Tax Court refuses to reweigh the evidence, affirming the Indiana Board of Tax Review’s final determinations of land value for a gas station and convenience store

Tax Court refuses to reweigh the evidence, affirming the Indiana Board of Tax Review’s final determinations of land value for a gas station and convenience store

In a pair of related decisions issued July 2, 2015, the Indiana Tax Court once again emphasized that it will not reweigh the evidence on appeal from the final determinations of the Indiana Board of Tax Review.

Assessor’s appraisal is more persuasive for 2010 assessment.  In Kooshtard Property I, LLC, v. Monroe County Assessor, the Court affirmed the $1,050,000 assessment of land supporting a gas station and convenience store for the March 1, 2010 assessment date.  Before the Indiana Board, Taxpayer submitted an appraisal prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), indicating that the three acres should be valued at $300,000 based on comparable sales.  The Assessor also submitted an appraisal prepared according to USPAP.  Her appraisal valued the entire parcel (land and improvements) at $1.5 Million ($1,050,0000 for land and $450,000 for improvements).  The Assessor’s appraiser further testified that sales used in Taxpayer’s appraisal were unreliable.  The Indiana Board found this testimony to be persuasive, and its final determination adopted the Assessor’s land value.

On appeal, Taxpayer argued that the Assessor’s appraisal was not probative because (1) it failed to adjust for properties sold pursuant to land contracts and (2) it included the value of personal property in valuing the land.  The Court explained:  “Kooshtard’s arguments regarding the probative value of the Assessor’s Appraisal invite this Court to reweigh evidence; that task, however, is not within this Court’s prerogative on appeal absent an abuse of discretion.”  Slip op. at 4.  An abuse of discretion occurs when the “final determination is clearly against the logic and effect of the facts and circumstances before it or when it misinterprets the law.”  Id.  That was not the case here.  The Assessor’s appraiser testified that he did not have to adjust the land contract sales. Moreover, while three of the appraiser’s sales included personal property, the Indiana Board concluded that his analysis was more comprehensive than Taxpayer’s appraisal.  The Assessor’s appraiser had also “persuasively challenged the reliability of Kooshtard’s Appraisal, while Kooshtard’s appraiser did not challenge the Assessor’s Appraisal in any manner whatsoever.”  Slip op. at 5.  (The Court also rejected two arguments raised by Taxpayer for the first time on appeal, see Slip op. at 4 n.4.)  The Tax Court found that the Indiana Board did not abuse its discretion.  Slip op. at 5-6.  Finally, the Court held that Taxpayer failed to show that the Board’s final determination was not supported by substantial evidence.  Slip op. at 6.

Turnabout is fair play – Taxpayer’s 2006 appraisal carries the day for 2008, 2009 and 2011 assessments.  In a second opinion involving the same property and same parties for the 2008, 2009, and 2011 assessments, the Tax Court affirmed a final determination reducing the land’s value from $1.2 Million to $300,000 for each year.  Taxpayer supported its reduction before the Indiana Board with a USPAP-compliant appraisal that relied on four comparable sales.  The Assessor objected to the appraisal, asserting that it was for the wrong valuation date (March 1, 2006) and that the adjustments to the comparable sales were “extreme.”  Regardless of the appraisal’s flaws, however, the Board found the appraisal to be the best indication of value.

On appeal to the Tax Court, the Assessor claimed that the Board did not act impartially because the identify of the witness — an appraiser (vs. an assessor) — trumped the quality of the evidence (in this case, the assessor’s purportedly better sales).  Not so, the Court found:   “The Indiana Board’s final determination reveals . . . that it acted as an impartial adjudicator because it reviewed and weighed the quality of both parties’ evidentiary presentations.”  Slip op. at 5.  The Board was “troubled” by parts of the appraisal.  Certain evidence did sufficiently link the appraisal’s 2006 valuation date to the later assessment dates at issue, including the Assessor’s property record cards and statement regarding the stability of land values.  Furthermore, the Assessor failed to rebut the adjustments applied by the appraiser.  The Assessor’s sales did not support her values, because she did not relate them to the valuation dates and did not show that the sold properties were comparable to the contested land.  The Tax Court would not substitute its judgment for that of the Board. Slip op. at 5.

The Assessor further asserted that the Board’s final determination was arbitrary, capricious, and not supported by substantial or reliable evidence.  She argued that the Indiana Board improperly used her evidence regarding the stability of land values against her.  The Tax Court explained that the administrative record supported the Indiana Board’s finding regarding the stability of land values; its decision was “not simply favoritism for an appraiser’s work product as the Assessor has alleged.”  Slip op. at 7.  Thus, the Court would not conclude that the Board’s final determination was arbitrary, capricious, or unsupported by substantial or reliable evidence.









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