Declining to reweigh the evidence, Indiana Tax Court affirms assessments of CVS store based on cost approach

Declining to reweigh the evidence, Indiana Tax Court affirms assessments of CVS store based on cost approach

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The Indiana Tax Court declined to reweigh the evidence in affirming the assessments for a store used as a CVS.

Name: CVS Corporation v. Elkhart County Assessor

Date Issued: December 9, 2019

Property Type: Retail pharmacy

Assessment Years: 2012 – 2015

Point of Interest: Indiana Tax Court would not reweigh the record evidence, which supported the Indiana Board of Tax Review’s conclusion of value based solely on the cost approach without adjustment for external obsolescence.

Synopsis: CVS challenged the assessments of its nearly 11,000 SF retail pharmacy, built in 2004 and situated on 1.26 acres of land. The County Assessor had valued the property at a range of approximately $1 Million to $1.1 Million for the four contested assessment dates. At the consolidated administrative hearing before the Indiana Board of Tax Review, both parties presented USPAP-compliant appraisals; both appraisers applied all three approaches to value but assigned weight to them differently. For CVS, its appraiser gave most weight to the sales and income approaches, concluding to a range of $800,000 to $890,000. For the Assessor, her appraiser assigned equal weight to each of the three approaches, opining on a value for each year of about $1.8 Million.

The Indiana Board applied the cost approach, without obsolescence. The Indiana Board concluded that the cost approach – absent any adjustment for economic obsolescence – was the most persuasive indication of value for this eight- to eleven-year-old store. The Indiana Board disregarded both appraisers’ sales and income approaches completely, finding them too flawed, and concluded to values of more than $1.2 Million for each year.

The Court will not reweigh the evidence. The Tax Court noted that the Indiana Board is “required to adopt a value based exclusively on evidence in the administrative record,” but it is not obligated to “adopt the same weight afforded to the evidence” that the appraisers applied in their respective reports. The Court further explained that the record evidence supported the Indiana Board’s rejection of external obsolescence. The appraiser for CVS had testified in “vague generalities” about the subject property’s “softer market.” The Assessor’s appraiser, however, presented evidence regarding growth in population, employment and gross domestic product in the local area during the years at issue. CVS was asking the Court to reweigh the record evidence in its favor, something the Court cannot do “absent a showing that the Indiana Board has abused its discretion.” Concluding that the Indiana Board had acted within its statutory authority, the Court affirmed the final determination.

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