A tale of two assessments: Indiana Board of Tax Review clarifies the new “5% rule” shifting the burden of proof for property tax appeals

It was the best of assessments, it was the worst of assessments.  At least from the perspective of the owners of a home fronting a lake channel, the Indiana Board of Tax Review’s decision on April 24, 2012 was the best of assessments, as the Board lowered the property’s assessed value from $183,200 to $136,000 for the March 1, 2007 assessment date based on the owners’ appraisal.   But in achieving this positive outcome, the owners lost their argument that the assessor had the initial burden on appeal to prove the assessment was valid.  In other words, the owners asserted that it was the duty of the assessor to show first that the assessment was right, not their duty to prove that it was wrong.  If the assessor met her initial burden, only then would the owners have to prove the property was over assessed.  (As noted in a previous post, the Board has determined that the taxpayer on appeal has the burden to prove a value that is lower than the prior year’s assessment, even if the assessor has the initial burden to show the assessment under appeal is correct.)

The Board disagreed, relying on a comparison of two (from the taxpayer’s perspective) “worse” assessments:  the assessor’s March 1, 2006 assessment of the property at $203,400 and the Steuben County Board’s (or PTABOA’s) 2007 assessment at $183,200, which was the value on appeal to the Indiana Board.  The Board noted that the owners “claim that Ind. Code § 6-1.1-15-17, which was originally enacted effective July 1, 2011 and which has since [because of the need for a technical correction] been repealed and re-enacted as Ind. Code § 6-1.1-15-17.2, shifts the burden of proof to the Assessor in these appeals.”  (Page 7, ¶ 14.)  That provision states:

This section applies to any review or appeal of an assessment under this chapter if the assessment that is the subject of the review or appeal increased the assessed value of the assessed property by more than five percent (5%) over the assessed value determined by the county assessor or township assessor (if any) for the immediately preceding assessment date for the same property. The county assessor or township assessor making the assessment has the burden of proving that the assessment is correct in any review or appeal under this chapter and in any appeals taken to the Indiana board of tax review or to the Indiana tax court.

Ind. Code § 6-1.1-15-17.2 (emphasis added).  The Board held that the owners had the initial burden to show on appeal that the 2007 assessment was erroneous, reasoning:   

. . . .  [T]he starting point for the year-to-year comparison required by Ind. Code § 6-1.1-15-17.2 is the prior year’s assessment (in this case 2006) determined by the township or county assessor, not the PTABOA.  That is then judged against the assessment that is the subject of review for the second year (in this case, 2007).  And in Board proceedings, the assessment under review is the assessment determined by the PTABOA.  As already explained, the PTABOA’s determination for 2007 actually decreased from the county or township assessor’s assessment for 2006.  So Ind. Code § 6-1.1-15-17.2 does not operate to shift the burden of proof to the Assessor in these appeals.” 

(Pages 7-8, ¶ 17.)  The owners did not prevail on this procedural, burden-shifting point; but, my guess is that they consider the Board’s final determination to be one of wisdom, not of foolishness.  

http://1.usa.gov/JkTzQ7

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