ATTORNEY FOR PETITIONER: 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
RAKOCI, ROBERT, )
) Cause No. 49T10-0002-TA-23
DEPARTMENT OF LOCAL )
See footnote )
ON APPEAL FROM A FINAL DETERMINATION OF
THE STATE BOARD OF TAX COMMISSIONERS
NOT FOR PUBLICATION
April 23, 2004
Robert Rakoci (Rakoci) appeals the State Board of Tax Commissioners (State Board) final
determination valuing his real property for the 1998 tax year. The issue
for the Court to decide is whether the State Board erred in assigning
each of Rakocis two apartment buildings a C grade.
See footnote For the following
reasons, the Court AFFIRMS the State Boards final determination.
FACTS AND PROCEDURAL HISTORY
Rakoci owns two apartment buildings in Syracuse, Indiana. One building, a single-story
structure, was built in 1957 (1957 building); the second building, a two-story structure,
was built in 1996 (1996 building). For the 1998 assessment year, the
local assessing officials valued the buildings from the General Commercial Residential (GCR) Schedule
apartment model and graded them a C. Rakoci appealed the assessment
to the Kosciusko County Board of Review (BOR), claiming that the buildings were
graded erroneously.See footnote The BOR denied Rakocis claim. Rakoci then appealed the
BORs determination to the State Board. After a hearing on November 15,
1999, the State Board also denied Rakocis claim.
On February 4, 2000, Rakoci initiated an original tax appeal. The parties
stipulated to the record and, on April 25, 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.
In Indiana, an assessor uses his subjective judgment to assign a grade to
a building. See Mahan v. State Bd. of Tax Commrs, 622 N.E.2d
1058, 1064 (Ind. Tax Ct. 1993). The grading system allows the assessor
to recognize variations in the quality of an improvements materials, design, and workmanship.
Id. See also Ind. Admin. Code tit. 50, r. 2.2-10-3(a) (1996).
A grade is applied as a multiplier to an improvements base replacement
Miller Structures, Inc. v. State Bd. of Tax Commrs, 748 N.E.2d
943, 952 (Ind. Tax Ct. 2001) (footnote added).
As the party challenging the final determination of the State Board, Rakoci was
required to submit probative evidence demonstrating that its buildings were either improperly given
a C grade or improperly denied an alternative grade. See Sollers Pointe
Co. v. Dept of Local Govt Fin., 790 N.E.2d 185, 191 (Ind. Tax
Ct. 2003). Rakoci has done neither.
At the administrative hearing, Rakoci presented a document titled Assessment Review and Analysis
See footnote The Analysis described the 1957 building as having a 7-foot wall
height[,] . . . face brick on wood joist[ walls,] . . .
tile floors[,]  no ceiling light fixtures[, and] no carpeting. (Stip. R.
at 63.) The Analysis described the 1996 building as having an 8-foot
wall height[,] . . . roof trusses [that] are 2x4 inch wood construction
24 inches on center[,] . . . limited window openings and no sliding
glass doors. (Stip. R. at 63.) Photocopied photographs of the exteriors
of both buildings were also included in the Analysis. (Stip. R. at
65-71.) The Analysis concluded that [n]o downward adjustment was made to reflect
the features in the buildings, and that they both should be graded D-2.
(Stip. R. at 63.)
These statements do not reflect that the C grade as assigned by the
State Board was improper nor do they demonstrate how the buildings more closely
resemble a D-2See footnote grade. Rather, the statements are nothing more than conclusions
that the grade is this and it should be that. A taxpayers
conclusory statements do not constitute probative evidence concerning the grading of the subject
Miller Structures, Inc., 748 N.E.2d at 953 (internal quotation and citation
omitted). Consequently, the State Board properly rejected Rakocis grade challenge.
For the reasons stated above, this Court AFFIRMS the determination of the State
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 those 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, Rakoci raises 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 Rakocis claims and supporting arguments are identical to those
previously rejected by the Court, the Court will not address them.
Rakoci also claimed that yard improvements and a concrete dumpster pad were
erroneously assessed; however, those issues were later withdrawn at the administrative level.
See Stip. R. at 3, 24, 33.)
For instance, C grade buildings are moderately attractive and constructed with average
quality materials and workmanship. These buildings have minimal to moderate architectural treatment
. . . an average quality interior finish with adequate built-ins, standard quality
fixtures, and mechanical features.
Ind. Admin. Code tit. 50, r. 2.2-10-3(a)(3) (1996).
A C grade indicates a multiplier of one hundred percent (100%).
50 IAC 2.2-10-3(b)(3).
Rakocis Assessment Review and Analysis was prepared by his property tax assessment
consultant, Mr. Lance K. Rickard of Landmark Appraisals, Inc.
Footnote: D grade buildings are constructed with economy materials and fair workmanship. .
. devoid of architectural treatment. 50 IAC 2.2-10-3(a)(4). These buildings have
a substandard quality interior finish with minimal built-in features, substandard quality electrical and
plumbing fixtures, and a substandard quality heating system.
In examining Rakocis briefs submitted to this Court, it also appears he
is requesting a base rate adjustment to account for the features in his
buildings that allegedly deviate from the model used to assess them. (
Petr Br. at 1, 3-4; see also Petr Reply Br. at 1-3.)
However, the general rule is that the Court is bound by the issues
and evidence raised at the administrative level. Miller Structures, Inc. v. State
Bd. of Tax Commrs, 748 N.E.2d 943, 948 (Ind. Tax Ct. 2001).
Accordingly, because the issue was not raised at the administrative level, the issue
is waived and may not now be considered by the Court. See