Taxing Issues - Property Tax Blog » Indiana Property Tax

Indiana Property Tax Assessment and Valuation Rules Amended

Brett Harrington — Thu, 01 Apr 2010 14:55:54 +0000

Indiana has made a long (and I mean long) list of changes to the to property tax valuation and assessment procedures and requirements.

LSA Document #09-576(F) calls for changes to personal property reporting and valuation, obsolescence, township and county assessor duties and more.

Persuasive Obsolescence Arguments Win Property Tax Appeals

Brett Harrington — Tue, 30 Mar 2010 14:34:52 +0000

In the recently decided case of Stinson v. Trimas Fasteners, Inc. the Tax Court of Indiana affirmed the decision of the Indiana Board of Tax Review finding in favor of the taxpayer’s claim of overvaluation for property tax purposes.

Trimas initially challenged the 2002 assessment of their manufacturing facility. The PTABOA reduced the original assessment of $7,762,600 to $7,212,300. Trimas appealed the decision to the Indiana Board.

Before the Indiana Board Trimas offered an appraisal estimating the value at $2,960,000. The assessor, on the other hand, offered an appraisal estimating the value at $8,000,000. The large discrepancy in values resulted from, you guessed it, obsolescence.

The Indiana Board found in favor of Trimas and reduced the assessment to $2,960,000. The assessor appealed to the Tax Court.

At the heart of the case was the selection of the comparable sales used to value the subject property. Trimas’s expert relied on sales of vacant manufacturing properties, whereas the assessor relied on sales of occupied, owner/user manufacturing facilities. Then came the testimony. Trimas’s expert testified that:

Trimas’s property suffered from external obsolescence because a loss of manufacturing jobs and companies within Indiana during the relevant time period saturated the market with manufacturing facilities for sale; that market, however, lacked buyers. (See Cert. Admin. R. at 273-74, 305, 827-28.) As a result, the sales prices for these facilities were low, particularly when compared to their respective replacement costs (i.e., the amount it would cost to construct facilities with similar utility). That market trend, noted Mitchell, affected what Trimas’s property would itself garner on the market: “[w]hen there’s an oversupply and a lack of demand, to remain competitive, if your neighbor drops their price, you have to drop your price.” (Cert. Admin. R. at 828.)

The assessor claimed that vacant properties are not comparable to occupied properties and that the claim of external obsolescence was “absurd” because the comps relied upon were vacant and the Trimas property was occupied.

In it’s decision the Tax Court stated:

the Assessor misunderstands the concept of market value-in-use on its most basic level. Generally speaking, market value-in-use, as determined by objectively verifiable market data, is the value of a property for its use, not the value of its use.

And there you have it. The taxpayer’s team was able to convince the deciding bodies that obsolescence existed. The assessor’s arguments, obviously, didn’t go over so well.

Marion County, IN Property Tax Bills Delayed (Again)

Brett Harrington — Tue, 17 Mar 2009 08:49:02 +0000

Marion County has announced that the mailing of final 2007 tax bills will not occur until sometime this summer. These bills will serve as the final 2007 (pay 2008) bills and will reconcile the difference between the estimated first half bills and the bills reflecting the new 2007 values. These bills will be based on a valuation date of January 1, 2006, meaning the value will be based on market activity for 2004 & 2005. This is going to be a tough sell to taxpayers in the midst of the current economy.

Normally, 2007 taxes would have been paid in May and November of 2008. However, due to the state ordering the county to conduct a reasssessment for 2006 and a computer system snafu, everything has been pushed back. Right now, Marion County is indicating that the 2007 bills will be mailed in June or July and will be due within 30 days. The hope is to have 2008 bills sent a few months later and 2009 (pay 2010) bills to resume a normal schedule of being due in May and November of 2010. It sure will be interesting to see how taxpayers react to being required to pay 2 1/2 years worth of tax bills within such a short time frame.