ATTORNEYS FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
B. KEITH SHAKE STEVE CARTER
ROBERT L. HARTLEY, JR. ATTORNEY GENERAL OF INDIANA
MICHAEL R. HARPRING Indianapolis, IN
HENDERSON DAILY WITHROW & DEVOE
Indianapolis, IN JOEL SCHIFF
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
CONSOLIDATED SYSTEMS, INC., )
v. ) Cause No. 49T10-9704-TA-149
DEPARTMENT OF LOCAL )
See footnote )
ORDER ON PARTIES CROSS-MOTIONS
FOR SUMMARY JUDGMENT
NOT FOR PUBLICATION
May 28, 2004
Consolidated Systems, Inc. (Consolidated) appeals the State Board of Tax Commissioners (State Board)
final determination denying it an enterprise zone inventory credit
See footnote (EZ credit) for the
1995 and 1996 assessment years (years at issue). The matter is currently
before the Court on the parties cross-motions for summary judgment. The issue
for the Court to decide is whether the State Board erred in denying
Consolidateds application for the EZ credit.
FACTS AND PROCEDURAL HISTORY
The material facts as they relate to this case are undisputed. Consolidated
is a South Carolina corporation with its principal offices in Columbia, South Carolina.
Consolidated owns and operates a warehouse/distribution facility in Gary, Indiana, which is
in the Gary Urban Enterprise Zone. On October 10 and November 1,
1996, Consolidated filed Enterprise Zone Business Personal Property Tax Credit applications (Forms EZ-1)
with the Lake County Auditor (Auditor) for the years at issue. The
Auditor denied the applications because they were not timely filed.See footnote Consolidated appealed
to the State Board. The State Board also denied Consolidateds appeal.
Consolidated subsequently filed an original tax appeal on April 28, 1997. On
December 4, 1997, this Court issued an order staying Consolidateds cause pending the
Graybar Electric Company, Incorporated v. State Board of Tax Commissioners, Cause
No. 49T10-9603-TA-22. This Court issued its opinion in Graybar on February 2,
2000, finding that the timely filing of a Form EZ-1 was not a
condition precedent to actually receiving the credit.
Graybar Elec. Co., Inc. v.
State Bd. of Tax Commrs, 723 N.E.2d 491, 495 (Ind. Tax Ct. 2000).
Consolidated filed a motion for summary judgment on September 28, 2000. The
State Board requested a remand on January 29, 2001. The Court conducted
a hearing on the State Boards request on February 22, 2001; the Court
granted the State Boards request on March 13, 2001. In its remand
order, the Court instructed the State Board to consider Consolidateds Forms EZ-1 on
their merits, in light of its decision in Graybar. The State Board
reviewed Consolidateds Forms EZ-1 and, on June 4, 2001, issued another final determination
again denying Consolidateds applications. More specifically, the State Board determined that Consolidateds
failure to timely file its Forms EZ-1 did not meet any of the
factors it used to determine whether or not it should consider late filed
economic revitalization area (ERA) deduction applications. In addition, the State Board determined
that Consolidated failed to include the required Enterprise Zone Business Registration forms (Form
EZB-R) with its Forms EZ-1.
Consolidated filed an amended and supplemental petition for an original tax appeal on
July 17, 2001, and reasserted its motion for summary judgment on February 5,
2002. The State Board filed a cross-motion for summary judgment on March
See footnote The Court conducted a hearing on the parties motions on
June 17, 2002. 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.
In addition, a motion for summary judgment will be granted only when there
is no genuine issue of material fact and the moving party is entitled
to judgment as a matter of law. Ind. Trial Rule 56(C).
Cross motions for summary judgment do not alter this standard. Matonovich v.
State Bd. of Tax Commrs, 705 N.E.2d 1093, 1096 (Ind. Tax Ct. 1999),
In its remand order, this Court directed the State Board to consider the
merits of Consolidateds Forms EZ-1. Consolidated asserts that the State Board failed
to consider its Forms EZ-1 on the merits when, instead, it based its
final determination on the seven factors it uses to determine whether it should
consider untimely ERA deduction applications.
See footnote The State Board claims, however, that it
followed the express instruction of the Remand Order in review[ing Consolidateds Forms EZ-1].
. . . [I]t was required to review the application under the factors
set out in
Graybar and it did. (Respt Resp. to Mot. for
Summ. J. and Cross-Mot. for Summ. J. at 11-12.)
This Courts remand order stated, in relevant part, that:
[t]he [State Boards] Request for Remand states This cause should be remanded to
the State Board to review with the same factors applied to the late-filed
EZ credit application used in Graybar.
The Court finds that the request should be GRANTED. As this Court
in Graybar used the language in ordering a remand that the Court of
Appeals did in State Board of Tax Commissioners of Indiana v. New Energy
Company of Indiana, 585 N.E.2d 38 (Ind. Ct. App. 1992), trans. denied., the
Court now REMANDS this cause. On remand, the State Board is directed
to consider the merits of Consolidated Systems [applications].
(Cert. Admin. R. at 4-5.) The State Board erroneously incorporates the Courts
recitation of its request for remand with its actual order: the Court
unambiguously ordered the State Board to consider the merits of Consolidateds applications.
Graybar merely held that the State Board had jurisdiction to consider late filed
EZ credit applications (consistent with the decision of the Indiana Court of Appeals
in New Energy holding that the State Board could consider late filed ERA
deduction applications). See Graybar, 723 N.E.2d at 496 n.7. Graybar
did not hold that the State Board may or must utilize the factors
it adopted to consider late filed ERA deduction applications in considering late filed
EZ credit applications. Therefore, the State Board erred in using the seven
factors designated to consider late filed ERA deduction applications when considering Consolidateds Forms
Nevertheless, the State Board ultimately considered Consolidateds Forms EZ-1 on the merits; it
determined that they were incomplete because Consolidated failed to file a Form EZB-R.
(Cert. Admin. R. at 26.) In claiming that Consolidateds Forms EZ-1
were incomplete, the State Board relies on Indiana Code § 6-1.1-20.8-2(c), which states
that [c]ompliance with this chapter does not exempt a person from compliance with
IC 4-4-6.1-2.5. Ind. Code Ann. § 6-1.1-20.8-2(c) (West 1996) (repealed 2001).
Under Indiana Code § 4-4-6.1-2.5, a zone business that claims any of the
incentives available to zone businesses shall . . . submit to the board
. . . a verified summary [Form EZB-R] concerning the amount of tax
credits and exemptions claimed by the business in the preceding year[.]
Code Ann. § 4-4-6.1-2.5(a) (West 1995) (amended 2002). Furthermore, [i]f
a zone business fails to comply with [this requirement] before July 16 and
does not pay any penalty [for filing late] . . . the zone
business is denied all of the tax credit and exemption incentives available to
a zone business . . . for that year. A.I.C. § 4-4-6.1-2.5
(e). The State Board argues that by failing to timely file a
Form EZB-R, Consolidated waived its right to receive the inventory tax credit.
Essentially, the State Board concluded that Consolidated must be a zone business in
order to receive the EZ credit.
Consolidated claims, however, that it was not required to comply with Indiana Code
chapter 6.1 because it was not a zone business, nor was it required
to be a zone business in order to receive the EZ credit.
For the years at issue, a zone business was defined as any entity
that accesses at least one (1) tax credit or exemption incentive available under
this chapter. Ind. Code Ann. § 4-4-6.1-1.1 (West 1995) (amended 2002).
Consolidated asserts that since it is not seeking any of the zone business
incentives or credits available under Chapter 6.1[,] it was not required to file
a Form EZB-R. (Petr Reply in Supp. of its Mot. for Summ.
J. and Resp. to Respt Cross-Mot. for Summ. J. at 5.)
Consolidated is correct.
For the years at issue, no statute mandated that a taxpayer claiming an
EZ credit under Indiana Code chapter 20.8 must be a zone business subject
to the requirements of Indiana Code chapter 6.1.
See footnote Therefore, the State Board
could not require Consolidated to file a Form EZB-R in order to receive
the EZ credit. Consequently, the State Board erred when it determined that
Consolidateds Forms EZ-1 were incomplete because it did not provide proof that it
timely filed the Form EZB-R. (
See Cert. Admin. R. at 26.)
Accordingly, the Court finds that Consolidated was entitled to the EZ credit for
the years at issue.
For the aforementioned reasons, the Court DENIES the State Boards motion for summary
judgment and GRANTS summary judgment in favor of Consolidated. Therefore, the Court
REVERSES the final determination of the State Board, REMANDING it to the Indiana
Board of Tax Review (Indiana Board)
See footnote to instruct the local assessing officials to
award Consolidated the EZ credit for the 1995 and 1996 assessment years.
SO ORDERED this 28th day of May 2004.
Thomas G. Fisher, Judge
Indiana Tax Court
B. Keith Shake
Robert L. Hartley, Jr.
Michael R. Harpring
HENDERSON DAILY WITHROW & DEVOE
2600 One Indiana Square
Indianapolis, IN 46204
Attorney General of Indiana
By: Joel Schiff
Deputy Attorney General
Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, Indiana 46204-2770
Indiana Board of Tax Review
100 N. Senate Ave.
Room N-1058 (A)
Indianapolis, IN 46204
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.
A person is entitled to a credit against his property tax liability
under IC 6-1.1-2 for a particular year in the amount of his property
tax liability . . . on enterprise zone inventory for that year.
Ind. Code Ann. § 6-1.1-20.8-1(a) (West 1995) (amended 2003). Enterprise zone inventory
is defined as inventory, as defined in IC 6-1.1-3-11, that is located within
an enterprise zone created under IC 4-4-6.1[.] A.I.C. § 6-1.1-20.8-1(b).
Indiana Code § 6-1.1-20.8-2 provides that a person [who] timely files a
personal property return . . . for an assessment year must file the
[Form EZ-1] between March 1 and May 15 of that year in order
to obtain the credit in the following year.
Ind. Code Ann. §
6-1.1-20.8-2 (West 1995) (amended 1996) (repealed 2001).
Indeed, this Court held that the State Board had jurisdiction to consider,
on the merits, a taxpayers untimely Form EZ-1, as the statutory language [a
person] must file the application between March 1 and May 15 of [the
assessment] year in order to obtain the credit in the following year was
meant to inform taxpayers that the credit would be applied in the following
Graybar Elec. Co., Inc. v. State Bd. of Tax Commrs, 723
N.E.2d 491, 495-496 (Ind. Tax Ct. 2000). But see Dalton Foundaries, Inc.
v. State Bd. of Tax Commrs, 653 N.E.2d 548, 554-555 (Ind. Tax Ct.
1995) (finding that the township assessor had discretion to deny an untimely RRS
deduction application because the statutory language the person must file the statement between
March 1 and May 10, inclusive, of the assessment year . . .
[to obtain the deduction in that year] would be rendered meaningless to interpret
As referenced in footnote one,
supra, the State Board was abolished as
of December 31, 2001. Consequently, the DLGF actually filed the motion to
dismiss. For continuity purposes, however, this opinion will refer to the DLGFs
motion to dismiss as the State Boards.
Indiana Administrative Code title 50, rule 10-4-2(b) provides that:
In exercising its discretion [to consider a late-filed application for the economic revitalization
area deduction application], the state board shall consider the totality of the facts
and circumstances in determining whether or not to approve a late-filed deduction application.
Such consideration may be based on one (1) or more of the
Whether the failure to timely file the deduction application resulted from an act
of God, or from the death or serious illness of the person principally
responsible for the filing of the deduction application.
Whether the approval of the late-filed deduction application would result in the loss
of property tax revenues to the taxing units affected by the deduction.
Whether a public official gave misleading information to the taxpayer that was the
proximate cause of the late-filing, and whether it was reasonable for the taxpayer
to rely on that misleading information.
Whether the lapse between the filing deadline and the date on which the
deduction application was actually filed would have prevented local officials from accurately determining
the assessed value for budget, rate, and levy purposes.
Whether there is substantial evidence that local officials support the approval of the
late-filed application, even if such approval would result in a loss in tax
Whether the late-filing was not due to the taxpayers negligence.
Any other factor that the state board considers relevant.
Ind. Admin. Code tit. 50, r. 10-4-2(b) (Supp. 2001) (eff. 1996).
Indiana Code § 6-1.1-20.8-2(c) was not enacted until 1996, and therefore applies
only to one of the years at issue. Nonetheless, it is not
dispositive in this Courts analysis on the issues raised in this case.
Footnote: In 2000, the legislature broadened the definition of zone business to include
any entity seeking a tax credit under chapter 20.8.
See Ind. Code
Ann. § 4-4-6.1-1.1 (West 2000) (amended 2002). Thus, beginning January 1, 2000,
a taxpayer would statutorily be required to file a Form EZB-R under chapter
6.1 in order to receive the EZ credit.
All cases that would have been remanded to the State Board are
now remanded to the Indiana Board of Tax Review (Indiana Board).
Code Ann. § 6-1.1-15-8 (West Supp. 2003). Final determinations made by the
Indiana Board are subject to review by this Court pursuant to Indiana Code
§ 6-1.1-15. Ind. Code Ann. §§ 6-1.5-5-7, 3-33-5-2 (West Supp. 2003).