Tuesday, August 27, 2013

Board Rejects Argument that PTABOA Makeup Relevant to Petitioner's Appeal; Finds Petitioner Failed to Present Probative Evidence of Property's Value

Mr. Costello spent much of his time arguing that the PTABOA was not properly constituted when it heard and decided the appeal below. But that claim is irrelevant to the Costellos’ appeal before the Board. The Board’s proceedings are de novo, and nothing about how the PTABOA was constituted hindered the Costellos from presenting their valuation case to the Board. Indeed, it is not clear what relief the Costellos seek. At most, a finding that the PTABOA was not properly constituted might lead the Board to dismiss the Costellos’ Form 131 petition and remand the matter for a properly constituted PTABOA to hear and decide the appeal. Such a finding, however, would not be grounds for reducing the subject property’s assessment. If anything, because the improperly constituted PTABOA’s determination would be a nullity, the assessment would be returned to the higher amount originally determined by the Assessor.

The Board therefore turns to the Costellos’ claims about the subject property’s assessment...  The Costellos challenged both the land portion of the subject property’s assessment and the property’s overall assessment. As to the land assessment, the Costellos pointed first to the Board’s final determination in their appeal of the subject property’s March 1, 2007 assessment. In that determination the Board found that the Assessor had admitted to an error in the property’s land assessment and reduced the assessment accordingly. Evidence of a property’s assessment in one year, however, is not necessarily probative of its true tax value in another year. E.g., Fleet Supply, Inc. v. State Bd. of Tax Comm’rs, 747 N.E.2d 645, 650 (Ind. Tax Ct. 2001) (citing Glass Wholesalers, Inc. v. State Bd. of Tax Comm’rs, 568 N.E.2d 1116, 1124 (Ind. Tax Ct. 1991)) (“Finally, the Court reminds Fleet Supply that each assessment and each tax year stands alone. . . . Thus, evidence as to the Main Building's assessment in 1992 is not probative as to its assessed value three years later.”). That is particularly true here, where the final determination that the Costellos rely on was for an assessment date four years before the assessment at issue in this appeal.

Mr. Costello also pointed to the land assessments for three nearby “60-foot” lots. Costello testimony. Those March 1, 2011 assessments ranged from $124,000 to $165,000. Without anything else, that range does as much to support the PTABOA’s determination of $148,000 for the subject land as it does to rebut that determination. In any case, Mr. Costello did not attempt to compare the three neighboring lots to the subject lot other than to highlight their proximity to each other and the fact that they are all “60-foot” lots. Mr. Costello’s comparative assessment data therefore has little or no probative value. See Long v. Wayne Twp. Assessor, 821 N.E.2d 466, 471 (Ind. Tax Ct. 2005) (finding that sales data lacked probative value where taxpayers did not compare the characteristics of the subject property and to those of the sold properties or explain how differences affected the properties’ relative market values-in-use).

As to the Property’s overall assessment, Mr. Costello pointed to the assessments, and in some cases to the sale prices, for the three neighboring properties as well as for various other properties around Sylvan Lake. Again, Mr. Costello did little to show how those properties compared to the subject or property or to account for any relevant ways in which the properties differed. So the assessment and sales data lacks probative weight for purposes of showing the subject property’s overall market value-in-use.

But Mr. Costello also pointed to the assessment and sales data to make two more general points: (1) that assessments around Sylvan Lake varied significantly from year to year with little rhyme or reason, and (2) that real estate prices were down across the board. As to Mr. Costello’s first point, the fact that assessment values fluctuated annually does little to show that the subject property’s March 1, 2011 assessment was wrong or, if so, what the correct assessment should have been. As explained above, evidence of a property’s assessment in one year is not necessarily probative of its true tax value in another year.

As to Mr. Costello’s second point, the fact that some properties sold for less than what they were assessed for does little to prove that real estate values were down or, more importantly, what the subject property’s market value-in-use was. At most, the Costellos’ evidence about sales to assessment ratios might relate a claim for an equalization adjustment based on a lack of uniformity and equality in assessments. See Indiana Dep’t of Local Gov. Fin. v. Commonwealth Edison Co. 820 N.E.2d 1222 (Ind. 2005) (“Commonwealth was entitled to seek an adjustment to the assessed value of its distributable property . . . on grounds that its property taxes were higher than they would have been had other property in Lake County been property assessed). But the Costellos did not make such a claim, and even if they did, their evidence would fall well short of proving an actionable lack of uniformity and equality.

Finally, the Costellos offered evidence to show that weeds were present in various areas of Sylvan Lake. While having a weed problem might affect the subject property’s value, merely showing that a problem exists is not enough; the Costellos instead needed to offer probative evidence to show the degree to which any weed problem affected the property’s market value-in-use. Because the Costellos did not offer such evidence, the fact that Sylvan Lake has a weed problem does little to rebut the subject property’s assessment.

http://www.in.gov/ibtr/files/Costello_57-011-11-1-5-00011.pdf