ATTORNEY FOR PETITIONER:    ATTORNEYS FOR RESPONDENT:
TIMOTHY J. VRANA    STEVE CARTER    
SHARPNACK BIGLEY LLP     ATTORNEY GENERAL OF INDIANA
Columbus, IN    Indianapolis, IN

     LINDA I. VILLEGAS
    DEPUTY ATTORNEY GENERAL
    Indianapolis, IN

_____________________________________________________________________

    IN THE INDIANA TAX COURT _____________________________________________________________________ 

ROYAL REALTY OF SEYMOUR,                                           )
                                                                               )
    Petitioner,                                                                )
                                                                               )
    v.                                                                         )   Cause No. 49T10-0109-TA-78
                                                                               )                
DEPARTMENT OF LOCAL                                                            )                
GOVERNMENT FINANCE
                                                            
                                                 
                                                                      
                                      See footnote
,            )
    )
    Respondent.            )    
_____________________________________________________________________


_____________________________________________________________________

ON APPEAL FROM A FINAL
DETERMINATION OF THE STATE BOARD OF TAX COMMISSIONERS


NOT FOR PUBLICATION
January 10, 2003

FISHER, J.     

    Royal Realty of Seymour (“Royal Realty”) appeals the final determination of the State Board of Tax Commissioners (“State Board”) that valued its commercial property improvement for the 1995 assessment. The Court finds the following issues dispositive:
Whether the State Board erred in valuing Royal Realty’s steel siding and roofing; and

Whether the State Board erred in valuing Royal Realty’s epoxy-painted floor.

FACTS AND PROCEDURAL HISTORY

    Royal Realty owns an automobile dealership in Jackson Township, Jackson County, Indiana. For the 1995 assessment, the Jackson County Board of Review (BOR) assessed Royal Realty’s property at $139,830 ($52,130 for land and $87,700 for improvements). In arriving at that value, Royal Realty’s building was priced using the General Commercial Mercantile (GCM) Schedule and assigned a grade of C-1.
    On August 5, 1998, Royal Realty filed a Form 131 Petition for Review of Assessment with the State Board, alleging that the assessment was erroneous. Specifically, Royal Realty claimed that the State Board should have used the General Commercial Kit (GCK) Schedule to value its improvement. See footnote
    The State Board held a hearing on March 2, 2000. At that hearing, the Jackson Township Assessor (Assessor) maintained that if the State Board determined that the GCK Schedule was the appropriate schedule to use, then several “special” adjustments would have to be made to account for features in Royal Realty’s improvement that were not accounted for under the GCK Schedule. These adjustments were necessary, the Assessor explained, to account for the presence of heavy gauge siding and roofing, overhead doors in the auto service and light utility storage areas, the plate glass window in the showroom, the canopy, and an epoxy-painted floor. The Assessor also presented the mathematical calculations indicating the value of these features and how they would affect Royal Realty’s overall assessment.
    Because the “special” adjustments were first discussed at the State Board hearing, the State Board gave Royal Realty until March 8, 2000 to provide a written response to the Assessor’s recommendations and to provide any other evidence it deemed necessary to counter those adjustments. On March 9, 2000, the State Board received Royal Realty’s response. While it addressed the heavy gauge siding and roofing and the epoxy-painted floor, it did not address the other adjustments first raised by the Assessor.
    In its final determination of August 15, 2001, the State Board determined that Royal Realty’s improvement should have been valued pursuant to the GCK Schedule. The State Board also adopted the Assessor’s recommendation that adjustments were necessary to account for the features not listed in the GCK Schedule.
    Royal Realty filed an original tax appeal on September 7, 2001, challenging the State Board’s adjustments. See footnote Because both parties agreed that the matter should be resolved on the basis of the stipulated record and briefs, no trial was held. The Court heard oral arguments on October 7, 2002. Additional facts will be supplied as necessary.
STANDARD OF REVIEW

    This Court accords great deference to the State Board when it acted within the scope of its authority. Wetzel Enters., Inc. v. State Bd. of Tax Comm’rs, 694 N.E.2d 1259, 1261 (Ind. Tax Ct. 1998). Accordingly, the Court will reverse a State Board final determination only if it is unsupported by substantial evidence, constitutes an abuse of discretion, exceeds statutory authority, or is arbitrary and capricious. Id.
DISCUSSION AND ANALYSIS
I. Siding and Roofing

    When the State Board changed the improvement’s pricing to the GCK schedule, it made an adjustment to account for heavy gauge siding and roofing. See footnote Specifically, the State Board claimed that because 24 gauge siding and roofing was used on the improvement, a $1.00 per square foot adjustment was necessary. See Ind. Admin. Code tit. 50, r. 2.1-4-5 (Schedules A.1 and A.2) (1992) (codified in present form at id., r. 2.2-11-6 (Schedule A.4)(1996)).
    Royal Realty contests the adjustment, alleging that although the Assessor measured the siding as 24 gauge, she did not account for the fact that the siding had paint on it. “Although the exact thickness of the paint is not known, it has to have some thickness. Once the thickness of the paint is accounted for, the thickness of the siding itself must be less than 24 gauge. Because the siding is thinner than 24 gauge, the heavy gauge adjustment cannot be allowed to stand.” (Pet’r Br. at 2 (emphases in original).)
    Royal Realty bears the burden of demonstrating the invalidity of the State Board’s final determination. See Clark v. State Bd. of Tax Comm’rs, 694 N.E.2d 1230, 1233 (Ind. Tax Ct. 1998). To do so, it must present a prima facie case, or one in which the evidence is “sufficient to establish a given fact and which if not contradicted will remain sufficient.” See id. (internal quotation and citation omitted). While Royal Realty may be correct in its assertion that paint will lend a thickness to the aluminum on which it is applied, it has not made its prima facie case. See Whitley Prods., Inc. v. State Bd. of Tax Comm’rs, 704 N.E.2d 1113, 1119 (Ind. Tax Ct. 1998), review denied (stating that in order to make a prima facie case, the taxpayer must offer probative evidence concerning the alleged assessment error). Royal Realty bore the burden to show what the thickness of the paint was. Instead, it merely made a conclusory statement that there was paint and it added a thickness. See footnote This does not constitute probative evidence. See id. Accordingly, the Court AFFIRMS the State Board’s final determination on this issue.
II. Epoxy-Painted Floor

    The State Board also made an additional adjustment to account for the floor finish in the auto service area of Royal Realty’s improvement. Specifically, the State Board adopted the Assessor’s findings that “[t]he floor is sealed with high quality or epoxy paint, with a portion having colored paint chips and a decorative painting design[,]” (Cert. Admin. R. at 123), and implemented an additional value of $5.20 per square foot pursuant to the State Board’s unit-in-place cost schedules. See Ind. Admin. Code tit. 50, r. 2.2-15-1, § 12.18.
    Royal Realty contends this was in error for two reasons. First, it states that during the hearing, “there was discussion and disagreement between the Assessor and [our consultant] about the presence (or absence) of the floor finish at the relevant time.” (Pet’r Br. at 6). Second, Royal Realty argues that while the “[State Board] was free to believe whichever witness it wanted []; [] it needed to explain its reasoning. Once it decided to apply an adjustment for an epoxy floor finish, it needed to choose between a Rule 11 adjustment or a Rule 15 adjustment, and it needed to explain the reasoning for that choice as well.” See footnote (Pet’r Br. at 6.)
    As stated earlier, Royal Realty bears the burden of proof in showing that the State Board’s assessment of the epoxy floors was in error. The extent of Royal Realty’s discussion with the Assessor at the State Board hearing is as follows:
[Royal Realty]: Yeah, they have just recently done that to the floor.

[Assessor]: Yeah, but now I’ve talked to them and he said they first did that 15 years ago. They just redo it every so often.

[Royal Realty]: No, they don’t.

[Assessor]: I’ve talked to a gentleman who’s been out there for 15 years.

[Royal Realty]: But I know the floor wasn’t like that when we did the assessment.

[Assessor]: Well, it had worn down.

[Royal Realty]: Yeah, ok.
(Cert. Admin. R. at 167.) This testimony simply does not constitute a prima facie case. See Herb v. State Bd. of Tax Comm'rs, 656 N.E.2d 890, 893 (Ind. Tax Ct. 1995) (stating that to make a prima facie case, a taxpayer must show probative evidence that an error existed in its assessment). Rather, the testimony merely indicates that Royal Realty’s property tax consultant was unaware as to what type of floor finish Royal Realty actually had for the period in question.
    As to Royal Realty’s argument that the State Board was required to explain why it chose a unit-in-place cost adjustment of $5.20 per square foot over a lesser adjustment, it is correct. However, this issue was not raised until oral argument. Indeed, the only written evidence Royal Realty presented in its March 9, 2000, post-administrative hearing response was the statement “[t]he GCM Auto Service has $.50 included in its base rate for floor finish, therefore $.50 is correct[.]” (Cert. Admin. R. at 73.) Again, this does not constitute a prima facie case – it is merely a conclusory statement that Royal Realty disagrees with its assessment. Mere references to State Board regulations, without explanation, do not qualify as probative evidence for purposes of assessment errors. See Heart City Chrysler v. State Bd. of Tax Comm’rs, 714 N.E.2d 329, 333 (Ind. Tax Ct. 1999). Because Royal Realty has not provided the State Board with probative evidence supporting its position, the State Board’s duty to support its final determination with substantial evidence is not triggered. Whitley Prods., 704 N.E.2d at 1119-20.

CONCLUSION

Royal Realty has not made prima facie case with respect to the issues raised in its case. Thus, the State Board’s final determination is AFFIRMED.

Footnote: The State Board of Tax Commissioners (“State Board”) was originally the Respondent in this appeal. However, the legislature abolished the State Board as of December 31, 2001. P.L. 198-2001, § 119(b)(2). Effective January 1, 2002, the legislature created the Department of Local Government Finance (“DLGF”), see Indiana Code § 6-1.1-30-1.1 (West Supp. 2001)(eff. 1-1-02); P.L. 198-2001, § 66, and the Indiana Board of Tax Review (“Indiana Board”). Ind. Code § 6-1.5-1-3 (West Supp. 2001)(eff. 1-1-02); P.L. 198-2001, § 95. Pursuant to Indiana Code § 6-1.5-5-8, the DLGF is substituted for the State Board in appeals from final determinations of the State Board that were issued before January 1, 2002. Ind. Code § 6-1.5-5-8 (West Supp. 2001)(eff. 1-1-02); P.L. 198-2001, § 95. Nevertheless, the law in effect prior to January 1, 2002 applies to these appeals. Id. See also P.L. 198-2001, § 117. Although the DLGF has been substituted as the Respondent, this Court will still reference the State Board throughout this opinion.


Footnote: Royal Realty also alleged that its land was improperly valued, but withdrew the issue at the State Board hearing.
Footnote: In its original tax appeal, Royal Realty also challenged the State Board’s adjustments to account for overhead doors, a plate glass window in its showroom, and a canopy. As discussed earlier, however, Royal Realty had an opportunity to provide argument and evidence to counter the application of these adjustments after its administrative hearing but did not do so. It now attempts to assert its argument and supporting evidence for the first time with this Court. The Court, however, is limited to reviewing the record before the State Board. See State Bd. of Tax Comm’rs v. Gatling Gun Club, Inc., 420 N.E.2d 1324, 1328 (Ind. Ct. App. 1981). Because there is nothing in the record on these issues, the Court will not now decide them. See id.

Footnote: Heavy gauge is defined as “24 to 20 guage [sic] steel; .032’’ to .050’’ thick aluminum.” See Ind. Admin. Code tit. 50, r. 2.1-4-5 (Schedules A.1 and A.2) (1992) (codified in present form at id., r. 2.2-11-6 (Schedule A.4, n. 2)(1996)).
Footnote: Royal Realty presented no evidence indicating that a coat of paint increased the thickness of the steel by a certain amount.

Footnote: Royal Realty refers to Indiana Administrative Code title 50, rule 2.2-11-6, which provides that an adjustment for epoxy floors may be between $2.45 per square foot and $3.10 per square foot.