News Reports Shelbyville Council Continues Work on Budget

From the Shelbyville News:

As the Shelbyville Common Council continues work on the 2014 budget, it is expected to make a second vote on the ordinance and continue to look for long-term solutions to make the city's finances healthier.

The council will save $755,000 in general fund appropriations from the insurance, police, fire and ambulance department budgets.

After the savings, the general fund is expected to have approximately $13.9 million in appropriations.

A choice for employees between creating a health savings account or seeing an increase in premiums could save $332,000, according to Shelbyville Mayor Tom DeBaun.

A decrease in police officers, created through attrition, will keep the force at 47, and DeBaun is thinking of replacing retiring firefighters with part-time workers.

That, combined with final decisions from police and fire negotiation can save more than $300,000. Smaller changes in other departments will make up the rest.

The council came up with several of these decisions at a meeting last month, but had not voted on them.

The council and the mayor will have to looking at other short-term and long-term budget decisions after the vote.

"We're looking at a priority list of cuts," DeBaun said.

http://www.thestarpress.com/apps/pbcs.dll/article?AID=2013310070007

Truth Reports Elkhart Councilman Advocates Not Passing Budget

From the Elkhart Truth:

David Henke thinks Mayor Dick Moore’s 2014 budget plan is seriously flawed.

And he thinks the mayor’s veto last year of a Republican-led budget amendment has left the Elkhart City Council powerless to do much of anything related to the budget.

As a result, the Republican council member says the council should not pass a budget for 2014, meaning the city would continue with the existing 2013 spending plan for the next year.

Whether he has much support for such a maneuver remains to be seen, but officials need to wrap up decisions on the budget in less than two weeks.

The council on Monday, Oct. 7, announced it will vote on a series of salary ordinances and the entire budget plan on Oct. 21.

Moore’s proposed $54 million budget is about $2 million over the current spending level and much of that is connected to anticipated rising costs for city employee health care.

The budget includes 2 percent raises for all city employees.

Moore said he could not recall a time when the Elkhart City Council had not passed a budget and said doing so would be “irresponsible” and would leave city government short-changed in numerous areas.
...

http://www.elkharttruth.com/article/20131007/NEWS01/710079920

Ketzenberger: Indiana Needs New Incentives to Bring Film Makers to the State

By John Ketzenberger in the Indianapolis Star:

We all like an incentive to do something and business is no different. Whether it’s tax credits for development or state dollars for training, most deals in Indiana include incentives.

Whether to grant them is a tough decision for fiscal leaders. The calculation of whether it spurs business activity or merely subsidizes it is tough to nail, but this much is clear about selective stinginess: “The Fault in Our Stars,” a movie that absolutely should be made in Indiana, is shooting in Pittsburgh instead.

When it comes to incentives for making movies, Film Indiana brings a peashooter to a bazooka battle. Film Indiana, the successor to the moderately successful Indiana Film Commission, has an arsenal of exactly one incentive: the state will waive sales and county innkeepers’ taxes on rooms rented for at least 30 days.

Meanwhile Michigan offers a tax credit of up to 42 percent of a production company’s expenditures related to a film project. In Ohio, it’s 25 percent of expenses and 35 percent of the wages paid to Buckeyes. Even Kentucky offers a 20 percent tax credit.

The worthiness of tax credits all depends upon your point of view. Former Gov. Mitch Daniels blessed some tax credits, but he didn’t like what he called subsidies for the movie business. Daniels vetoed a bill to enact a 15 percent tax credit for film production, which is exactly the opposite tack taken by our neighboring states and Pennsylvania, which allows up to $60 million in such tax credits each year and where “The Fault in Our Stars” is being filmed.

...

Indiana’s film industry contributed nearly $250 million to the Hoosier economy last year, according to the Motion Picture Association of America. In Pennsylvania, it was more than $730 million. A group of film industry advocates will try again next year to convince Indiana lawmakers to enact tax incentives to boost their industry.

...

http://www.indystar.com/apps/pbcs.dll/article?AID=2013310050030

Trib-Star Reports Terre Haute Believes New Revenue for 2014 Will Bring Budget Stability

From the Terre Haute Tribune Star:

The city council is poised to pass Mayor Duke Bennett’s 2014 budget this week, sparing Terre Haute a potentially jarring financial mess.

A few members of the council last month asked the mayor to present a plan to fix the city’s “general fund,” which has come up in the red each of the past few years. On Thursday night, Bennett gave them just that.

The plan, if successful, would erase the need for an annual loan, called a “tax anticipation warrant,” to float the general fund by 2017. That loan is expected to be $5 million again in 2014, matching its level for the past two years. Bennett, using a Powerpoint presentation, showed the council several new sources of revenue he hopes, along with new spending cuts, can make the general fund whole in the next few years.

Councilman Jim Chalos, D-at large, said he commended Bennett for the presentation after the meeting. “I’ve been around [city budgets] since I was a kid,” said Chalos, whose late father, Pete Chalos, was a four-term mayor in the 1980s and 1990s. “The more open we can be, the fewer problems there will be.”

Chalos is one of six council members who have said they plan to vote in favor of the budget, which comes up for a vote Thursday night.

Failure to pass the budget would amount to a budget cut for the city, according to state officials. If a city does not pass a new budget, it forfeits the additional revenue it would have otherwise been allowed by the state’s “growth quotient,” this year set at 2.6 percent, said Jenny Banks, director of communications for the Indiana Department of Local Government Finance.
...

See the full article here:

http://tribstar.com/local/x134973336/City-believes-new-revenue-for-2014-budget-will-provide-more-stability

Revenue Determines Sales and Use Tax for Commercial Printer

Taxpayer is an Indiana commercial printer. As the result of an audit, the Indiana Department of Revenue ("Department") determined that Taxpayer had not paid the proper amount of sales tax for purchases made during the years 2008-2010 and had not collected and remitted the proper amount of sales tax as a retail merchant during that time. The Department therefore issued proposed assessments for sales and use tax and interest.
...

Taxpayer protests the calculation of sales tax. Taxpayer states that the sales tax audit sample is not a fair representation of the audit periods. The Department notes that a notice of proposed assessment is prima facie evidence that the Department's claim for the unpaid tax is valid, as provided by IC § 6-8.1-5-1(c). The burden of proving the proposed assessment is incorrect rests with Taxpayer.

...
 

During the Department's audit all sales records were available to the auditor, but, due to the volume of invoices, the auditor chose to use a sample method rather than go through all of the invoices. IC § 6-8.1-3-12. Taxpayer argues that an audit sample period which consisted of only the first four months of the tax year 2008 was not a fair representation of the sales for the remainder of 2008, and all of the years 2009 and 2010. Taxpayer states that because of the economy and the mix of work processed for exempt customers throughout the three year period, a sample method of two months from each year would have been more accurate. Taxpayer notes that a customer that makes up twenty-seven (27) percent of the sample had reduced sales throughout the rest of 2008 and all sales in 2009 and 2012 with this customer were less than one (1) percent.
 

Taxpayer did not show, however, that sales to this customer were an aberration as compared to other periods. There could have been other customers in other time periods that had a similar impact on alternate sample periods. The Department has the authority to use methods considered necessary to determine a taxpayer's proper tax liability as provided by IC § 6-8.1-4-2. As noted above, it is Taxpayer who must show that the assessment is wrong and there is nothing in the statutes or regulations circumscribing an auditor's choice of time frames for projecting results unless a taxpayer can show that the method was unreasonable. It does not matter that Taxpayer's business with a specific customer was larger during the projection period than the entire audit period. The only relevant fact is that there was a transaction with the client during the projection period and Taxpayer has not demonstrated that this was an aberration as compared to other sample periods.
 

Therefore, based on the above, and due to the volume of invoices, the Department's method of choosing a specific time period from the overall audit period was reasonable.
...
 

Taxpayer protests the imposition of sales tax on shipping charges. Taxpayer argues that because their delivery is done through third parties 95 percent of the time, the shipping charges should be exempt. Additionally, Taxpayer believes that the sales tax should not be charged on deliveries because the delivery charge is stated separately on the invoices.

...
 

Taxpayer does not cite to any legal authority for its contentions. IC § 6-2.5-1-5(a) states clearly that delivery charges are considered part of the "gross retail income" and are therefore taxable – the fact that they are separately stated makes no difference. Again, Taxpayer has not cited to any statutes, regulations, or Indiana case that support the Taxpayer's position.
...
 

Taxpayer argues that an exemption certificate that was submitted at the time of the audit was not taken into consideration.

...
 

The exemption certificate provided by the Taxpayer was not fully filled out by the client. Sections with pertinent information such as the clients name, address, TID, and the completion date of the certificate, were left blank. As a result, the exemption certificate cannot be considered "a fully completed exemption certificate." Therefore, Taxpayer's protest that it had an exemption certificate from a client is respectfully denied.
...

 

The Department's audit assessed sales tax on a maintenance agreement because "in the case of purchase agreements or option warranties, it is presumed that tangible personal property is in the form of updates that will be transferred and software maintenance agreements are to be subject to use tax."
 

Taxpayer protests the imposition of tax on the maintenance agreement. Taxpayer argues that no tangible personal property was exchanged under the agreement and therefore the maintenance agreement was merely for maintenance services. Taxpayer explains that it paid a flat monthly rate for three hours of maintenance consulting services. Taxpayer explained that it paid an additional hourly fee for additional time it spent on a project, as well as for any tangible personal property it received.
 

Taxpayer has documented that the service agreement was for three hours of consulting services, was paid monthly, and any time tangible personal property was purchased from the consulting company, sales tax was paid on the purchase at that time.

...
 

The Department assessed use tax on a stacker forklift, waste toner cartridges, and a dehumidifier. Taxpayer argues that these items are exempt from use tax.
 

...
 

45 IAC 2.2-5-8(k) describes direct production as the performance of an integrated series of operations which transforms the matter into a form, composition or character different from that in which it was acquired, and that the change must be substantial resulting in a transformation of the property into a different and distinct product. The Department next notes that IC § 6-2.5-5-3 provides that commercial printing shall be treated as the production and manufacture of tangible personal property. "Commercial printing" is described in IC § 6-2.5-1-10 as a process or an activity, or both, that is related to the production of printed materials for others. The term includes receiving, processing, moving, storing, and transmitting, either physically or electronically, copy elements and images to be reproduced; plate making or cylinder making; applying ink by one or more processes, such as printing by letter press, lithography, gravure, screen, or digital means; casemaking and binding; and assembling, packaging, and distributing printed materials. The term does not include the business of photocopying.
 

A commercial printer is, therefore, entitled to an exemption for machinery, tools, and equipment that are directly used to perform the activities previously set out. This includes equipment (computers, scanners, etc.) that is used to perform what is commonly referred to as "prepress activities," which include the receiving, processing, moving, storing, and transmitting, either physically or electronically, of copy elements and images to be reproduced and plate-making or cylinder-making. Exempt prepress activities do not include drafting of copy or the creation of artwork for reproduction.
 

Commercial printers are also exempt from sales and use tax on purchases of capital equipment, consumables, and materials used in commercial printing under IC § 6-2.5-5-4, IC § 6-2.5-5-5.1, and IC 6-2.5-5-6. Like other manufacturers, commercial printers may also be exempt from tax under other sections of the Indiana Code.
...
 

Taxpayer states that the forklift should be exempt because it "is used to unload paper, move skids, and transport to presses and put into racks during the entire manufacturing process." Taxpayer says it should therefore be entirely exempt. In order for a piece of machinery to be exempt it must be directly used in direct production of the Taxpayer's printed materials.
...
 

Taxpayer has provided sufficient documentation to show that the forklift is used in an exempt fashion at least part of the time. Taxpayer's exempt process begins with the placement of paper (or other items) into the printers and ends when the printed materials are in their final form. Any other activities are considered to be pre or post-production. A supplemental audit will determine the percentage of the exemption. Taxpayer however must send in documentation – within thirty (30) days of the date of this Letter of Findings – that shows how much time the forklift is used for each of the operations Taxpayer describes.

 ...
 

Taxpayer argues that the waste toner cartridge for the colored ink should be exempt. According to Taxpayer, the purpose of a waste toner cartridge is to contain the toner waste collected during the printing process. While containing the toner waste may be necessary, it does not satisfy the "double direct" test provided in IC § 6-2.5-5-3(b) which states that the property must be directly used in the direct production of a product.
 

Here the waste toner cartridge is not part of direct production. Once the paper has been printed upon, the leftover/waste toner is no longer part of production. Therefore the cartridges used solely for holding toner waste are not directly used in direct production.

...
 

Taxpayer argues that its dehumidifier should be exempt from use tax because it is necessary for climate control in the press room. Taxpayer states that the dehumidifier is necessary for the total manufacturing/printing process because if the paper absorbs moisture it will not process through the printers properly. Taxpayer argues that but-for the dehumidifier Taxpayer would not be able to conduct its business of printing.
 

In addition to the law stated above, 45 IAC 2.2-5-8 (j) provides:
 

Machinery, tools, and equipment used in managerial sales, research, and development, or other non-operational activities, are not directly used in manufacturing and, therefore, are subject to tax. This category includes, but is not limited to, tangible personal property used in any of the following activities: management and administration; selling and marketing; exhibition of manufactured or processed products; safety or fire prevention equipment which does not have an immediate effect on the product; space heating; ventilation and cooling for general temperature control; illumination; heating equipment for general temperature control; and shipping and loading.
 

(Emphasis added).
 

Therefore, while as a commercial printer, some of the items Taxpayer uses in its production process may qualify for the manufacturing exemption, not all of the items Taxpayer uses will be exempt.
...
 

In Taxpayer's case, the use of the dehumidifier is more like the use of air conditioning in RCA Corp. The dehumidifier may be necessary or even essential to the production process but necessity is not enough to qualify the dehumidifier as exempt as described above in 45 IAC 2.2-5-8(g).The dehumidifier used in Taxpayer's process dehumidifies the surrounding air, but does not have a direct effect on the product being produced. Only clearly demarcated areas in which there is active manufacturing that depends on a controlled environment are entitled to the exemption. In Taxpayer's facility, the dehumidifiers operate to "condition" the environment within that facility rather than a specific, demarcated area within that facility (as is the case in Kimball).
 

Taxpayer has not presented any documentation that suggests the dehumidifier is used in a manner more akin to the air makeup units used in Kimball. As a result the dehumidifier does not qualify for the manufacturing exemption.
...
 

Taxpayer protests the imposition of use tax on a portion of the audit labeled "no documentation." During the audit period, Taxpayer had made purchases from various vendors but did not have supporting documentation to show that either sales tax was paid or that the purchase qualified under an exemption. As a result, use tax was imposed.
 

The purchases in question include payments for web hosting, software, annual membership dues to an organization, French paper, imprinted beads, chocolate coins, imprinted flags and payments for internet service.
 

Taxpayer has provided sufficient documentation to establish that the French paper, imprinted beads, chocolate coins and flags were all items it printed on. Taxpayer has also provided sufficient documentation to establish that the payments for web hosting, software and annual membership dues were not subject to sales tax.

 

http://www.in.gov/legislative/iac/20130925-IR-045130428NRA.xml.html

Courier-Times Reports Tax Sale Nets $650,000 for Henry County

From the New Castle Courier-Times:

Nearing the end of about 20 minutes worth of instructions, auctioneer Glen Luedtke gave the reason for Thursday's morning's property tax sale in the Henry County courthouse.

"If a taxpayer is not going to keep taxes current, this is an opportunity to put the property in the hands of people who have shown they will keep it current," he said.

Shortly thereafter he launched into taking bids, attempting to get the taxes paid on 316 properties which, together, had accumulated $1,161,535.02 in past due property tax, penalties and fees. Properties can be sold for the amount owed to the county after the owner has missed several installments, with repeated notifications bringing no result.
...

Henry County Auditor Patricia French said that while many buyers are local, some are professionals who go from county to county looking for property investments. Although she likes to see property ownership stay local, bidders from anywhere are welcome. The idea, she said, is to get the property back to producing income for the county.

She and County Treasurer Gene Bundy both said they were pleased with the sale.

"We sold about 20 percent of what we had on the list" of delinquent properties, Bundy said. He had hoped that perhaps 25 percent would be sold but noted that the list of delinquent properties has been shrinking because of better efforts to get past-due property tax paid.

"Money-wise, we did pretty good," he said.

About 50 buyers put in bids on 61 of the delinquent properties. The bidders agreed to pay $650,743.84 for the properties, or $500,389.42 more than had been owed on them. Some bids were only for the amount owed, but others - on more desirable properties - ran as high as several thousand dollars more than owed.

Prior to the sale, past due taxes and charges had been paid on another 105 properties, bringing in $199,685.65.
...

For the 255 properties that did not sell, the county commissioners will acquire a tax lien and can offer those properties for sale later. A commissioners' sale was conducted online in the spring, French said, and another will be scheduled next spring.
http://www.thecouriertimes.com/main.asp?Search=1&ArticleID=283633&SectionID=23&SubSectionID=45&S=1

Post Reports Online Travel Providers and Hotel Industry Clash Over Taxes

From the Washington Post:

When you log on to Orbitz to find that perfect room for your next vacation, you may be thinking about the pool, or the view, or the chance to get away from it all. But the travel site you use and the hotel where you stay are thinking about something else: Who’s responsible for your taxes?

Online travel providers and the hotel industry will clash next year over which side is responsible for forwarding taxes to state and local governments, setting up high-stakes battles in state capitals that are increasingly facing the question of how to tax Internet sales. In this case, the consumer’s bottom line may not change, but shifting the tax burden is a threat to travel providers still operating on narrow margins after a recession severely dented their balance sheets.

The rate an online shopper sees now reflects a balance between hotels and the travel providers who sell their rooms. The online sites contract with hotels to sell rooms at below-market rates, then sell those rooms to the consumer at market rates; the difference is where Orbitz and Travelocity and Expedia make their profits. And even if the hotels are only receiving 80 percent of their regular rate, it’s better for them than to leave the rooms unoccupied.

What happens next is the nexus of the debate: When you pay the online provider the cost of the room plus the tax, they forward the contracted amount to the hotel. The hotel then forwards the taxes on the contracted rate on to state and local governments. But there’s a gap between the taxes the consumer pays and the taxes for which the hotel is responsible — and the hotel industry wants to close that gap.

Consider a typical room available for $100 online. The consumer pays $100, and a hypothetical 10 percent tax rate, or $10, on that room. The online travel site has contracted with the hotel to pay $80 for the room. They forward the $80, plus the 10 percent tax, $8, to the hotel, which then forwards the $8 to the local taxing authority. The travel company keeps the $20 difference as their profit, along with the extra $2 that the consumer paid; because the travel site bought the room for $80, they get to keep the extra two bucks.

...

“Tax policy has not kept up with changes in technology, giving rise to significant ambiguity in defining the tax base, or the amount subject to tax,” Utah state Sen. Curt Bramble (R) said in an e-mail. “When changes in technology render current tax policy obsolete, when special interest, cottage industries take extraordinary advantage or exploit tax ambiguities and loopholes, there is a strong impetus to discuss and address the issue.  This is clearly the case with online travel services.”

 

But travel industry advocates say the change would hurt travel agents that operate offline, too, and that there’s no reason to change a system that has operated without change for years.

“The majority of the states are seeing that the business model, as it is, works just fine,” said Robin Reck, communications director for the Travel Technology Association. “For the online travel companies, it’s a lot of money, but the people it also effects are the local travel agents.”

So far, the online travel companies are winning the legislative fight. Sixteen state legislatures took up similar bills proposing to change the policy in 2013, but it only passed in one state, Oregon.

Both sides are fighting over the taxes in courts from Florida to Chicago. A federal court in Texas and state courts in South Carolina and Georgia have all ruled that online travel sites must pay taxes on the full amount under existing statute, while the travel sites won a case in Los Angeles in 2004.

...

http://www.washingtonpost.com/blogs/govbeat/wp/2013/10/05/hotels-online-sites-fight-over-travel-tax-burden/

Tribune Reports Property Tax Assessments Good and Bad News for Duneland

From the Chesterton Tribune:

Porter County continues to see a downward trend in its overall assessments this year.

According to the figures computed by the County’s Auditor and Assessor offices, the overall adjusted net assessed value is $8.368 billion countywide for 2013 pay 2014, which is a $52 million drop compared to last year.
 

Assessment notices, or Form 11s, were mailed by the assessor’s office to county taxpayers on Sept. 21 in which the majority saw their assessments decrease.
 

In Duneland however, some taxing units saw their numbers climb, particularly in Westchester, Jackson and Liberty townships.
 

For the Duneland School District, the auditor’s office reports a dip of 0.6 percent in the 2013 pay 2014 adjusted net AV with an overall figure of $2.391 billion.
 

According to adjusted net assessment figures from the auditor’s office, which applies credits to the gross assessed values to come up with the net assessment, the biggest value drops by percentage were seen in the Town of Porter with $26.5 million less than last year (a difference of 11.4 percent) and the Town of Pines with $3 million less (a difference of 12.5 percent).
 

County Assessor Jon Snyder said appeals were the chief reason assessments were down in the Town of Porter. One appeal granted was to Worthington Steel, whose assessment was modified by more than $17 million last year, Snyder said.
 

The total assessed value for the Town of Porter this year is $205.9 million compared to 2012’s $232.4 million.
 

A few more properties on the commercial side saw shifts in assessments this year, including the former Splash Down Dunes water park property which is now owned by Seven Peaks Inc., Snyder said.
 

Chesterton’s AV slid 2.1 percent. Burns Harbor’s fell 0.2 percent.
 

Meanwhile, on the upswing, the taxing unit with the most growth this year was unincorporated Westchester Township by a factor of 6.9 percent with a total of $228.4 million, an increase of $14.7 million from 2012, which Snyder attributes to construction of higher end homes. Jackson Township and Liberty Township unincorporated zones both saw their numbers rise.
 

By percentage, Portage City-Westchester grew the most with a 10.3 percent increase over last year, moving from $6.0 million in 2012 to $6.2 million this year, the auditor’s office said.

...

See the full article here:

http://chestertontribune.com/Porter%20County/property_tax_assessments_good_ne.htm

 

 

Journal-Gazette Reports Fort Wayne Shares Details of Ash Project

From the Fort Wayne Journal-Gazette:

The announcement that Ash Brokerage would move its national headquarters to downtown Fort Wayne as part of a $71 million development was hailed by city officials.

...

City officials plan to disclose their plans publicly for the project, which includes an $11.7 million parking garage. The details will be released Monday.

Though the final amounts have yet to be set and separate bodies need to approve the moves, the estimated $19.5 million in costs the city is responsible for will come from:

•The Capital Improvements Board
•The Legacy Fund
•The Civic Center Tax Increment Finance District

The Civic Center TIF district covering the area uses the increase in property taxes from new development to pay for capital improvements in the district. Usually, those improvements are infrastructure improvements, such as sewers or roads, that enabled the development in the first place, but the money can also be spent on improvements that have a public benefit.

Redevelopment Director Greg Leatherman said the Civic Center TIF district’s biggest obligation is to make loan payments on Grand Wayne Center. Officials also recently said the TIF district would give $750,000 toward the Embassy Theatre Foundation’s efforts to bring life to the long-defunct Indiana Hotel.

Officials said the TIF has about $5.2 million on hand, enough to cover the $4.3 million cost of the land. The property comprises nearly a city block between Wayne and Berry streets from Webster to Harrison streets, with the exception of the five-story brick building at Berry and Webster, home to attorneys Shambaugh, Kast, Beck & Williams.
...

See the full article here:

http://journalgazette.net/article/20131006/LOCAL/310069935/0/SEARCH

Palladium-Item Reports Wayne County Recieves over $500,000 from Tax Sale

From the Richmond Palladium-Item:

Wayne County sold more than half of the 100 properties offered in its delinquent tax sale this week, but some past-due owners avoided the sale by enrolling in a new program.

The county sold 58 properties with unpaid property taxes and collected $513,422 at the sale Thursday, Auditor Karen Stevens said Friday. The 42 properties that weren’t sold are now eligible for a commissioners’ sale next spring, Stevens said.

“The number sold was a little less than what we’ve sold in the past, but the total number is also down,” Stevens said.

In 2012, Wayne County had 153 properties in the delinquent tax sale.

The General Assembly updated tax sale laws this year, allowing treasurers to make signed payment agreements with delinquent property owners so their properties can be removed from the tax sale.

Forty-seven properties were removed from Wayne County’s sale Thursday after owners signed payment agreements, Wayne County Treasurer Cathy Williams said.

The agreement includes making regular installment payments, with the debt to be repaid by June 30 of the following year, Williams said. The county auditor is authorized to remove the property from the tax sale list when a signed agreement is presented, Williams said.

Senate Enrolled Act 275, which changed the rules, went into effect July 1. Treasurers are now to notify taxpayers either on their property tax bill or on the envelope that a payment plan is available for partial payments for delinquent taxes, according to the act.
...

See the full article here:

http://www.pal-item.com/apps/pbcs.dll/article?AID=2013310040012

IBJ Reports Blommerang LLC Offered Incentives for Expansion in Indianapolis

From the Indianapolis Business Journal:

Bloomerang LLC, which provides donor-management software for not-for-profits, said it is expanding in Lawrence, creating up to 70 jobs by 2023.

The company was founded a year ago by technology entrepreneur Jay Love. Love, who serves as CEO, is best-known as the founder of the donor-management firm eTapestry, which was acquired for $25 million in 2007. He later served as CEO of the digital marketing firm Slingshot SEO, but left after less than a year at the helm.

Bloomerang, now based at 5625 N. Post Road, plans to buy and renovate offices at Lawrence Village at the Fort.  As part of the expansion, the company has begun hiring for project manager, IT and developer positions.

The Indiana Economic Development Corp. offered Bloomerang up to $700,000 in conditional tax credits and up to $30,000 in training grants based on the company's job-creation plans.
...

http://www.ibj.com/donor-management-software-startup-plans-to-add-70-jobs/PARAMS/article/43913

Times Reports Former Lake County Assessor Hank Adams Dies After Battle with Cancer

From the Northwest Indiana Times:

Hank Adams, the first Republican to hold a countywide office in Lake County in more than 50 years, died Sunday.

Adams, 77, had been battling cancer for more than a year. He resigned from his elected post as Lake County assessor less than a week ago.

Adams had undergone chemotherapy and returned to work earlier this year. His wife, Jean Shepherd, said Adams wanted to work until he absolutely couldn't work anymore.

His health started to deteriorate about two weeks ago when he had a relapse, she said. He spent his last days at his Schererville home.

"He went quietly and peacefully," she said. "I'm happy that he could go that way and that he wasn't in pain anymore."

Lake County Republican Party Chairman Dan Dernulc, who also serves on the Lake County Council, said he lost a friend in Adams, and the GOP lost an effective leader in the realm of county property assessments and taxes.

"He was a ray of light for our party and for the county, and we will continue to keep carrying his torch," Dernulc said.

...

http://www.nwitimes.com/news/local/lake/crown-point/former-lake-county-assessor-dies/article_545bb410-ee5a-5f86-af1e-39eadc99c573.html

Board Finds Lack of Documentation did not Prove Petitioner's Property was not her Primary Residence

Excerpts of the Board's Determination follow:

The Petitioner applied for the homestead deduction using the sales disclosure form as allowed by 50 IAC 24-4-3. The Petitioner testified that the subject property is her primary residence and she owns no other real property. A homestead deduction may be removed if it is determined the individual is no longer eligible for the deduction because the use of the property changed so that it is no longer the principal place of residence or the individual has the homestead deduction on another parcel. The Respondent, however, offered no substantial evidence that the subject property is not the Petitioner’s primary residence or that she owns other real property.

The Respondent focused on other things. The Respondent contends the Petitioner should not have received the homestead deduction because when she returned her homestead verification form in 2012, she did not have documents corroborating her residency, such as a valid Indiana driver’s license. The lack of documentation triggered a legitimate investigation. The Respondent’s current position assumes the lack of an Indiana driver’s license, tax return, and voter registration necessarily establishes lack of the required residency. But the Respondent cited no applicable authority for that position. For example, holding an Indiana driver’s license is not required for the homestead deduction per the Department of Local Government Finance release of November 13, 2012. The fact that the Bureau of Motor Vehicles requires a new resident to obtain an Indiana driver’s license within 60 days is not determinative. At most, the lack of this kind of normal documentation is a factor to be considered along with other evidence when determining a residency claim. Lack of that documentation is not conclusive.

Other than the lack of documentation (Indiana driver’s license, tax return, or voter registration), the Respondent did not submit evidence showing the Petitioner was not entitled to the homestead deduction. The Respondent did not submit probative evidence that any of the Petitioner’s testimony about residence is untrue or unreliable. The Respondent failed to prove the Petitioner did not use the property as her primary residence. The Respondent failed to prove the Petitioner had a homestead deduction for another property.

The Petitioner testified that the property is now a licensed bed and breakfast and she has two rooms available for rent when she is in residence, but 2012 was the first full-time year for the bed and breakfast. Based on the evidence presented, the Petitioner used the subject property as her primary residence in 2011. Therefore, the Respondent improperly removed the homestead deduction for taxes based on the 2011 assessment. As to the issue of a partial deduction, there is nothing in the record to show exactly when the Petitioner started her business or what specific portion of the property is affected. The Board, therefore, will not address that issue.

 

http://www.in.gov/ibtr/files/Charlesworth_08-007-11-3-5-00001.pdf

Times Reports Portage Grants Abatement for Carmeuse Expansion

From the Northwest Indiana Times:

The Portage City Council last week approved a tax abatement for the expansion of Carmeuse Lime and Stone.

The company is located at 165 Steel Drive in the Port of Indiana.

Site Operations Manager Ron Vessell said the company is planning on adding two new mills to the facility, which will expand its operational capacity  from 500,000 tons to 800,000 tons per year. The expansion is a $10 million investment.
...

While the company will not be hiring additional employees, said Vessell, the expansion will have a direct effect on the local economy.

Vessell said the company pays dockage fees at the Port of Indiana. With additional boats of limestone rock coming to the facility from upper Michigan, Carmeuse will pay additional fees. It will also require additional longshoremen to offload the product and additional security personnel will be needed. Also, the expansion will provide additional jobs for trucking companies.

The council approved a five-year abatement for personal property and a 10-year abatement for real estate.

http://www.nwitimes.com/news/local/porter/portage/portage-grants-tax-abatement-for-carmeuse-expansion/article_5054a01e-28ab-596e-95ab-bdf5e645a69e.html

Star-Press Reports Supporters of Muncie's Bus Referendum "Stepping on the Gas"

From the Muncie Star-Press:

Supporters of the Muncie Community Schools “bus” referendum are stepping on the gas when it comes to getting the word out.

A political action committee has been formed by residents. Bus drivers are planning a “yes” rally and an elementary school student is sharing her thoughts on keeping the buses running in her blog.

“We are picking up some momentum,” said MCS Supt. Tim Heller. “In the next few weeks, the community will see more yellow signs, billboards and the board members doing some door-to-door canvasing.”

The $3.3 million seven-year referendum would increase property taxes for local residents.

Without it, Muncie Community Schools officials say, school buses will stop running after this school year.

The vote is set for Nov. 5. Monday is the deadline to register to vote.

...

http://www.thestarpress.com/apps/pbcs.dll/article?AID=2013310060029

Riley: Voting for Referendum in Muncie will Increase Property Tax Burden of Properties that have Reached the Tax Cap

By Larry Riley in the Muncie Star-Press:

...

In the last week, I’ve run into two people who have told me similar stories about discussions they’ve had with friends of theirs whom they know to be intelligent.

They and their friends were talking about the upcoming referendum over raising Muncie Community Schools taxes. On Nov. 5, voters in Center Township will be eligible to cast a ballot either opposing or supporting increasing property taxes by 39.39 cents per $100 of assessed value of the property they own.

Each person said their friends, after talking over the issue, made a statement similar to this: “Well, if the referendum passes, it won’t matter to me because our property tax already is at the property tax cap.”

Buzz. Way wrong response.

We wouldn’t be having a referendum unless a pro-hike outcome was going to take local property taxes in Center Township past the tax caps, and levy additional taxes.

If you’re at the property tax cap, which 65.5 percent of homesteaded property owners in Center Township are (homesteaded property are homes in which the homeowner lives in the home), you’ll keep paying the maximum allowed by the caps and pay additional taxes.

WHAT ABOUT THE “AVERAGE” increase Muncie Community Schools officials keep talking about?

School folks are fond of saying the “average” home in the school district is assessed at $75,000 and the owners will pay an additional $65 annually in taxes with rate hike approval.

The mean assessed value of a homesteaded property in Center Township is actually $69,135, but the net assessed value on which property taxes are paid, thanks to a really generous homestead exemption, drops to $20,200. On this NAV, the additional taxes MCS wants would be $80 per year.

More than one-third of all properties by parcel in the township are homesteaded.

But what about the “average” non-homesteaded property, where people rent the homes they live in? Another 26 percent of property parcels in the township are in this category.

The “average” property in this category is assessed at $57,102, and because those property owners get far fewer exemptions, the NAV average is $56,965. The annual increase on these property owners would be $224.

If the owners don’t absorb any of the increase, average rent would increase by that much, about $20 a month. If owners are willing, say, to split the difference, rents would go up $112 per year.

The highest property tax-paying category is commercial/industrial property, and the “average” assessment for these owners is $108,000. This is a little deceiving, though, because the range is really large: from a few hundred dollars up to the Muncie Mall’s $22 million value.

How about a specific example?

Lowe’s Home Center off Clara Lane on Muncie’s northwest side, is almost exactly 1 percent of the total commercial/industrial property assessment total. The company enjoyed a terrific second quarter of the year, with sales up 10.3 percent over the second quarter of 2012.

If the referendum passes, Lowe’s will pay $33,721 in additional taxes.

Say the home center has a 10 percent margin (could be optimistic). To pay the additional taxes will require $337,000 in additional sales.

Given how well the year’s going, people might think, good, they can easily afford more taxes. Yet if the national chain wants to continue profit levels it currently runs, the layoffs of three part-time workers may be a better option than trying to sell one-third of a million more dollars worth of goods.

Center Township has more than 8,000 parcels of commercial/industrial properties, but 93 percent of the assessed value is in 1,400 parcels, and all those are at the property tax cap maximum.

...

See the full article here:

http://www.thestarpress.com/apps/pbcs.dll/article?AID=2013310060026&nclick_check=1

Times Reports Plans to Spend Lake County Income Tax Vary by Municipality

From the Northwest Indiana Times:

Lake County cities and towns are in line to receive revenue from the newly implemented county option income tax. But how local governments are preparing to handle those funds vary, according to a Times survey.

Some are taking a wait-and-see approach and not budgeting the money until officials have a better handle on how much their municipality will receive. Others may use the new revenue to offer employees raises. At least three municipalities said they will use the revenue to hire police or firefighters.

“Even though they implemented the tax, we still have the old adage of having something in your hand before you spend it,” East Chicago Mayor Anthony Copeland said. “It's kind of hard until you actually get the hard, true numbers of what this would total up to.”

Copeland said he has a wish list on how to budget the city's portion once the amount is realized, including hiring 13 police officers and eight firefighters.

Town leaders in Merrillville and Schererville are being equally cautious. The communities haven’t decided how they will use the income tax funding.

Merrillville Clerk-Treasurer Eugene Guernsey and Schererville Clerk-Treasurer Janice Malinowski said their municipalities won’t commit the revenue to specific expenses until they have a solid understanding of how much additional funding they will receive.

In Hammond, the city will use the approximately $7 million to $8 million in revenue anticipated from the tax to supplement its general fund.

Hammond Mayor Thomas McDermott Jr. told City Council members prior to a Sept. 23 meeting that while he believes in offering pay raises every year, the city must be sensitive to taxpayers.
...

St. John Town Manager Steve Kil said the increased revenue provided by the new income tax will allow the municipality to give town employees a raise, the first in several years. The town’s budget proposal contains a 3 percent raise for employees, Kil said.

In Hobart, the City Council has approved a 2 percent salary increase for city employees and elected officials for 2014, and if possible, revenue from the income tax could go to support that, City Councilman Matt Claussen said.

The 1.5 percent income tax is broken down as 1 percent of the tax going toward property tax reductions, 0.25 percent as a public safety tax and 0.25 percent in an economic development tax.
Lowell is planning to hire the town’s first paid firefighter using the income tax. Officials say the new position is necessary to deal with the lack of daytime responders.
...

Whiting plans to bring its police and fire departments up to normal operating levels with the income tax. The city will hire firefighters next year and likely add ranks to its police department in 2015, Whiting Mayor Joe Stahura said.

http://www.nwitimes.com/news/local/lake/plans-to-spend-income-tax-vary-by-municipality/article_a7f3662f-a690-5c7e-b5c4-1f7f2404d162.html

Wszolek: How to Appeal your Property Taxes in Porter County

By Joe Wszolek in the Northwest Indiana Times;

It’s that time of year again when leaves are turning color and Porter County Assessor Jon Snyder is mailing the now annual Form 11 property assessment notices. Their September arrival means our local governments can continue providing public safety and our quality of life – without having to borrow.

The date of mailing of the Form 11 creates the 45-day window to appeal the assessment. Missing the window misses the opportunity for this year.

Filing an appeal in Porter County can be done in person or online at www.PorterCountyAssessor.com -- when the window of opportunity is open. Appealing includes the possibility of you having the burden to prove your assessment is incorrect.

The first step is meeting with the assessor. Everywhere except Portage Township, this means the county assessor.

If the assessment increased by more than 5 percent, assuming no changes to the property have been made from the prior year, the assessor has the burden initially to prove the assessment is correct. If the assessor presents sufficient market-based evidence supporting the assessment, the burden then shifts to you to do the same that best supports your opinion.

If the change is 5 percent or less, assuming no changes to the property have been made from the prior year, the burden of proof falls first on you and then the assessor. In either case, the evidence needs to be market-based (a Uniform Standards of Professional Appraisal Practice compliant appraisal from a licensed appraiser; completed or attempted sales of the property; sales, attempted sales or assessments of comparable properties). A USPAP compliant appraisal is not required but is considered to be of the best pieces of evidence.

Income property is a bit more complex and can have its income and expenses considered as evidence as well.

If you resolve your appeal at this level, then all is done. If not, you have the option to file to have the three-member Porter County Property Tax Assessment Board of Appeals hear your appeal. Two members are appointed by the county commissioners and the third by the County Council. The board is independent from the assessor to ensure equity and fairness of assessments.

The PTABOA hearing is somewhat informal, but the market-based evidence requirement is the same. In every case, the presentation needs to include a walk-through of the evidence so the board can have a clear understanding of its comparability to ensure a reasonable judgment can be made.

The process might sound daunting, but no one should feel intimidated. The PTABOA members are committed to making fair and equitable decisions based on all credible evidence presented and current state codes and statutes.

There are additional appeal opportunities if you disagree with the PTABOA decision. Complete information about the appeal process can be found online at www.in.gov/dlgf/2508.htm.

http://www.nwitimes.com/news/opinion/columnists/guest-commentary/guest-commentary-how-you-can-appeal-your-property-tax-assessment/article_ae039510-8ed2-516a-ab4d-8591c6fde3a5.html

Supreme Court Denies Review of Hamilton County Assessor v. Allisonville Road Development

49T10-1204-TA-30 Hamilton County Assessor v. Allisonville Road Development, LLC Review Denied - All Justices concur.


http://www.in.gov/judiciary/cofc/2338.htm

Revenue Finds Taxpayer Provided Sufficient Documentation to Support Waiver of Underpayment and Negligence Penalties

Taxpayer is an Indiana company. In 2013, Taxpayer's accountant, on behalf of Taxpayer, timely filed the corporate income tax, IT-20 form, for the 2012 tax year.

The Indiana Department of Revenue ("Department") processed the 2012 return and determined that Taxpayer failed to withhold sufficient amount of estimated tax and to pay the full amount of income tax owed. As a result, the Department issued two (2) notices of proposed assessment, imposing additional tax, interest, underpayment penalty and negligence penalty.

...
 

Taxpayer disagreed and stated that its accountant had filed the corporate income tax, IT-20 forms, for previous tax years. In one of the previous year returns, Taxpayer's accountant elected to have the overpayment "applied to the following year's estimated tax account," but the Department issued a refund to Taxpayer instead without informing the accountant. Taxpayer further explained that its accountant calculated the estimated tax and filed the return based on the assumption that the previous overpayment was applied as credit for the following year. As a result, the accountant was not able to properly withhold the estimated tax and to file the income tax return for 2012 tax year.
 

A. Underpayment Penalty.
 

The Department imposed an underpayment penalty because Taxpayer failed to timely remit its estimated payments of adjusted gross income tax under IC § 6-3-4-4.1(d).
 

IC § 6-3-4-4.1(d) states:
 

The penalty prescribed by IC 6-8.1-10-2.1(b) shall be assessed by the department on corporations failing to make payments as required in subsection (c) or (f). However, no penalty shall be assessed as to any estimated payments of adjusted gross income tax which equal or exceed:

(1) the annualized income installment calculated under subsection (c); or

(2) twenty-five percent (25 [percent]) of the final tax liability for the taxpayer's previous taxable year.

In addition, the penalty as to any underpayment of tax on an estimated return shall only be assessed on the difference between the actual amount paid by the corporation on such estimated return and twenty-five percent (25 [percent]) of the corporation's final adjusted gross income tax liability for such taxable year.
 

Taxpayer has provided sufficient documentation demonstrating that the imposition of the underpayment is not appropriate. Thus, Taxpayer's protest of the imposition of underpayment penalty is sustained.
 

B. Negligence Penalty.
 

Pursuant to IC § 6-8.1-10-2.1(a), the Department may assess a ten (10) percent penalty if the taxpayer:
 

(1) fails to file a return for any of the listed taxes;

(2) 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;

(3) incurs, upon examination by the department, a deficiency that is due to negligence;

(4) fails to timely remit any tax held in trust for the state; or

(5) is required to make a payment by electronic funds transfer (as defined in IC 4-8.1-2-7), overnight courier, or personal delivery and the payment is not received by the department by the due date in funds acceptable to the department.
 

45 IAC 15-11-2(b) further states:
 

"Negligence" on behalf of a taxpayer is defined as the failure to use such reasonable care, caution, or diligence as would be expected of an ordinary reasonable taxpayer. Negligence would result from a taxpayer's carelessness, thoughtlessness, disregard or inattention to duties placed upon the taxpayer by the Indiana Code or department regulations. Ignorance of the listed tax laws, rules and/or regulations is treated as negligence. Further, failure to read and follow instructions provided by the department is treated as negligence. Negligence shall be determined on a case by case basis according to the facts and circumstances of each taxpayer.
 

The Department may waive a penalty as provided in 45 IAC 15-11-2(c), in part, as follows:
 

The department shall waive the negligence penalty imposed under IC 6-8.1-10-1 if the taxpayer affirmatively establishes that the failure to file a return, pay the full amount of tax due, timely remit tax held in trust, or pay a deficiency was due to reasonable cause and not due to negligence. In order to establish reasonable cause, the taxpayer must demonstrate that it exercised ordinary business care and prudence in carrying out or failing to carry out a duty giving rise to the penalty imposed under this section. Factors which may be considered in determining reasonable cause include, but are not limited to:

(1) the nature of the tax involved;

(2) judicial precedents set by Indiana courts;

(3) judicial precedents established in jurisdictions outside Indiana;

(4) published department instructions, information bulletins, letters of findings, rulings, letters of advice, etc.;

(5) previous audits or letters of findings concerning the issue and taxpayer involved in the penalty assessment.
 

Reasonable cause is a fact sensitive question and thus will be dealt with according to the particular facts and circumstances of each case.
 

Upon review, Taxpayer has provided sufficient documentation to demonstrate that it had reasonable cause for penalty abatement. Thus, Taxpayer's protest of the imposition of negligence penalty is sustained.

 

http://www.in.gov/legislative/iac/20130925-IR-045130427NRA.xml.html