said he appreciated the administration acknowledging they have the city’s best interest at heart and that their proposal moved the discussion forward.

Jehl and Harper proposed making up the difference with a combination of spending cuts, property tax increases and using Community Development Economic Income Tax, or CEDIT, money, and money from the Legacy Fund, created by the lease and sale of the city’s old electric utility. Henry is proposing the same spending cuts, a smaller property tax increase and a new local option income tax, which would raise local income taxes in Allen County from 1 percent to 1.5 percent.

Tuesday, City Controller Pat Roller addressed the Jehl-Harper proposal, pointing out where the two sides agreed and differed.

She said it appears the Jehl-Harper idea would spend more of the CEDIT money than is available, leaving a deficit, and would eat into the main body of the Legacy Fund, which was meant to be used for transformational projects rather than operations.

John Stafford, director of the Community Research Institute at IPFW, told the council both plans have similarities, but the issue is sustainability. The Harper-Jehl proposal may have the political benefit of not raising income taxes, but does not appear to solve the city’s long-term problem of increasing expenses and falling revenues, he said. Jehl said there may be a misunderstanding in the city’s take on his CEDIT proposal.

The one bright spot in the debate also compounds the problem: Everyone agrees more spending is needed on parks, police and fire protection, and street repairs.

Finance Committee Chairman John Crawford, R-at large, said next week the council must decide how much to spend on those items and how much of a cash reserve the city needs. On June 11, he said, the council will begin debate on how to pay for those, choosing between the mix of options before them.

Officials had wanted a final vote on June 25, but some council members had been planning to be out of town; if necessary, the council will hold a special session July 2 to decide the question.

Journal-Gazette Calls Local Income Tax a "Necessary Tax Hike" for Fort Wayne

From the Fort Wayne Journal-Gazette:

City leaders have put off making difficult budget decisions they knew were coming. But now, with an $11 million gap in the 2014 city budget, they have no more time.

Fortunately, the proposal from the fiscal policy group convened by the mayor offers a reasonable mixture of budget cuts and increases in revenue to ensure a sustainable city budget for 2014 and moving forward.

Some council members may prefer to avoid raising taxes, but it will be impossible to maintain needed city services without them.

The city has lost $53 million in revenue to the tax caps since 2009. But city leaders held off on making any severe adjustments to the budget because the weak economy made tax increases unconscionable and the city’s strong cash reserves made delay reasonable.

The fiscal policy group, which includes some of the state’s most respected experts in local government finance, suggested a plan that reduces spending and increases taxes. The proposal for increasing taxes includes adopting a new property tax called a cumulative capital development fund and a new local option income tax.

The incoming revenue would go toward road construction and hiring additional firefighters and police officers. City officials have deferred road projects as a cost-cutting measure and both public safety departments are understaffed.
Council members Mitch Harper, R-4th, and Russ Jehl, R-2nd, have offered an alternative budget proposal that does not include adopting any new income taxes.

Some of the suggestions in the alternative plan are valuable, including setting an objective of maintaining a 7 percent cash balance and opening up a discussion about the appropriate level of debt for the city.

Harper and Jehl also deserve credit for sharing their proposal early enough in the budget process so that it could be given due consideration rather than revealing it at the eleventh hour.

But their proposal is not sustainable in the long term because it relies too heavily on finite Legacy Fund money to prop up the city’s general fund. The Legacy money was specifically earmarked for special projects that would have a lasting effect on the city.

It’s also questionable whether this use of Legacy dollars could win approval.
According to an agreement unanimously passed by City Council, the spending proposal would require six council votes and the mayor’s consent.

Not adopting the local income tax will make it impossible to maintain the services city residents have overwhelmingly said they want to keep.

News-Sentinel Reports Fort Wayne Responds to Jehl/Harper Budget Proposal

From the Fort Wayne News-Sentinel:

City Councilman John Crawford, R-at large, said at Tuesday's council meeting that the votes the nine councilmen will take in the next few weeks will be the most important of the year, and possibly the most important votes of their term.
So he assigned them homework.
They are to come to council next Tuesday prepared to discuss how much funding will be needed in 2014 to provide essential city services – services every resident should care about. Funding for street repairs, parks maintenance, and new police officers and firefighters is at stake.
The budget squeeze is due to property tax caps in effect since 2009 that have cost the city $53 million in revenue. if the city makes no cuts to its 2014 budget and doesn't increase taxes, by Dec. 13, 2014, the projected cash balance is expected to be $4 million in the red. "That's not legal," Crawford said. "We can't do that."
The options include cutting services and layoffs, raising taxes, or some mix of the two.
The city administration has proposed a raft of ordinances to fix the budget crisis based on recommendations from a Fiscal Policy Group created in 2012 by Mayor Tom Henry. The proposals include unpopular benefit changes for city employees that could save about $3 million and adoption of a 0.5 percent Local Option Income Tax that could be done one of two ways: either a 0.5 percent increase entirely for property tax relief or a 0.25 percent increase for property tax relief (generating $3.7 million in revenue) and a 0.25 percent increase for public safety (generating $11 million in revenue). The city says the result of that scenario would be 20 new police officers, 15 new firefighters, and funding for street improvements and parks without borrowing money.
However, councilmen Russ Jehl, R-2nd and Mitch Harper, R-4th, have proposed an alternative framework that would avoid an income tax increases. The solutions, they say, include spending cuts, expiring debt obligations, increased assessed value, using the banked levy and more.
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Star Reports Axia Technology Offered Incentives for Expansion in Columbus

From the Indianapolis Star:

Axia Technology Partners LLC announced today plans for a $2.8 million expansion to its Central Indiana operations that will create up to 45 new jobs by 2017.

The Indianapolis-based communications technology company will lease an additional 2,500 square feet to expand its existing Downtown Indianapolis headquarters, adding up to 34 new jobs, according to a news release from the Indiana Economic Development Corp. Facility renovations are expected to begin in June.

In addition, Axia will lease and equip new data center space at the 86,000-square-foot Data Cave facility in Columbus, Ind., creating up to 11 new jobs.


The Indiana Economic Development Corp. offered Axia up to $425,000 in conditional tax credits and up to $30,000 in training grants based on the company’s job-creation plans.

AP: Farm Families Likely to Benefit From Tax Repeal

By the Associated Press in the Kokomo Tribune:

A Purdue Extension agricultural economist says the repeal of Indiana's inheritance tax should help farm families.
Gerry Harrison says before the repeal that took effect Jan. 1, children or grandchildren were tax-exempt on an inheritance up to $250,000. Anything over that was subject to being taxed. A family friend had only a $100 exemption, and tax rates ranged from 10 to 20 percent. So three siblings who last year inherited farmland valued at $1 million from a friend faced an inheritance tax of about $100,000.
The repeal doesn't affect the federal inheritance tax. But Harrison says the current federal estate credit is equal to the tax on a $5.25 million inheritance, which means only a few beneficiaries in Indiana would be affected.