Perspective Reports Kohl's Appealing Assessment in Kokomo

From the Kokomo Perspective:

Retailer appealing assessment, which would shift $1 million in taxable value to others


Kohl’s department store wants its customers to “expect greats things.” If it gets its way in Kokomo, the only thing local residents can expect is a greater tax bill. The retailer has appealed its assessed valuation for 2014, and Howard County Assessor Jamie Shepherd-Bryant is preparing for a legal fight with them next month.

According to Shepherd-Bryant, the dispute centers around the assessed valuation of Kohl’s building. The company appealed the valuation earlier this year before Howard County’s Property Tax Board of Appeals (PTBOA), but lost. That resulted in another appeal -- this time to the Indiana Board of Tax Review.

“Right now, we have one case at the Indiana Board of Tax Review,” said Shepherd-Bryant. “It’s Kohl’s. We each have had appraisals, and we are about $1 million apart. My big contention with Kohl’s is the methodology they used for their appraisal.

“When a store like Kohl’s comes to town, a lot of smaller businesses see hits in their profits. As those stores go out of business, Kohl’s appraisers are using the sales of those “dark boxes,” the buildings no longer in use, to compare to their highly profitable building.”

Shepherd-Bryant contended that a proper appraisal of the Kohl’s property in Kokomo is obtained by comparing sales of retail space that is in use instead of without a tenant. That is how Howard County directed its appraiser to come up with a value, and it explains why the appraisal is $1 million more than Kohl’s empty box appraisal.

“In the state of Indiana, we are not a market value in exchange state,” said Shepherd-Bryant. “We are a market it value in use state. That means we value the building at its highest and best use. I don’t believe in the philosophy of comparing a highly successful store to a dark or unused building.”

If Kohl’s is successful in its appeal, the impact will hit local property tax payers. Though the taxes on $1 million in assessed valuation is relatively small when spread across everyone in the county, the win would provide other businesses a precedent that is contrary to the “best and highest use” approach used by government. This could mean additional appeals on the same ground.
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See the full article here:

http://kokomoperspective.com/kp/kohl-s-county-square-off-on-taxes/article_f0bdb92a-6cb2-11e3-80b2-001a4bcf887a.html