Board Finds Purchase Price Established Value of Property; Assessor Failed to Rebut

Excerpts of the Board's Determination follow:

The Spades offered two different calculations, both of which were based either partially or wholly on assessments from 2012 or 2013. Because the Spades did not explain how those later-year assessments relate to the property’s true tax value for 2011, their calculations have little or no probative weight.

But the Spades bought the property for $191,843 on February 11, 2011. A property’s sale price is often the best evidence of its 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). That is particularly true in a case like this where the sale occurs less than a month before the relevant valuation date.

The Assessor offered no probative valuation evidence of his own to rebut that sale price. He instead simply described the procedures that were followed in computing assessments. But as the Indiana Tax Court has explained, strictly applying assessment regulations does not necessarily prove a property’s market value-in-use in an assessment appeal. See Eckerling, 841 N.E.2d at 678 (holding that taxpayers failed to make a case by simply focusing on the assessor’s methodology instead of offering market value-in-use evidence).

The Assessor likewise offered no authority for using a ratio study to prove that an individual property’s assessment reflects its market value-in-use. In fact, the International Association of Assessing Official’s Standard on Ratio Studies, which 50 IAC 27-1-4 incorporates by reference, prohibits using ratio studies for that purpose:

Assessors, appeal boards, taxpayers, and taxing authorities can use ratio studies to evaluate the fairness of funding distributions, the merits of class action claims, or the degree of discrimination. . . . .However, ratio study statistics cannot be used to judge the level of appraisal of an individual parcel. Such statistics can be used to adjust assessed values on appealed properties to the common level.

INTERNATIONAL ASSOCIATION OF ASSESSING OFFICIALS STANDARD ON RATIO STUDIES VERSION 17.03 Part 2.3 (Approved by IAAO Executive Board 07/21/2007) (bold added, italics in original).

 

http://www.in.gov/ibtr/files/Spade_15-013-11-1-5-00003.pdf

News and Tribune Reports Jeffersonville Redevelopment Commission Approves Abatement for Rivera Consulting

From the Clark County News and Tribune:

he first step was cleared Wednesday for a tax abatement that could bring about 120 jobs with average salaries of $100,000 to Jeffersonville.

Rivera Consulting Group’s application for a tax abatement to build a 32,000-square-foot headquarters in the North Port Business Centre, near Port and Middle roads, was approved by the Jeffersonville Redevelopment Commission.

“We want to build a corporate facility here, so we can bring our folks home,” said Joey Rivera, CEO and president of Rivera Consulting Group. The company has a facility in Sellersburg.

Rivera said the company, which develops software and cyber security systems for the federal government, currently employees about 100 people in 10 states. The construction of a headquarters in Jeffersonville would give the company a central location. The total project cost is estimated at about $6 million, with an expected investment in personal property of about $1 million, of which $750,000 is slated for computer equipment and development efforts. The company expects to employ 120 people  with a total payroll of more than $10.6 million.

Redevelopment Commission Attorney Les Merkley said the abatement would still need to go before the City Council for approval. It is expected to be on the council’s agenda on Monday.

The abatement application was approved 3-1 with Redevelopment Commissioner Jack Vissing voting against and Commissioner Kevin LaGrange absent from the meeting.

http://newsandtribune.com/business/x862196411/Project-could-bring-120-jobs-to-Jeffersonville

IBJ Reports on Indiana's Long Fight for Less Government

From the Indianapolis Business Journal:

Former Governor Mitch Daniels argued for years that Indiana had too much local government — a costly maze of overlapping townships, taxing districts and city and county entities that took shape before the Civil War. The Republican even recruited his Democratic predecessor to help make the case.

A prime example was the factory town of Muncie, seat of Delaware County. With 37 entities taxing a declining population and a projected deficit of $5.6 million next year, the county is “ground zero” for the problems Daniels targeted, Ball State University economist Michael Hicks said. Merging Muncie and Delaware County could save at least $7 million a year in efficiencies and improved services, he said, as Indianapolis and Marion County did by combining four decades ago.

Yet, when voters considered a merger last November, almost two-thirds said no.

“This is one of those issues where bipartisanship and a great good-government rationale isn’t enough,” said Daniels, 64, now president of Purdue University in West Lafayette. “It’s easy enough if you’re passionate in defending the status quo to persuade enough people to stand pat and not take a chance on something new.”

The failed referendum and other thwarted efforts in Indiana show how difficult it is to shrink local government, even with political support at the highest levels and obvious taxpayer savings. Before leaving office in January, Daniels, a popular two-term governor in a state known for its common-sense fiscal policies, pushed streamlining government for five years.

Entrenched interests

With entrenched interests protecting jobs, only a handful of changes were made. Most of the restructuring that Daniels and his allies sought either died in the legislature or was never seriously considered, and only two of five ballot measures to consolidate local governments have passed.

The commission also proposed reducing the number of school districts by setting a minimum student population of 2,000, an idea that went nowhere in a state whose celebration of small towns was immortalized in the basketball movie “Hoosiers.”
...

See the lengthy article here:

http://www.ibj.com/indianas-long-fight-for-less-government-has-politicians-protecting-own/PARAMS/article/44339

Palladium-Item Reports Chamber Previews Legislative Agenda in Richmond

From the Richmond Palladium-Item:

...
The Indiana chamber is “wholly supportive” of Common Core, Waltz said. Carter agreed, saying the standards provide “some degree of common comparison with other states.”

How Indiana fares in comparison with other states was a recurrent topic during the presentation. In his discussion of Indiana’s taxes, for example, Waltz said that though “we definitely have a very business-friendly tax climate,” commercial/industrial property taxes are “one of the areas where we do not compare well.”

Indiana taxes businesses on machinery and equipment in addition to real estate. That is not true of Ohio, Illinois or Michigan. Kentucky does tax but at a lower rate than Indiana.

“It doesn’t put us in a great position,” Waltz said. The chamber hopes to change that.

Other chamber ideas included:

• Switching from a tax on fuel consumption to one based on miles traveled, so fuel-efficient vehicles pay their share for highway maintenance and improvement;

• Allowing employers to ask if job candidates are smokers before they are hired, something now prohibited by state law;

• Extending the patent-derived income tax exemption to include the patent pending phase;

• Ending or strictly regulating lawsuit lending, in which a third party lends money to someone hoping to receive damages, often at rates that swallow up any settlement payment and more;

• Creating a “work sharing” program that would encourage employers to avoid layoffs but limit an employee’s hours, with partial unemployment payments making up the rest of the employee’s paycheck.
...

http://www.pal-item.com/apps/pbcs.dll/article?AID=2013310300028

Star Press Reports 80 Jobs and 74 Buses Lost if Referendum Fails in Muncie

From the Muncie Star-Press:

It has been widely publicized how the bus referendum could impact Muncie Community Schools students.

If it is voted down on Tuesday, more than 4,000 kids would not have a ride to and from school on a yellow school bus.

But what happens to the bus company — not to mention the drivers — that provides the rides?

“The doors will close,” said Kendra Burgess, vice president of M&M Bus Co.

And that, she said, would impact 80 employees.

Burgess has been with M&M for 24 years, 17 as a driver. The business itself has been around since 1974 and has been the provider of school bus service for MCS since then.

She said if the buses do not run, it will leave the six salaried employees and 74 drivers without jobs. And it will leave 74 buses on the lot.

On Tuesday, community members will be able to vote yes or no on the referendum, which will ask for about $3.35 million for studenttransportation.

The biggest chunk of the $3,325,000 will go to M&M for its 2014 contract totaling $2,650,000.

A “yes” vote will keep the buses running by raising property taxes, to the tune of no more than 22 cents for every $100 of assessed property value. This rate was voted on by the school board earlier this month. The tax rate over the seven-year referendum cannot exceed 39 cents for every $100.

The referendum itself does not have to go the full seven years. That, too, is determined by the board.
...

http://www.thestarpress.com/apps/pbcs.dll/article?AID=2013310310033

Tribune Reports Seymour Appeals to Recover Revenue Lost to Property Tax Refunds

From the Seymour Tribune:

Seymour will appeal to the state in an attempt to recover revenue that officials say was lost due to property tax refunds made this year.

City council members gave their approval Monday night for the city to file an excess levy appeal to the Indiana Department of Local Government Finance.

“This is to try to regain tax money that we were supposed to get but didn’t receive because of appeals and adjustments made in property taxes,” council member Lloyd Hudson said.

http://www.tribtown.com/view/local_story/Officials-Levy-will-make-up-fo_1383189733

State Posts 2013 Property Tax Report

See the interactive webpage here:

http://www.in.gov/legislative/publications/County_Report_2013.pdf

Oral Argument in Tax Court in R.R. Donnelley & Sons Matter Posted

THU, OCT 31, 2013 at 10:00 AM

R.R. Donnelley & Sons Co. v. Indiana Department of State Revenue

Tax

Marion

http://mycourts.in.gov/arguments/default.aspx?court=tax

Tax Court Denies Revenue's Motion to Dismiss in Garwood

Excerpts of the Tax Court Decision follow:
...

The Department contends that the Court does not have subject matter jurisdiction over Garwood’s case because it does not satisfy the “arising under” requirement of Indiana Code § 33-26-3-1. More specifically, the Department contends that Garwood’s case does not arise under Indiana’s tax laws for two reasons. First, it claims that Garwood’s case is not a “valid” refund claim under Indiana Code § 6-8.1-9-1. (See Confd’l Mem. Supp. Resp’t Mot. Dismiss (hereinafter, “Resp’t Br.”) at 6-8.) The Department explains that Garwood’s case, unlike a case involving a “valid” refund claim, is not based on what she actually paid toward her tax liability by using a method described in Indiana Code § 6-8.1-8-1 (i.e., $175.48), but is instead based on a purported tax payment derived from the appraised value of her animal inventory (i.e., 
$122,650). (See Resp’t Br. at 7-8; Resp’t Confd’l Reply Supp. Resp’t Mot. Dismiss (hereinafter “Resp’t Reply Br.”) at 2-3, 5 (footnote added).) Second, the Department maintains that Garwood’s case does not arise under Indiana’s tax laws because it does not involve the collection of a tax or defenses to that collection pursuant to the Indiana Supreme Court’s decision in Aisin, but rather seeks to recover monies that allegedly were not paid or credited to her by mistake. (See Resp’t Br. at 8-9 (citing Aisin, 946 N.E.2d at 1155); Resp’t Reply Br. at 4-5.) As such, the Department maintains that Garwood’s case involves a claim for compensatory damages, not a refund of sales tax. The Court, however, is not persuaded by either of these arguments. 

Indiana Code § 6-8.1-9-1 provides, in relevant part, “[i]f a person has paid more tax than the person determines is legally due for a particular taxable period, the person may file a claim for a refund with the department.” IND. CODE § 6-8.1-9-1(a) (2012). The claim must be filed within three years of the date of payment and “must set forth the amount of the refund to which the person is entitled and the reasons that the person is entitled to the refund.” I.C. § 6-8.1-9-1(a). Here, the facts show that just over a week after the Court issued Garwood II, Garwood filed with the Department a completed Form GA-110L, its prescribed form for claims for refund. (See Pet’r Pet. ¶ 3, Ex. A at 3.) The document provided that Garwood made a tax payment on June 2, 2009, stated the amount of refund requested, and explained why she believed she was entitled to a refund: 

Jeopardy assessments were issued against me for sales taxes purportedly owed. On June 2, 2009 my personal property (dogs and puppies) were seized from my home and farm. We followed the appeals process and the Indiana Tax Court has held that the jeopardy assessments are void and ordered the Indiana Dept. of Revenue to take all actions necessary to effect the order. I am attaching an appraisal of the value of my property as well as the decision of the Indiana Tax Court. My dogs were appraised at $122,650.00. I calculate my actual sales tax due as $1217.00 for 2008 and $1333.50 for 2009. In addition to taking the dogs the Department took $1260 in cash and uncashed checks totaling $1325. Subtracting what I owed from what was seized I am owed a refund of $122,684.50. 

(Pet’r Pet., Ex. A at 3.) Thus, Garwood’s filing of the Form GA-110L complied with the requirements of Indiana Code § 6-8.1-9-1. 

Furthermore, and as acknowledged by the Department, Garwood did everything the Department indicated that she needed to do. Indeed, the facts reveal that during Garwood’s first appeal, the Department repeatedly argued that she was required to file a refund claim under Indiana Code § 6-8.1-9-1 to obtain any relief whatsoever. For example, during the hearing on the Garwood I motion to dismiss, the Department asserted that because Indiana is a “pay-to-play” state, Garwood needed to pay the jeopardy assessments in their entirety and then file a refund claim to satisfy the exhaustion of administrative remedies requirement. (See Pet’r Resp. Br. Ex. G at 14-19.) Then, in moving for summary judgment in Garwood II, the Department stated: “The Petitioners can avail themselves of Ind. Code § 6-8.1-9-1 and file a claim for refund of amounts either seized by or paid to the Department.” (See Pet’r Resp. Br. Ex. F at 24 (emphasis added).) Moreover, in petitioning the Indiana Supreme Court to review Garwood II, the Department acknowledged that Garwood had already filed a refund claim: 

Indiana’s refund remedy provides meaningful backward-looking relief to rectify any erroneous, unlawful, or unconstitutional tax collection. It does so by providing a fair opportunity to challenge the accuracy and legal validity of a tax obligation, both administratively and judicially. It provides the clear and certain remedy of a refund with interest if the taxes are found to have been collected erroneously, unlawfully, or unconstitutionally. This remedy has been available to the Garwoods since the day their inventory was levied. They have, until the past month, intentionally avoided this remedy. 

(See Pet’r Resp. Br. Ex. H at 36 (emphasis added).) (See also Pet’r Pet. at 2, Ex. B at 1; Resp’t Des’g Evid., Vol. 2, Ex. 5 at 1 (demonstrating that the Department issued a check to Garwood in June 2012 and, on two separate occasions, indicated the “refund” was for her overpayment of sales tax for the 2007 tax period).) Based on the totality of these jurisdictional facts, the Court finds that Garwood’s case “arises under Indiana’s tax laws”: she filed a refund claim with the Department on August 29, 2011, pursuant to Indiana Code § 6-8.1-9-1 and now seeks to have the validity of her claim resolved by this Court. 

Second, the General Assembly created this Court “to channel tax disputes into a single specialized tribunal, thereby ensuring the uniform interpretation and application of the tax laws.” Aisin, 946 N.E.2d at 1152 (citation omitted). To that end, the Indiana Supreme Court has explained that the “arising under Indiana’s tax law” requirement is to be broadly construed. See id. at 1153; Sproles, 672 N.E.2d at 1357. Indeed, “any case challenging the collection of a tax or assessment arises under the tax laws, whether the challenge is premised on constitutional, statutory, or other grounds.” Aisin, 946 N.E.2d at 1153 (citations omitted). Moreover, the challenge need not directly involve the collection of a tax - challenges to earlier steps in the taxation or assessment process also arise under the tax laws. Id. 

Here, the parties do not dispute that the Department employed the jeopardy assessment procedure under Indiana Code § 6-8.1-5-3 in seizing and selling Garwood’s animal inventory. Thus, Garwood’s case concerns the sale of seized property pursuant to jeopardy tax warrants, a tax matter. Moreover, the resolution of Garwood’s appeal will require the Court to determine whether other tax statutes apply to the jeopardy tax collection process. (Compare Pet’r Resp. Br. at 3-4 (where Garwood argues that the procedures in Indiana Code § 6-8.1-8-8 apply to sales conducted pursuant to jeopardy tax warrants) with Resp’t Br. at 4-5 (where the Department argues that Indiana Code § 6-8.1-8-1 provides the exclusive method by which a tax payment can be made).) See also supra note 3; 45 IND. ADMIN. CODE 15-5-8 (2013) (see 10 http://www.in.gov/legislative/iac/) (the jeopardy tax statute and regulation do not shed 
any light on either position). Consequently, the Court finds that these factors also indicate that Garwood’s case satisfies the “arising under Indiana tax law” requirement of Indiana Code § 33-26-3-1.

II. The Final Determination Requirement

With respect to the final determination requirement in Indiana Code § 33-26-3-1, Indiana Code § 6-8.1-9-1 accounts for the possibility that the Department may not rule on a claim for refund within 180 days of its filing by deeming such claims denied. See I.C. § 6-8.1-9-1(c)(2) (barring the Court from hearing a refund appeal suit if it “is filed both before the [department’s] decision is issued and before the one hundred eight-first day after the date the person files the claim for refund with the department”); Ziegler v. Indiana Dep’t of State Revenue, 797 N.E.2d 881 n.2 (Ind. Tax Ct. 2003). Here, there is no dispute that Garwood filed her second appeal with this Court more than 180 days after she filed her refund claim with the Department. (See Resp’t Reply Br. at 2 (“It is certainly true that the Department did not rule on Garwood’s request for more than 181 days after it was filed”).) As a result, Garwood has also satisfied the final determination or exhaustion of administrative remedies requirement of Indiana Code § 33-26-3-1. 
...

http://www.in.gov/judiciary/opinions/pdf/10311301tgf.pdf

Star-Press Reports Muncie Referendum a Week Away

From the Muncie Star-Press:

A week from today, people will be going to the polls to vote for or against the Muncie Community Schools bus referendum.

The special election will be Nov. 5. A yes vote will mean an increase in property taxes that will keep the buses running after this school year. A no vote will mean that transportation will not be provided by the school district for the 2014-15 school year.

The district is not required by law to provide transportation for its students. On the flip side, it is illegal for districts to charge children to ride the school buses.

Polling sites have been consolidated to cut down on costs — the district will be billed about $40,000 to hold this election during an off time. Some have said that this was meant to “confuse” voters.

This map will show you what precinct you live in.

Muncie Community Schools Chief Financial Officer Mark Burkhart said that isn’t the case.

“We had nothing to do with combining election sites,” he said last week. The county election board, citing an anticipated lower turnout than during other elections, consolidated the sites.

“We don’t see that as a negative, going to voting centers,” he added.

A yes vote will increase property taxes in order for the district to collect the $3.325 million needed for its transportation fund, which will operate the regular buses, buses for special needs students and extra-curricular buses.

A person who owns a home valued at $75,000, with normal homestead deductions, will pay $36.83 for the year.

The tax rate, voted by the board earlier this month when it approved the 2014 budget, was set at about 22 cents for every $100 of assessed property value. That is the maximum for 2014, Burkhart said.

But, after receiving the estimated property assessment for 2014, Burkhart said the rate could be closer to 19 cents (18.97 cents) in order to get the district the $3.3 million it needs to keep the buses running.

Burkhart said the assessed value estimate is $1,606,307,601, and with the added TIF district estimate of $146,592,154, the total estimate for 2014 is $1,752,899,755.

If this holds, the cost for that $75,000 home would be $31.30 for the year.
...

http://www.thestarpress.com/apps/pbcs.dll/article?AID=2013310290010

Chase: Desperate Measures to Find Late Lake County Assessor's Replacement

By Marc Chase in the Northwest Indiana Times:

Desperate times indeed call for desperate measures in some cases. But a sign of good leadership in politics is tackling a desperate measure with thoughtfulness -- acting in the best possible interest of taxpayers.

Lake County Republicans have been up against the wall lately trying to pick a successor for late county Assessor Hank Adams. Adams scored a rare GOP win for a countywide office in 2010, and his recent death created a party dilemma.

Most Republicans and Democrats agree -- privately if not out in the open -- that whomever the Republican caucus picks to serve out the remainder of Adams' term very well could be a sacrificial lamb for the November 2014 general election. Democrats in this Democratic county are seen as a near-lock to win back the assessor's seat.

To find a qualified candidate to endorse -- and have the slimmest of prayers to carry forward Adams' many reforms -- Lake County GOP Chairman Dan Dernulc thought outside of the box.

Dernulc is endorsing current county assessor's office employee Debra Johnson for the seat, to be decided in a Republican Party caucus Friday.

Cedar Lake resident Jolie Covaciu also said she is throwing her hat into the ring for the GOP nod, which ultimately will be decided by the county's Republican precinct committeemen.

I make no judgments here about the value of one candidate over another, but I do appreciate the sentiment of Dernulc's endorsement of Johnson.

You see, Johnson has not always voted as a Republican. In a recent election cycle, Johnson voted in the Democratic primary.

But she appears to have been a favorite employee of Adams and worked in the past for former GOP Center Township Assessor Martha Wheeler.
...

See the full article here:

http://www.nwitimes.com/news/opinion/columnists/marc-chase/marc-chase-desperate-measures-can-be-shining-examples/article_a0100b75-208a-5756-b8d7-7536b7ede54e.html

IBJ Reports Marion County and Simon Property Group Tangle Over Value of Malls

From the Indianapolis Business Journal:

A years-long fight between Marion County and mall developer Simon Property Group Inc. has moved to the Indiana Tax Court as a judge weighs vastly different estimates of the values of Lafayette Square Mall and Washington Square Mall.

The Marion County Assessor contends that the assessed values for property-tax purposes on the two struggling malls should be millions of dollars higher than Simon’s estimates. Last year, the Indiana Board of Tax Review sided with Simon, leading to the assessor’s current appeals in tax court.

The court heard arguments in individual cases for the two properties in recent weeks and is weighing a decision.

The battle focuses on Washington Square’s appraised value between 2006 and 2010, and Lafayette Square’s appraisals for 2006 and 2007. Marion County had valued Lafayette Square at $35 million in 2006, for example, while Simon argued it was worth $15 million.

Likewise, the county’s appraiser valued Washington Square at $22 million for 2006, while Simon’s appraiser pegged it at $12 million.
...

See the lengthy article here:

http://www.ibj.com/marion-county-simon-tangle-over-valuation-of-local-malls/PARAMS/article/44315

Revenue Finds Montana LLC a "Legal Sham Transaction" Insufficient to Shield Purchase of Vehicles from Indiana Sales Tax

Taxpayers are Indiana residents who purchased two automobiles during 2009 and 2012. The Department of Revenue ("Department") assessed sales/use tax on the purchase price of each vehicle.
...

Taxpayers argue that the Department's assessment of sales/use tax on the purchase of two automobiles was erroneous. Taxpayers set out various arguments including "insufficiency of evidence," "abuses of due process," and that the assessments violate the constitutional sovereignty of both Louisiana and Montana.
...
  

Taxpayers freely admit in writing that, the vehicles are used in Indiana but argue that the two vehicles were actually purchased by Taxpayers' Montana based Limited Liability Company. Taxpayers are or were the LLC's managers. A Montana "Services Company" assisted Taxpayers in establishing their LLC. The "Services Company" invites its prospective customers – such as Taxpayers – to "Register your vehicles in Montana and Pay No Sales Tax." (Emphasis in original). The "Services Company" invites its customers to "Incorporate your Limited Liability Company in tax-free Montana and our experienced Registered Agents can help you save thousands on RV, car, and airplane registered simply with a Montana LLC." In apparent response to "Service Company's" invitation, a one-page document was prepared designating "Service Company" as the LLC's Montana "agent."
 

Other than the purchase of the vehicles, Taxpayer was unable to provide any documentation or evidence establishing any business or non-business activity by the LLC in Indiana, Montana, or any other state in the union. While the LLC made no attempt to undertake any further activity, the titling of the vehicles by the LLC did have an effect on Taxpayer's sales/use tax responsibility. This tax avoidance effect leads to consideration of the "sham transaction" doctrine, which is long established both in state and federal tax jurisprudence dating back to Gregory v. Helvering, 293 U.S. 465 (1935). In that case, the Court held that in order to qualify for favorable tax treatment, a corporate reorganization must be motivated by the furtherance of a legitimate corporate business purpose. Id. at 469. A corporate business activity undertaken merely for the purpose of avoiding taxes was without substance and "[T]o hold otherwise would be to exalt artifice above reality and to deprive the statutory provision in question of all serious purpose." Id. at 470.
 

The courts have subsequently held that "in construing words of a tax statute which describe [any] commercial transactions [the court is] to understand them to refer to transactions entered upon for commercial or industrial purposes and not to include transactions entered upon for no other motive but to escape taxation." Comm'r v. Transp. Trading & Terminal Corp., 176 F.2d 570, 572 (2d Cir. 1949), cert. denied, 338 U.S. 955 (1950). "[T]ransactions that are invalidated by the [sham transaction] doctrine are those motivated by nothing other than the taxpayer's desire to secure the attached tax benefit" but are devoid of any economic substance. Horn v. Comm'r, 968 F.2d 1229, 1236 (D.C. Cir. 1992). In determining whether a business transaction was an economic sham, two factors can be considered; "(1) did the transaction have a reasonable prospect, ex ante, for economic gain (profit), and (2) was the transaction undertaken for a business purpose other than the tax benefits?" Id. at 1237. The question of whether or not a transaction is a sham, for purposes of the doctrine, is primarily a factual one. Lee v. Comm'r, 155 F.3d 584, 586 (2d Cir. 1998).
 

In this case, the Montana LLC had no business or non-business functions and never attempted to acquire, maintain, or dispose of any property other than vehicles in question. In fact, the LLC had no apparent functions of any kind other than those directly related to the purchase of the vehicles in question. The titling of the vehicles in Montana, a state without a sales tax, was an apparent attempt – as publicly advertised by "Services Company" – to reduce or eliminate Taxpayers' sales and use tax liabilities. The formation of the LLC and the titling of the vehicles in the name of the LLC constituted a "sham transaction."
 

In conclusion, there is no apparent indication that the LLC had any valid function beyond avoiding sales and use taxes on the purchase of the vehicles. Therefore, the formation of the LLC and the titling of the vehicles by the LLC constituted a legal sham transaction. Consequently, Taxpayer acquired tangible personal property in a retail transaction, used and stored it in Indiana, but did not pay sales tax at the point of purchase or anywhere else.
 

In such circumstances, Indiana use tax is due as provided under 45 IAC 2.2-3-4.

 

http://www.in.gov/legislative/iac/20130925-IR-045130437NRA.xml.html

News Urges Residents to Vote on Referendum in Goshen November 5th

From the Goshen News:

“Shall Goshen Community Schools issue bonds or enter into a lease to finance the renovation of and construction of improvements to Goshen Middle School and Goshen High School, which includes site improvements, which is estimated to cost not more than $17,150,000 and is estimated to increase the property tax rate for debt service by a maximum of $.1098 per $100 of assessed valuation over the 20-year life of the bonds?”

ON NOV. 5, registered voters within the boundaries of Goshen Community Schools will have the opportunity to answer the question above and to directly impact their quality of life here in the Maple City. In the form of a “yes” vote that quality would be enhanced with a new pool for the school corporation, along with expanded music and physical education facilities at both Goshen High School and Goshen Middle School, all part of a proposed $17.15 million construction and remodeling project.

In the form of a “no” vote that would equate to a victory against an additional tax over the state-mandated 1 percent cap for residential property owners. Make no mistake, living in a community with low taxes contributes to the quality of life for many residents. The tax impact if the project were to be approved by voters would be about $37.03 per year for the median value home owner, which is $101,500. Keep in mind, that impact will be less for some and considerably more for others.

STARTING THIS PAST Sunday, and running through Friday, Goshen News reporter Sherry Van Arsdall will navigate through this potential project and examine what the needs of the school corporation are and what the concerns of taxpayers are. The hope is that we can give voters the knowledge they need to make an informed decision when they cast their ballot.

We’d also like to remind voters that there is one more school-sponsored informational meeting at 5:30 p.m. Wednesday inside the Goshen Middle School. School officials have already held several input meetings that we feel have been very helpful. We’d like to commend them for opening up the floor to the public and answering tough and legitimate questions about this project. We would also encourage voters to visit the GCS website at http://www.goshenschools.org/blog/2013/10/22/updated-slideshow-regarding-proposed-renovations/ to view a slide show regarding the proposal.

Polls will open at 6 a.m. on Nov. 5. Registered voters of precincts Elkhart 1 through Elkhart 21, comprising all of the Goshen Community School Corporation are eligible to vote. Polls will close at 6 p.m. Eligible voters can also vote early at the Elkhart County Administration Building, 117 N. Second St., Room 108, Goshen. You can refer to the information box on the front page today for dates and hours of operation.
...

http://goshennews.com/editorials/x703149435/Be-sure-to-cast-your-vote-on-Nov-5

Chronicle-Tribune Reports Property Values and Tax Caps Continue to Hurt Taxes in Grant County

From the Grant County Chronicle-Tribune:

A countywide drop in assessed property values last year has led to higher tax rates this year — and could continue to hurt the local economy in the future, experts say.

The “Comprehensive Assessed Value Report” released by the Indiana Department of Local Government and Finance last month shows drops in several types in assessed values, or AVs, in Grant County from the 2011-2012 tax year to the 2012-2013 tax year. Assessments made in 2012 affected 2013 tax payments.


http://www.chronicle-tribune.com/news/property-values-hurt-taxes/article_de72bbb2-3f85-11e3-a688-001a4bcf887a.html


 Despite levying more property taxes this year, Grant County’s local governments lost out on even more.

A report released by the Indiana Office of Fiscal and Management Analysis last month shows that, in total countywide, levies increased by 6 percent compared to last year, while the amount of levies that could not be collected due to tax caps increased by 6.9 percent.

http://www.chronicle-tribune.com/news/tax-caps-hitting-harder/article_240213f4-3ebd-11e3-8ba1-0019bb2963f4.html

Tribune Reports Seymour Council to Vote on Property Tax Increase

From the Seymour Tribune:

Seymour City Council will vote tonight on a proposal to increase local property taxes by 36 cents in 2014.

The city is presenting an overall tax rate of $1.478 per $100 of taxable property, an amount nearly identical to the rate advertised for 2013. That rate eventually dropped to $1.119 once actual assessed values were calculated and reported by the state Department of Local Government Finance last February.

Mayor Craig Luedeman said he expects the 2014 rate to wind up around the same or even less than this year’s rate.

http://www.tribtown.com/view/local_story/Council-looks-at-raising-tax-r_1382925912

Board Finds Assessor with Burden Failed to Supporty Property's Assessed Value

Excerpts of the Board's Determination follow:

In this case, the subject property’s valuation history report shows that the County Assessor assessed the property for $62,100 in 2009. The PTABOA determined the property’s March 1, 2010, value is $84,900, which represents an increase of more than 5%. Therefore, the Assessor has the burden of proving the 2010 assessment is correct.

…

Here, the Assessor did not meet her burden. Mr. Wallenfang relied on his analysis of five comparable sales in the area to show the assessed value for the subject property. In order to effectively use a sales-comparison analysis as evidence in a property assessment appeal, the proponent must show that the properties are truly comparable to the property under appeal. Conclusory statements that a property is “similar” or “comparable” to another property do not suffice. Long v. Wayne Township Assessor, 821 N.E.2d 466, 471 (Ind. Tax Ct. 2005). Rather, 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 affect the relative market values-in-use. The Assessor did not do this.

The Assessor presented no evidence to show that the properties offered as comparisons were actually comparable to the property under appeal. Instead, her witness offered five properties that sold in the same area and simply compared the size, age, grade, condition, year built, basement area, and garage area of those homes to the subject property. Fatally, he did not address how these differences affected the relative values. The Assessor’s evidence showed that the sale prices of properties in the area ranged from $53.13 per square foot to $92.59 per square foot in 2009. Thus, the Board can infer that the properties in the Englerts’ area varied a great deal. Because Mr. Wallenfang made no attempt to identify or value the differences between the compared properties, the Assessor’s sales comparable analysis has little probative value. As the Indiana Tax Court stated in Fidelity Federal Savings & Loan v. Jennings County Assessor, 836 N.E.2d 1075, 1082 (Ind. Tax Ct. 2005), “the Court has frequently reminded taxpayers that statements that another property ‘is similar’ or ‘is comparable’ are nothing more than conclusions, and conclusory statements do not constitute probative evidence. Rather, when challenging an assessment on the basis that the comparable property has been treated differently, the taxpayer must provide specific reasons as to why it believes the property is comparable. These standards are no less applicable to assessing officials.” 836 N.E.2d at 1082 (citations omitted and emphasis added).

According to the Assessor, the trending factor on the subject property dropped from 1.2 in 2008 to 0.95 in 2009. But the Assessor failed to provide any documentation as to why the trending factor changed so dramatically. Then, in 2010, the trending factor returned to 1.2 for the neighborhood based on valid sales in the neighborhood from the preceding 14 months. When the trending factor was applied to the subject property it resulted in an assessed value of $84,900. Based on this, the Assessor claims the subject property is assessed correctly. The Assessor failed to explain why the decreased trending factor in 2009 justified the 2010 assessment for the subject property.

More importantly, the Assessor misunderstands the nature of her burden under Indiana Code § 6-1.1-15-17.2. When this statute applies, the Assessor’s burden is not merely to explain why assessment increased, but to prove the assessment is “correct,” i.e. that it reflects the market value-in-use. In this case, the Assessor needed to offer probative evidence addressing the subject property’s actual market value-in-use. The Assessor failed to offer such evidence.

 

http://www.in.gov/ibtr/files/Englert_79-004-10-1-5-00001.pdf

Property Tax Payment Information for Lake, Allen, and Daviess Counties

From the Northwest Indiana Times:

The Lake County treasurer's office will be open Veterans Day and have extended hours Nov. 12, the final day property taxes can be paid on time.

County Treasurer John Petalas said Monday the rest of county government will be closed Nov. 11 in honor of Veterans Day, but his offices in the Lake County Government Complex, 2293 N. Main St., Crown Point, or the satellite county courthouses at 401 Broadway in Gary and 232 Russell St. in Hammond. will be open from 8 a.m. to 4:30 p.m. that day.

He said his office also will be open from 8:30 a.m. to 7 p.m. Nov. 12 for final payments.

Those who aren't disputing their tax bills can avoid lines be paying at local branch offices of these banks: American Savings FSB, Centier Bank, Chase Bank, Citizens Financial Bank, DeMotte State Bank, First Financial Bank, BMO Harris Bank N.A., Horizon Bank, Lake Federal Bank FSB, MainSource Bank, Peoples Bank and Tech Credit Union.

http://www.nwitimes.com/news/local/lake/crown-point/lake-treasurer-is-extending-hours-for-final-tax-installment/article_113033a5-2ecd-5fe1-81b1-b47e8c4ad530.html

From the Fort Wayne Journal Gazette:

Chief Deputy Treasurer William Royce wants to remind everyone that only two weeks remain to pay their property taxes. Due to November 10 falling on Sunday, and Monday November 11 being Veterans Day, tax payers have until November 12, to make their fall property tax payment.

Payments must be in the Treasurer’s office or postmarked by November 12, 2013 to avoid penalty.

A new payment method is now available! Tax payments can be paid right from your smart phone or mobile device.

Simply type ACIMAP.US/MPATI into your device’s web browser and you can download your tax bill, or pay by electronic check or credit card.

"We constantly look for more convenient ways for taxpayers to pay their taxes," said Royce, "With this new phone app, people can look up and pay taxes from anywhere in the world where they can find a signal."

Complete details can be found on the Treasurer’s website.

Other payment methods include:

Mail to: Allen County Treasurer, PO Box 2540, Fort Wayne IN 46801-2540. Payment is considered 'on time' when postmarked by the US Post Office on or before the due date.

Local Banks: You may pay your property taxes on time at the Allen County banks listed on the back of the tax bill. You must have your tax statement when paying at a bank.

Treasurer’s Office: The Treasurer’s office is located in suite 104 of the Rousseau Centre (City – County Building) 1 E. Main St. in Fort Wayne.

Please bring your entire statement when paying in person. Office hours are 8:00 a.m. to 5:00 p.m. weekdays. The deposit slot in the front of the Treasurer’s office is available from 7:00 a.m. to 5:30 p.m.

Drop Box: Taxpayers can deposit their tax payment in the night depository for the Clerk of the Court and Allen County Treasurer located on Main Street in front of the Court House. Also available is the night depository at any Star Financial Bank location.

Other Options: Check the Treasurer’s web site, www.allencountytreasurer.us for information about paying by credit card, single electronic payment or signing up for the monthly payment plan or the Spring/Fall Payment option. Follow the links on the home page.

http://journalgazette.net/article/20131028/BLOGS01/131029408/0/SEARCH

From the Washington Herald-Times

Property taxes due No. 12; Treasurer to extend hours

The Daviess County Treasurer reminds taxpayers that the second installment of taxes is due by Tuesday, Nov. 12. Payments postmarked or made in person after Nov. 12 will automatically incur a penalty. The office is open Monday through Friday from 8 a.m. until 4 p.m. The courthouse will be closed on Monday, November 11th for Veterans Day.

The office will be open Saturday, November 2nd, from 8:00 a.m. until Noon.

The Treasurer’s website, www.daviesstax.net, updates payments daily, and has information on tax amounts, assessments, and exemptions. Credit card payments can also be made at this site or by calling 800-809-5849; such payments can also be made at the office. There is a 2.95 percent fee on all credit card transactions; the company gets the fee, the Treasurer receives only the tax amount. For those with questions, call 254-8677; voice mail is available after hours. -

See more at: http://washtimesherald.com/local/x934967499/Property-taxes-due-No-12-Treasurer-to-extend-hours#sthash.Jlhy35yE.dpuf

Times Reports Two Compete for Lake County Assessor Vacancy

From the Northwest Indiana Times:

Two south county women are competing to become the first female Lake County assessor.

Jolie Covaciu, 46, of Cedar Lake, and Debra M. Johnson, 54, of Crown Point, have filed their candidacies for the countywide office with Republican officials. It is unclear whether anyone else will file for the office before Tuesday's 6 p.m. deadline.

Johnson is receiving the GOP's blessing to run for the job despite most recently voting in a Democrat primary and having to buy an empty lot in Lake Station last week to qualify for the position.

The county's Republican precinct committeemen will caucus at 6 p.m. Friday to chose the next assessor to serve the remaining 14 months of the late Hank Adams' term as county assessor. He died earlier this month.

Both women have the highest state certification required for the office -- Level III assessor/appraise. Both also have on-the-job experience.

Covaciu worked 18 years as a deputy Cedar Creek Township assessor and in the private sector with Nexus Group. Johnson has 14 years as a deputy Center Township and most recently as a compliance and hearing officer in the county assessor's office.

However, Johnson required the intervention of GOP party leaders to run as a Republican because she has voted as a Democrat in past years when she worked under former county assessor Paul Karras, a Democrat.

Lake County GOP Chairman Dan Dernulc said Monday that, although Johnson voted as a Democrat in a previous county primary, she has a solid history of voting as a Republican previously. He said her candidacy has the blessing of the region’s Republican legislators and state party leadership.
Dernulc said he is endorsing Johnson because she worked closely with the Adams and vowed to finish his work.

Johnson also had to quickly purchase real estate last week to meet the statutory qualification of being a Lake County property owner. Covaciu said she has been a Cedar Lake homeowner for more than a decade.

Johnson said Monday she had been a homeowner for many years in the Crown Point area but sold the residence in 2010 and currently lives in rental property.

After deciding to run for county assessor, she said she found a small vacant lot in the 2700 block of South Vigo Street in Lake Station.

The lot was listed on last month's county treasurer's tax sale because its property taxes hadn't been paid in two years. Nobody bid on the property during the sale.

Johnson said she purchased it Friday after the owner, Ile Suleski, of Lake Station, paid back taxes, interest and penalties of nearly $2,400 on the parcel. She declined to name her purchase price, except to say it was less than its assessed value of $18,100.

http://www.nwitimes.com/news/local/lake/cedar-lake/two-women-compete-for-lake-county-assessor-vacancy/article_74140c92-121e-5555-83de-0cc8d9e716d9.html

DLGF Schedules Level I and Level II Assessor Appraiser Certification Examinations

Please note the Level I and Level II exam originally scheduled for November 4 has been changed to Tuesday, November 12 in Indianapolis. Room is still available for this examination. Please contact Donna Bratcher at dbratcher@dlgf.in.gov or 317-233-0166 with questions or to register for the November 12 exam.

 

MEMORANDUM

 

TO: All Interested Parties

FROM: Barry Wood, Assessment Division Director

DATE: October 29, 2013

RE: 2013 Fourth Quarter Level I & Level II Assessor Appraiser Certification Examinations

 

The objective of the Level I and Level II examinations, in accordance with IC 6-1.1-35.5-3, is to test individuals on job-related concepts that are representative of the substantial knowledge needed for effective performance as a county or township assessor or assessing official. The examination will test practical applications used in the performance of the duties associated with the office.

The examinations are open to anyone at no charge. However, in accordance with IC 6-1.1-35.5-7, “a person who is successful on the level one examination may apply for and take the level two examination.” Therefore, you must take the examinations in order, and the examinations cannot be taken on the same day. You must pre-register for the examinations.

Tutorials

 

The 2013 Level I and II Tutorials and Examinations use the 2011 Real Property Assessment Manual and Guidelines and the SIX (6) 2013 PowerPoint Level I and SIX (6) 2013 PowerPoint Level II Tutorial Courses and Review Material Problems that can be download from our website at http://www.in.gov/dlgf/9185.htm. A Review Exam for each level is also available.

 

If you need assistance printing a copy of the tutorials, please contact Donna Bratcher at the DLGF at 317-233-0166 or dbratcher@dlgf.in.gov.

 

Electronic devices such as laptops, cell phones, iPads, etc... will NOT be allowed during the examinations.

 

Examinations

 

The examinations are open book. In order to answer some of the questions on the exam, you will need to work problems similar to those in the tutorial and on the Review Exam. The examinations will consist of 50 multiple-choice questions of two points each. A passing grade is 70 points.

 

The proctor for the examination will not answer questions regarding the Level I and II materials prior to or during the examination. Please contact DLGF staff prior to the examination day with any questions regarding the course materials at Level1@dlgf.in.gov or Level2@dlgf.in.gov.  

 

The examination will run five (5) consecutive hours from the beginning of the examination at approximately 10:00 am, but will end no later than 3:00 pm local time. You will be asked to provide a photo ID when you arrive. During the examination, there will be no breaks, although you will be allowed to leave the room for restroom breaks or to get a snack or drink.

 

You MUST pre-register using the form below. You may register for both examinations, but on different dates, on the same registration form. Room space is limited to a maximum of 25 registrants. A minimum of five (5) registrants must be received or the examination will be cancelled. Registrants will be notified by e-mail if the examination is cancelled.

Commission on State Tax and Financing Policy Schedules Meetings for November

Commission on State Tax and Financing Policy

 

** TO DETERMINE IF A MEETING IS BEING WEBCAST TODAY, SEE NOTICES AND AGENDAS FOR TODAY'S DATE. NOT ALL MEETINGS ARE WEBCAST.

 

Members:   Sen. Brandt Hershman, Chairperson   Sen. Ed Charbonneau   Sen. Timothy Skinner   Rep. Eric Turner   Rep. Greg Porter Staff:   James Landers, Fiscal Analyst for the Commission   Robert Sigalow, Fiscal Analyst for the Commission   Randhir Jha, Fiscal Analyst for the Commission   Heath Holloway, Fiscal Analyst for the Commission   Lauren Sewell, Fiscal Analyst for the Commission   Karen Firestone, Fiscal Analyst for the Commission   Edward Gohmann, Attorney for the Commission   Michael Landwer, Attorney for the Commission   Ross Hooten, Attorney for the Commission Authority: IC 2-5-3-2 Expiration: Permanent

Notices and Agendas: 11/13/2013   11/18/2013 Minutes: Reports: Preliminary Drafts:

http://www.in.gov/legislative/interim/committee/stfp.html

Star Reports Indiana Companies Still Fighting Medical Tax Device

From the Indianapolis Star:

As the federal government shutdown showdown neared an end earlier this month, it appeared that the one change that would be made to the Affordable Care Act would be a repeal of the law’s tax on medical devices.

That didn’t happen, but opponents of the tax say the fight isn’t over.

“This is something that leaders of both parties know is a high priority for a number of members, both Democrat and Republican,” said Sen. Joe Donnelly, D-Ind.

More than any of the industry fees or taxes imposed by the law to help pay for extending health insurance to millions more Americans, the medical device tax continues to be hotly debated. Bipartisan majorities voted in the House last year and in the Senate this year to repeal it.

That’s in large part because repeal is the top goal of an industry that fought the tax from its inception and has companies spread throughout all states, including a large presence in Indiana, Massachusetts, and Minnesota.

“The medical device industry is clearly both very aggressive and very effective in its lobbying efforts,” said Paul N. Van de Water, a senior fellow at the Center on Budget and Policy Priorities who argues the tax should not be repealed. “They’ve succeeded in mobilizing lots of people from device companies around the country. They’ve just done much more than any other industry has been doing.”

But the industry still faces major obstacles. Opponents need to find a way to replace the approximately $30 billion in revenue that the 2.3 percent tax on device purchases is expected to raise over the next decade. And, if the tax is repealed, insurance companies, drug makers and hospitals will clamor for repeal of the new fees and reduction in reimbursements they face.

“If the device tax gets addressed, then there will be many others wanting their issues to be addressed,” said Phillip Swagel, a professor at the School of Public Policy at the University of Maryland who thinks the device tax has little policy rationale. “So it’s hard for any one measure to have smooth sailing. And of course getting anything through is difficult in general.”

…

See the full article here:

http://www.indystar.com/apps/pbcs.dll/article?AID=2013310270005