Source: http://indianapropertytaxreporter.blogspot.com/2012/06/
Timestamp: 2017-12-12 10:15:30
Document Index: 141211302

Matched Legal Cases: ['§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6']

Indiana Tax Reporter: June 2012
More on Delaware Deciding Significant Issues of Indiana Tax Law: Bankruptcy Court Lowers Assessed Value of Majestic Star Casino
On September 11, 2011, the Delaware Bankruptcy Court issued a decision on the Majestic Star's 2006-2011 Indiana Property Tax Assessment Appeals:
The task for the Court is to determine for ad valorem purposes, the value of two riverboat casinos located in Lake County, Indiana.
For the March 1, 2002 through March 1, 2005 assessment dates, the Vessels were assessed at a combined value of approximately $39 million. (Hearing Stip. para. 19.) For the March 1, 2006 assessment date, the Calumet Township Assessor (the “Assessor”) increased the combined assessed value of the Vessels to approximately $110 million. (Id. para 20.) For the March 1, 2007, and March 1, 2010, assessment dates, the Vessels were assessed in the aggregate amounts of approximately $109 million and $100 million respectively. (id. para 21, 24).
The parties subsequently agreed to limit this proceeding to a determination of the assessed value of the Vessels for Indiana real property tax purposes as of the March 1, 2007, and March 1, 2010 assessment dates. (Am. and Restated First Stip. ¶ 2.) The parties have stipulated that these values will be used to determine the assessed values of the Vessels as of the other assessment dates in dispute, based on an agreed-upon formula. (Id. para 3.) The other assessment dates in dispute are March 1, 2006, March 1, 2008, March 1, 2009, and March 1, 2011.
At trial, both parties presented evidence and introduced appraisals that had been performed in the relevant time period for various purposes, none in connection with the instant litigation. As discussed below, these appraisals varied in the purposes for which they were performed and the assets that they valued. Of the various appraisals, the Court finds that the most probative appraisals are those that valued only the assets that are at issue here—the Vessels.
The Court has concluded on the bases of the facts and law that the County did not meet its burden of impeaching or rebutting the affirmative opinion of value offered by the Debtors. The evidence clearly, precisely and overwhelmingly establishes that Mr. Herman’s opinion as to the true tax value of the Vessels is reliable. The evidence also establishes that the opinions of value offered by the County—through both Mr. Kelly and Ms. Owen—were not reliable and the County failed to meet its burden. Accordingly, the Court concludes that the proper assessed value for the MSC I vessel is $6,290,000 for the March 1, 2007 assessment date and $3,500,000 for the March 1, 2010 assessment date; and the proper assessed value for the MSC II vessel is $5,580,000 for the March, 2007 assessment date and $3,200,000 for the March 1, 2010 assessment date.
http://www.deb.uscourts.gov/Opinions/2011/KG20110913_09-14136.pdf
For the Delaware Bankruptcy Court's determination on Indianapolis Downs' income tax liability, see this post:
http://indianapropertytaxreporter.blogspot.com/2012/06/delaware-deciding-significant-issues-of.html
Indiana's medical device and orthopedics industry will continue to fight against a tax on its products after the U.S. Supreme Court upheld the tax as part of a broader affirmation of the federal health care overhaul.
“Now that we know the Affordable Care Act will not be overturned, the Senate needs to follow the House’s lead and act in the best interests of American patients and American companies who produce these vital medical technologies. Repealing the tax, which is on top line revenues of all companies that sell medical devices in the U.S., is a critical imperative that saves jobs and drives continued medical treatment innovation here at home,” said Steve Ferguson, chairman of the board of Cook Group, the parent company of Bloomington-based Cook Medical.
"For companies like Cook it will amount to an additional 10 to 15 percent tax on top of state taxes of up to 8 percent and federal taxes that can crest at 35 percent, the highest income tax in the world," Ferguson said.
Ferguson also said that the tax will make the industry less competitive internationally and harm patients, "who will be deprived of breakthroughs, research and development, suppliers and local businesses in thousands of communities. "
Bill Kolter, the vice president of government affairs at Warsaw-based Biomet concurred with Ferguson, saying "we believe that the medical device tax is misdirected policy."
"It is contrary to the government goal of promoting well paying jobs, American leadership in manufacturing and the promotion of technological advances that deliver cost effective care," he said.
Kolter warned that the tax could cause small medical device companies to go to bankrupt because it applies to sales, not profits.
The industry has been fighting to repeal the tax through the legislative process.
The House of Representatives has repealed the tax. Both Kolter and Ferguson urged the Senate to repeal the tax as well.
There are at least 90 medical device companies in Indiana employing almost 25,000 people, according to the Indiana Chamber of Commerce.
AdvaMed, a trade association representing the medical device industry, released a statement saying it will continue to work with legislators to repeal the tax.
http://www.indystar.com/apps/pbcs.dll/article?AID=2012206280349
Editorial Reminds Homeowners to Send in Homestead Deduction Form
By Larry DeBoers in the Northwest Indiana Times:
A homestead is defined as an owner-occupied primary residence. Homeowners can only have one primary residence, so they can qualify for only one set of homestead tax breaks. Second homes or vacation homes are classified as non-homestead residential property, and they don't get the tax breaks.
The state suspects that some people are getting homestead deductions and credits they aren't supposed to get. People who own more than one home, sometimes in more than one county, may be getting homestead tax breaks on more than one house.
To catch these errors, the state has authorized counties to send homestead verification forms to homeowners. These are pink forms that were included with tax bills. The form asks homeowners to show that their house is eligible for homestead tax breaks. The counties will use this information to look for people who are claiming more than one homestead. The state's Department of Local Government Finance has a lot of information about these forms on its website.
The forms first went out a couple of years ago. For taxes in 2013, county auditors can use this information to cancel the homestead status for homes that don't qualify. People who have not submitted their forms can lose their homestead tax breaks, too.
A lot of people don't bother with forms, but ignoring this form could cost them their homestead deductions and credits.
Tax rates could be affected if a lot of homeowners don't submit their forms. Without those big homestead deductions, a county's total assessed value would be higher. Tax rates would then be set lower to raise the necessary revenue. Qualified homestead owners would pay less in taxes at those lower rates. So would owners of rental housing, farmland and businesses. Counties with homestead credits funded by local income taxes would provide more tax relief to fewer homesteads. Credit rates would be set higher. Qualified homestead owners would see even lower tax bills.
What's the chaos in store for 2013? Some very unhappy homeowners appealing their tax bills. Tax rates set too low, and homestead credits set too high. Local governments struggling to handle revenue shortfalls.
It doesn't have to be, though. All we have to do is send in a form.
http://www.nwitimes.com/news/opinion/guest-commentary/larry-deboer-to-stop-property-tax-chaos-send-in-a/article_81e10711-8aca-5819-8c4d-938fa31feb38.html
More on Delaware Deciding Significant Issues of Indiana Tax Law; Costs to Indiana in the Millions
In its "General Fund Forecast," the state estimated the amount of the tax refund owed to the Indianapolis Downs casino and the intervening Hoosier Park under the Delaware Bankruptcy Court's ruling that the graduated tax does not extend to the funds required to be set aside for other entities in the 15% set aside to be approximately $65 million.
http://www.in.gov/sba/files/rev_forecast_20111214_presentation.pdf
A post on the Delaware Tax Court's income tax determination for the Indianapolis Downs casino can be found here:
Posted by Indiana Tax Reporter at 5:40 PM
Tax Court to Hear One Oral Argument in July
Indianapolis Public Transportation Corporation v. Department of Local Government Finance (View)
Monday, July 09, 2012 1:30 PM - 2:30 PM
This is a hearing on Respondent's Motion for Judgment on the Pleadings.
The arguments previously scheduled in AE Outfitters Retail Co. and Ray's Trash Service have been cancelled:
1:30 PM - 2:30 PM (Cancelled) [TAX] AE Outfitters Retail Co. v. Indiana Department of State Revenue
10:00 AM - 11:00 AM (Cancelled) [TAX] Ray's Trash Service, Inc. v. Indiana Department of State Revenue
http://www.in.gov/activecalendar/EventList.aspx?fromdate=6%2f1%2f2012&todate=6%2f30%2f2012&display=Month&view=DateTime
Posted by Indiana Tax Reporter at 5:20 PM
Elkhart Completes its Annual Abatement Review; 18 of 19 Companies Found to be In Compliance
All but one of 19 tax abatement renewals were approved by the Elkhart City Council this week.
The only company not to win approval of the council was Dynamic Metals, which moved out of the city limits to another nearby location last year.
The council voted Thursday to find the company not in compliance with the agreement and set a public hearing for July 16 to formally vote on whether to deny benefits, said Barkley Garrett, director of economic development for the city.
Company representatives did not attend Thursday’s meeting.
Garrett said he believes the renewal paperwork was filed in error by the company and believes the council will vote to deny benefits when it meets July 16.
Garrett said he believes the renewal form, known as a CF-1, was filled out by the company not realizing it would no longer qualify since the company is no longer located in the city.
The company had been at 1937 Sterling Ave., but has since moved to Highland Boulevard just north of the city.
The tax abatement agreement was established in 2007.
Thursday’s meeting was the second of two meetings called by the council to review the renewals.
The council on Thursday approved abatement renewals for the following companies: Indratech of Indiana, Elkhart Senior Housing, Roosevelt Center, Kem Krest and Indiana Circle and KIK Custom Products.
The council approved 12 other existing agreements on Monday night.
http://www.etruth.com/article/20120630/NEWS01/706309954/0/FRONTPAGE
Posted by Indiana Tax Reporter at 5:12 PM
Porter County Rejects Property Tax Amnesty Program
With Indiana counties having just a few days to consider passing an ordinance to give delinquent taxpayers a break on their back taxes, the Porter County Council refrained from action Tuesday to grant amnesty on property taxes.
In House Enrolled Act 1090, the state gives county councils the authority to grant a one-year moratorium on all penalties and interest on unpaid taxes owed before Jan. 1 this year. If the taxpayer can redeem all current and delinquent taxes by July 1, 2013, with the county treasurers office, their fees would be dropped. The one-time amnesty is an incentive for taxpayers to stay off the lists for tax sales and a chance for counties to recoup taxes owed.
The county commissioners looked at the new law a few months ago when the county auditors office proposed a plan to waive back taxes on multi-unit dwellings in violation of their homestead credit if the property owner corrected their records with the auditors office. The plan was dropped however when the state said no law exists for counties to grant amnesty.
County Treasurer Mike Bucko said 74,577 of the countys 81,958 parcels are up to date on their taxes and 1,750 properties are in bankruptcy. He said he recently sent an e-mail to other treasurers to ask if their counties had enacted the policy and Lake was the only one which responded saying they have.
The council ended up not voting on a motion to adopt the policy, instead Council member Jeremy Rivas, D-2nd, moved to adjourn the meeting.
Conover showed strong interest in the plan saying this one-time deal could have helped a few residents save their homes.
"Some people have fallen on hard times," she said.
Council member Laura Blaney, D-at large, said the county could look into other payment plans to help keep taxpayers properties off the tax sale list.
http://chestertontribune.com/PorterCounty/county_council_passes_on_opportu.htm
Posted by Indiana Tax Reporter at 12:22 AM
Hendricks County Passes Increase to Wheel Tax
From the Hendricks County Flyer:
After much debate, the Hendricks County Council grudgingly approved a $5 increase to the wheel and sur taxes during a special meeting Friday.
The hearing was called after a vote on increasing the wheel tax wasn't unanimous earlier this month. Any tax increase had to be approved before July 1 in order to go into effect at the beginning of next year.
The vote was 4-1, with Jay Puckett being the lone "no." Brad Whicker and Myron Anderson weren't present. Whicker voted no at the first meeting with Puckett. This time the vote didn't have to be unanimous for the measure to pass.
Eric Wathen, president of the Hendricks County Commissioners, had asked the council to raise the wheel and sur taxes from $20 per vehicle to $25. Both fund road maintenance, the wheel tax applying to personal motor vehicles and the sur tax on commercial vehicles including trailers.
Wathen asked for the tax increase because revenue from the state's gas tax has been down about 2 percent for the county since 2003. Money from the wheel tax is up almost 16 percent in that time, but the cost of asphalt has soared between 75 and 80 percent.
Raising the wheel and sur taxes to $25 is projected to give the county an extra $414,000 annually, or about 50 percent more than what it has now for road maintenance. That's only enough to pave an extra four and a half miles. Even worse, with more than 800 miles of road to pave, this tax increase only enables the county to pave all its roads once every 67 years. Before the tax increase, it was about a 100-year cycle.
http://flyergroup.com/local/x1395105059/County-passes-increase-to-wheel-tax
Posted by Indiana Tax Reporter at 12:14 AM
Brownsburg and Townships Reject Consolidation Plan
From a lengthy story in the Hendricks County Flyer:
Town officials here met this week with representatives of Brown and Lincoln townships to further discuss a consolidation plan put forth by a reorganization committee.
“Consolidation, consolidation, consolidation,” were Town Council President Dwayne Sawyer’s words when he was asked what was the most important issue facing the town early in 2012.
The plan of reorganization that was submitted by the committee was struck down in a first reading when the Brownsburg and Lincoln Township officials voted to reject the document due to concerns that it would cut the Brownsburg Fire Territory’s equipment replacement fund by more than $580,000.
Brown Township’s board did vote to approve a revised version of the reorganization document, which will need to be completed by noon on July 25.
The next step in this process is a public hearing set for July 10, followed by an introduction of a revised reorganization plan due on July 25 to comply with an Aug. 1 deadline. Even if a revised document is submitted, however, town and township officials say it likely won’t be capable of having a remedy to the state statute regarding the equipment replacement fund.
Public comments will be taken at the July 10 meeting.
http://flyergroup.com/local/x2004648526/Brownsburg-township-reject-consolidation-plan
Posted by Indiana Tax Reporter at 12:09 AM
Study Finds Tax Abatements Bring $192 Million in Investment to Bloomington
Commercial or residential properties currently receiving tax abatements have brought Bloomington an additional $192 million in new investment in real or personal property, according to the 2011 tax abatement report.
Representatives of the city’s economic and sustainable development department shared the 2011 report with the Bloomington City Council in a special session meeting Wednesday. All of the 19 properties receiving a tax abatement were deemed to be in “substantial compliance” with the requirements of the tax abatement.
According to economic development director Danise Alano-Martin, the properties receiving tax abatements had originally estimated the new investment at roughly $66.8 million and new jobs created at 287. Instead, the city has realized about $192 million in new investment and 624 new jobs with an average salary of $56,968.
Cook Pharmica was a big reason for that success, officials said, though all the properties had either met or, more often, exceeded their initial estimate for new investment. Cook Pharmica, which is in year 6 of a 10-year real estate property tax abatement for its property at 1300 S. Patterson Drive, had estimated its real estate investment at $19 million and anticipated the creation of 200 new jobs. Instead, it added $112 million in real estate investment and 422 new jobs.
Other properties receiving tax abatements are housing developments — largely those targeting low-income residents but a few for market-rate apartments — and commercial properties such as Cook. Six other property abatements expired in 2011.
http://www.heraldtimesonline.com/stories/2012/06/29/news.tax-abatements-bring-city-192m-in-new-investments-according-to-report.sto?1341028432
Posted by Indiana Tax Reporter at 11:57 PM
Lafayette Grants Faith West a Property Tax Exemption on Land; but no Hint as to Whether Future Project Will Be Exempt
The Faith West planned development has a history of attracting large crowds of protesters and supporters at public meetings.
But Faith West’s appearance before the Tippecanoe Couty Property Tax Board of Appeals was brief and was attended by only two church supporters, Pastor Steve Viars, Faith’s attorney, and three reporters from various news organization. It was quite a contrast from the packed meeting rooms of the last two months.
Jim Malady, chairman of the Property Tax Board of Appeals, asked Viars if Faith West was a religious organization, to which Viars said it was.
“Under Indiana law, vacant land owned by a religious organization is exempt,” Phillips said. “They have eight years to build on it, and they have to show they’ve made progress on it in four years.”
Although the matter was taken under advisement, and Phillips has 90 days to let Faith West know if the land is exempt from property taxes, it’s a safe bet the board will OK the exemption.
But Viars had hoped to get a sense of how the board might view the entire project. It was a read he couldn’t get from the brief interaction with the board.
“We’ve said all along, we don’t think they’re obligated to make that decision at this point in time,” Viars said.
“I don’t know that PTBOA (Property Tax Board of Appeals) was comfortable with that,” Phillips said of giving a broader interpretation of the tax-exempt status of the project. “They rule on what exists. The question today was the land, and there’s really no question about it.”
http://www.jconline.com/apps/pbcs.dll/article?AID=2012306280044&nclick_check=1
Posted by Indiana Tax Reporter at 11:52 PM
Amsted Rail Granted Exemption for Investment in Hammond
Amsted Rail will receive a property tax break on a $7.7 million renovation the company is making to its Hohman Avenue facility.
The Hammond City Council approved a 10-year tax abatement this week that is projected to save the company more than $500,000 in property taxes in that span.
Amsted Rail, which has been in Hammond for more than 110 years, had faced pressure to move closer to its customer base in the south. The tax break was a way of keeping the company in Hammond.
“You have to have loyalty,” Mayor Thomas McDermott Jr. said. “The business has been in the city for over 100 years. We're competing with Louisiana and Mexico, and as a mayor, I'm sick of seeing jobs leave the area.”
The company will make the investment during a two-year period, with the most of the money going to adding new equipment at the site. The renovations are expected to create 21 new full-time jobs at the plant.
Beth Downes Jacobson, Hammond director of economic development, said as part of the project, the company will make facade improvements to the Hohman Avenue side of its property.
Even with the abatement, the company will pay an estimated $537,740 in additional taxes on the renovations during the 10-year period and taxes on all its existing property.
http://www.nwitimes.com/news/local/lake/hammond/hammond-gives-amsted-rail-tax-break-for-renovating-facility-staying/article_a36f1d76-9a48-5b1c-a05e-9c33f963f446.html
Posted by Indiana Tax Reporter at 11:34 PM
DLGF Publishes Guidance on Tax Sales and Payments of Delinquent Taxes
TO: All Assessors, Auditors, and Treasurers
FROM: Brian Bailey, Commissioner
RE: Tax Sales & Payment of Delinquent Property Taxes, HEA 1090
On March 14, 2012, Governor Mitch Daniels signed House Enrolled Act 1090, effective March 14, 2012 (“HEA 1090”). HEA 1090 addresses payment of delinquent property taxes and procedures for conducting tax sales and affects IC 6-1.1-24, IC 6-1.1-25, and IC 6-1.1-37. This memorandum provides guidance on these changes.
AGREEMENT REGARDING PAYMENT OF DELINQUENT TAXES, IC 6-1.1-24-1.2
HEA 1090, Section 1, amends IC 6-1.1-24-1.2 to permit an auditor of a county, regardless of the county’s population, to remove a tract or an item of real property from the list certified under IC 6-1.1-24-1 prior to a tax sale if the county treasurer and the taxpayer agree to a mutually satisfactory arrangement for the payment of delinquent taxes.
The auditor may remove the tract or item from the list if the agreement between county treasurer and taxpayer:
(3) requires the taxpayer to pay the delinquent taxes in full not later than the last business day before July 1 of the year after the date the agreement is signed.
Moreover, IC 6-1.1-24-1.2(e) now provides that if the taxpayer fails to make a payment under the agreement with the county treasurer, the agreement is void. In which case, the county auditor must immediately place the tract or item of real property on the list of real property eligible for sale at a tax sale.
Limitation on Taxpayer to Enter into Subsequent Agreements
Under IC 6-1.1-24-1.2(f), if a taxpayer fails to make a payment under the agreement with the county treasurer, and the county auditor removes the tract or item that was the subject of the agreement, the taxpayer may not enter into another arrangement with respect to that same tract or item after the due date of the payment and before the date that succeeds by five (5) years the date on which the original arrangement would have expired if the arrangement had not become void.
Example: In 2013, Taxpayer entered into an agreement with the county treasurer to pay all delinquent taxes on property A in full not later than the last business day before June 30, 2014 (“the due date”). Under this arrangement, Taxpayer must pay in monthly installments. The county auditor removed property A from the list of properties subject to a tax sale. Taxpayer failed to pay the first monthly installment due on June 1, 2013. Thereafter, the county auditor put property A back on the list. Taxpayer may not enter into another arrangement to pay delinquent taxes on property A from the day after the day the first installment was due until the day after the five (5) year anniversary of the due date, in this case June 30, 2019.
WAIVER OF INTEREST AND PENALTIES, IC 6-1.1-37-10.1
HEA 1090, Section 18, adds section IC 6-1.1-37-10.1(effective upon passage) regarding waiver of certain interest and penalties for delinquent property taxes. Under this section, the fiscal body of a county may, before July 1, 2012, adopt an ordinance to have IC 6-1.1-37-10.1 apply throughout the county. If the fiscal body of a county adopts an ordinance under IC 6-1.1-37-10.1(a), the ordinance applies after June 30, 2012, and until July 1, 2013.The fiscal body must deliver a copy of the ordinance to the county treasurer and the county auditor.
Under IC 6-1.1-37-10.1(b), the county treasurer of a county to which IC 6-1.1-37-10.1 applies must waive all interest and penalties added before January 1, 2012 to a delinquent property tax installment or special assessment on a tract or an item of real property notwithstanding any payment arrangement entered into by the county treasurer and the taxpayer under IC 6-1.1-24-1.2 or under any other law if:
(2) before July 1, 2013, the taxpayer has paid:(A) all of the delinquent taxes and special assessments described in IC 6-1.1-37-10.1(a)(1); and (B) all of the taxes and special assessments that are first due and payable on the tract or item of real property after December 31, 2011, and before July 1, 2013 (and any interest and penalties on these taxes and special assessments).
Declaration of waiver of penalties, IC 6-1.1-24-2(a)(15) & IC 6-1.1-24-4(a)
HEA 1090, Section 2, adds IC 6-1.1-24-2(a)(15). With respect to a tract or an item of real property that is subject to sale under IC 6-1.1-24 after June 30, 2012, and before July 1, 2013, the auditor’s notice must contain a statement declaring whether an ordinance adopted under IC 6-1.1-37-10.1 is in effect in the county and, if applicable, an explanation of the circumstances in which penalties on the delinquent taxes and special assessments will be waived. HEA 1090, Section 3, also adds this language within IC 6-1.1-24-4(a). The remainder of IC 6-1.1-24-4(a) is unaffected.
AUTHORITY OF COUNTY TREASURER TO HOLD TAX SALE,
AMENDED IC 6-1.1-24-5
HEA 1090, Section 4, amends IC 6-1.1-24-5(e) such that the county treasurer must sell a tract or item of real property in a tax sale, subject to the right of redemption, to the highest bidder at public auction whose bid is at least the minimum bid specified in IC 6-1.1-24-5(f) or IC 6-1.1-24-5(g), as applicable.
ORDINANCES ALLOWING BIDS BELOW GROSS ASSESSED VALUE OF PROPERTY, IC 6-1.1-24-15
Under IC 6-1.1-24-15(a), the fiscal body of a county may adopt an ordinance authorizing the county treasurer to accept a bid on a tract or an item of real property offered for sale under IC 6-1.1-24 that is greater than or equal to the lesser of:
(1) the amount determined under IC 6-1.1-24-5(f) for the tract or item of real property; or
Notice of ordinance adoption or repeal to county treasurer and auditor, IC 6-1.1-24-15(b)
If the fiscal body of a county adopts an ordinance under IC 6-1.1-24-15(a) or repeals an ordinance adopted under IC 6-1.1-24-5(a), the fiscal body shall promptly deliver a copy of the ordinance to the county treasurer and the county auditor.
New limitation on amount for which real property can be sold under an ordinance pursuant to IC 6-1.1-24-15
New subsection IC 6-1.1-24-5(g) applies when a county adopted an ordinance permitting a minimum bid as prescribed in IC 6-1.1-24-15(a). If an ordinance adopted under IC 6-1.1-24-15(a) is in effect in the county in which a tract or an item of real property is located, the tract or item of real property may not be sold for an amount that is less than the lesser of:
(1) the amount determined under IC 6-1.1-24-5(f); or
Limitation on amount for which the real property can be sold
IC 6-1.1-24-5(f) is amended to apply in all cases except when a county adopted an ordinance under IC 6-1.1-24-15(a). When IC 6-1.1-24-5(f) applies, a tract or an item of real property may not be sold for an amount which is less than the sum of:
(4) the amount prescribed by IC 6-1.1-24-2(a)(3)(D) reflecting the costs incurred by the county due to the sale;
(5) any unpaid costs which are due under IC 6-1.1-24-2(b) from a prior tax sale; and
(6) other reasonable expenses of collection, including title search expenses, uniform commercial code expenses, and reasonable attorney’s fees incurred by the date of the sale.
In addition, the amount of penalties due on the delinquencies under IC 6-1.1-24-2(a)(3) must be adjusted in accordance with IC 6-1.1-37-10.1, as applicable.
ALLOCATION OF PROCEEDS OF TAX SALE, IC 6-1.1-24-7
Allocation of proceeds in general, IC 6-1.1-24-7(a)
When real property is sold under IC 6-1.1-24, the purchaser at the sale must immediately pay the amount of the bid to the county treasurer. The county treasurer shall apply the payment in the following manner:
(1) first, to the taxes, special assessments, penalties, and costs described in IC 6-1.1-24-5(f);
(3) third, to a separate “tax sale surplus fund.”
County allowing sale below gross assessed value may get part of proceeds, IC 6-1.1-24-7(b)
HEA 1090 Section 9 provides that, under certain conditions, a taxing unit where the real property sold resides receives a proportion of the proceeds of the sale. Under IC 6-1.1-24-7(b), if:
(1) a tract or an item of real property sold under IC 6-1.1-24-5 is located in a county in which an ordinance adopted under IC 6-1.1-24-15 is in effect in the county; and
(2) the sales price of the tract or item of real property is less than the amount specified in IC 6-1.1-24-5(f);
in addition to the application of any payment received under IC 6-1.1-24-7(a)(1), each taxing unit having an interest in the taxes on the tract will be charged with the part of the tax due to the taxing unit equal to an amount that bears the same relationship to the tax due to the taxing unit as the amount determined under IC 6-1.1-24-5(f) minus the selling price bears to the amount determined under IC 6-1.1-24-5(f).
Hence, the taxing unit receives a portion of the tax sale proceeds relative to what it would have received had the county not adopted an ordinance allowing for a minimum bid that is either:
(1) the amount needed to satisfy all taxes, penalties, interests, and expenses; or
(2) seventy-five percent (75%) below the gross assessed value of the property, as determined on the most recent assessment date.
Example: Property A, located in city C, is sold at a tax sale. Its gross assessed value is $100,000. The county where property A is located adopted an ordinance allowing for a sale price below what is required in IC 6-1.1-24-5(f). Without the ordinance, the sale price would have been $90,000, which is also the amount required to satisfy all the obligations under IC 6-1.1-24-5(f). The proceeds of the tax sale total $80,000. The tax due to city C is $10,000. City C shall receive a portion of the proceeds relative to what it would receive from a tax sale had the county not adopted the ordinance allowing a sale price below the required value in IC 6-1.1-24-5(f). Hence, city C will receive the $10,000 due to it from the tax sale as required by IC 6-1.1-24-7(a), but it will not receive any additional proceeds from the sale of property A.
REDEMPTION OF REAL PROPERTY, IC 6-1.1-25-2 & IC 6-1.1-25-4
HEA 1090, Section 13, adds new subsection IC 6-1.1-25-2(f). The total amount required for redemption now includes, in addition to the amounts required under IC 6-1.1-25-2(b) and (e), all taxes, special assessments, interest, penalties, and fees on the property that accrued after the sale.
Procedures for redemption of real property after tax sale, IC 6-1.1-25-4
Finally, HEA 1090, Section 14, amends or adds the following subsections to IC 6-1.1-25-4:
IC 6-1.1-25-4(b) is now subject to IC 6-1.1-25-4(l) and IC 6-1.1-24-9(d), but still provides that the period for redemption of real property:
Under new subsection IC 6-1.1-25-4(l), if a tract or item of real property did not sell at a tax sale and the county treasurer and the owner of real property agree before the expiration of the period for redemption under IC 6-1.1-25-4(b) to a mutually satisfactory arrangement for the payment of the entire amount required for redemption under IC 6-1.1-25-2 before the expiration of a period for redemption extended under this subsection:
(2) except as provided in IC 6-1.1-25-4(m), the extended period for redemption expires one (1) year after the date of the agreement.
Under new subsection IC 6-1.1-25-4(m), if the owner of real property fails to meet the terms of an agreement entered into with the county treasurer under IC 6-1.1-25-4(l), the county treasurer may terminate the agreement after providing thirty (30) days written notice to the owner. If the county treasurer gives notice under this subsection, the extended period for redemption established under IC 6-1.1-25-4(l) expires thirty (30) days after the date of the notice.
http://www.in.gov/dlgf/files/120629_-_Bailey_Memo_-_Tax_Sale_Agreements.pdf
Posted by Indiana Tax Reporter at 11:23 PM
Revenue Decides Multiple Cases Involving Late Payment of Withholding Taxes
Taxpayer is a company doing business in Indiana. For the period ending October 31, 2011, Taxpayer was required to remit Indiana employee withholding taxes on November 21, 2011. However, Taxpayer's payroll service provider remitted Indiana employee withholding tax on November 22, 2011, one day after the deadline. The Indiana Department of Revenue ("Department") assessed a ten-percent penalty for the late payment of employee withholding tax.
http://www.in.gov/legislative/iac/20120627-IR-045120299NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120315NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120322NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120298NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120314NRA.xml.html
Other cases decided this month regarding the late payment:
http://www.in.gov/legislative/iac/20120627-IR-045120331NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120300NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120302NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120303NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120307NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120317NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120318NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120321NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120335NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120339NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120341NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120301NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120304NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120305NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120306NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120308NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120310NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120311NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120312NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120313NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120316NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120319NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120320NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120323NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120324NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120325NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120326NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120327NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120328NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120329NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120330NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120333NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120334NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120338NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120342NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120344NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120346NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120347NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120348NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120349NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120350NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120309NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120332NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120336NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120337NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120340NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120343NRA.xml.html
http://www.in.gov/legislative/iac/20120627-IR-045120345NRA.xml.html
Board Finds Petitioners Failed to Prove Value of Property with Allocated Purchase Price or Income Calculation
The Petitioners’ case nominally relies on the type of analysis done in most appraisals (income approach, cost approach, market approach), but they did not present an appraisal. More importantly, they did not establish that any of their methodology conforms to generally accepted appraisal principles. After considering everything that was presented in this case, it is clear that what the Petitioners mean by using those terms for their calculations is inconsistent with how appraisers use the terms.
Therefore, the amounts suggested by the Petitioners’ “cost approach,” “income approach,” “market approach,” and “other” calculations do not help to prove anything relevant to this case.
Often the purchase price for a property can be some of the best evidence of its market value-in-use. The Petitioners’ version of the cost approach in this case, however, does not help to make a case for several reasons. It is not really a cost approach. Mr. Richards testified that $625,000 of the total purchase price was for 25 acres of land that is not included in the assessment of the subject property. The Sales Disclosure Form appears to generally support the fact that the purchase price was $1,290,000 and it included 24.35 acres of land. The PRC shows that the assessment of the subject property includes no land. Accordingly, reducing the total purchase to account for the land conceptually makes sense. But the amount—$625,000—is problematic because the record contains no substantial evidence to support Mr. Richards’ conclusory calculation based on $25,000 per acre. Mr. Richards’ cost calculation also subtracted another $100,000 for the demolition of five structures on the property, but his statements about that part of the calculation were entirely unsupported conclusions. He offered no authority or substantial argument to support how subtracting demolition costs conforms to generally accepted appraisal principles. Furthermore, his anticipated $100,000 figure is merely a bald conclusion. Ultimately, the unsubstantiated conclusions at the heart of the Petitioners’ version of the cost approach leave the calculation with no probative value. See Lacy Diversified Indus. v. Dep’t of Local Gov’t Fin., 799 N.E.2d 1215, 1221 (Ind. Tax Ct. 2003); Whitley Products v. State Bd. of Tax Comm’rs, 704 N.E.2d 1113, 1119 (Ind. Tax Ct. 1998).
The Petitioners presented some factual evidence about the 2007 income and expenses related to the subject property. The Respondent did not dispute the accuracy of that information and for purposes of this analysis the Board will regard that income and expense data as accurate. Nevertheless, the Petitioners’ version of the income approach to value has serious problems and no probative value. There was a 79 percent vacancy rate. That number may be high, but from the record it is impossible to draw any legitimate conclusion about what it really means. For 2007 they had $136,013 gross operating income and $173,487 of expenses—a loss of $37,474. The Petitioners made no attempt to relate their own numbers to industry standards or establish what might reasonably be expected over a longer period of time. Most importantly, their income approach includes absolutely nothing about determining an appropriate capitalization rate and applying it to determine a value, which is an integral part of any generally accepted income approach to value. The Petitioners’ version of the income approach is not credible or relevant.
The market approach also frequently is called the sales comparison approach. It can be accomplished by comparing a subject property to other properties that have been sold in the same market. See, e.g., State Bd. of Tax Comm'rs v. Garcia, 766 N.E.2d 341, 343 n.3 (Ind. 2002). Similarities and differences such as date of sale, location of property, physical characteristics, and conditions of the sale must be noted in detail. See Long v. Wayne Twp. Assessor, 821 N.E.2d 466, 470-471 (Ind. Tax Ct. 2005) (explaining that in offering comparables one must establish the characteristics of the subject property, establish how those characteristics compare to the purportedly comparable properties, and establish how any differences affect the relative values). In this case the Petitioners offered no other sales to compare. As a market approach they simply relied on their own purchase price of $1,290,000 and subtracted the purported $900,000 cost to remediate asbestos, reaching a value of $390,000. For the reasons explained earlier, this single reference point does nothing to help prove the actual market value-in-use of the subject property. Furthermore, the Petitioners’ calculation assumes that the cost of the asbestos remediation relates to reducing value on a one for one basis, but provides no support for that assumption. Such a conclusion is not probative evidence. See Lake Co. Assessor v. U.S. Steel Corp., 901 N.E.2d 85, 94-95 (Ind. Tax Ct. 2009) (holding that failure to link the cost of remediating environmental contamination with an actual reduction in property value equivalent to what was spent on remediation left the remediation cost with no probative value for purposes of determining assessed valuation). The Petitioners’ purported market approach does nothing to support their claim.
The approach that the Petitioners identified as "other" is nothing more than subtracting the purported land value and environmental clean-up costs from their purchase price. Again, they failed to establish that this approach is in accordance with generally accepted appraisal principles. Furthermore, the record contains no substantial basis for attributing $625,000 to land value and it contains no substantial basis for attributing $900,000 remediation cost to a $900,000 reduction in the value of the subject property. The kind of unsupported conclusory statements that the Petitioners relied on are not probative evidence and do not help to prove that the existing assessment must be changed. See Lacy Diversified, 799 N.E.2d at 1221; Whitley Products, 704 N.E.2d 1119.
In summation, none of the Petitioners’ various valuation approaches are probative evidence. They do not prove the existing assessment is wrong or prove the lower value that was requested.
http://www.in.gov/ibtr/files/Ballew_and_Richards_10-004-07-1-4-10001.pdf
Revenue Finds Mold Release Chemicals and Glue Gun Holders Exempt, but Mold Maintenance Equipment and Air Monitoring Equipment Subject to Tax
Without the "mold release chemicals" certain products could not be removed from the molds in one solid piece. The product would come out in pieces or with flaws making it an unmarketable product. Thus, the use of the "mold release chemicals" can be compared to a baker's use of butter or grease to ensure a cake will come out in one piece. However, while the production equipment that is used to spray the "mold release chemicals" and the "mold release chemicals" themselves would be "directly used or consumed" in the manufacturing of the Taxpayer's products, any equipment used to store the raw materials (i.e., the "mold release chemicals") or transport the raw materials prior to their entry into the manufacturing process are taxable. …
The Department's assessment of use tax was not on the equipment used to spray the "mold release chemicals" or the "mold release chemicals" themselves, but was on equipment which stores and transports the "mold release chemicals" prior to their entry to the production process. Therefore, the Department's assessment of use tax on this equipment was proper.
The Department found that use tax was due on Taxpayer's purchase of "glue gun holsters." … Taxpayer states that the "glue gun holsters" hold the glue gun in place during the production process allowing the employee to merely pull the trigger to put the glue in the exact place needed at the correct time. Taxpayer cites to 45 IAC 2.2-5-8(c) example (2)(E), which states that "[a] work bench used in conjunction with a work station or which supports production machinery within the production process" is an example of equipment that would qualify for exemption. The "glue gun holsters" in question in this protest are analogous to the work bench discussed in 45 IAC 2.2-5-8(c) example (2)(E). The "glue gun holsters" supports production equipment. Therefore, the "glue gun holsters" at issue qualify for the manufacturing exemption. Accordingly, Taxpayer's protest to the imposition of use tax on the "glue gun holsters" is sustained.
The Department found that use tax was due on Taxpayer's purchase of "air monitoring equipment." Taxpayer asserts that the "air monitoring equipment" is production equipment that qualifies for exemption under 45 IAC 2.2-5-8(c), which allows for sales and use tax exemptions for safety clothing or equipment. Taxpayer states that the equipment evaluates the plant air for any signs of a chemical spill or leak. ... The "air monitoring equipment" is not directly involved in the production process. Even though its existence provides the assurance of a safer operating environment, nonetheless, the "air monitoring equipment" is not identical to the shields in U.S. Steel discussed above. The "air monitoring equipment" is not directly used by workers in the direct manufacturing process.
The Department found that use tax was due on Taxpayer's purchase of a "seat pad cart carrier." Taxpayer asserts that the "seat pad cart carrier" is exempt because it is transporting work in process. Taxpayer maintains that "the movement of the seat frames by carriers from [Taxpayer] to [Taxpayer's sister company] is part of a 'continuous integrated production process' and should be exempt as determined in General Motors Corp. v. Indiana Dep't of State Revenue, 578 N.E.2d 399, 404 (Ind. Tax Ct. 1991)." .... However, General Motors Corp. is not relevant to Taxpayer's situation because unlike the plants in General Motors Corp. that were owned by the same entity, Taxpayer's plant and the assembly plant are owned by two different entities. See Mynsberge v. Indiana Dep't of State Revenue, 716 N.E.2d 629, 631 (Ind. Tax Ct. 1999) (determining that the manufacturing exemption for the utilities services and commodities only applies when the purchaser of the utility services and commodities is also the consumer of those services and commodities)… Therefore, equipment that is used to transport Taxpayer's product after the completion of its production process to another taxpayer is post-production transportation equipment, which does not qualify for exemption under IC § 6-2.5-5-3. See 45 IAC 2.2-5-8(d).
The line items in Taxpayer's invoices that referenced fabrication and assembly would be included in gross retail income because the items are charges for completion of the tangible personal property that take place prior to transfer of the property as provided in IC § 6-2.5-4-1(e)(2). As provided in the statute, the fact that these charges are stated separately does not change the fact that they represent an amount that is included as part of the retail transaction. Additionally, the line items from the invoices which include a single charge "for installation and fabrication" of an item of property would be subject to use tax as a unitary transaction as provided in IC § 6-2.5-1-2. Lastly, as to the transaction for the "scrap conveyor" where the invoice(s) had the following line items for "installation of a scrap conveyor," "supervision of installation," and "materials/consumable cost for installation," it is not clear what these charges represent. The invoice did not have a separate line item for the purchase of the "scrap conveyor." In addition, Taxpayer has not presented evidence which would indicate that the "scrap conveyor" was purchased in another transaction. Without evidence of the separate purchase of the "scrap conveyor," the transaction in question represents charges for both the fabrication and assembly of the "scrap conveyor" and the labor for installation services. Thus, the "scrap conveyor" transaction represents a transaction that is taxable under IC § 6-2.5-4-1(e)(2) and IC § 6-2.5-1-2. Accordingly, Taxpayer has failed to meet its burden of proof to demonstrate that the assessments of use tax were incorrect as found in IC § 6-8.1-5-1.
http://www.in.gov/legislative/iac/20120530-IR-045120227NRA.xml.html
Posted by Indiana Tax Reporter at 8:31 PM
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