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

Heading: Was the Board's Assessment Contrary to Law.

Text: Liability for property tax is set forth in Chapter 2, Section 4 of the article on property taxes which reads: (a) The owner of any tangible property on the assessment date of a year is liable for the taxes imposed for that year on the property. (b) A person holding, possessing, controlling, or occupying any tangible property on the assessment date of a year is liable for the taxes imposed for that year on the property unless: (1) he establishes that the property is being assessed and taxed in the name of the owner; or (2) the owner is liable for the taxes under a contract with that person. When a person other than the owner pays any property taxes as required by this section, that person may recover the amount paid from the owner, unless the parties have agreed to other terms in a contract. Ind. Code § 6-1.1-2-4 (West 1989). Any ambiguity in a tax-levying statute is construed against the State and in favor of the taxpayer. State Dep't of Revenue v. Estate of Eberbach (1989), Ind., 535 N.E.2d 1194. When a statute is clear and unambiguous, however, there is no need to apply any rules of construction other than the rule that words and phrases shall be taken in their plain, ordinary, and usual sense. State v. Indiana-Kentucky Elec. Corp. (1982), Ind. App., 436 N.E.2d 352, 356, reh'g granted, (1982), 438 N.E.2d 782. We find this statute unambiguous. Under the ordinary meaning of the words chosen by the legislature, the Board has the discretion to tax either the owner or the possessor unless the possessor can prove the owner is being taxed, or the owner has accepted liability for the tax under contract. The statute does not clearly indicate any order of priority. The statute does not place primary tax liability on a possessor, because its provisions allow the possessor to escape liability by establishing that the property is being assessed and taxed to the owner, and to recover the amount paid from the owner unless the parties agreed to other terms in a contract. Empire Gas of Rochester, Inc. v. State (1985), Ind. App., 486 N.E.2d 1036, 1041. The Tax Court has permitted the use of Ind. Code § 6-1.1-2-4(b) in certain circumstances to levy an assessment against a possessor. In State Line Elevator v. Board of Tax Comm'rs (1988), Ind. Tax, 528 N.E.2d 501, the State Board found the operator of a grain elevator liable for business personal property tax on grain stored in elevators. The elevator appealed the final determination and attempted to claim an exemption available only to owners. The Tax Court indicated that State Line Elevator was incorrect in its assumption that the assessment was based on ownership. The assessment was made under IC 6-1.1-2-4(b) on the basis that State Line is a possessor who has not established that `the property is assessed and taxed in the name of the owner.' 528 N.E.2d at 502. This reading of the statute is consistent with the provision that sets forth the assessor's recourse in the event a taxpayer fails to file. [1] While Ind. Code § 6-1.1-2-4 requires that the holder establish that the owner has in fact been assessed, the Indiana Administrative Code provides an even simpler means for a holder to escape liability. Under the administrative rules grain in storage was to be assessed as follows: The owner of grain shall file an assessment return declaring the assessment and liability for taxes in each taxing district where said grain was located as of March 1 of each assessment year. Every elevator or other storage facility shall file a true and complete list of all owners to be assessed, including name and address, description, quantity, etc., for any property which it may hold, possess or control in any capacity whatsoever on the assessment date and attach same as part of its business personal property assessment return Form 103. In the event an elevator or other storage facility does not furnish a listing of property held, possessed or controlled as of the assessment date, so as to enable the property to be assessed and taxed to the owner, then the assessor shall assess and tax said property to the elevator or other storage facility so holding, possessing or controlling the property. Ind. Admin. Code tit. 50, r. 1-2-1(b)(3) (1988). [2] Jewell Grain did not provide the evidence required by statute to avoid assessment. It did not avail itself of the opportunity to avoid assessment by filing Form 103-N with its return. It provided the form only after it was audited. The Board was not under any statutory obligation to accommodate this tardy compliance. Simply stated, the Board's assessment was lawful.