Proceed with Caution, Part XIII (March 2014): Legislature expands Indiana’s burden of proof statute for property tax appeals

Proceed with Caution, Part XIII (March 2014): Legislature expands Indiana’s burden of proof statute for property tax appeals

The Indiana General Assembly last week passed legislation amending the burden of proof statute in property tax appeals.  The statute, Ind. Code § 6-1.1-15-17.2, assigns the burden of proof to the assessor where the disputed property’s assessment has increased by more than 5% over the prior year’s value.  The law has been interpreted by the Tax Court and Indiana Board of Tax Review several times since 2011, when a slightly different version first became law.  If signed into law by the Governor, the legislation (Senate Enrolled Act 266) will become effective immediately and apply to all pending appeals.  The act modifies or clarifies the law as follows:

  • In determining whether an assessment has increased by more than 5%, the assessment to rely upon for the prior assessment year is the original assessment or, if applicable, the assessment: (1) as last corrected by an assessing official; (2) as stipulated or settled by the taxpayer and the assessing official; or (3) as determined by the reviewing authority (the county board or PTABOA, the Indiana Board of Tax Review, the Indiana Tax Court or Supreme Court).
  • If the assessor fails to meet her burden of proof, the taxpayer may introduce evidence to prove the property’s correct assessed value.  If neither party submits evidence proving the property’s value, the assessment reverts to that established for the prior tax year as last corrected by the assessing official, by stipulation or settlement, or as determined by the reviewing authority.
  • Burden-shifting does not apply where the assessment under appeal is based on structural improvements, zoning or uses that were not considered in the assessment for the prior tax year.
  • If the prior year’s value was reduced on appeal by the assessor or reviewing authority, the assessor has the burden of proof regardless of the amount of increase for the property’s gross assessed value.  (This is not the case where the property’s value was determined under the income approach.)

These changes will help to protect taxpayers by compelling assessors to support their valuations of properties that have received substantial increases.

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