INDIANA TAX COURT
WARREN W. SPURLING and )
SSS DEVELOPMENT, LLC, )
v. ) Cause No. 82T10-0205-TA-44
VANDERBURGH COUNTY PROPERTY )
TAX ASSESSMENT BOARD OF APPEALS, )
ORDER ON PETITIONERS PETITION FOR REHEARING
NOT FOR PUBLICATION
April 30, 2004
Come now the Petitioners, Warren W. Spurling and SSS Development, LLC, and file
a Petition for Rehearing pursuant to Indiana Appellate Rules 54 and 63.
In their Petition, the Petitioners challenge this Courts holding in Spurling v. Vanderburgh
County Property Tax Assessment Board of Appeals, No. 82T10-0205-TA-44, slip opinion (Ind. Tax
Ct. November 13, 2003). Having reviewed the Petition, the Court now GRANTS
the Petition and, in lieu of scheduling a rehearing, addresses the merits of
Petitioners Petition in this order.
FACTS AND PROCEDURAL HISTORY
The Petitioners own and operate more than 10 commercial properties in Vanderburgh County,
Indiana. Each of these properties contains numerous improvements that are used as
offices and retail centers. For the 1999 tax year, the Petitioners improvements
were assessed pursuant to the General Commercial Mercantile (GCM) office model and were
each assigned a grade of C.
The Petitioners challenged the assessment of the improvements, first with the local assessing
authorities and then with the State Board of Tax Commissioners (State Board).
Throughout the appeal process, the Petitioners argued, among other things, that the improvements
were erroneously assessed because they were assigned a base price of approximately $36.00
per square foot, despite evidence indicating that they were constructed at a cost
of approximately $24.00 per square foot.
See Spurling, slip op. at 6.
Consequently, the Petitioners requested that the GCM retail model, which carried a
base price of approximately $23.00 per square foot, be used to assess its
improvements. See id.
Neither the local assessing officials, nor the Indiana Board of Tax Review (Indiana
, awarded the Petitioners any relief. Consequently, the Petitioners filed an original
tax appeal with this Court on May 1, 2002. After hearing the
parties oral arguments, this Court issued an opinion in which it affirmed the
Indiana Boards final determination. Spurling, slip. op. at 9.
On December 11, 2003, the Petitioners filed a Petition for Rehearing. The
Respondent, the Vanderburgh County Property Tax Assessment Board of Appeals (PTABOA), did not
file any response thereto.
But see Ind. Appellate Rule 54(C). Additional
facts will be supplied as necessary.
ANALYSIS & ORDER
In their Petition, the Petitioners argue that the Courts decision in Spurling was
erroneous because it did not address the argument that the Indiana Board, in
making its final determination, failed to follow Indiana Administrative Code title 50, rule
17-7-3. That regulation provides, in relevant part:
Evidence submitted to demonstrate that an individual assessment is not consistent with the
market value of the particular assessed property [is] deemed immaterial.
[However, e]vidence of actual construction costs or replacement costs may be submitted to
demonstrate that the tax system was not properly applied to the individual assessment
Ind. Admin. Code tit. 50, r. 17-7-3(b) & (d) (2001) (eff. 3-1-00).
More specifically, the Petitioners explain that at the hearing held before the Indiana
Board on September 5, 2000, they submitted evidence as to the actual construction
costs of their improvements pursuant to 50 IAC 17-7-3(d). The Petitioners assert
that, in turn, the Indiana Board failed to meaningfully deal with that evidence.
The Petitioners are correct.
Upon reviewing the administrative record again, the Court notes that, in its final
determination, the Indiana Board essentially made one finding with respect to the Petitioners
actual cost evidence. Indeed:
The Petitioner[s] also presented cost information. The Petitioner[s] state the cost to
construct the subject buildings was $24.00 per square foot. With regard to
the cost of constructing, the Tax Court stated: Relative costs of construction
materials are irrelevant in deciding whether the Major Buildings better resemble the characteristics
attributed to the Mill Manufacturing or Heavy Manufacturing models.
Inland Steel, 739
N.E.2d at 226. Accordingly, the cost of constructing the subject buildings in
this appeal are deemed irrelevant in deciding whether the General Office or General
Retail model is more appropriate.
(Cert. Admin. R. at 372.) Thus, the Indiana Board determined that the
Petitioners construction cost evidence was irrelevant solely in light of this Courts decision
in Inland Steel Company v. State Board of Tax Commissioners, 739 N.E.2d 201
(Ind. Tax Ct. 2000), review denied.
Inland Steel presented its case at the administrative level in a series of
hearings, the earliest in October, 1995, and the latest in November, 1998.
See Inland Steel Co., 739 N.E.2d at 209. The State Board issued
its final determination on the matter on February 16, 1998. Id.
Thus, Inland presented its case, and the State Board decided it, before
50 IAC 17-7-3 was even promulgated. At the time of the Petitioners
administrative hearing before the Indiana Board (September 5, 2000), however, 50 IAC17-7-3(d) was
in effect. Consequently, the Indiana Board erred in its failure to address
the Petitioners cost data in light of that regulation.
Upon review and for the foregoing reasons, this Court GRANTS the Petitioners Petition.
The Court REMANDS the case to the Indiana Board with instructions to
consider the Petitioners cost evidence in light of 50 IAC 17-7-3.
SO ORDERED this 30
th day of April, 2004.
Thomas G. Fisher, Judge
Andrew R. Rutz
Mark S. Samila
G. Michael Schopmeyer
KAHN, DEES, DONOVAN & KAHN, LLP
Fifth Main Financial Plaza
P.O. Box 3646
Evansville, IN 47735-3646
Attorney General of Indiana
By: Linda I. Villegas
Deputy Attorney General
Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, IN 46204-2770
Indiana Board of Tax Review
100 N. Senate Avenue
Indianapolis, IN 46204
On December 31, 2001, the legislature abolished the State Board of
Tax Commissioners (State Board). 2001 Ind. Acts 198 § 119(b)(2). Effective
January 1, 2002, the legislature created the Indiana Board of Tax Review (Indiana
Board) as successor to the State Board.
Ind. Code Ann. §§ 6-1.5-1-3;
6-1.5-4-1 (West Supp. 2003)(eff. 1-1-02); 2001 Ind. Acts 198 § 95. Consequently,
when the final determination was issued on Spurlings appeal in March of 2002,
the Indiana Board issued it.
Spurling, this Court addressed three issues: 1) burden of
proof; 2) proper application of the use models; and 3) proper grade assignment.
Spurling v. Vanderburgh County Property Tax Assessment Board of Appeals, No. 82T10-0205-TA-44,
slip op. at 4-9 (Ind. Tax Ct. November 13, 2003). The Petitioners
Petition for Rehearing is granted, however, with respect to the disposition of issue
two only. The Indiana Boards final determination with respect to issues one
and three remain AFFIRMED.