Indiana Board of Tax Review:  Solar Electric Generating Facilities Should be Assessed as Utilities for Property Tax Purposes

Indiana Board of Tax Review: Solar Electric Generating Facilities Should be Assessed as Utilities for Property Tax Purposes

On February 14, 2015, the Indiana Board of Tax Review in eight appeals by the owners of four solar electric generating facilities ruled for the 2013 and 2014 tax years that the solar companies should be centrally assessed by the Indiana Department of Local Government Finance as utilities.  The solar companies sold electricity to a public utility through a feed-in tariff program. The companies argued that they were not traditional public utilities and should not be assessed by the Department.  While that may be true, the Board noted that “[e]ach company which is engaged in the business of selling or distributing electricity, gas, steam, or water” shall be taxed as a utility.  (Page 4, ¶ 8) (citing I.C. § 6-1.1-8-3(a).)  That definition is “intended to apply to the property of a wider variety of companies that are not necessarily similar to a traditional public utility company.”  Id.  Because the Department’s authority under the statute “expressly applies to the property of a company that sells electricity,” the solar companies were assessable by the Department. Id.

Nevertheless, a 2013 amendment allows companies “participating . . . in a feed-in tariff program” to file a personal property tax return for its property with the local assessor.  (Page 4, ¶ 9) (citing I.C. § 6-1.1-8-3(c)(7).)  Following the amendment, “the company has the option to file locally” but the “default provision is that the company files with the Department.”  (Page 5, ¶ 10.)  The amendment was effective after the 2013 assessment and filing dates; the Department therefore had authority to assess the solar companies for 2013.  (Page 5, ¶ 11.)  For 2014, the companies filed returns both with the Department and the local assessors, but the Department had issued its tentative assessments before the local returns were filed.  Accordingly, the Department had authority to assess the companies.  (Page 5, ¶ 12.)  Finally, because the solar companies failed to show that the Department’s assessments were erroneous as a matter of law, the assessments were affirmed. (Page 6, ¶¶ 13-15.)

The Board’s ruling can be viewed here.

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