ATTORNEY FOR PETITIONER:    ATTORNEYS FOR RESPONDENT:
DAVID L. PIPPEN    STEVE CARTER
ATTORNEY AT LAW     ATTORNEY GENERAL OF INDIANA
Indianapolis, IN    Indianapolis, IN
    
    LINDA I. VILLEGAS
    DEPUTY ATTORNEY GENERAL
    Indianapolis, IN
______________________________________________________________________
     IN THE INDIANA TAX COURT

GOSHEN SASH & DOOR – SMOKERCRAFT,     )
                                                )
    Petitioner,                                 )
    v.                                          )

                  

(Stip. R. at 47.) GSD’s Analysis also contained: 1) a one-page general description of obsolescence; 2) a cursory mathematical calculation showing how it arrived at 47%; 3) the property record card for the subject property; 4) an article titled “Identifying, Measuring, and Treating Functional Obsolescence in an Appraisal”; and 5) the property record card from the State Board final determination for 1992. See footnote ( See Stip. R. at 44-91 (footnote added).)
    Obsolescence must be tied to an actual loss in property value; in the commercial context, this loss of value usually means a decrease in the property’s income generating ability. See Miller Structures, Inc. v. State Bd. of Tax Comm’rs, 748 N.E.2d 943, 953-54 (Ind. Tax Ct. 2001). Consequently, when a taxpayer quantifies the amount of obsolescence to which it believes it is entitled, it is required to convert that actual loss of value into a percentage reduction and apply it against the improvement’s overall value. See Clark, 694 N.E.2d at 1238. In this case, GSD presented no evidence whatsoever indicating an actual loss – i.e., how the various causes of obsolescence present in its property are causing it to lose money. See id. For example, GSD needed to support its allegation that its irregular and inefficient floor plan has caused increased production and material handling costs with calculations indicating the amount of those increased costs. Likewise, GSD needed to support its claim that it has incurred higher utility costs due to a lack of insulation, thermal pane windows, numerous roof-lines and roof valleys, with evidence indicating the amount of those higher utility costs. GSD’s failure to provide this evidence is fatal to its quantification of additional obsolescence. See footnote
    In the alternative, GSD argues that because obsolescence was initially applied, “whether [GSD] presented evidence demonstrating a need for additional obsolescence has nothing to do with whether the [10%] figure itself is supported by substantial evidence.” (Pet’r Post-Hr’g Br., Findings of Fact and Conclusions of Law at 7 (internal quotation omitted).) In other words, GSD claims that whether or not it supported its claim for additional obsolescence, the State Board was required, at the very least, to support the application of 10% obsolescence with substantial evidence. GSD is incorrect.
This Court has held that it would not consider taxpayer complaints concerning obsolescence in cases where the State Board holds administrative hearings after April 24, 1998, “unless the taxpayer has identified the causes of the alleged obsolescence and presented probative evidence that would support a quantification of obsolescence at the administrative level.” Clark, 694 N.E.2d at 1241 (April 24, 1998 being the date of Clark). Thus, in pre-Clark cases, if a taxpayer fails to quantify obsolescence, the State Board is nonetheless obligated to support its quantification of obsolescence with substantial evidence. See Canal-Realty Indy Castor v. State Bd. of Tax Comm’rs, 744 N.E.2d 597, 603 (Ind. Tax Ct. 2001). In post-Clark cases, however, if a taxpayer fails to quantify obsolescence, the State Board’s duty to support its quantification with substantial evidence is not triggered. See id. This being a post-Clark case, the State Board’s duty to support its quantification of the obsolescence present in GSD’s improvements was not triggered. See id.