ATTORNEY FOR PETITIONERS: ATTORNEYS FOR RESPONDENT:
DAVID L. PIPPEN STEVE CARTER
ATTORNEY AT LAW ATTORNEY GENERAL OF INDIANA
Indianapolis, IN Indianapolis, IN
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
UMBAUGH, M.D. & SYMPSON, CLAUD, )
) Cause No. 49T10-0002-TA-24
DEPARTMENT OF LOCAL )
See footnote )
ON APPEAL FROM A FINAL DETERMINATION OF
THE STATE BOARD OF TAX COMMISSIONERS
NOT FOR PUBLICATION
March 16, 2004
M.D. Umbaugh and Claud Sympson (the Petitioners) appeal the State Board of Tax
Commissioners (State Board) final determination valuing their real property for the 1996 tax
year. The issue for the Court to decide is whether the State
Board erred when it refused to adjust the base rate and physical depreciation
assigned to the Petitioners improvement.
See footnote For the following reasons, the Court AFFIRMS
the State Boards final determination.
FACTS AND PROCEDURAL HISTORY
The Petitioners own land and an improvement in Kosciusko County, Indiana. For
the 1996 tax year, local assessing officials valued the Petitioners improvement using the
General Commercial Industrial (GCI) light manufacturing model and calculated its physical depreciation using
the 40-year life expectancy table.
The Petitioners appealed their assessment by filing a Form 133 Petition for Correction
of an Error (Form 133) with the Kosciusko County Board of Review (BOR).
The BOR denied their appeal. The Petitioners then appealed the BORs
denial to the State Board, claiming that the base rate and physical depreciation
calculations were erroneous. After a hearing on November 15, 1999, the State
Board issued a final determination in which it adjusted the base rate of
the Petitioners improvement to account for a lack of partitioning, but denied all
other requested relief.
On February 4, 2000, the Petitioners initiated an original tax appeal. The
parties stipulated to the record and, on April 20, 2001, this Court heard
their oral arguments. Additional facts will be supplied as necessary.
ANALYSIS AND OPINION
Standard of Review
This Court gives great deference to the final determinations of the State Board
when it acts within the scope of its authority. Hamstra Builders, Inc.
v. Dept of Local Govt Fin., 783 N.E.2d 387, 390 (Ind. Tax Ct.
2003). Thus, this Court will reverse a final determination of the State
Board only when its findings are unsupported by substantial evidence, arbitrary, capricious, constitute
an abuse of discretion, or exceed statutory authority. Id. When appealing
to this Court from a State Board final determination, the taxpayer bears the
burden of showing that the final determination is invalid. Id.
The Petitioners filed a Form 133 to correct certain errors that they discovered
in their tax duplicate. See Ind. Code Ann. § 6-1.1-15-12(a)(7) (West 1996).
Those errors were limited first, to those errors involving the incorrect use
of numbers in determining the assessment; and second, to those errors which [could]
be corrected accurately, with precision, and with rigorous exactness. Barth v. State
Bd. of Tax Commrs, 756 N.E.2d 1124, 1128 (Ind. Tax Ct. 2001) (quoting
Hatcher v. State Bd. of Tax Commrs, 561 N.E.2d 852, 854 (Ind. Tax
Ct. 1990)). Thus, the errors subject to correction by a Form 133
are those that can be corrected without resort to subjective judgment. See
1. Base Rate Adjustments
The Petitioners claim they are entitled to several base rate adjustments to account
for their improvements deviation from the GCI light manufacturing model used to assess
See footnote The State Board denied the Petitioners claims, finding that subjective judgment
would be required to make the requested adjustments and therefore, were not appropriate
for a Form 133. (Stip. R. at 44-47.)
A. Wall Height
The Petitioners first contend that the wall height adjustments for their improvement should
be determined from the unfinished category rather than semifinished category presumed under the
GCI model. Wall height adjustments are made based on the structures actual
wall height as compared to the model height. Each foot of height
variation is either added or deducted based on the finish type of the
Ind. Admin. Code tit. 50, r. 2.2-10-6.1(a)(6) (1996).
To support their claim, the Petitioners submitted photocopied photographs of interior sections of
their improvement and the testimony of their property tax consultant, Mr. M. Drew
Miller (Miller), that the upper portion of the walls are exposed insulation.
(See Stip. R. at 68-70, 74.) The State Board countered that the
interior had some paint and eight-foot of steel siding that had to be
accounted for. (Stip. R. at 74-75.)
The evidence demonstrates that the interior of the Petitioners improvement comprises a range
of qualities and designs, and therefore fails to show objectively that the interior
is unfinished. Accordingly, an assessors subjective judgment is required to determine the
finish type present in the Petitioners improvement. See Barth, 756 N.E.2d at
1131 (stating that when an assessor must decide whether a buildings interior finish
is minimal or covers most of the interior, an assessor must use subjective
judgment). Consequently, the remedy the Petitioners seek is not correctable via a
Form 133 and therefore, the State Board did not err in denying the
Petitioners requested relief in this regard.
B. Exterior Walls
The Petitioners next claim they are entitled to an adjustment to account for
the type of their improvements exterior walls. The GCI model provides for
two different wall types: Type One (1) walls are reinforced concrete block
and Type Two (2) walls are [c]ommon brick on concrete block back-up.
Ind. Admin. Code tit. 50, r. 2.2-11-2(4) (1996).
To support the Petitioners claim, Miller explained that the subject does not have
[concrete block exterior walls.] (Stip. R. at 74.) Miller also submitted
photocopies of photographs of the building; however, it is unclear what the photographs
are meant to depict. (See Stip. R. at 68-70.) The Petitioners
testimonial and pictorial evidence fails to indicate what type of exterior wall their
improvement does have. Thus, the Court cannot say that the State Board
erred in denying relief to the Petitioners on this issue.
Finally, the Petitioners assert that their improvement does not have the type of
windows, heating, or lighting fixtures presumed in the GCI model. The GCI
model presumes an improvement has: 25% vented steel sash glass windows[;] a
[g]as fired, forced air heating system; and 600 ampere service . . .
[h]igh intensity [lighting] fixtures, switches and receptacles. 50 IAC 2.2-11-2(4). Accordingly,
to be entitled to these base rate adjustments, the Petitioners bore the burden
of presenting objective evidence that their improvement did not have the features listed
in the model or had features not listed in the model.
Barth, 756 N.E.2d at 1129. The Petitioners also bore the burden of
ascertaining the cost of each feature based on the regulations without exercising subjective
The Petitioners, however, failed to provide any objective base rates to account for
the differing features that they claim existed in their improvement. Consequently, to
determine the correct amount to deduct from the Petitioners base rate to compensate
for these alleged deviations, the State Board would first have to determine the
type of heating system, the intensity of illumination, and the quality of the
lighting present in the Petitioners improvement.
Then, the State Board would have
to determine how those features are different from those presumed in the model
and what amount of adjustment is appropriate under the regulations. Such determinations
require subjective judgment.
See Hatcher v. State Bd. of Tax Commrs, 601
N.E.2d 19, 22 (Ind. Tax Ct. 1992). Thus, the remedy the Petitioners
seek is not correctable via a Form 133 and the State Board therefore
did not err in denying the Petitioners claims.
2. Physical Depreciation Tables
The Petitioners also ask the State Board to adjust the life-expectancy table used
to calculate their improvements physical depreciation.
See footnote The local assessing officials depreciated their
improvement from the 40-year life expectancy table, which is used for wood joist
apartments, medical facilities, parking garages, [and]
all  fire resistant buildings not listed
elsewhere. See Ind. Admin. Code tit. 50, r. 2.2-11-7 (1996) (emphasis added).
See also Ind. Admin. Code tit. 50, r. 2.2-10-6.1(a)(9) (1996) (stating that
the base rate for the GCI schedule, the schedule used to assess the
Petitioners improvement, is based upon fire resistant construction).
The Petitioners assert, however, that their improvement is a light pre-engineered structure [that]
should be physically depreciated using the 30-year life table. (Stip. R. at
74.) Light pre-engineered structures are one type of building depreciated according to
the 30-year life expectancy table. See 50 IAC 2.2-11-7. Accordingly, to
prevail on their claim, the Petitioners bore the burden of presenting objective evidence
demonstrating that their improvement is a light pre-engineered structure. See Hamstra Builders,
783 N.E.2d at 390-91 (describing structural characteristics of certain light, pre-engineered buildings).
At the administrative hearing, Miller stated that the improvement is a light pre-engineered
structure . . . [with] tapered columns.
See footnote (Stip. R. at 74 (footnote
added).) Tapered columns are but one type of column used in the
construction of certain pre-engineered buildings.
See Hamstra Builders, 783 N.E.2d at 391.
Absent evidence supporting this assertion, however, it remains conclusory and does not
objectively establish that the Petitioners improvement is a light pre-engineered building. See
Miller Structures, Inc. v. State Bd. of Tax Commrs, 748 N.E.2d 943, 954
(Ind. Tax Ct. 2001) (stating that conclusory statements do not constitute probative evidence).
Thus, the State Board did not err when it denied the Petitioners
The Petitioners failed to provide objective evidence demonstrating that they were entitled to
the base rate and physical depreciation adjustments they requested. Accordingly, the Court
AFFIRMS the final determination of the State Board.
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. 2001 Ind. Acts 198 § 119(b)(2). Effective January
1, 2002, the legislature created the Department of Local Government Finance (DLGF),
Indiana Code Annotated § 6-1.1-30-1.1 (West Supp. 2003)(eff. 1-1-02); 2001 Ind. Acts 198
§ 66, and the Indiana Board of Tax Review (Indiana Board). Ind.
Code Ann. § 6-1.5-1-3 (West Supp. 2003)(eff. 1-1-02); 2001 Ind. Acts 198 §
95. Pursuant to Indiana Code Annotated § 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 Ann. § 6-1.5-5-8
(West Supp. 2003)(eff. 1-1-02); 2001 Ind. Acts 198 § 95. Nevertheless, the
law in effect prior to January 1, 2002 applies to these appeals.
A.I.C. 6-1.5-5-8. See also 2001 Ind. Acts 198 § 117. Although
the DLGF has been substituted as the Respondent, this Court will still reference
the State Board throughout this opinion.
In addition, the Petitioners raise various state and federal constitutional claims that
this Court has declined to reach in previous cases.
See, e.g., Barth,
Inc. v. State Bd. of Tax Commrs, 756 N.E.2d 1124, 1127 n.1 (Ind.
Tax Ct. 2001). Because the Petitioners claims and supporting arguments are identical
to those previously rejected by the Court, the Court will not address them.
To help identify and define various classes of buildings, Indianas assessment regulations
have categorized improvements into numerous models based upon their physical characteristics. See
Ind. Admin. Code tit. 50, rr. 2.2-11-1 to -3 (1996). The improvement
models replicate the reproduction costs of a given structure by assuming the presence
of certain construction elements. See Ind. Admin. Code tit. 50, r. 2.2-10-6.1(a)(1)
(1996). When an improvement varies from the model, adjustments must be made
to the base price to account for those variations. 50 IAC 2.2-10-6.1(c).
These adjustments can generally be accomplished via the assessment regulations cost schedules
and unit-in-place cost schedules. See Ind. Admin. Code tit. 50, r. 2.2-11-6
(1996); Ind. Admin. Code tit. 50, r. 2.2-15-1 (1996).
Both parties agreed that the Petitioners improvement lacked windows. The State
Board claimed it accounted for that deviation by reducing the grade of the
improvement because there was no specified rate listed in the regulations to deduct
for that missing component. (
See Stip. R. at 76.) See also
Whitley Prods., Inc. v. State Bd. of Tax Commrs, 704 N.E.2d 1113, 1117
(Ind. Tax Ct. 1998) (stating that when an objective adjustment cannot be made
to account for deviations from the model, the State Board must resort to
using subjective judgment to account for such deviations by reducing the grade of
an improvement), review denied.
The Petitioners photographs showing fluorescent lighting, alone, fails to provide the State
Board with an objective rate to deduct pursuant to the regulations. (
Stip. R. at 69, 74.) See also 50 IAC 2.2-10-6.1-(c)(1)(F) (stating that
the lighting adjustments are predicated on intensity of illumination and fixture quality).
Physical depreciation measures an improvements loss of value due to decay and
wear and tear.
Ind. Admin. Code tit. 50, r. 2.2-10-7(a) (1996).
To account for this loss of value, the regulations provide economic life tables
that, based on the combination of an improvements age and condition, provide a
percentage that can be applied to reduce an improvements value. See 50
Miller also submitted a document stating that [t]he 12,500sf building is constructed
with .325 rigid framing with .024 metal siding and has minimal tolerances[.]
(Stip. R. at 67.) It is unclear to the Court, however, that
this description is in fact for the improvement at issue: the document
refers to an assessment for the 1989-1991 tax years, concerning parcel number 020-21000-08,
regarding a structure priced from the small shop model. (
See Stip. R.
at 67.) The Petitioners are appealing the 1996 tax year, parcel number
020-065-004.A, regarding a structure priced from the light manufacturing model. (See Stip.
R. at 4, 26-28.) Consequently, the Court will not consider this evidence
relevant in its analysis of the Petitioners claim. See Standard Plastic Corp.
v. Dept of Local Govt Fin., 773 N.E.2d 379, 384 (Ind. Tax Ct.
2002) (stating that relevant evidence is such evidence a reasonable mind might accept
as adequate to support a conclusion).