Indiana’s personal property tax
system is a self-assessment system. Every person, including any firm, company,
partnership, association, corporation, fiduciary, or individual owning,
holding, possessing, or controlling personal property with a tax situs in
Indiana on March 1 of a year must file a personal property tax return on or
before May 15 of that year unless the person obtains a timely extension of
time. Ind. Code § 6-1.1-3-7; 50 IAC 4.2-2-2.
Additional documentation must be
attached to the return to claim the tax abatement. Specifically, to obtain a
deduction, a taxpayer must file a verified deduction schedule with a
timely-filed personal property return. Ind. Code § 6-1.1-12.1-5.4. The statute
is clear that a timely-filed return is a statutory prerequisite for claiming
the tax abatement. See Id. (stating the deduction is applied in the
amount claimed in a certified schedule that a person files with: (1) a timely
personal property return under IC 6-1.1-3-7(a) or IC 6-1.1-3-7(b)).
Emphasis added.
Indiana statutes are clear that
the personal property return and accompanying abatement filing must be timely
for a taxpayer to get the abatement. Smith argument. Specifically, Indiana
Code section 6-1.1-12.1-5.4 states that a person who desires to obtain the deduction
must file a verified deduction schedule with the person’s timely filed
personal property return. Id. Indiana Code section 6-1.1-1-7 defines the
filing date as May 15. Id. Further, Forms 103-EL and 103-ERA, which are
abatement forms, both state that they must be submitted with a timely filed
Form 103 to receive the deduction. Id.
Legal precedent suggests that the
Board has jurisdiction and authority to review the untimely filing of a
Certified Deduction Application and underlying Business Tangible Personal
Property Return. In State Bd. of Tax Comm’rs.
v. New Energy Co.,
585 N.E.2d 38 (Ind. Ct. App. 1992), the issue before the Court was whether “the
Board had the authority to consider New Energy’s application for deduction
notwithstanding the untimely filing.” Id. at 39.7 In resolving
this issue, the Court of Appeals found that the Board had jurisdiction and
authority to consider an untimely filed return.
In Dalton Foundries v. State Bd. of Tax Comm’rs., 653 N.E.2d 548
(Ind. Tax Ct. 1995), the issue before the Indiana Tax Court was an untimely
filed Resource Recovery System (“RRS”) property tax deduction. The Court found
that the assessor had the authority and must consider an untimely application,
but did not go so far as to hold that the assessor must grant the deduction.
More recently, in Graybar
Elec. Co. v. State Bd. of Tax Commrs., 723 N.E.2d 491 (Ind. Tax Ct. 2001),
the Tax Court interpreted New Energy to mean that the Board may not deny
the abatement at issue solely because it was not timely filed.
However, it appears the General
Assembly has vested in the designating body, in this case the Town of Markle,
the discretion to waive non-compliance through resolution. Specifically,
Indiana Code section 6-1.1-12.1-11.3 states that a designating body may by resolution
waive non-compliance, which includes the failure to timely file a deduction application
pursuant to Indiana Code section 6-1.1-12.1-5.4. See also Ind. Code §
6-1.1-12.1-9.5; 50 IAC 4.2-11.1-7(a)(5). Thus, because the General Assembly
specifically vested such authority in the Town of Markle, the Board does not
have the authority to waive the late filing.
Here, the parties agree that
neither the verified deduction schedule nor the underlying personal property
return were timely filed. Thus, in asking that the Board grant its tax abatement,
HJM is, in effect, asking the Board to waive the filing deadlines. The Board is
sympathetic to the seemingly harsh consequence of HJM’s failure to timely file
Form 104. Nevertheless, the use of the word “shall” by the General Assembly
when setting forth the filing deadlines for personal property returns in
Indiana Code sections 6-1.1-3-7 and 6-1.1-1-7 means that filing such a return
by on or before the May 15 deadline is mandatory, if a timely extension is not
obtained. Truedell-Bell v. Marion Cty. Treasurer, 955 N.E.2d 872, 875
(Ind. Tax Ct. 2011). Further, HJM provided the Board no legal authority on
which to base this request or on which the Board could excuse or waive the untimely
filing. HJM did not timely file its verified deduction schedule or personal property
return, and, as such, the Assessor properly denied its tax abatement.
http://www.in.gov/ibtr/2536.htm
