Wednesday, April 30, 2014

Revenue Publishes Information Bulletin on Automatic Taxpayer Refund Credit


Information Bulletin #110
Income Tax
February 2014
Effective Date: Upon Publication

SUBJECT: Automatic Taxpayer Refund Credit

For certain tax years, IC 4-10-22-4 authorizes a repayment of Indiana income taxes for certain qualifying taxpayers ("automatic taxpayer refund credit" or "ATRC"). The ATRC is a refundable tax credit. This bulletin provides guidance as to the application of Indiana adjusted gross income tax to the ATRC.

For taxpayers who receive an Indiana tax refund (or an increased refund) due to the ATRC, the ATRC will be included in income for federal tax purposes if the taxpayer claimed the Indiana state and local income tax payments as an itemized deduction on the taxpayer's federal income tax return filed in the preceding calendar year. Please consult the instructions for the Form 1040 or IRS Publication 525 to determine what portion of the refund is to be included as income for federal tax purposes.

Any previous state tax refund included as income for federal tax purposes–regardless of whether the refund was the result of the ATRC or other tax payments–can be deducted on the taxpayer's current year Indiana income tax return.

If a taxpayer did not claim Indiana state and local income taxes as an itemized deduction on the taxpayer's federal income return filed for the preceding calendar year, an Indiana tax refund is not considered income to the taxpayer. Likewise, if the ATRC reduced any underpayment otherwise due on the taxpayer's preceding calendar year Indiana income tax return, the ATRC is not considered income to the taxpayer.

Board Finds Respondent with Burden Failed to Support Property's Assessed Value with Comparable Sales and Ratio Study Data

Excerpts of the Board's Determination follow:

c. Here, the Respondent contends the property is properly valued based on the sales of comparable properties. Respondent Exhibits A, B and C. In making this argument, the Respondent relies on the sales comparison approach. See MANUAL at 3 (stating that the sales comparison approach “estimates the total value of the property directly by comparing it to similar, or comparable, properties that have sold in the market.”). In order to effectively use the sales comparison approach as evidence in a property assessment appeal, the proponent must establish the comparability of the properties being examined. Conclusory statements that a property is “similar” or “comparable” to another property do not constitute probative evidence of the comparability of the two properties. Long, 821 N.E.2d at 470. Instead, 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 differences between the properties affect their relative market values-in-use. Id.

d. In support of her argument, the Respondent submitted sales information for six properties that sold between January 2008 and February 2009. Respondent Exhibits A, B. Yet the Respondent made no attempt to show how the properties compared to the subject property and offered no explanation as to how any differences may have affected the properties’ values. Thus, the Respondent‘s evidence was not probative of the subject property’s market value-in-use. See Long v. Wayne Twp. Assessor, 821 N.E.2d 466, 471-72 (Ind. Tax Ct. 2005) (holding that sales data lacked probative value where taxpayers failed to explain how the characteristics of their property compared to the characteristics of purportedly comparable properties or how any differences between the properties affected their relative market values-in-use).

e. Next, the Respondent claimed a ratio study shows the assessments of the sold properties are relatively close to their sales prices. Respondent Exhibit C. This study is of no value in arriving at the correct assessed value for the subject property because the Respondent offered no authority for her argument that a ratio study can be used to prove that a property’s assessment reflects its market value-in-use. To be sure, the International Association of Assessing Officers Standard on Ratio Studies, which 50 IAC 27-1-4 incorporates by reference, says otherwise:

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 OFFICERS STANDARD ON RATIO STANDARDS VERSION 17.03 Part 2.3 (Approved by IAAO Executive Board 07/21/2007) (bold added, italics in original).

f. The Respondent implied that the subject assessment draws validity from the fact that the disputed assessment is within an acceptable range for mass appraisals. But an appeal of an individual assessment is an entirely different thing. The Respondent provided no authority or substantial explanation for the conclusion that there is an acceptable range for establishing the value of property. 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).

g. The Respondent did not support the accuracy of the existing assessment with any meaningful market value-in-use evidence. Accordingly, the Respondent failed to meet the burden of proof. In other cases where the Respondent had the burden of proof and failed to carry that burden, the Board has ordered that the assessment be returned to the assessed value of the year before. Therefore, the parcel’s March 1, 2009, assessment must be reduced to the 2008 assessed value of $215,000.

h. That, however, does not end the Board’s inquiry because the Petitioners sought an even lower assessed value of $190,000 for March 1, 2009. The Petitioners presented a comparative market analysis to support the requested value. The comparative market analysis is not dated and all the sales occurred in 2009 and 2010, well after the January 1, 2008, valuation date. Additionally, the real estate broker that prepared the analysis did not make any adjustments to the sold properties to account for differences between them and the subject property. For these reasons, the comparative market analysis is not probative evidence for a reduction in assessed value.

i. Next, the Petitioners presented a real estate listing for a property in their immediate neighborhood. The property was advertised on January 12, 2014, which is almost six years after the valuation date and is not indicative of the value of the subject property for March 1, 2009.

j. Finally, the Petitioners submitted a list of eight sales that occurred on their street, Crestwood Avenue. These sales took place between April 2001 and March 2004. Again, the sales are not within the required time frame for the March 1, 2009, assessment date and the Petitioners did not make any meaningful attempt to compare the properties to the subject property. The Petitioners failed to make a prima facie case for a lower value.

Times Reports Townships Get Share of Lake County Income Tax Revenues

From the Northwest Indiana Times:

Lake County trustees and advisory board members for eight suburban and rural townships will share public safety income tax revenue.
Lake County Councilman Eldon Strong, R-Crown Point, said the officials met last weekend to approve an agreement with county government for a share of more than $22 million in local income taxes the county started collecting last fall.
Strong said the county will distribute $313,136 to Cedar Creek, Center, Eagle Creek, Hanover, Hobart, St. John, West Creek and Winfield townships to support firefighting and emergency medical services the eight provide to residents living outside the county's 19 cities and towns.
Strong said Calumet, North and Ross townships are not a part of the agreement because North and Calumet are primarily covered by municipal fire and emergency medical services, and Ross has access to additional property taxes through the Merrillville Fire Protection Territory.
The county council passed a 1.5 percent tax last spring on the personal income of all county residents and workers, but the state only distributed that money to cities and towns. Township officials asked late last year for a share of that money to support their public safety services.

Times Reports Frazzled Taxpayers can Appeal to Lake County Assessor

From the Northwest Indiana Times;

Lake County property owners experiencing sticker shock after receiving their latest bill can turn to the county assessor's office if they wish to appeal the value of the property being taxed.
Lake County Assessor Jolie Covaciu said Tuesday property owners have until June 10 to meet the appeal deadline for the current tax bill. The deadline for paying the first installment on that bill is May 12.
Covaciu is inviting taxpayers to her office, 2293 N. Main St., Crown Point, for answers to questions concerning their assessment. She said the assessed value should reflect the amount a willing buyer would pay for the property during the valuation period covered by the tax bill.
She said anyone can appeal by obtaining an application at her Crown Point office. She said the forms also are available for:
Calumet Township residents at the Calumet Township Assessor's office, 501 E 5th Ave., Gary. IN 46402, (219) 885-0555;
Center Township residents at the Center Township assessor's office, 213 S. Court St., Crown Point. 46307, (219) 663-0841;
Hobart Township residents at the Hobart Township assessor's office, 1461 S. Lake Park Ave., Hobart. 46342, (219) 947-7490;
Ross Township residents at the Ross Township assessor's office, 7870 Broadway, Suite C, Merrillville. 46410, (219) 769-2643; and
St. John Township residents at the at the St. John Township assessor's office, 9157 Wicker Ave., St. John. 46373, (219) 365-1075.
She said residents of Cedar Creek, Eagle Creek, Hanover, North, West Creek and Winfield townships must obtain the forms from her Crown Point office.
She said taxpayers can file an appeal online at or by a letter with your name, address, address of the property that you are appealing. The taxpayer also can include their email address and all phone numbers. Send the letter to: Assessor Jolie Covaciu at 2293 N. Main St., Crown Point, IN 46307.
She said the Department of Local Government Finance website, at, has information explaining how assessments are determined and the appeal process as well as the necessary forms.

Truth Reports How Children are Educated at Stake in May Primary for Elkhart and Concord Schools' Referendums

From the Elkhart Truth:

ISTEP testing starts this week for Hoosier students, including those in Elkhart County.

They'll sit at computers and takes tests that assess their academics.

It's a big test. And it's a big deal. It's been called a high-stakes test.

But another high-stakes test will be put before Elkhart County adults on May 6.

That's the date of the primary election in Elkhart County. And for Elkhart County children, there has probably never been a primary election day that's this important.

How children and teens are educated and protected in our community hinges on what happens on a week from Tuesday.

Concord and Elkhart schools systems are both going to voters with school referendums. More than half - 54 percent of Elkhart County voters - can vote in one of the two referendums.

Residents in either district are assessing whether the school system needs the money for which it's asking. The state's property tax caps are prompting schools to find new ways to fund annual budgets.

Elkhart Community Schools officials are seeking $47 million. Passing both parts of the referendum would raise taxes for 13 cents to 18 cents per $100 valuation for seven years and 5 cents per $100 assessed valuation for the next 12 years. Officials have said it'll cost the average resident in its district the equivalent of a Big Mac every month.

Concord Community Schools officials are asking for yes votes to get $28 million. The tax rate would go up 40 cents per $100 assessed valuation, raising taxes at least $10 a month for homeowners and more than $50 a month for some over the next seven years.

If you believe that the schools need the money and you owe it to Elkhart and Concord students to help, you should go vote yes.

If you believe that the schools should find ways to live within their means, you should go vote no.

But either way, you should vote. There's too much at stake to not vote. How our community educates approximately 18,000 students will change based on the results on May 6.

Journal-Gazette Reports Homestead Deduction Crackdown Nets Allen County $1 Million

From the Fort Wayne Journal-Gazette:

More than $1 million has been collected in back taxes from Allen County property owners who filed ineligible homestead exemptions – and there’s more on the way.

The revenue will continue to increase since the audit will not be completed for 18 months, County Auditor Tera Klutz said. A home must be the owner’s primary residence to claim a homestead exemption.

The homestead exemption on property taxes is worth 60 percent of the assessed value of the property or $45,000, whichever is less.

A 2009 change in state law required homeowners to verify eligibility. Since that time, homeowners have been notified and asked to return a pink form verifying the deduction, Klutz said.

Those who did not respond were again notified the following year, she said. Those who notified the county that they were ineligible in 2010 or 2011 were given amnesty and the homestead deductions were simply removed, Klutz said.

Although state law allows county auditors to remove any homestead that has not been verified, Klutz’s office has not automatically removed the homestead exemptions.

“Instead, we have mailed homestead audit questionnaires to those with unverified homesteads, auditing them one-by-one,” she said. “It’s the taxpayer-friendly way to handle it.”

If a homestead is found not to be the primary residence, the exemption is removed and the taxpayer is billed for up to three years in back taxes, Klutz said.

Homeowners have the ability to apply or vacate homestead exemptions on a sales disclosure form, a required form on all real estate transfers, Klutz said.
Some may not be aware of their homestead status because many times the forms are completed by title agencies that are unaware of how the taxpayer intends to use the property, she said.

With the elimination of ineligible exemptions, the county will have a broader tax base, “helping all county tax units to collect more taxes this year and going forward,” Klutz said.

So far, the largest amount of back taxes billed and paid were by TES Properties LLC, a Fort Wayne company that had 49 homestead deductions found to be ineligible, Klutz said.

Tuesday, April 29, 2014

Revenue Finds Taxpayer Failed to Keep Sufficient Records to Dispute Audit Results

Excerpts of Revenue's Determination follow:

Taxpayer is an Indiana company, which sells cubed ice and drinking water from automated vending machines ("Vending Machines"). The Vending Machines, which use the water purchased from the local water utility, manufacture and dispense cubed ice and drinking water for sale. Customers can purchase cubed ice or drinking water by inserting cash into money acceptors located at the front of the Vending Machines.

In late 2012, the Indiana Department of Revenue ("Department") audited Taxpayer's business records for the tax years 2010 and 2011. Pursuant to the audit, the Department determined that Taxpayer failed to remit the proper amount of sales tax on its sales of the cubed ice and drinking water. The Department's audit also determined that Taxpayer purchased certain tangible personal property to be used in the course of its business without paying sales tax or self-assessing use tax. As a result, the Department assessed additional sales tax, use tax, penalty, and interest.

The Department's audit, after examining Taxpayer's records, determined that Taxpayer did not have a reliable method of tracking its sales of cubed ice and drinking water sold from the Vending Machines. As a result, the Department's audit utilized Taxpayer's water purchase invoices (i.e., monthly water bills) to compute the total gallons of water purchased in producing the cubed ice and drinking water for sale and allowed 500 gallons of water per month for shrinkage ("Shrinkage"). The audit considered that the Shrinkage accounted for various causes, including "melting of ice that is stored in the unit after production due to temperature fluctuations, leakage of water from the lines, or external faucets left on by offenders, malfunctioning of the machines and boil water advisories from the utility company."

In this instance, Taxpayer disagrees with the method used in the Department's audit. Specifically, Taxpayer argues that the Department's audit cannot use its 2010 and 2011 purchase invoices and then arbitrarily allow the Shrinkage to determine the amount of Taxpayer's 2010 and 2011 sales tax on its sales of cubed ice and drinking water. Taxpayer claims that the audit's estimated Shrinkage did not fully consider various reasons which caused the Shrinkage.

Taxpayer further asserts that the audit overestimated Taxpayer's sales for the 2010 and 2011 tax years. Taxpayer states that, in September 2012, it installed monitoring systems in its Vending Machines. The monitoring systems collect "real time" data on the sales of its cubed ice and drinking water. After compiling the data recorded by the monitoring systems from September 2012 through August 2013, Taxpayer presented the information in an Excel summary to support its protest. Taxpayer also submits various photos to demonstrate several circumstances in which the water it purchased was not used to produce saleable cubed ice or drinking water.

Upon reviewing Taxpayer's supporting documentation, however, its reliance is misplaced. First, the Department audited Taxpayer's records for the 2010 and 2011 tax years. Taxpayer, to the contrary, refers to its Excel summary, which contains information from September 2012 through August 2013 to support its contention that the audit assessments were overstated. Thus, Taxpayer's post-audit information is outside the audit and is beyond the scope of the protest.

In this instance, both Taxpayer and the Department agree that not all of the water Taxpayer purchased was used to produce cubed ice and drinking water for sale. Also, both Taxpayer and the Department agree that Shrinkage occurred for various reasons during the tax years at issue. However, Taxpayer did not maintain adequate records for the tax years at issue so that the Department can determine the proper amount of tax by reviewing Taxpayer's records. Pursuant to the above referenced statutes, if the Department reasonably believes that Taxpayer has not reported the proper amount of tax due, the Department is only required to make a proposed assessment on the basis of the best information available to the Department. Thus, given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayer met its burden of proof to demonstrate that the proposed assessment is wrong.

The Department's audit determined that Taxpayer failed to pay sales tax or remit use tax on various tangible personal property it purchased and used in the course of its business, which include a "Sediment Filter," a "Hockey puck lock," a "Sanitation kit," a "Liquid hand sanitizer," a hose, a sanitizing spray bottle, gloves, a glove dispenser, a low ambient valve and heat strip, and a hot water sink ("Items at Issue"). Taxpayer, to the contrary, claims that it was not responsible for the tax because the Items at Issue are used to produce ice and, therefore, were exempt from the sales/use tax.

In this instance, Taxpayer claims that it was not responsible for the tax because its purchases of the Items at Issue were used in an exempt manner. Taxpayer explains the needs of purchasing and using the Items at Issue. However, upon review, Taxpayer's documentation fails to demonstrate that Taxpayer directly used the Items at Issue in its direct production. As mentioned earlier, "[t]he fact that particular property may be considered essential to the conduct of the business of manufacturing because its use is required either by law or by practical necessity does not itself mean that the property 'has an immediate effect upon the article being produced.'" Given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayer met its burden to demonstrate that the Department's assessment is not correct.

Pursuant to IC § 6-8.1-10-1(e), the Department does not have the authority to waive the interest.

Taxpayer has provided sufficient documentation establishing that his failure to pay tax or timely remit tax was due to reasonable cause and not due to negligence.

Revenue Publishes Information Bulletin on Sales and Use Tax Exemptions for Aircraft Being Repaired or Remanufactured


Information Bulletin #74
Sales Tax
March 2014
(Replaces Bulletin #74 issued May 2012)
Effective Date: Upon publication

SUBJECT: Sales and Use Tax Exemptions for Aircraft Being Repaired or Remanufactured


Aside from nonsubstantive, technical changes, this version of the bulletin has been changed to reflect the enactment of HEA 1545-2013, which eliminated the requirement that an aircraft be registered in another country; weigh at least 5,000 pounds; and be equipped with a turboprop or turbojet engine to qualify for the sales tax exemption for the repair, maintenance, or refurbishing of an aircraft found at IC 6-2.5-5-46.

Beginning on July 1, 2007, the Indiana General Assembly authorized a sales and use tax exemption on the acquisition of aircraft brought into Indiana to be repaired, refurbished, or remanufactured or for a prepurchase evaluation. Effective January 1, 2009, the exemption was expanded to include aircraft brought into Indiana for completion work.

Effective July 1, 2012, the Indiana General Assembly enacted an exemption from sales and use tax for materials, parts, equipment, and engines used, consumed, or installed in the repair, maintenance, refurbishment, remodeling, or remanufacturing of an aircraft or avionics system for aircraft registered in a country outside the United States and having a minimum landing weight of at least 5,000 pounds or being equipped with a turboprop or turbojet power plant. The exemption applied only if the retail merchant possessed a valid repair station certificate issued by the Federal Aviation Administration. Effective July 1, 2013, the requirement that an aircraft be registered in another country and weigh more than 5,000 pounds to be eligible for the exemption has been eliminated.

The Indiana Code provides for an exemption from both sales and use tax on the acquisition of aircraft subsequently brought into Indiana for qualified activities, including repairs, refurbishment, remanufacturing, completion work, or for prepurchase evaluations. Unlike the exemption related to materials incorporated into an aircraft (discussed below), these exemptions apply to the acquisition of the aircraft itself.

Exemption from Sales Tax
IC 6-2.5-5-42 provides that a transaction involving an aircraft, including completion work, is exempt from the sales tax if:
1. The purchaser is a nonresident;
2. The purchaser transports the aircraft to a destination outside Indiana within 30 days after:
A. Accepting delivery of the aircraft;
B. A repair, refurbishment, or remanufacture of the aircraft is completed, if the aircraft remains in Indiana after the purchaser accepts delivery for the purpose of accomplishing the repair, refurbishment, or remanufacture of the aircraft; or
C. Accepting delivery of the aircraft following completion work or a prepurchase evaluation.
3. The aircraft will be:
A. Titled or registered in another state or country; or
B. Based in another state or country, if the state or country does not require a title or registration for aircraft; and
4. The aircraft will not be titled or registered in Indiana.

Exemption from Use Tax
IC 6-2.5-3-2 provides an exemption from the use tax for an aircraft that meets the following requirements:
1. The aircraft is titled, registered, or based in another state or country;
2. The aircraft is delivered to Indiana by or for a nonresident owner or purchaser of the aircraft;
3. The aircraft is delivered to Indiana for the sole purpose of being repaired, being refurbished, being remanufactured, or having completion work performed or is subject to a prepurchase evaluation; and
4. Within 30 days after completion of the repair, refurbishment, remanufacture, or prepurchase evaluation, the aircraft is transported to a destination outside Indiana.

Within 60 days after a purchaser accepts delivery of an aircraft and claims an exemption for an aircraft to be registered outside Indiana, the purchaser shall provide the seller with a copy of the purchaser's title or registration of the aircraft outside Indiana.

Within 60 days after a repair, refurbishment, or completion or remanufacture of the aircraft is completed, and if the aircraft remains in Indiana after the purchaser accepts delivery of the aircraft for the purpose of accomplishing the repair, refurbishment, or completion or remanufacture of the aircraft, the purchaser shall provide the seller with a copy of the purchaser's title or registration of the aircraft outside Indiana.

Effective July 1, 2013, IC 6-2.5-5-46 provides a sales tax exemption for parts, materials, equipment, and engines used, consumed, or installed in the repair, maintenance, refurbishing, remodeling, or remanufacturing of an aircraft or avionics system of an aircraft. The exemption applies only if the work is performed by a retail merchant who possesses a valid repair station certificate issued by the Federal Aviation Administration. This exemption is unrelated to where the aircraft is titled, registered, or based. Because this exemption is based exclusively on the work performed by and status of the retail merchant, the retail merchant does not need to obtain an exemption certificate from its customer to recognize an exempt transaction under this statutory provision.

Property Tax Bills Due May 12th

From the Richmond Palladium-Item:

Wayne County Treasurer Cathy Williams reminds area property owners the spring deadline for property tax payments is May 12 since May 10 is a Saturday.

Normally, property tax payments are due May 10 and Nov. 10.

Williams said property tax statements have been mailed and property owners have begun to come in to pay spring taxes.

If paying by mail, envelopes must be postmarked by May 12. Officials encourage taxpayers paying that last day by mail to go into the post office to get their envelopes postmarked to avoid the chance of a late penalty in case the mail is picked up a few minutes early.

Treasurer’s office hours are 8:30 a.m. to 5 p.m. Mondays and 8:30 a.m. to 4:30 p.m. Tuesday through Friday. An outdoor drop box is located on the west side of the administration building. A drop box is also available inside the building in case taxpayers are in a hurry and don’t want to wait if there’s a line.

Payments are accepted at First Bank Richmond, Wayne Bank and Trust and West End branches.

For more information, call the treasurer’s office at (765) 973-9238.

Randolph County

Payments also are due May 12 in Randolph County. The treasurer’s office is located in Room 103 of the courthouse at 100 S. Main St., Winchester.

The office is open from 8 a.m. until 4 p.m. Mondays through Fridays. Extended hours are offered from 8 a.m. to noon May 10 and 8 a.m. to 5 p.m. May 12. Payments also may be left in an after-hours drop box on the southwest corner of the courthouse. Call (765) 584-0704 with questions.

Residents also may make payments at any Old National Bank in Union City, Winchester, Farmland and Losantville or MainSource Bank in Lynn; by calling (800) 809-5849; or by going online, although the credit card company charges a fee for this service.

Those who did not receive a tax statement should contact their treasurer’s office.

From the Columbus Republic:

Most Bartholomew County residents should find the amount of their spring installment of property taxes comparable to what they paid last year, county officials say.

While the property tax season, which ends with a May 12 payment deadline for the spring installment, has been smooth so far, workers at the Bartholomew County Governmental Office building have been answering a lot of questions over the phone.

"People really need to look at their tax bill — especially the TS-1 tax statement, in regard to what they paid last year compared to this year," Auditor Barb Hackman said. "They need to make sure they have their deductions, especially if they appear to be off."

Daily Journal Reports Johnson County Panel Restarts Talks on Hotel Tax

From the Johnson County Daily Journal:

The idea of a new tax on hotel and motel stays isn’t dead, and a group is working to answer the questions and address the concerns that stalled the proposal earlier this year.

A group of county council members who voted no to the innkeeper’s tax have formed a group with other economic development officials to research the county’s best attractions and ways to promote them. Their goal is to answer questions about how the money from an innkeeper’s tax would be spent, before presenting their findings to the community and county council members who may vote on the tax again.

An innkeeper’s tax would enact a 5 percent tax on hotel and motel bills in the county. Council members who voted no to the tax had concerns about not having a specific plan in place for how to spend the money collected. Supporters argued that the council only approves the tax, and a visitors and tourism bureau would be created that would decide how to spend the money.

Star Reports Tax Hike Would Increase Indianapolis Police Force by Almost 300 Officers

From the Indianapolis Star:

With homicides rising for a third straight year, a City-County council task force is recommending $29 million in tax hikes to increase the Indianapolis police force by nearly 300 officers.
The IMPD Staffing Study Commission proposal would add 286 officers to the force by 2020 at a annual cost of about $100 in new taxes for most Marion County residents. The new revenue would increase the department's ranks to 1,813 officers, the most its ever had.
"People don't feel safe in our community right now, the number one priority should be put on hiring police officers," said Democratic Councilor Mary Moriarty Adams, chairwoman of the commission.
Half the new revenues would be provided by eliminating a homeowner tax break — a move originally proposed by Republican Mayor Greg Ballard that Democrats on the council have rejected three times.
The difference this time, said council chief financial officer Bart Brown, is that the homestead tax credit would be phased out over four years. Brown said a property owner with a $100,000 home ultimately would pay an extra $30 a year.
Another $15 million a year would be generated by slightly increasing the income taxes dedicated to public safety. A resident making $50,000 a year would pay about about $75 a year more.
Democratic Councilor John Barth said it was imperative that the council address the IMPD staffing shortage now, before the number of police offices and agency morale dip too low to be repaired. His constituents, he said, have indicated they'd be willing to pay for adequate police coverage. But the question going forward is: How much?
"No matter what, it is going to be hard when we talk about revenue enhancement (tax increases)," Barth said. "The next step is to stand up and say, 'We are willing to make the hard decisions.' "

DLGF Reports Tax Bills On Time in All 92 Counties

Indiana Department of Local Government Finance
News Release
For Immediate Release
April 28, 2014
Property tax bills on-time in all 92 counties 
INDIANAPOLIS (April 28, 2014) – The Indiana Department of Local Government Finance (DLGF) announced today that property tax bills were issued in 92 counties. This is the first time since at least 2001 that all 92 counties have achieved on-time billing. 
“The DLGF is very pleased that all 92 counties have returned to the normal statutory tax billing cycle,” said DLGF Commissioner Micah G. Vincent. “This milestone could not have been accomplished without the time and effort of the county and township assessors, county auditors, and county treasurers.” 
On-time tax bills provide predictability for both taxpayers and local government units. Many of Indiana’s 2,500 local governments will no longer have to borrow money to continue operations while waiting for delayed revenue distributions due to late tax billing and collections. 
Indiana’s property tax bills were mailed to taxpayers on or before April 25, 2014. As a general rule, the first property tax installment payment is due to the county treasurer by May 12, 2014 and the second installment is due by November 10, 2014. 
Taxpayers interested in learning more about the assessment to tax billing cycle can visit In depth information about how taxes and other public dollars are budgeted and spent by Indiana's local units of government may be found on the Indiana Gateway for Government Units website at:

About DLGF
The Department of Local Government Finance is responsible for ensuring property tax assessment and local government budgeting are carried out in accordance with Indiana law. The DLGF is charged with publishing property tax assessment rules and annually reviewing and approving the tax rates and levies of every political subdivision in the state, including all counties, cities, towns, townships, school corporations, libraries, and other entities with tax levy authority.

Monday, April 28, 2014

Revenue Finds Taxpayer's Records Insufficient to Dispute Audit Conclusions

Excerpts of Revenue's Determination follow:

Taxpayer operates a combination gas station and convenience store. Along with gasoline, Taxpayer's convenience store sells coffee, tobacco products, snack foods, automobile supplies, health and beauty supplies, candy, newspapers, cell phone accessories, grocery items and the like.

The Indiana Department of Revenue ("Department") conducted an audit review of Taxpayer's sales tax records and returns. The audit found that Taxpayer had approximately 7.5 million dollars in sales during the three-year audit period.

The Department concluded that Taxpayer overstated the amount of its exempt convenience store sales. Taxpayer concludes that approximately 50 percent of its convenience store sales were exempt.

The audit found that Taxpayer failed to retain source sales tax documents for the years under audit. Taxpayer instead provided handwritten monthly summary statements. Taxpayer was able to provide cash register summaries for one month in 2013. According to the audit report, "Since the [T]axpayer was unable to produce the requested documentation, an Agreement Project Audit Results based upon the April 2013 cash register summary records was prepared." The audit report describes the process as follows:

The auditor reviewed the April 2013 month end cash register summary (Z-tape) which was the only sales documentation the [T]axpayer could provide. Using the information a worksheet was prepared by the auditor listing department description (i.e. chips, newspaper, coffee, etc.), department codes, department gross receipts and the taxability of each department . . . . The various departments were totaled (less the fuel sales, money orders and money grams sales) to determine the month total sales. The total of the departments subject to sales tax was subtracted from the total sales to determine the amount of audited exempt sales. The sum of the audited exempt sales was then divided by the month total sales to determine the total audited exempt sales percentage. The auditor established the exempt sales to be 34 [percent] of total sales. This amount is higher than average because the [T]axpayer provides a service to their customers of cashing payroll checks and charges a fee. This fee is included in the exempt sales percentage. The [T]axpayer also accepts food stamps. Based on this review, the audit has concluded the [T]axpayer over reported their exempt sales. (Emphasis added).

Taxpayer reported that approximately 50 percent of its convenience stores sales were exempt but had no source documentation to verify that calculation. Based on the limited source documents Taxpayer did possess – for one month outside the audit period – the audit calculated the 34 percent of its convenience store sales were exempt.

The audit report states that, "The [T]axpayer agrees to use the information from the April 2013 cash register summary" but that "[T]axpayer disagrees with the overall audit findings."

Taxpayer argues that the handwritten summary statement sufficiently establishes that it correctly reported its exempt sales during 2010, 2011, and 2012.

Taxpayer's representative maintains that Taxpayer's exempt sales during 2010 were 55 percent, during 2011 were 50 percent, and during 2012 were 45 percent. However, Taxpayer readily admits that it disposed of all the source documentation that would have verified those claimed percentages.

As a business conducting retail transactions and collecting sales tax on behalf of the state, Taxpayer was required to maintain accurate financial records. "Every person subject to a listed tax must keep books and records so that the Department can determine the amount, if any, of the person's liability for that tax by reviewing those books and records."IC 6-8.1-5-4(a). "If the Department reasonably believes that a person has not reported the proper amount of tax due, the Department shall make a proposed assessment of the amount of the unpaid tax on the basis of the best information available to the [D]epartment." IC 6-8.1-5-1(b). See also 45 IAC 15-5-1.

Based on the documentation available, it is not possible to agree that Taxpayer established that the audit assessment was "wrong" as required under IC 6-8.1-5-1(c). Using Taxpayer's own 2013 available source documents, the audit quite reasonably determined that Taxpayer's exempt convenience store sales were 34 percent. In the absence of source documentation, the audit quite reasonably "extrapolated" that exempt calculation to the years at issue.

Given the fact that Taxpayer failed to retain or preserve source documentation of its day-to-day transactions and that the audit employed Taxpayer's own 2013 documents to calculate the amount of the proposed assessment, it is not possible to conclude that Taxpayer has met its burden of demonstrating that the audit's conclusions were wrong as required under IC 6-8.1-5-1(c).

Tribune Reports Porter County Hospital to Get Property Tax Bill

From the Chesterton Tribune:

Porter County Auditor Bob Wichlinski told the County Council at its meeting Tuesday he is ready to mail Porter Regional Hospital tax bills totaling over $5.5 million based on the values the Property Tax Assessment Board of Appeals has assigned for 2012 and 2013.

The PTABOA ruled for the values to be $117 million and $244.5 million, respectively.

The revenue will be distributed appropriately among the respective taxing units, he said. The hospital is located in Liberty Twp. and within the Duneland School District at U.S. 6 and Ind. 49.

Wichlinski said there will likely be modifications over time as the hospital has appealed the two assessments to the Indiana Board of Tax Review, but he will issue the bill according to the information he’s received from the assessor’s office.

The County and the hospital have yet to agree, however, on what the assessed values should be for those two years, which also plays a part in setting the ten-year abatement.

Abatement issue progresses

Council Attorney Scott McClure said the hospital has retained Indianapolis Tax Attorney Tom Atherton to work on a solution to the abatement dispute with the County Assessor Jon Snyder. The parties met earlier in the day and had a “productive discussion” dealing with the issue, although no agreement came out of it, McClure said. He encouraged the Council to allow the conversation to continue as the next step in resolving the abatement.

“We’ve come further in the last 30 days than we have in two years,” McClure said.
Meeting with representatives from Porter Hospital’s parent company, Community Health Systems, just recently, McClure said hospital officials have heard the points made by the Council and are looking at the issues with “a fresh set of eyes.”

“I think they understand that time is of the essence and the Council will not lead this into becoming a negative issue,” he said.

See the full article here:

Board Finds Sale and Appraisal Not Related to Proper Valuation Date Insufficient to Support a Reduction in Property's Value

Excerpts of the Board's Determination follow:

c. The Petitioner presented evidence of the uninhabitable condition of the property. The Petitioner’s evidence, however, shows the condition of the property in 2009 which is months after the assessment date and almost a year and a half after the valuation date. Brown contends the poor condition of the property had been ongoing for a number of years, but the first environmental complaint documented in the evidence is June 30, 2009, and the photographs of the property were taken in August of 2009. Brown did not present any evidence in support of his opinion that the subject property was uninhabitable as of the relevant valuation and assessment dates. Statements that are unsupported by probative evidence are conclusory and of little value to the Board in making its determination. Petitioner Exhibits 1-5; Whitley Products, Inc. v. State
Board of Tax Commissioners, 704 N.E.2d 1113, 1119 (Ind. Tax Ct.).

d. The Petitioner presented an appraisal report prepared by Daniel Barrick. Barrick used sales of comparable properties to establish a value for the subject property of $4,400, post demolition. Barrick included his qualifications in his appraisal report, but nothing in the report states that Barrick is an Indiana certified appraiser. While Barrick’s assertions may not differ significantly from those made by a certified appraiser in an appraisal report, the appraiser’s assertions are backed by his education, training, and experience. The appraiser also typically certifies that he complied with the Uniform Standards of Professional Appraisal Practice (USPAP). Thus, the Board, as the trier-of-fact, can infer that the appraiser used objective data where available to quantify his adjustments. And where objective data was not available, the Board can infer that the appraiser relied on his education, training and experience to estimate a reliable quantification. Here, however, there is no evidence that Barrick is a certified appraiser. He did not establish that he has any particular expertise in applying generally accepted appraisal principles; and he did not certify that he complied with USPAP in performing his analysis. Consequently, Barrick’s appraisal report lacks probative value in this case. See Inland Steel Co. v. State Board of Tax Commissioners, 739 N.E.2d 201, 220 (Ind. Tax Ct. 2000) (holding that an appraiser’s opinion lacked probative value where the appraiser failed to explain what a producer price index was, how it was calculated or that its use as a deflator was a generally accepted appraisal technique).

e. Additionally, the appraisal report was prepared on November 18, 2010, after the residence was demolished. The appraised value, therefore, is not indicative of the value of the property as of the valuation date of January 1, 2008, nor can the appraisal substantiate the condition of the property for the March 1, 2009, assessment date.

f. The Petitioner submitted a purchase agreement and a sales disclosure form for the subject property showing the property sold for $4,400 in August of 2011. The property sold as vacant land and was not the same property that existed on the parcel as of March 1, 2009.

g. The Petitioner failed to establish a prima facie case. Where the Petitioner has not supported its claims with probative evidence, the Respondent’s duty to support the assessment with substantial evidence is not triggered. Lacy Diversified Indus. v. Dep’t of Local Gov’t Fin., 799 N.E.2d 1215, 1221-1222 (Ind. Tax Ct. 2003).

Times Reports Clay County Property Taxes Due May 12th

From the Brazil Times:

The first installment of property tax bills are due on Monday, May 12.

Clay County Treasurer Debbie James says property tax statements were mailed on April 2, and those who have not received statements are urged to contact her office at 448-9009.

Business hours for the Treasurer's Office are 8 a.m. to 4 p.m. Monday through Friday. Extended hours for payment collection will be from 8 a.m. to noon on Saturday, May 10, and 8 a.m. to 6 p.m. on Friday, May 9, and Monday, May 12.

James said tax payments are also accepted with your statement at First Financial Bank, Terre Haute Savings Bank and Riddell National Bank -- all in Clay County.

Journal-Gazette Reports Veteran and Newcomer Seek Nod for Allen County Assessor in Primary

From the Fort Wayne Journal & Courier:

The veteran Allen County assessor will run against a political newcomer vying for the Republican slot in the May 6 primary.

Republican Allen County Assessor Stacey O’Day is being challenged by Kimberly Klerner.

Sam Walker, 33, is running unopposed as the Democratic candidate for Allen County assessor. Walker is the deputy assessor for Wayne Township.

O’Day, 48, is nearing the end of her second term in office. She began her career with the assessor’s office as a records deputy 24 years ago.

The Allen County Assessor’s Office oversees 156,000 parcels, the largest land area in the state of Indiana and one of the most complex, with a mix of agriculture, commercial and industrial and residential properties, O’Day said.

She also serves as a legislative chair and vice president for the Indiana County Assessors Association and was appointed a board member of the Association of Indiana Counties.

“It’s a huge benefit for a county of this size to have a voice at the Statehouse,” O’Day said.

O’Day said tracking the ever-changing legislation is among the biggest challenges she’s faced in recent years.

“Assessing is a complicated system, and it’s constantly changing based on the legislation,” she said.