Friday, February 28, 2014

Leader Reports Washington County Tax Sale Scheduled for March 5th

From the Salem Leader:

Washington County hopes to recover money it is owed from delinquent taxes by selling 22 parcels through a sale planned for 10 a.m. Wednesday, March 5.

"This is property that hasn't sold in past tax sales," Bob Woodward, Washington County Treasurer, said. "To get it back on the tax rolls, they (the property) has been turned over to the commissioners. They have a sale - and on this one, they will go down to as low as 25 percent of taxes owed on it."

The commissioners could have held the sale on the Internet, but Woodward said that hasn't worked well for the county in the past. The commissioners decided to have a live auction which will be held in the basement of the courthouse.

"Bidding will start out at 25 percent of the taxes owed on it and go from there," Woodward said.

It will be conducted by SRI, the company that also handles sheriff sales for the county. There are 23 properties listed on SRI's website but Woodward said one, at 308 S. Mill in Salem, has been taken off the list. He explained the owner is deceased and the state has given the property to the city.

Salem Mayor David Bower said the city will probably demolish the structure, but said there are a lot of hoops that have to be jumped through first.

"We've been working with the building department," Bower said. "It's our responsibility to look at any unsafe building. Our obligation is to remove unsafe buildings especially ones that have been abandoned."

Woodward described many of the parcels as "less than desirable" and added that some are landlocked.


Times Herald Reports Daviess County Residents Can Learn About Property Taxes

From the Washington Times Herald:

Area residents will have an opportunity to learn about the personal property tax with Prof. Larry DeBoer from Purdue University. DeBoer will discuss the tax via video streaming. The free program can be viewed from multiple locations across the state on March 7 and can be viewed from the comfort of home as well.

Locally, the program can be viewed at the Daviess County Security Center from 11 a.m. until 1 p.m.

“Governor Pence has proposed a $1 billion change in local finances with the elimination of the tax on personal property,” said DeBoer. “The intent is to reduce the tax burden on business investment, and encourage firms to locate and expand in Indiana.”

DeBoer said that eliminating the tax would result in a shift to other taxpayers, including homeowners, and would also cause loss of revenue for local government services.

During the program, DeBoer will discuss the issue as well as provide research on the effect of taxes and public services on economic development, the reason for tax shifts to other taxpayers, the size and locations of revenue losses, and some of the alternate proposals for partial elimination of personal property taxes.

The possible discontinuation of the tax has been a hot topic with mayors and other officials across the state. At the Washington city council meeting Monday, a resolution was passed stating the city was in opposition of the elimination of the tax. Mayor Joe Wellman said that the Washington Community School Board had also motioned to oppose the bills that would force government agencies, including schools, libraries and other city and county services to be further reduced.

Wellman said that what is so frustrating about the situation is that Indiana currently ranks near the top of the most business friendly states.

City Councilman Eric Bassler said he has attended several of the On Local Government programs.

“These are exceptional programs full of valuable information,” said Bassler. “There’s also an opportunity for participants to ask Dr. DeBoer questions, which makes it very interactive. I’d highly recommend the program to anyone who is even remotely interested in local government.”

While the program is free, those wishing to participate should register by going to, select Local Government Finance and Budgeting page and click on the link to register or contact Cindy Barber with Daviess County Extension at 254-1060 Ext. 279 or before March 5.

Herald-Tribune Repors Franklin County Council Oversees $12.8 Million Budget

From the Batesville Herald-Tribune:

The Franklin County Council did what every other government entity must do at budget time – advertise high, budget lower – because a budget cannot exceed its legally published tax rates. The county’s advertised 2014 budget totalled $15.2 million, but when the dust settled after August budget hearings, the council approved $12.8 million, reported auditor Steve Brack.

Council President Jeff Koch, Oldenburg, said, “I don’t feel that one department got cut more than another compared to last year’s final budget. When you look at the requests at budget hearings, those requests are ‘‘wish lists,’ so sometimes they are inflated compared to the final budget. Then the council’s job is to make the budget fit the county’s tax revenue.”

He maintained, “Because of the current and anticipated business growth in Batesville in Franklin County, it is important for people to know how their tax dollars are being allocated.”

After the initial budget was submitted to the Indiana Department of Local Government Finance, it looked as if the council would have to make more cuts until IDLGF employee Cathy Stockhoff poured over county financial records with Debbie Richardson, the auditor’s assistant.

Brack recalled, “We saw in an investment ledger total monies on deposit/general fund $3.2 million. We were trying to determine if it was an actual investment from the general ledger. We sent information that showed our findings supported what we were looking at. Once we did that, we were told we could go ahead and use that to adjust our revenue and fund the budget.”

The council decided not to fully fund the unfunded mandate of complying with stricter jail standards state leaders adopted in 2013. Sheriff Ken Murphy suggested more than doubling the $751,912 budgeted for the Franklin County Security Center last year to $1.82 million this year because of the new rules. He will have to make do with $921,645, according to Brack.

Likewise, Murphy asked for $1.135 million for the Franklin County Sheriff’s Department budget, which includes 11 jailers’ salaries. This year he must be frugal with $813,465, still better than 2013’s $681,823.

Star Press Reports Muncie Could Face New Bus Referendum

From the Muncie Star Press:

Muncie Community Schools continues to struggle with ways to keep school buses running.

This week the school board discussed options that would pay for the buses after the district’s money runs out in 2015.

MCS stands to lose about 44 percent of its transportation fund (instead of 89 percent) if legislation passes within the next week or so that would put on hold the impact of protected taxes for three more years.

If that happens, it means a cut of $1,483,966 to the transportation fund. The revenue for that fund this year, MCS Chief Financial Officer Mark Burkhart has estimated, will be $2,172,503. The projected total costs for 2014 come in at $3,104,012.

Here’s how it breaks down: Under the current M&M Bus Co. contract, MCS is paying about $16,642.33 a day or $1,647,580 for January through June of this year.

Burkhart used the current bid rate and subtracted 12 daily routes (that can be eliminated with the closing of the Wilson Middle School building), estimating that the district will pay about $1,261,867 for August through December. He estimated in-house costs at $194,565.

That would still leave the district short about $931,000.

The district plans to use its rainy day fund of about $2 million to cover the projected shortfall this year and in 2015.

What the district will do after that money runs out is now up to the board.

Journal and Courier Reports Tax Breaks on Subaru's Expansion Plan Clears First Hurdle in Lafayette

From the Lafayette Journal-Courier:

The Lafayette Redevelopment Commission on Thursday approved tax abatements for Subaru of Indiana Automotive Inc.’s planned $422 million expansion to build Subaru Imprezas in Lafayette.

The commission endorsed the automaker’s request for 10-year tax abatements on $353 million in new manufacturing equipment, $1 million in IT equipment and $68 million in real estate improvements at SIA’s facility at 5500 Indiana 38 East.

The abatements allow the company’s property tax liabilities to increase from 0 percent in the first year to 100 percent 10 years after the equipment and building improvements are assessed.

Commission member Jos Holman asked city attorney Ed Chosnek why the abatement on equipment exceeds the typical recommendation of seven years.

“This is part of the incentive package to encourage SIA to make this investment, and $354 million is a significant amount of equipment,” Chosnek said.

“It is within the discretion of the commission to offer 10 years.”

SIA estimates its annual payroll will increase by $1.5 million, which averages out to $30,000 for each of the new jobs to be created, according to Doug Meyer, SIA general counsel and senior manager of legal and human relations.

“The project itself will create 900 new jobs,” Meyer explained.

“Essentially, though, it will be a net 50 jobs because we’ve been advised that Toyota will not be continuing Camry production at the end of the current contract, which runs until sometime in 2016.”
Job creation is the goal, said John Thieme Jr., president of the commission.

“Anytime we can bring jobs to our community it brings people who pay county and state income taxes, people who buy property and pay property taxes,” Thieme said.

Revenue Finds Taxpayer's Underpayment of Taxes Due to Acts of Others

Excerpts of Revenue's Determination follow:

Taxpayers are individuals. Taxpayers made regular estimated payments of Indiana individual income tax throughout 2012. Taxpayers obtained an extension to file their 2012 federal income tax return and paid $10,000 in Indiana individual income tax before April 15, 2013, to obtain an extension to file their Indiana individual income tax return.

An S-Corporation, in which Taxpayers had a partial interest, held an LLC that was involved in negotiations regarding its one asset, a commercial building. Taxpayers report that they were not involved in these negotiations. On May 6, 2013, Taxpayers received a 1099-A for the S-Corporation reporting significantly more income than Taxpayers anticipated. Taxpayers report that this additional income resulted from the LLC's negotiations. Taxpayers filed their individual income tax return and paid the tax due on August 22, 2013.
The Department determined that Taxpayers had underpaid their individual income tax and assessed Taxpayers with a ten percent negligence penalty, which Taxpayers protest. The Department will determine whether the penalty imposed shall be waived.
A taxpayer who "fails to pay the full amount of tax shown on the person's return on or before the due date for the return or payment . . . is subject to a penalty." IC § 6-8.1-10-2.1(a). The Department shall waive the negligence penalty if the taxpayer demonstrates that the failure to pay the outstanding taxes "was due to reasonable cause and not due to negligence." 45 IAC 15-11-2; see also IC § 6-8.1-10-2.1(d). A taxpayer's ignorance of Indiana's tax laws, "carelessness, thoughtlessness, disregard or inattention to duties placed on [it] by the Indiana Code or department regulations" constitutes negligence. The taxpayer may demonstrate reasonable cause by showing affirmatively that it used "ordinary business care and prudence" in not paying the outstanding taxes. Whether a taxpayer demonstrates reasonable cause for penalty purposes is a fact-sensitive question and determined on a case-by-case basis. 45 IAC 15-11-2(b) and (c).
In this case, Taxpayers affirmatively demonstrated that they had reasonable cause for the underpayment of tax. Taxpayers obtained an extension to file their federal income tax return and made an additional payment that, when added to the estimated payments made in 2012, totaled ninety percent of the income tax they reasonably expected to be due on the original due date, April 15, 2013. They would have reasonably believed the deadline to file their Indiana individual income tax return was automatically extended to November 15, 2013, pursuant to IC § 6-8.1-6-1(c).
Taxpayers received notification after the April 15, 2013, deadline that the income reported from an S-Corporation in which they had a partial ownership interest was significantly more than Taxpayers anticipated. Taxpayers did not participate in and could not control the underlying LLC's ongoing negotiations leading to this increase in income. Additionally, they could not control when the information was distributed to the S-Corporation owners. Upon receiving the information, Taxpayers filed their Indiana individual income tax return with this new information and paid the total amount of tax due. They did so well before the anticipated extended deadline date of November 15, 2013.
Taxpayers' underpayment of income tax resulted from actions of other parties outside their control and not their own negligence. Upon receiving the new information, Taxpayers acted promptly to report and pay the additional tax liability. Taxpayers demonstrated reasonable cause for their underpayment of tax, and the penalty shall be waived. Taxpayers' protest is sustained.

Thursday, February 27, 2014

Revenue Sustains Taxpayer's Protest of Tax, but Refuses to Refund Collection Costs Due to Taxpayer's Delay in Disputing Taxes

Excerpts of Revenue's Determination follow:

Taxpayers are individuals. Taxpayers filed an Indiana individual income tax return for a part-year or full-year nonresident claiming a refund for the tax year 2009. The Indiana Department of Revenue ("Department") processed the tax return and granted a refund of $269.00. A W-2 search revealed Taxpayers received Indiana wage income in 2009. On May 13, 2011, the Department issued a proposed assessment for the tax year 2009 in the total amount of $2,401.99.

After being contacted by Taxpayers, the Department granted Taxpayers an extension of four months on July 12, 2011. This extension was granted to provide Taxpayers additional time to provide information or pay the liability. On November 9, 2011, the extension expired, and the Department mailed a Demand Notice for Payment to Taxpayers. Taxpayers contacted the Department again, and on November 16, 2011, the Department granted Taxpayers a second extension of two months to provide additional information or pay the liability. This second extension expired January 17, 2012. Taxpayers had not provided any additional information or paid the liability, and the Department filed a tax warrant, engaging the services of a collection agency. On February 6, 2012, the Department granted Taxpayers a third extension, recalled the warrant, and removed the collection fees from the liability. This final extension of four months expired on June 5, 2012, and the Department once again filed a tax warrant and engaged the services of a collection agency. Taxpayers indicate that they paid the liability in full on November 13, 2012 in order to purchase a house. The payment totaled $2,767.61.
On June 21, 2013, Taxpayers provided a copy of a corrected W-2 (W-2C) showing that Taxpayers did not receive Indiana wage income for the tax year 2009. The Department promptly refunded $2,249.58 base tax plus $43.60 interest (for a total of $2,293.18). The Department did not refund $518.03, of which $269.00 is base tax, $39.63 is interest, and $209.40 is collection fees.
Taxpayers protest the assessment of base tax and interest. All tax assessments are prima facie evidence that the Department's claim for the tax is valid, and the taxpayer bears the burden of proving that any assessment is incorrect. IC § 6-8.1-5-1(c); Lafayette Square Amoco, Inc. v. Indiana Dep't of State Revenue, 867 N.E.2d 289, 292 (Ind. Tax Ct. 2007). The issue is whether Taxpayers have met their burden to show the Department's proposed assessment is incorrect.
The Department conducted a W-2 search which revealed that Taxpayers received Indiana wage income in the tax year 2009 and properly issued a proposed assessment based on that information. IC § 6-8.1-5-1. Taxpayers provided a copy of a corrected W-2 (W-2C) showing that Taxpayers did not receive Indiana wage income for the tax year 2009. Taxpayers have met their burden to prove this assessment is incorrect. Taxpayers' protest on the assessment of base tax and interest is sustained.
Taxpayers protest the imposition of collection fees. The issue is whether the Department's imposition of collection fees is proper.
In this case, the proposed assessment advanced through the legally required procedures. The Department issued a valid proposed assessment based on a W-2 search that revealed Taxpayers received Indiana wage income in the tax year 2009. The Department sent two notices, granted three extensions, and filed a tax warrant for the liability twice, having recalled one. The Department granted Taxpayers sufficient time during the process to provide information showing that the assessment was incorrect. Only after a second warrant was filed did Taxpayers establish that the proposed assessment was incorrect.
The Department incurred the fees based on a valid Department assessment that advanced to a tax warrant even though Taxpayer later established that the assessment was incorrect. The fees collected are proper if the fees were paid based on the information available to the Department at the time the fees were collected rather than at some time after collection. Since that is the case here, Taxpayers' protest of the imposition of collection fees is denied.

News Dispatch Reports Audit of LaPorte County Finds Funds Mislabeled and Funds Missing

From the LaPorte News Dispatch:

With the Indiana State Board of Accounts requesting nearly $200,000 from a former La Porte County deputy auditor, the state attorney general and the county prosecutor are looking at possible civil and criminal charges to recoup the missing funds and punish the defendant.

On Feb. 21, the state board of accounts filed its audit report on the La Porte County Auditor’s Office.

Amidst millions of dollars worth of mislabeled funds and other errors between Sept. 19, 2011 and Dec. 31, 2012, field examiners found $153,000 in missing money from the county auditor’s office.

In the audit report, investigators said there were 150 instances where less cash was deposited than receipted. Investigators said former deputy auditor Mary Ray was suspected because she was the primary employee responsible for receipting money and recording funds during this time. She was also mainly responsible for taking cash and checks down to the treasurer’s office for deposit.

On Sept. 6, 2013, Ray’s assets, including four vehicles and a house, were frozen after a temporary restraining order was filed in La Porte Count Circuit Court. She was accused of embezzling more than $150,000 at the time.

The investigation began after a bank deposit bag was discovered with $3,200 in missing cash in a local library. When a $1,800 discrepancy between receipts and deposits was found, examiners from the State Board of Accounts launched a preliminary audit.

According to the report, Ray tried to conceal the cash removal by not receipting some cash and checks, using voided checks to replace cash, writing receipts to departments and not posting them to the records, receipting lower amounts than were on the checks, holding receipted checks and turning them over to the treasurer at later dates, and not receipting electric fund transfers to the records.

The report listed more errors related to the auditor’s office, including a negative cash balance of $4.9 million in the excess tax fund, which is used to refund residents for overpaid taxes.

Mike Mauer, La Porte County chief deputy treasurer, said this error was a “snafu” on behalf of her office. The tax money simply wasn’t placed in the fund during settlement time. She said her department was distracted trying to get six years worth of tax bills out in two years because of the county-wide tax situation. She said checks written to residents during this time were still good, and the funds weren’t mislabeled or put in the wrong account.

But the report also listed a disbursement error of $5.7 million from the major moves fund in 2012 that wasn’t corrected until 2013, and $23.6 million worth of major move fund transactions posted as “transfers in” on the funds ledger and later included as part of the cash and investment balance, among other deficiencies.

Former county auditor Craig Hinchman, who served during the period of the errors, said some of the day-to-day operations of his office suffered because it had to get out three years worth of tax bill in 2012, or else get the county fined $1 million. And the office was short handed, needing at least two more employees to handle the workload.

“When I took office no auditor in the history of the state of Indiana found their office in the turmoil I did,” he said. “We were four years behind in collecting tax monies and had major assessment problems. The department of local government and finance created these problems because they did not follow their own rules.”

Courier-Times Reports Harvest Land Co-op Granted Abatement for Investment in Millville

From the New Castle Courier-Times:

Harvest Land Co-op will be allowed to defer paying some property taxes on a new steel grain bin that it plans to build at its plant near Millville.

The Henry County Council granted a property tax abatement to Harvest Land Thursday. The company plans to build a 750,000-bushel steel grain storage bin for $1.5 million. The bin will be 105 feet in diameter.

The abatement provides Harvest Land, at 477 S. Road 600E, with property tax savings of $64,769 over three years. The abatement allows Harvest Land to pay reduced taxes for three years, phasing in the full tax bill in the fourth yea

Times Reports Clay County Officials Discuss Gains Made from Wheel Tax

From the Brazil Times:

If you were to connect all of Clay County's roads end to end, you might be able to travel from Indiana to Washington D.C.

Clay County Commissioner Paul Sinders said the county has 660 miles of road and making the much-needed repairs to each will require time. However, decisions made in the past couple of years have given them a much-needed start.

"Last year was the first year that we ever had the wheel tax, surtax," Sinders said. "It has turned out to be a great blessing."

According to documents from the Clay County Auditor's Office, the wheel tax, which went into effect Jan. 1, 2013, generated $601,286.17 for the county -- a little under what was projected.

Brazil and towns throughout the county also received additional funding as a result of the wheel tax.

Using the revenue, commissioners worked on a little over 50 miles of roads last year. While it may appear to be a small amount, Sinders said it is an excellent start in a long process.

"We ask for the public to be patient," Sinders said. "It is going to take a while to get to all the roads. This is the first year we had the additional money available to us. Without this money, we could not have done the chip and seal and blacktopping that was done in this past year."

Daily Journal Reports School and Library Seek TIF Money in Greenwood

From the Johnson County Daily Journal:

Another school district and a library plan to follow the example of Clark-Pleasant schools and ask to use set-aside property taxes for construction projects they can’t afford.

The Greenwood City Council this week approved doubling the size of a tax-increment financing district and advising the city redevelopment commission to consider funding school and library building projects when spending tax dollars set aside for economic development.

Cheryl Dobbs, director of the Greenwood Public Library, and Kent DeKoninck, superintendent of Greenwood Community School Corp., both said they plan to ask for some of the money collected in tax-increment financing, or TIF, districts for projects, such as water pipe replacement and tearing out and repairing a parking lot.

Courier Reports Madison Residents Encouraged to Vote for Referendum

From the Madison Courier:

Local residents - many of them business owners - crowded into the Madison Area Chamber of Commerce building Wednesday to learn more about the $40 million Madison Consolidated Schools' building referendum coming before voters later this year.

MCS Superintendent Ginger Studebaker-Bolinger told the group that without a referendum the community will be faced with some crumbling buildings.

The discussion came during the Chamber's "Work it Wednesday," networking lunch.

The referendum will appear on the May 6 ballot. It calls for closing E.O. Muncie Elementary School, and adding classrooms and renovating the main office, media center and cafeteria at Anderson Elementary School. Muncie students would be moved to Anderson.

Work at Madison Consolidated High School would include construction of a gymnasium, converting the old gym into a performing arts center for music and theater space, renovating the school's "A" wing, adding classroom wings that would include a technology center, a centralized media center, new entryways, a renovated main office area and a main entrance facing Clifty Drive.

Bolinger told the group that E.O. Muncie and MCHS are in dire shape.

"If we don't get the referendum, we're going to have some crumbling buildings," she said.

The superintendent also discussed the issuance of bonds to finance the work.

While the gross tax impact will be roughly 40 cents per $100 spent, the debt repayment won't be added to property taxes until 2017, when existing debt is paid off.

The average increase to property taxes, Bolinger said, would be $4.73 a month.

Bill Hensler, who served on the building project task force that recommended the referendum to the school board, told the group that while it sounds good to pay off debt, a certain amount is needed for building upkeep.

"We need to maintain a certain amount of debt to maintain our buildings," he said.


Star Reports Legislature Considers Tax Break for Olympic Prize Money

From the Indianapolis Star:

Olympic medalists from Indiana could soon come home to more than just an adoring public and a proud hometown.

They could be getting a tax break.

The Indiana House is poised to exempt Olympic medals and prize money from Indiana income taxes.
The tax break would be retroactive to Jan. 1, which means it would apply to just one person: Nick Goepper, the 19-year-old from Lawrenceburg who won a bronze medal in slopestyle skiing at the Sochi Winter Olympics.

Other Hoosier medalists such as West Lafayette diver David Boudia will have to win another medal if they want to qualify.

"It would definitely be a blessing," Boudia said of the legislation. He won two medals at the 2012 London Olympics, a gold on 10-meter platform and a bronze in the synchronized event.

In addition to Goepper's bronze medal, he will receive $10,000 from the U.S. Olympic Committee. Gold medal winners receive $25,000, silver medal winners $15,000.

A legislative analysis of the tax break lists its cost to the state as "insignificant."

IBJ Reports Gusto, LLC Offered Tax Credits for Expansion in Indianapolis

From the Indianapolis Business Journal:

Gusto LLC, a tech startup founded by former ChaCha and executive Shawn Schwegman, plans to grow operations in Indianapolis, creating as many as 150 jobs by 2018, the company announced Thursday.

The firm, which plans to develop applications for smart phones, tablets and desktop computers, said it will invest $975,000 to launch the company and its debut product: an iPhone app that combines mobile e-mail with built-in cloud storage.

Schwegman said the company will hire as many as 35 people this year, followed by as many as 150 to 250 over the next four to five years. The company's office should be operational by April.

“Success breeds success, and Indiana has proven that home-grown entrepreneurial companies can become national powerhouses,” said Schwegman, CEO of Gusto, in a prepared statement. “We are proud to build a company here and look forward to growing it with the support of Indiana."

The Indiana Economic Development Corp. offered Gusto up to $2.65 million in conditional tax credits and up to $100,000 in training grants based on the company's job-creation plans. The tax credits are performance-based and won't be paid unless the company meets job commitments, the state said.

Trib-Star Reports Vigo County Sets Up On-Line Payment System for Property Taxes

From the Terre Haute Tribune Star:

Vigo County Treasurer’s office is creating a new website that will allow Vigo County taxpayers more options to pay county property taxes online.

“It will not be ready for the spring payments in May, but should ready by the fall,” said Treasurer Jim Bramble.

“You will still be able to mail your payments in, but this will provide more options to pay bills online at home, whether with a credit card, a debit card or by e-check,” Bramble said.

The county’s previous service took credit cards only. The new system also will provide up-to -date tax data, Bramble said.

“The previous company had information that was updated periodically and was not live. Sometimes we ran into a problem where a mortgage company paid the taxes, but then that was not showing up” on tax information, Bramble said.

The new system will also people pay online during a county tax sale, the treasurer said. Parke County uses the same system, the treasurer said.

The Vigo County Board of Commissioners on Tuesday approved a three-year renewable contract with Thomson Reuters for the service. Last week, the Vigo County Council approved $21,200 to get the system operational. That cost includes $10,600 for software and hardware and $10,600 for annual maintenance of the system.

Board Finds Evidence of Listing Price Not Sufficiently Related to Valuation Date to Show Error in Assessed Value

Excerpts of the Board's Determination follow:

In this case, the Petitioner is attempting to use listing prices rather than a selling price to establish value. She claims that the assessment is wrong based on her inability to sell this property in 2008 and 2009 for a price well below the disputed assessment.

31. More specifically, she claimed that the land value is assessed too high based on the fact that she was unable to sell the property in late 2008 though 2009 for an amount between $12,000 to $25,000. The Petitioner first listed the property for sale with Remax in August of 2008 for $25,000. Soon after, the price was lowered to $22,900. The property received no offers at this price. The property was then listed on the internet from March to September of 2009 for $19,000. The asking price was eventually lowered to $12,000 and it still did not sell.

32. The Petitioner’s argument fails because she failed to show how her evidence related to the required valuation date of January 1, 2007. The time period of August of 2008 through September of 2009 is beyond both the assessment date and the appropriate valuation period, which included January of 2006 to December of 2007. The Petitioner offered no other evidence as to the purportedly “correct” valuation of the property other than the fact that she could not sell it for a range of $25,000 to $12,000 during the period of August of 2008 to September of 2009. With only this evidence, the Petitioner failed to make a prima facie case that the 2008 assessment needs to be changed.

33. When a taxpayer fails to provide probative evidence supporting the position that an assessment should be changed, the Respondent’s duty to support the assessment with substantial evidence is not triggered. See Lacy Diversified Indus. v. Dep’t of Local Gov’t Fin., 799 N.E.2d 1215, 1221-1222 (Ind. Tax Ct. 2003); Whitley, 704 N.E.2d at 1119.

Oral Argument in RDM Sales & Service Posted

THU, FEB 27, 2014 at 10:00 AM

Wednesday, February 26, 2014

Journal-Gazette Reports Business Tax Legislation Closer to Agreement

From the Fort Wayne Journal-Gazette:

Legislation to cut business taxes is coming together as House and Senate Republicans are moving closer on the details.

Both sides amended bills on the business personal property tax in separate committees Tuesday.

The House program is contained in House Bill 1001 and the Senate proposal is in Senate Bill 1.

Gov. Mike Pence started the discussion by pushing for an elimination or phase-out of the business personal property tax paid on equipment and machinery. It brings in about $1 billion in revenue annually to Indiana schools, cities, towns and other local units.

But legislative Republicans have been working around the margins on the issue.

On Tuesday both the House and Senate inserted language creating a so-called “super abatement” that local units could give to specific companies on equipment for up to 20 or 25 years. Current law limits that to 10 years.

They both agree on eliminating filing for some small businesses, but are still tinkering on the formula. The latest estimate is that only 50 percent of businesses in the state would have to file, but that saves only $13 million statewide because a small number of major businesses pay the bulk of the tax.

“This is a nice improvement,” said Sen. Luke Kenley, R-Noblesville. “It’s much more temperate to locals.”

But House Republicans continue to push a wider-scale option for counties to permanently exempt all new equipment from the business personal property tax. While there would be no immediate fiscal effect, in time the revenue would disappear as equipment is replaced.

Both bills also now include a further reduction in the state corporate income tax. Lawmakers previously passed legislation lowering it from 8.5 percent to 6.5 percent by 2015. It is currently at 7.5 percent.

Both bills now would further drop the tax to 4.9 percent by 2022.

“We stretched that out so it makes revenue loss less and makes the glide path into implementation a little shallower,” said Sen. Brandt Hershman, R-Buck Creek.

Star Reports Green Council Votes to Approve TIF Financing Plan

From the Indianapolis Star:

The Greenwood City Council voted 7-1 Monday to approve a tax increment financing plan that will raise millions of dollars for downtown streets, sidewalks and building facades.

But first there were verbal fireworks from Sam Hodson, an attorney for the city, who accused Clark-Pleasant Superintendent Patrick Spray of spreading bogus numbers and "misinformation" in an effort to derail the proposed TIF district.

"We're not the problem," Hodson said, accusing Clark-Pleasant of overspending on past building projects. "We're not the cause of their high tax rate."

Spray has been a vocal critic of the proposed TIF, which diverts new tax revenue from schools, libraries and other local governments and spends it on infrastructure improvements designed to attract growth.

Spray declined to address Hodson directly, saying only "facts are friendly."

But Greenwood Community Schools Superintendent Kent DeKoninck called Hodson's presentation "insulting."

"We're trying to work together here," DeKoninck said.

In the end, council member Bruce Armstrong cast the only no vote.

Before the plan won approval, the council voted 8-0 for an amendment to make it easier for Clark-Pleasant Schools and other local taxing bodies to receive funding from the TIF district.

The council held the special meeting after the TIF plan failed on a 4-4 vote Feb. 18. Tim McLaughlin, who was absent last week, voted yes Monday.

Times Reports Porter Hospital Challenges Appraisal of Facility

From the Northwest Indiana Times:

Representatives of Porter Regional Hospital accused Porter County Assessor Jon Snyder of going outside state guidelines when hiring an independent appraiser to assess the new hospital and outpatient building at Ind. 49 and U.S. 6.
"We don't know what his methodology was," said Donald Feicht Jr., vice president of taxes at Uzelac & Associates.
The hospital representatives appeared Tuesday morning before the Porter County Property Tax Assessment Board of Appeals to challenge the $244.5 million assessment, arguing the figure should be $39.3 million.
The lower figure was arrived at using an assessor manual and guidelines provided by the state, Feicht said. He cited other examples of hospitals assessed at lower values and accused Snyder of being the only assessor in the state to go outside the guidelines in this type of work.
Snyder provided the PTABOA members with a copy of the privately-done appraisal, saying it used approaches involving cost, sales comparisons and income. Each approach came to a value that is far closer than 1 percent of one another, he said.
Feicht questioned why the independent appraisal was labeled confidential and kept out of the hands of the public and himself.
"We are the hospital," he said.
Snyder said the confidential status was ordered by the court that forced the hospital to release information said to be needed for the assessment.
The PTABOA members took the appeal under consideration.

Tribune Reports Millions of Dollars in Money Errors Found in LaPorte Audit

From the South Bend Tribune:

A recent audit has revealed millions of dollars in accounting and tax errors in the LaPorte County Auditor’s office from September 2011 to December 2012.

It also turned up lax record-keeping regarding county credit cards.
An Indiana State Board of Accounts report, filed Feb. 21, also details the mishandling of county funds by former deputy auditor Mary Ray, who allegedly took more than $153,000 from cash deposits made to the auditor’s office.

The audit shows more than $34.3 million in uncorrected differences between county bank accounts and the Treasurer’s ledgers from 2009 to 2012. Some of those differences are noted in reconciling items (which can be things like uncashed checks), while others are unidentified.

As of Nov. 14, 2013, no full reconcilement between bank accounts and the auditor’s ledgers was completed by county staff, the report states.

Former auditor Craig Hinchman responded with an official statement included in the report, and said many of the errors were out of his and his staff’s control. Hinchman served as LaPorte County auditor from Jan. 1, 2009, to Dec. 31, 2012.
When it came to the condition of the county’s bookkeeping, Hinchman cited the need to meet a state-imposed deadline of completing prior taxes as reason for letting some daily tasks slide.
“If LaPorte County did not get three years of taxes completed in 2012 the State of Indiana was going to fine the county one million dollars,” Hinchman wrote in his response. “So the focus of my department along with other departments was to comply with this order. Some of the day to day operations suffered. This would not have happened if we were not trying to make the dead line.”

Journal and Courier Reports ConAgra Offered Tax Credits for Investment in Frankfort

From the Lafayette Journal and Courier:

ConAgra Foods announced Tuesday plans to construct a 1.6 million-square-foot distribution center in Frankfort, which will create about 76 jobs by 2015.

The packaged food company, based in Omaha, Neb., employs more than 36,000 people, including 1,150 Hoosiers. The distribution center will work in conjunction with the existing center in Lebanon, according to a press release from the Indiana Economic Development Corp.

“There is a good workforce in the Frankfort area, and the location will allow us to address our current and future business needs,” said Bob Masching, senior vice president of supply chain for ConAgra Foods. “Selecting Frankfort for our distribution center was made possible through great partnerships between ConAgra Foods and officials from the city, county and state.”

ConAgra is eligible to claim up to $750,000 in conditional tax credits offered by the Indiana Economic Development Corp. These tax credits are performance-based; ConAgra will not be able to claim them until Hoosiers are hired.

Frankfort and Clinton County approved additional incentives.

News-Sentinel Reports Mid-America Foundation Offered Tax Credits for Investment in Berne

From the Fort Wayne News-Sentinel:

A Fort Wayne-based barge-maker will locate a facility in Berne, creating up to 26 jobs by 2015.
Mid-America Foundation Supply Inc., which manufactures barges under the name Poseidon Barge, said it will invest $6.05 million to purchase, renovate and equip a 72,180-square-foot facility on 22 acres on East Parr Road in Berne.

The facility, which will begin operations in May, will provide the company with the additional space it needs to fabricate, store, test and display its product line of portable sectional barges.

The Indiana Economic Development Corp. offered Mid-America Foundation Supply, Inc. up to $300,000 in conditional tax credits.

These tax credits are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives. The city of Berne will consider additional incentives at the request of the Adams County Economic Development Corporation.

IBJ Reports ID Castings Seeks Abatement for Investment in Noblesville

From the Indianapolis Business Journal:

A new owner plans to invest $51.4 million to overhaul the former Noblesville Foundry on South Eighth Street, resurrecting a property that has been underused for years.

ID Castings LLC officials did not return messages from IBJ, but a tax-abatement application filed with the city provides a glimpse of the proposed project. About half of the facility is targeted for demolition, an existing production line will be refurbished, and two new lines are in the works.

The company, founded in October, has 27 workers at the site now, and plans to add another 25 with an average salary of $35,525, according to the application.

Noblesville’s Common Council will consider the abatement request Tuesday evening.
The 13.9-acre foundry site has become an eyesore after years of underuse. (IBJ Photo/Andrea Davis)
On the table: a three-year abatement on personal property taxes tied to the $31 million in manufacturing equipment it plans to install. The temporary tax break would save the company almost $1.3 million.

ID Castings acquired the 13.9-acre site and a warren of well-worn foundry buildings in October. Previous owner Indiana Ductile LLC bought it in 2004, according to Hamilton County tax records.

The property was assessed for tax purposes at about $1 million last year.

Board Finds Taxpayer's Comparable Analysis Failed to Show Error in Properties' Assessed Values

This is an interesting decision because it recognizes some differences between the 2011 Real Property Assessment Manual and the 2002 Real Property Assessment Manual.

Excerpts of the Board's Determination follow:

The Petitioner claimed that his land value was assessed too high in 2010 and 2012 compared to other parcels in his area. In support of his contentions, the Petitioner submitted assessment data for seven nearby properties each in 2010 and 2012. For 2010, the Petitioner erroneously calculated that the comparable land was assessed at an average rate of $5.97 per square foot (or $6.96 per square foot as explained in footnote 2), whereas the Petitioner’s land was assessed at $18.37 per square foot. Using a similar calculation for 2012, the Petitioner concluded the average assessed land value for the comparables was $8.52 per square foot while the Petitioner’s land was assessed at $18.37 per square foot.

31. Indiana Code section 6-1.1-15-18(c) states: “To accurately determine market-value-in-use, a taxpayer . . . may in a proceeding concerning property that is not residential property, introduce evidence of the assessments of any relevant, comparable property.” The statute further states that preference is given to properties in the same taxing district or within two miles of a boundary of the taxing district and that “the determination of whether properties are comparable shall be made using generally accepted appraisal and assessment practices.” Id.

32. Here, the Petitioner failed to establish the comparability of the selected parcels. The only comparable qualities the Petitioner offered were the fact that the subject property and the comparables were located near each other, and the fact that the subject property and the comparables were similarly zoned as commercial general or commercial arterial. Pet’r. Ex. 4-5. However, the subject property is a convenience market with gas stations and the comparable properties include the following: two commercial structures (comparables 1, 6), a fast food restaurant (comparable 2), a commercial warehouse (comparable 3), a full-service bank (comparable 4), a vacant lot (comparable 5), and a 40 unit apartment building (comparable 7). Pet’r Ex. 5. And the size of the lots range from .155 acres to 1.33 acres. Pet’r Ex. 5. The Petitioner is “responsible for explaining to the Indiana Board the characteristics of their own 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.” Long, 821 N.E.2d at 471. Despite presenting such a variety of comparables, the Petitioner failed to address any of the considerable differences between the subject property and the comparables.

33. The Petitioner also argued that the subject property should not have had an influence factor applied to the land. The Board notes that the Petitioner failed to provide any market evidence of what the value should be. Instead, he merely alleged that the county assessor should remove the 100% positive influence factor applied to the Petitioner’s land. He provided no support, other than his opinion, for this assertion. Unsubstantiated conclusions do not constitute probative evidence. Whitley Products, Inc. v. State Bd. of Tax Comm’rs, 704 N.E.2d 1113, 1119 (Ind. Tax Ct. 1998).

34. For 2010, the Petitioner failed to show that the assessment was not a reasonable measure of true tax value. See 50 IAC 2.3-1-1(d)4 (stating that “failure to comply with the … Guidelines … does not in itself show that the assessment is not a reasonable measure of ‘True Tax Value[.]”). The Petitioner presented no market evidence to show that the assessment is not a reasonable measure of the true tax value. See Eckerling v. Wayne Township Assessor, 841 N.E.2d 674 (Ind. Tax Ct. 2006) (stating that when a taxpayer chooses to challenge an assessment, he must show that the assessor's assessed value does not accurately reflect the property's market value-in-use. Strict application of the regulations is not enough to rebut the presumption that the assessment is correct). The Petitioner must show through the use of market-based evidence that the assessed value does not accurately reflect the property’s market value-in-use. Here, the Petitioner did not. Therefore, the Petitioner has failed to raise a prima facie case. See Eckerling, (stating that focusing strictly on the assessor’s methodology without showing that the methodology used failed to accurately reflect the property's market value-in-use is insufficient to show that the assessment was in error).

35. The Petitioner similarly failed to show that the assessment was not a reasonable measure of true tax value for 2012. The 2011 Manual states:

Any evidence relevant to the true tax value of the property as of the assessment date may be presented to rebut the presumption of correctness of the assessment. Such evidence may include an appraisal prepared in accordance with generally recognized appraisal standards; however, there is no requirement that an appraisal be presented either to support or to rebut an assessment. Instead, the validity of the assessment shall be evaluated on the basis of all relevant evidence presented. Whether an assessment is correct shall be determined on the basis of whether, in light of the relevant evidence, it reflects the property's true tax value.


36. Again, the only evidence for 2012 the Petitioner introduced was a list of comparable properties that were located near the subject property and zoned similar to the subject property. None of the Petitioner’s comparables were convenience markets in the same neighborhood as the subject property.

37. Finally, the Petitioner contended that properties with similar potential zoning uses should be assessed similarly. The Petitioner presented no authority in support of this argument. Indiana’s assessment scheme is based on a property’s market value-in-use, not some hypothetical use that zoning regulations might permit. 50 IAC 2.3-1-1; 50 IAC 2.4-1-1. The Petitioner’s conclusory assertions are insufficient evidence of the market value-in-use of the property. Whitley, 704 N.E.2d at 1119.

38. The Petitioner failed to make a prima facie case that the land was over-valued for 2010 or 2012.

39. When a taxpayer fails to provide probative evidence supporting the position that an assessment should be changed, the Respondent’s duty to support the assessment with substantial evidence is not triggered. See Lacy Diversified Indus. v. Dep’t of Local Gov’t Fin., 799 N.E.2d 1215, 1221-1222 (Ind. Tax Ct. 2003); Whitley, 704 N.E.2d at 1119.

Tuesday, February 25, 2014

Revenue Publishes Informational Bulletin on Sales Tax Application to Furnishing of Accommodations

Information Bulletin #41
Sales Tax
January 2014
(Replaces Bulletin #41 Dated September 2010)
Effective Date: January 1, 2014

SUBJECT: Sales Tax Application to Furnishing of Accommodations
This version of the bulletin has been changed from the previous version to now include a hotel tax matrix, which identifies various hotel transactions and provides guidance as to whether those transactions are subject to sales/use tax and innkeeper's tax. This version of the bulletin also has been changed to clarify that if an accommodation is rented for 30 or more consecutive days, the renter is entitled to a refund of any sales tax paid on the first 29 days of the rental. Additional clarification also has been provided regarding the exemptions available to government and nonprofit rentals of accommodations.
Indiana sales tax applies to the rental of rooms, lodgings, camping space, or other accommodations in Indiana furnished by any person engaged in the business of renting or furnishing such accommodations for periods of less than 30 consecutive days. Persons furnishing such accommodations must register as retail merchants and must collect sales tax from their customers.
"Accommodation" means any space, facility, structure, or combination thereof including booths, display spaces and banquet facilities, together with all associated real or personal property, which is intended for occupancy by persons for a period of less than 30 consecutive days. The term includes, but is not limited to, the following:
• Rooms in hotels, motels, lodges, ranches, villas, apartments, houses, bed and breakfast establishments, and vacation homes or resorts;
• Gymnasiums, coliseums, banquet halls, ballrooms, arenas, and other similar accommodations regularly offered for rent;
• Cabins or cottages;
• Tents or trailers (when situated in place);
• Houseboats and other craft with overnight facilities;
• Space in camper parks and trailer parks wherein spaces are regularly offered for rent for periods of less than 30 days; and
• The renting or furnishing of cubicles or spaces used for adult relaxation, massage, modeling, dancing, or other entertainment to another person.
The term "accommodation" does not include vendor spaces occupied for periods of less than 30 consecutive days by merchandise trailers, absent the incorporation of tangible property or an amenity designed to support occupancy by human beings. Examples of amenities designed to support occupancy by human beings include, but are not limited to, utility connections and structures such as roofs and walls. Accordingly, "primitive" campsites (those that provide no amenities) and parking spaces for cars and trucks are not included in the term "accommodation."
The tax is imposed on the gross receipts received by the retail merchant and includes the amount that represents consideration for the rendition of those services which are essential to the furnishing of rooms or accommodations, as well as those services which are provided in the ordinary and regular course of business of furnishing rooms or accommodations. Such amounts are subject to tax even if they are separately itemized on the statement or invoice. This includes, but is not limited to, telephone access charges, food or drink services provided by a retail merchant to customers, and membership fees charged to customers, provided the charges are included in the room charge.
An accommodation that is rented for 30 consecutive days or more is not subject to the sales tax. The customer is required to pay, and the accommodation provider is required to collect and remit, the tax for the first 29 days if the customer is billed on less than a monthly basis. However, if the guest ends up staying for 30 or more consecutive days, the guest is entitled to a refund of the sales tax.
A business rents accommodations for its employees and signs a lease for 4 months, payable monthly. The first 29 days would not be subject to tax.
A business rents accommodations for its employees and signs a lease for 4 months. The business pays the rental on a weekly basis. The business is required to pay sales tax on the first 29 days of the rental. However, upon the 30th consecutive day of the rental, the business is entitled to a refund of sales tax paid on the first 29 days. The business can either seek a refund from the department (via a Form GA-110L Claim for Refund) or from the hotel or accommodation provider. If the hotel or accommodation provider refunds the tax to the business, the hotel or accommodation is then eligible to seek a refund of the tax from the department, assuming the refund is sufficiently documented.
When a business entity rents rooms for employees, the entity–not the employee who stays in the room–is renting the rooms, for the purpose of determining whether the rental is for 30 consecutive days or more. The contract does not have to be for a specific room as long as the continuous stay portion of the contract remains in effect.
An innkeeper moves two occupants of rooms rented on an extended stay to make a contiguous area available for a convention that wants all of their rooms together. Moving the people in the extended stay contract does not void the contract.
The tax does not apply to the rental of meeting rooms to charitable or nonprofit organizations if the facility is to be used for furtherance of the purpose for which the organizations are granted the exemption. In order to qualify for the exemption, an organization must present a properly completed exemption certificate to the accommodations provider, and the room must be invoiced to and paid directly by the charitable or nonprofit organization. Payment made by a member of the charitable or nonprofit organization that will be reimbursed by the organization disqualifies the purchase from exemption. Unlike meeting rooms, the rental of ordinary hotel/motel transient (i.e., sleeping) rooms for periods of less than 30 consecutive days to members of charitable or nonprofit organizations is subject to sales tax, even if the charitable or nonprofit organization pays for the room(s). There is an exception from this general rule for charitable or nonprofit organizations that rent ordinary hotel/motel transient (i.e., sleeping) rooms for individuals as part of the organization's mission, such as housing individuals who are displaced by natural disasters. In these rare instances, where the room is being rented to further the explicit mission of the organization and the rental is for the benefit of a non-member of the organization, the rental is not subject to tax. For more information related to the exemptions available to charitable or nonprofit organizations, please refer to the Hotel Tax Matrix below and Sales Tax Information Bulletin #10, available online at:
A nonprofit organization holds an annual conference at a hotel. As part of the conference, the nonprofit organization rents several meetings rooms and also rents a block of transient (i.e., sleeping) rooms for its members attending the conference. The hotel invoices the nonprofit for all the rentals, and the nonprofit organization pays the charges directly from its corporate funds. Rental of the meeting rooms is exempt from tax, but rental of the transient rooms is subject to tax, even though payment was made directly by the exempt organization.
With regard to rentals made by the federal government, its agencies, and instrumentalities, the tax does not apply to the rental of meeting or transient (i.e., sleeping) rooms if the federal government, agency, or instrumentality submits a properly completed exemption certificate and the accommodation is invoiced to and paid directly by the government entity.
With regard to Indiana state and local government entities, the tax does not apply to the rental of meeting rooms if the government entity predominantly uses the facility to perform its governmental function, submits a properly completed exemption certificate, and the accommodation is invoiced to and paid directly by the government entity. Similarly to rentals by federal government employees, but unlike the exemption available for charitable or nonprofit organizations, the rental of ordinary hotel/motel transient (i.e., sleeping) rooms for periods of less than 30 consecutive days to Indiana state or local government entities is not subject to sales tax. In order to qualify for the exemption, the government organization must submit a properly completed exemption certificate and the room must be invoiced to and paid directly by the government entity. Payment made by a government employee that will be reimbursed by the government entity disqualifies the purchase from exemption. The exemption available to state and local government entities is available only to Indiana state and local government entities and does not apply to out-of-state government entities. For more information related to the exemptions available to Indiana state and local government entities, please refer to the Hotel Tax Matrix below and Sales Tax Information Bulletin #4, available online at:
A county sheriff's office rents a transient hotel room for one of its employees attending a conference on behalf of the office. The employee submits an ST-105 exemption certificate, claiming the government exemption, but pays for the room with his own credit card. He explains that he will be reimbursed by the county when he submits his travel report. The rental of the room is subject to tax. Had the employee paid for the room with a credit card or check in the name of the county, the rental would have been exempt from tax.
Note: A person is not a retail merchant if the person is a promoter that rents a booth or display space in a facility that is operated by a political subdivision (including a capital improvement board established under IC 36-10-8 or IC 36-10-9) or the state fair commission. However, this does not exempt the renting of accommodations by a political subdivision or the state fair commission to a promoter or an exhibitor.
Any organization or entity renting a transient (i.e., sleeping) or meeting room exempt from sales tax must provide the retail merchant with a properly completed and facially valid exemption certificate, such as the Form ST-105 General Sales Tax Exemption Certificate, available online at: This is true regardless of whether the entity renting a room is a federal, state, or local government entity.
If a retail merchant accepts a properly completed and facially valid exemption certificate, the retail merchant is relieved of any responsibility to collect and remit sales tax related to the transaction at issue.

The employee of a nonprofit organization rents a transient (i.e., sleeping) room and pays for the room with a credit card issued by the nonprofit organization. The nonprofit employee fills out a Form ST-105 and claims the exemption applicable to nonprofit organizations. The retail merchant is not relieved of its obligation to collect and remit sales tax. The Form ST-105 is not facially valid since a nonprofit organization may not rent a hotel sleeping room exempt for use by its own employee, even when directly invoiced for the transaction.
The rental of rooms, lodgings, camping space or other accommodations to a person for periods of less than 30 consecutive days for the purpose of subleasing or subletting such accommodations to others, may be done exempt from tax. However, in such situations, the sublessor must register as an Indiana retail merchant and must collect the tax from the person to whom the accommodation is ultimately leased.
The following matrix identifies various hotel transactions and provides guidance as to whether the transactions are subject to sales/use tax and innkeeper's tax. For more information related to innkeeper's tax, please refer to Departmental Notice #40, County Innkeeper's Taxes.

Daily Reporter Reports Hancock County to Reassess Some Local Properties

From the Greenfield Daily Reporter:

About a quarter of local homes and businesses will be reassessed for property taxes again this summer, even though a countywide evaluation of properties was just done in 2011.

Hancock County Assessor Mary Noe says per a new state law that went into effect last year, the local office must reassess a quarter of residential, agricultural, commercial and tax-exempt properties each year from 2014-2018. The goal is within the four-year period, all properties will be re-evaluated to ensure their values are up to date.

The reassessments will start in July and could ultimately affect property tax bills. If the assessed value on the home or business rises, the amount of money due in taxes could also rise.

“I don’t expect us to have a lot of change since the last reassessment was 2011 (for 2012 property taxes),” Noe said. “Assuming everyone who has added on or made a change got a permit, we should be good.”

Reassessments this year will likely be in Center and Brandywine townships, Noe said, though a plan for which properties to reassess each year hasn’t been finalized yet. Property owners will notice any changes from this year’s reassessment on their property tax bills payable in 2016.

Tribune Asks Whether South Bend Schools Will Consider a Referendum

From the South Bend Tribune:

The South Bend Community School Corp.’s top budget guy gave the school board an unpleasant heads up about three years in advance at a special meeting Monday evening.

Since 2010, the district has lost more than $10 million — almost 20 percent of the revenue -— in its capital projects fund to Circuit Breaker tax caps and a declining assessed valuation.
Capital projects is the pot of money schools use to maintain and upgrade buildings and technology.

“It’s at what I would call a critical juncture,” Bob Orlowski, executive director of administrative services, told the school board. “We’ll be all right in ’14, ’15,” he said. “In ’16, we’ll be marginal. But by year 2017, that account will need $2.5 million in additional reductions.”
Already, Orlowski said, $450,000 has been reduced from the capital projects fund this year. That’s been done on a department-by-department basis by making cuts in areas such as maintenance and repair work, to name just two.
The district is facing similar declines in its transportation fund.
A board member asked Orlowski about other options.
“You can do a referendum … to add additional dollars,” Orlowski said, “but outside of that, we have limited options.”
Board President Michelle Engel asked, “Shouldn’t the preparation (for a referendum) begin now? That doesn’t seem like something you just do.”

Times Reports House Panels OKs Spending $4 Million from Lake County Tax Fix

From the Northwest Indiana Times:

A House committee agreed Monday the South Shore Line expansion project should receive the $4 million a year expected to be saved by closing a Lake County tax loophole -- even as the underlying legislation veered dangerously off-track.

Following a recommendation by state Rep. Hal Slager, R-Schererville, the House Ways and Means Committee changed Senate Bill 367 to specifically direct the Northwest Indiana Regional Development Authority spend the money "only to establish or improve public mass transportation systems in Lake County."

The Senate-approved version of the legislation awarded the savings to the RDA but did not say how it must be spent.

RDA officials already had promised to use the funds to help expand the commuter rail line to Dyer.
The $4 million comes from adjusting the Lake County Residential Property Tax Credit to ensure only homeowners with less than $18,000 in total income claim the $300 credit intended to help low-income homeowners with their property taxes.

Last year some 13,400 homeowners whose incomes topped $18,000 received the credit because the current income definition does not include most investment or retirement income.

The tax credit is paid by the state, which deducts the cost of the credit from casino admission tax revenue that otherwise would go to Hammond, East Chicago, Gary and Lake County.

Times Reports Hospital Appeal Has Cost Porter County More Than $100,000

From the Northwest Indiana Times:

Porter County Assessor Jon Snyder said the county has spent nearly $100,000 since he took office three years ago to respond to tax assessment appeals filed by Porter Regional Hospital.

As his office prepared for the next round of hospital appeals Tuesday, Snyder questioned the purpose of what has become an annual challenge to the assessment of all 17 hospital properties in the county.
"Why are they doing this?" he asked. "Why all the appeals?"

Hospital officials declined comment Monday.

Snyder said he is further baffled by the continued appeals considering the county has granted the hospital millions in ongoing tax breaks for its new building.

The hospital's latest appeal represents the first full tax assessment in 2013 of its new facility at Ind. 49 and U.S. 6. The hospital claims the property, which was assessed by the county at $244.5 million, should actually be $39.3 million.

The appeal claims the county's assessment exceeds the true value as defined by law, is not uniform with assessments of similar properties and is not based on guiding definitions, rules, procedures and instructions.

A similar appeal on the first assessment of the new hospital in 2012 backfired late last year, resulting in the Porter County Property Tax Assessment Board of Appeals increasing that $34 million assessed value to $117 million.

The decision was based in large part on a tax abatement document then-Hospital Chief Executive Officer Jonathan Nalli signed in 2011 and 2012 that placed the value of the building at $130 million.
The hospital appealed that decision downstate earlier this month.

The Porter County Council plans to take up the tax break issue at the hospital at its meeting Thursday.

AP Reports House Looks to Restore Business Tax Cut

From the Associated Press in the Kokomo Tribune:

A panel of Indiana House lawmakers is considering a series of amendments that would overhaul the Senate-approved plan for cutting the state's property tax on business equipment.

The House proposals would also protect tax credits that Senate Republicans proposed cutting to pay for the business equipment plan. If approved, the changes would effectively alter the Senate Republican plan to reflect the earlier House-passed measure.

Senate Appropriations Chairman Luke Kenley has suggested the issue might need to be reviewed after this year's legislative session by a study committee before lawmakers take any action.

Republican Gov. Mike Pence originally sought the elimination of the equipment tax, but trimmed back his request in the face of strong opposition from local government leaders, including many Republican mayors.

Star Press Reports Grudge Match Playing Out in Delaware County Assessor's Race

From the Muncie Star-Press:

This is shaping up to be a year when political contests for normally below-the-radar offices turn into real political wrestling matches.

With no disrespect meant to the many fine people who’ve held the position, the office of Delaware County assessor has rarely garnered headlines. The assessor — not surprisingly — assesses property but does not set property tax rates (that’s the auditor) or actually collect taxes (that’s the treasurer).

Nevertheless, there’s a genuine struggle, fraught with bad history and worse feelings, playing out in the Republican Party right now as incumbent County Assessor James Carmichael finds himself challenged by veteran office-seeker Stephen Fields in the May GOP primary election.

But while Fields — a former Mount Pleasant Township official who most recently sought county-level office in an unsuccessful 2012 campaign for commissioner — has plenty of opinions about Carmichael’s performance in office, it is an associate of Fields who not only has a history of clashes with Carmichael but has made national headlines for his practice of buying up properties delinquent in taxes.

Tom Terry is a Muncie resident who has shown up at recent Delaware County commissioners’ meetings to make the same arguments Fields has made: That Carmichael led the commissioners astray in their approval of a contract with a private Muncie company, PSC Associates, that has for several years assessed most local property.

Terry did not return a call seeking comment, but his attorney, Jon Orlosky, said Terry’s interest in the assessment of local property isn’t new.

“In all honesty, Tom has been upset for years about proper procedures not being followed in several government offices,” the attorney told W/R.

Monday, February 24, 2014

Board Finds Petitioner Failed to Rebut Assessed Value of Rental Properties with Lease Information

Excerpts of the Board's Determination follow:

The GRM is the preferred method for valuing rental properties with fewer than four units. Ind. Code § 6-1.1-4-39(b). The properties in this appeal are both single family rental properties. The Petitioners do not live at either property.

33. The Petitioners presented the leases for the properties under appeal, but did not provide any calculation or analysis showing the market values of the properties based on the GRM approach. Further, the Petitioners want to use actual rents to determine market value based on GRM, but failed to show their rents are consistent with similar properties in the market. See Indiana MCH, LLC v. Scott County Assessor, 987 N.E.2d 1182, 1185-6 (Ind. Tax Ct. 2013). It is necessary to consider data from other comparable properties in order to protect against distortions and inaccurate value estimates that might be caused by extraneous factors (such as bad management or poor business decisions) that have nothing to do with the inherent value of a property. Id. at 1184.

34. While critical of the Respondent’s choice of comparable properties and the adjustments made in the sales comparison analyses, the Petitioners failed to offer alternate analysis or submit calculations of their own to establish values. In fact, the Petitioners offered no analysis based on GRM, or any alternative approach otherwise to determine value in this case. A petitioner seeking review of a determination of an assessing official has the burden to establish a prima facie case proving that the current assessment is incorrect, and specifically what the correct assessment would be. See Meridian Towers East & West v. Washington Township Assessor, 805 N.E.2d 475, 478 (Ind. Tax Ct. 2003); see also, Clark v. State Board of Tax Commissioners, 694 N.E.2d 1230 (Ind. Tax Ct. 1998).

35. Despite the errors in the 2010 Valuation by GRM and the mathematical errors in the sales analysis, the Petitioners failed to establish a prima facie case for a reduction in the assessed values for 2217 Southaven Boulevard and 2319 Southaven Boulevard. The Petitioners offered no independent analysis or alternative approach to determine value in this case. Where a petitioner has not supported its claims with probative evidence, or any evidence in this case, a respondent’s duty to support these assessments with substantial evidence was not triggered. Lacy Diversified Indus. LTD v. Dep’t of Local Gov’t Fin., 799.