Tuesday, September 17, 2013

Board Finds Exemption Application Not Timely Filed and Declines to Remove Taxes on Property Purchased by Church


Indiana Code § 6-1.1-11-3(a) requires a property owner to file a written application on or before May 15 of the year for which it seeks the exemption. Indiana Code § 6-1.1-11-3.5 allows a slightly different requirement for not-for-profit corporations. Since the Petition for Review of Exemption and the Application for Exemption both state that Petitioner is a not-for-profit corporation, section 3.5(a) applies in this case. It states the following:

A not-for-profit corporation that seeks an exemption provided by IC 6-1.1-10 for 2000 or for a year that follows 2000 by a multiple of two (2) years must file an application for the exemption in that year. However, if a not-for-profit corporation seeks an exemption provided by IC 6-1.1-10 for a year not specified in this subsection and the corporation did not receive the exemption for the preceding year, the corporation must file an application for the exemption in the year for which the exemption is sought. The not-for-profit corporation must file each exemption application in the manner (other than the requirement for filing annually) prescribed in section 3 of this chapter.

Nevertheless, the legislature has enacted limited exceptions to the May 15 filing requirement. In the Form 132 Petition for Review of Exemption filed in case, Petitioner claimed to qualify for an exception provided by House Enrolled Act No. 1125. For 2003, 2004 and 2005, this exception permits an entity that is a church or religious society that failed to timely file an application for exemption under Ind. Code § 6-1.1-11 to file an application that will be considered as timely.

As Respondent noted, the Petitioner did not own, occupy or use the property on March 1, 2005. The logical meaning of Ind. Code § 6-1.1-11-3, however, relates the ownership requirement to the time of filing the exemption application, which must be on or before May 15, rather than the assessment date. In this case, Petitioner did not own the property on either date, the assessment date of March 1 or the filing date of May 15, 2005. The Application for Exemption was due by May 15. The evidence shows Petitioner did not file the Application until September 22, 2008.

Petitioner did not establish that it met the requirements of House Enrolled Act No. 1125. Petitioner failed to present any evidence or argument relating to that Act.

The Board finds the Petitioner’s 2005 claim for exemption must be denied because it was filed after the May 15 deadline and because Petitioner failed to establish that it satisfied the requirements for any exception that might have allowed approval of such a claim.

Responsibility for property taxes is governed by Indiana Statute. “The owner of any real property on the assessment date of a year is liable for the taxes imposed for that year on the property…" Ind. Code § 6-1.1-2-4. “When a person other than the owner pays any property taxes, as required by this section, that person may recover the amount paid from the owner, unless the parties have agreed to other terms in a contract.” Id.

Property taxes are a lien on the property and attach on the assessment date. The sale and purchase of the property does not affect the lien. Ind. Code § 6-1.1-22-13(a). Due to the delay between assessment and billing as well as the possibility of a having a lien on the property, parties frequently assign responsibility for the tax liability within the purchase agreement. Van Prooyen Builders, Inc. v. Lambert, 907 N.E.2d 1032 (Ind. Ct. App. 2009).

Regardless of whether or not Petitioner owned the subject property on the assessment date, the purchase of the property by Petitioner did not affect the tax lien that attached when the 2005-pay-2006 taxes were not paid in a timely manner. While Petitioner may have a possible claim against the prior owner of the property, it is not an issue for the Board. Therefore, Petitioner’s request that the assessor’s office remove any delinquent taxes that were assessed to the church prior to the June 15, 2005 purchase date is denied.