Proceed with Caution:  Depending on the Facts of the Property and the Assessment, Taxpayer or Assessor May have the Burden of Proof for Indiana Property Tax Appeals

Proceed with Caution: Depending on the Facts of the Property and the Assessment, Taxpayer or Assessor May have the Burden of Proof for Indiana Property Tax Appeals

Brent Auberry discusses recent Indiana Board of Tax Review rulings regarding the burden of proof in property tax appeals.

Last week I spoke at a seminar regarding recent developments involving Indiana property tax appeal procedures.  Following are summaries of various rulings of the Indiana Board of Tax Review (“IBTR”) involving the burden of proof in property tax appeals.  The following addresses two statutes — Ind. Code §§ 6-1.1-15-17.1 and -17.2, which dictate which party (the Taxpayer or the Assessor) has the burden. Generally, the Assessor has the burden of proof when he or she changes the classification of land under Section 17.1.  In addition, the Assessor typically has the burden of proof if the property’s assessment has increased by more than 5% over the last assessment date but the subject property’s physical status or use has not materially changed year-over-year.  If the Taxpayer successfully appealed the assessment for the immediately prior year, any increase in value (not just 5%+) shifts the burden of proof to the Assessor.  The following rulings analyze and apply these two provisions.

1. New construction. Kappa Investments, LLC v. Shelby County Assessor, Pet. Nos. 73-002-11-1-4-82434-15 et seq. (10/2/2018) (2011, 2012, 2013 tax years). Assessor asserted that the burden of proof should not shift under Ind. Code § 6-1.1-15-17.2 because improvements were constructed at the subject property between the March 1, 2010 and 2011 assessment dates. Taxpayer conceded it had the burden of proof, so IBTR concluded the burden of proof remained with Taxpayer.

2. IBTR reverses ALJ’s determination due to prior year’s successful appeal. Hoovler v. Clinton County Assessor, Pet. No. 12-012-15-1-1-00890-16 (10/9/18) (2015 tax year). ALJ initially ruled that Taxpayer had the burden of proof. In 2017, the IBTR issued a final determination lowering the subject property’s 2014 assessment. “Because this was a successful appeal, any increase in assessment causes the burden to shift.” The 2015 assessment increased $1,100 above the finally determined 2014 assessment. IBTR concluded that Assessor, in fact, had the burden of proof.

3. Failing to show change of use for land, Assessor had burden of proof on appeal. Russell Family Partnership v. Bartholomew County Assessor, Pet. Nos. 03-011-15-1-5-00305-15 et seq. (10/16/18) (2015, 2016, 2017 tax years). Assessor conceded that the assessment increased by more than 5% from the March 1, 2014 to 2015 assessments. But Assessor claimed the change was due to the reclassification of the properties’ land classification from agricultural to excessive residential. The burden-shifting provision does not apply if the new assessment is based on a use that was not considered in the prior year’s assessment. Ind. Code § 6-1.1-15-17.2(c)(3). But the Assessor failed to show that there was change of the properties’ actual use.

Assessor had burden to show change of land classification was correct. In addition, Assessor under Ind. Code § 6-1.1-15-17.1(2) had the burden to show the change in land classification was correct.

Assessor had the burden of proof for the March 1, 2015 assessment. Assigning the burden for the 2016 and 2017 years depends on the IBTR’s findings for 2015.

4. Burden-shifting statute applies to contested assessments – not homestead deduction challenges. Sickmeier v. Hamilton County Assessor, Pet. Nos. 29-007-14-1-5-00410-18 et seq. (12/10/18) (2014, 2015, 2016 tax years). Taxpayer requested application of the homestead deduction and mortgage deduction. “Because the Petitioner did not challenge the current assessments of the subject property, the burden shifting provisions of Ind. Code § 6-1.1-15-17.2 do not apply.”

5. Burden-shifting statute does not apply to uniformity claims. 546 Investments, LLC v. Bartholomew County Assessor, Pet. Nos. 03-005-16-1-5-01514-17 et seq. (12/27/17) (2016 and 2017 tax years). Taxpayer “raises a claim based on a lack of uniformity and equity in assessments. The burden-shifting rule under Ind. Code § 6-1.1-15-17.2 does not apply to such claims.” (citing Thorsness v. Porter County Assessor, 3 N.E.3d 49, 52 (Ind. Tax Ct. 2014)).

6. Assessor failed to meet his burden, but IBTR applied value conceded by Taxpayer. Bishop v. Bartholomew County Assessor, Pet. Nos. 03-005-15-1-5-00342-15 et seq. (1/7/19) (2015, 2016, 2017 tax years). Assessor had, and failed to meet, his burden of proof for the March 1, 2015 assessment date. Therefore, the 2015 assessment under the burden-shifting statute would be reduced to its 2014 assessment of $340,500. However, Taxpayer requested a 2015 assessment of $350,500. The Board accepted and applied this concession.

7. Burden of proof switched during hearing based on prior successful appeal. Geroulis v. Porter County Assessor, Pet. No. 64-09-19-379-008.000-019 (9/6/18) (2016 tax year). ALJ made a preliminary determination that Taxpayers had the burden of proof. But during the hearing ALJ realized that Taxpayers had successfully appealed their 2015 assessment and therefore told the parties that Assessor had the burden of proof.

8. Assessor re-classified land from agricultural to residential, causing a substantial increase year-over-year; assessor had burden of proof under two statutes. Susan Mudge-Trustee/Trust v. Bartholomew County Assessor, Pet. No. 03-001-17-1-5-01515-17 (3/11/19) (2017 tax year). The assessment of Taxpayer’s land increased from $8000 to $101,100, after Assessor changed the land’s classification. Therefore, Assessor had the burden of proof under both Ind. Code §§ 6-1.1-15-17.1 (changed land classification) and -17.2 (5+% increase).

The IBTR’s ruling can be viewed here.

These materials are intended for general information purposes only and are not to be considered legal or tax advice. The information herein should not be acted upon without appropriate professional advice.

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