Thursday, April 17, 2014

Board Finds Tax Rep's Guidelines-Based Arguments Failed to Support Reduction in Property's Value

Excerpts of the Board's Determination follow:

The parties agree that two parcels were purchased together in 1993, and the third parcel, the subject property of Petition No. 90, was originally common area and later quitclaimed to the Props in 1995. The aerial map shows that the subject property is located directly behind the residence, has no street access, and is of insufficient size to build a residence. Respondent Exhibit C. Mr. McAbee testified that he considered the three parcels as one property with the subject property as an extension of the “backyard.” McAbee testimony. Mr. Smith failed to offer rebuttal evidence of how the Props actually use the property, other than that they mow it. Mr. Smith opined that the subject property could be sold separate from the two parcels containing the residence, perhaps to a contiguous property owner. Smith testimony. The weight of the evidence supports the conclusion that the three parcels constitute a single economic use as a residence.

29. To decide whether Ind. Code § 6-1.1-15-17.2 shifts the burden of proof to the Assessor, the Board compares the total assessment of the three parcels to the amount that the Assessor determined for the previous year. The Assessor property record cards indicate that in 2008 the three parcels were assessed at $19,500 (Parcel 004), $1,780,000 (Parcel 005), and $15,900 (Parcel 008), for a total of $1,815,400. For 2009, the three parcels were assessed at $82,400 (Parcel 004), $1,718,300 (Parcel 005), and $67,200 (Parcel 008), for a total assessed value of $1,867,900. The increase is approximately 2.89%. Because the total assessment of the subject property represents an increase of less 5% from the preceding year, the Props have the burden of proof.

d. Mr. Smith cites to the original construction cost of $811,000. But the subject property was constructed sixteen years before the relevant valuation date. He does not introduce sufficient evidence to relate the construction cost to the January 1, 2008, valuation date, and therefore, the construction cost carries no probative value.

e. Mr. Smith argues that, based on the construction cost of the house, the grade factor of AA-1 is overstated. The Indiana Tax Court has consistently rejected arguments that simply contest the methodology used to compute the assessment. Eckerling v. Wayne Township Assessor, 841 N.E.2d 674, 677 (Ind. Tax 2006). Instead, a party must show the assessment does not accurately reflect the subject property’s market value-in-use. Id.; see also P/A Builders & Developers, LLC, 842 N.E.2d at 899, 900 (“the focus is not on the methodology used by the assessor, but instead on determining whether the assessed value is actually correct”). Mr. Smith’s testimony regarding grade presents no probative evidence about the market value-in-use of the property. 

f. Mr. Smith contends that from 2007 through 2013 property values in the subject property’s neighborhood have been declining. Specifically, the trending factors in the neighborhood dropped from 129% in 2009 to 119% in 2010 and dropped again in 2013 to 89%, which resulted in a lower assessed value for 2010 and 2013 on the subject property. But each assessment and each tax year stands alone. Fleet Supply, Inc. v. State Board of Tax Commissioners, 747 N.E.2d 645, 650 (Ind. Tax Ct. 2001) (citing Glass Wholesalers, Inc. v. State Board of Tax Commissioners, 568 N.E.2d 1116, 1124 (Ind. Tax Ct. 1991)). Thus, evidence as to a property value in one tax year generally is not probative of its true tax value in a different year. Mr. Smith provides no data or evidence to show that property values in the subject property’s neighborhood were declining. Statements that are unsupported by probative evidence are conclusory and of little value to the Board in making its determination. Whitley Products, Inc. v. State Board of Tax Commissioners, 704 N.E.2d 1113, 1119 (Ind. Tax Ct. 1998); and Herb v. State Board of Tax Commissioners, 656 N.E.2d 890, 893 (Ind. Tax Ct. 1995).