15. It is unclear precisely what Davis is claiming he was
denied. As explained above, he did not initially identify an error in his Form
133 petitions. Nonetheless, the PTABOA apparently understood Davis to be
claiming that he was erroneously denied a homestead deduction for the subject
property. And in the portion of the Form 133 petitions calling for a taxpayer
to give his reasons for appealing to the Board, Davis pointed to his
disagreement with what he viewed as the PTABOA’s conclusion that he did not
live at the subject property during the years in question. Under those
circumstances, the Board treats the Form 133 petitions as appealing the denial
of the standard deduction—also often
called the “homestead deduction” or “homestead standard deduction”—provided by
Ind. Code § 6-1.1-12-37.2.
16. That statute provides a deduction in specified amounts
for homesteads, which it defines as follows:
(a) The following definitions apply throughout this section:
(1) “Dwelling” means any of the following:
(A) Residential real property improvements that an
individual uses as the individual's residence, including a house or garage.
. . . .
(2) “Homestead” means an individual's principal place of
residence:
(A) that is located in Indiana;
(B) that: (i) the individual owns; [or] (ii) the individual
is buying under a contract, recorded in the county recorder's office, that
provides that the individual is to pay the property taxes on the residence . .
. ; and
(C) that consists of a dwelling and the real estate, not
exceeding one (1) acre, that immediately surrounds that dwelling.
. . . .
(j) A county auditor may require an individual to provide
evidence proving that the individual's residence is the individual's principal
place of residence . . . . The county auditor may limit the evidence that an
individual is required to submit to a state income tax return, a valid driver's
license, or a valid voter registration card showing that the residence for
which the deduction is claimed is the individual's principal place of
residence.
I.C. § 6-1.1-12-37 (2013 supp.) (emphasis added).
17. Although Ind. Code § 6-1.1-12-37 does not define
“principal place of residence,” the Department of Local Government Finance
(“DLGF”) defines that term as “an individual’s true, fixed, permanent home to
which the individual has the intention of returning after an absence.” 50 IAC
24-2-5.
18. The Board therefore must
decide how the DLGF’s definition of a taxpayer’s principal place of residence
applies to the unique facts presented in these appeals. Davis moved to the
subject property in early 2008 after a fire damaged his Ninth Street home. He
stayed at the subject property far more often than he stayed at the Ninth
Street home during the long rebuilding process. While Davis may have planned to
make the Ninth Street home his permanent, fixed residence at some point, the
subject property was his residence for the foreseeable future. It was to that
property that he planned to return after any trips or after working on the
Ninth Street home, even though he might have occasionally spent the night at
the Ninth Street home.
19. In that sense, these appeals are analogous to the common
scenario where a taxpayer is building a new home but continues to reside at his
existing home until the new home is completed. In such a case, it is doubtful
that anyone would contest the taxpayer’s right to claim a homestead exemption
on his existing home until he actually moves into the new home.
20. The Board therefore finds that the subject property was
Davis’s principal place of residence for the 2009 through 2011 assessment
dates. In reaching its conclusion, the Board recognizes that Davis’s driver’s
license and voter registration listed his residence as the Ninth Street home
and that he continued to have mail delivered there. Indeed, the Assessor
pointed to Ind. Code § 6-1.1-12-37(j), which allows an auditor to limit the
evidence that a taxpayer is required to produce to a state income tax return, a
valid driver's license, or a valid voter registration card. But the statute
does not prohibit the auditor or the Board from considering other evidence in
determining a taxpayer’s principal place of residence. Here, Davis persuasively
testified that he intended to and did live at the subject property for more
than three years while he rebuilt the Ninth Street home. And the undisputed
evidence that he did not claim a deduction for the Ninth Street home during
that period bolsters his testimony.
21. This case is therefore distinguishable from Kellam v.
Fountain County Assessor, 999 N.E.2d 120 (Ind. Tax Ct. 2013). In that case,
Kellam claimed a homestead deduction for a Fountain County property that he
co-owned with Carol Myers and that he was renovating. Kellam v. Fountain County
Assessor, 999 N.E.2d 120, 121 (Ind. Tax Ct. 2013). While working on the house,
he stayed next door with Myers’s parents. Id. Kellam and Myers both signed the
homestead deduction application, and both were receiving homestead deductions
on other properties at that time. Id. The Board had denied Kellam’s claim on
grounds that both he and Myers owned other properties for which they received
homestead deductions. Id. at 122-23. The Tax court, however, found that Kellam
had successfully removed the homestead deduction on his other property and that
he was therefore entitled to the deduction on the Fountain County property. Id.
at 124.
22. It appeared to the Tax Court, however, that the Board
had also concluded that the Fountain County property was not Kellam’s principal
place of residence because he was not physically residing there. The court
disagreed, explaining that the legal standard for determining a taxpayer’s
principal place of residence is “the ‘intention’ to return to the property
after an absence, not continuous physical presence at the property.” Id.
(citing 50 IAC 24-2-5). In that regard, the court pointed to Kellam’s testimony
that he alone intended to seek a homestead deduction for the Fountain County
property. Id. The court also noted that Kellam had used the property as his
mailing address, as the location of his voter registration, and as the address
on his driver’s license, tax returns, and bank statements. Id.
23. Nothing in Kellam compels a finding that the Ninth
Street home—rather than the subject property—was Davis’s principal place of
residence. Granted, both Kellam and Davis received mail at the properties that
they were rebuilding or renovating and used those properties as their addresses
for various purposes, such as receiving mail and registering to vote. Unlike
Kellam, however, Davis did not intend to claim a homestead deduction for the
property that he was rebuilding until after he finished the project. Also
unlike Kellam, who lived with Myers’s parents temporarily while he renovated
the Fountain County property, Davis lived for more than three years in another
house that he owned and for which he sought a homestead deduction.
24. The fact that Davis used the subject property as his
primary residence, however, does not end the Board’s inquiry. Davis referred to
the property as his “apartment house,” and he testified that he moved into its
“side.” Davis testimony. Thus, it is unclear whether he occupied the entire
property or whether he rented a portion of it to tenants. Davis is only
entitled to a deduction for the portion of the property that he used as his
principal place of residence and not for any portion of the property that he
leased to others during the years at issue.
