No Indiana property tax exemption for land encumbered by flowage easement

No Indiana property tax exemption for land encumbered by flowage easement

On June 29th, the Indiana Tax Court affirmed the Indiana Board of Tax Review’s ruling that land encumbered by a flowage easement did not qualify for a property tax exemption.  In Hatke v. Parke County Assessor, taxpayers owned a home on .66 acres of lakefront land in Rockville, Indiana.  More than half the acreage was subject to a United States Army Corps of Engineers’ flowage easement.  When needed, the area could be flooded to help control water levels.  Taxpayers needed permission to build any structure on the area (other than wire fencing).

For the January 1, 2019 assessment date, Taxpayers filed an exemption application, claiming the land should be exempt because the federal government controlled use of it. The IBTR found that no provision in Indiana law permitted an exemption for a flowage easement.  In addition, the IBTR concluded that Taxpayers did not show that they owned, occupied, and used the land for educational, literary, scientific, religious, or charitable purposes, which would qualify for an exemption under Indiana Code § 6-1.1-10-16(a). Taxpayers presented no evidence supporting an exempt use of the property, so the Court affirmed the IBTR’s denial.

Taxpayers appear to have really intended to make a valuation argument.  But no evidence supported that contention either.

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