Opinion ID: 2098942
Heading Depth: 2
Heading Rank: 1

Heading: Jewell's Cooperation

Text: Jewell argues that it can not be liable for the tax unless the Board has no alternative. That assertion is not supported by law. Under the Ind. Code § 6-1.1-2-4 Jewell can avoid liability by establishing that the property is taxed to the owner. The regulations allow the holder to escape liability by doing even less. Under title 50, rule 1-2-1(b)(3) of the Indiana Administrative Code, Jewell only needed to file a 103-N to avoid tax liability. Jewell did not do either of these things. We know of no provision allowing one protection from tax liability merely because one's failure to file was in good faith. Jewell asserts that South Shore I and South Shore Marina v. Board of Tax Comm'rs (1988), Ind.Tax, 527 N.E.2d 738, aff'd, (1989), Ind., 543 N.E.2d 644 [ South Shore II ], prevent the Board from assessing the holder of stored property unless the conduct of the holder makes it impossible to assess the owner. Brief of Appellee at 15. In South Shore I, the marina refused to cooperate with the State Board's attempts to discover who owned the boats stored at the marina, and the Board assessed the marina for the value of the boats. The Court of Appeals held that once property is assessed to an individual, that person has the burden to establish he is not liable for the tax. 422 N.E.2d at 735. The court held that the Marina invited the error, and the Board's assessment was the natural consequence of the Marina's actions. Faced with Marina's refusal to supply the information, the Board was without alternative. Id. at 730. The court reinstated the Board's final assessment. Id. at 735. The Court of Appeals' decision in Empire Gas reiterates the holding of South Shore I, stating: Clearly, South Shore does not establish that assessing possessors of personal property is statutorily preferred over assessing the owners themselves. Only when the Board found it impossible to assess the owners did it assess the possessor. Empire Gas, 486 N.E.2d at 1041. The court further distinguished Empire Gas from South Shore I, pointing out that the identity of the owner of the LP gas tanks in Empire Gas was never in question. Jewell's business is more like the marina in South Shore in that both businesses involve the storage in one location of property belonging to several different people. However, Jewell's behavior can be distinguished from the marina's in that Jewell did cooperate with the Board and supplied the information required. The tax court spoke to this issue in South Shore II. The Tax Court concluded that since the marina failed to provide the hearing officer with the information needed to correlate particular boats with their owners, the hearing officer had no alternative but to make a summary assessment of the boats to the apparent owner, South Shore. South Shore II, 527 N.E.2d at 742. The Tax Court stated that the Board's assessment was not arbitrary and capricious because the marina did not present evidence of nonliability sufficient to allow the Board to determine the true owner. Id. at 743. The notion that South Shore imposes a minimum threshold of non-cooperation is erroneous. The South Shore cases do nothing to restrict the Board's use of Ind. Code § 6-1.1-2-4; they merely affirm the Board's decision to assess the holder. Jewell would also have us believe that the Board refused to accept from Jewell in November of the assessment year what it would have accepted from South Shore Marina in December of the assessment year. Jewell argues that there is no justification for this arbitrary change of position. Brief of Appellee at 11. We view this assertion by Jewell as mere speculation about what the Board might have done if South Shore had been decided under different circumstances. [3] It was not. This argument essentially asks the court to hold that a taxpayer's cooperation, which does not even amount to substantial compliance, [4] alters the Board's ability to collect on a lawfully made assessment. In light of the fact that all taxpayers are expected to cooperate, Jewell's cooperation does not make the Board's revised assessment arbitrary.