ATTORNEYS FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
STEPHEN E. DEVOE STEVE CARTER
B. KEITH SHAKE ATTORNEY GENERAL OF INDIANA
MICHAEL R. HARPRING Indianapolis, IN
HENDERSON DAILY WITHROW
& DEVOE TED J. HOLADAY
Indianapolis, IN DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
INDIANAPOLIS RACQUET CLUB, INC., )
v. ) Cause No. 49T10-0206-TA-59
WASHINGTON TOWNSHIP )
(MARION COUNTY ) ASSESSOR, )
ORDER ON PETITIONERS PETITION FOR REHEARING
NOT FOR PUBLICATION
May 28, 2004
Comes now the Petitioner, Indianapolis Racquet Club, Inc. (IRC), and files a Petition
for Rehearing pursuant to Indiana Appellate Rules 54 and 63. In
its Petition, IRC challenges this Courts holding in Indianapolis Racquet Club, Inc. v.
Washington Township (Marion County) Assessor, Cause No. 49T10-0206-TA-59, slip opinion (Ind. Tax Ct.
Feb. 6, 2004) (IRC). Having reviewed IRCs Petition and having held a
hearing thereon, the Court now DENIES IRCs Petition in part and GRANTS it
FACTS AND PROCEDURAL HISTORY
IRC owns and operates a commercial tennis club in Washington Township, Marion County,
Indiana. On November 12, 1996, IRC filed a Form 133 Petition for
Correction of Error with the Marion County Auditor. In its Form 133,
IRC asserted that, beginning with the 1991 assessment, its improvement was entitled to
a kit building adjustment pursuant to the State Board of Tax Commissioners (State
Board) Instructional Bulletin 91-8.
On September 25, 1997, the Washington Township Assessor sent a letter to IRC
approving its Form 133. The Assessor attached to the letter six Claims
for Refund (Forms 17T) for IRC to sign and notarize. These forms
calculated new assessment values on IRCs property (based on an application of Instructional
Bulletin 91-8) for tax years 1989, 1990, 1991, 1992, 1993, and 1994.
The Assessor indicated that the Forms 17T were necessary [i]n order to receive
a refund for the overpayment of taxes resulting from the
assessment error. IRC signed and returned the Forms 17T on January 25,
In the meantime, however, the Marion County Board of Review (BOR) sent a
notice to IRC denying its Form 133 because it was untimely filed.
IRC appealed the BORs determination to the State Board.
On August 16, 2001, the State Board held an administrative hearing on the
matter. On April 17, 2002, the Indiana BoardSee footnote issued a final determination
in which it determined that IRCs Form 133 petition was timely, and that
it was entitled to the kit building adjustment for 1991. Nevertheless, the
Indiana Board determined that IRCs Form 17Ts for the 1991 and 1992 tax
years were not timely filed. Accordingly, the Indiana Board determined that IRC
was entitled to receive property tax refunds for the 1993 and 1994 tax
IRC subsequently filed an original tax appeal. After hearing the parties oral
arguments, this Court issued an opinion in which it affirmed the Indiana Boards
IRC, slip op. at 9-10.
On March 8, 2004, IRC filed a Petition for Rehearing. The Court
held a hearing on IRCs Petition on April 19, 2004. Additional facts
will be supplied as necessary.
ANALYSIS & ORDER
In its Petition, IRC argues that the Courts decision in IRC was erroneous
for two reasons. First, it argues that the Court improperly denied IRCs
claim for refund of taxes paid for tax years 1991 and 1992.
Second, IRC argues that the Court failed to address the Indiana Boards improper
application of depreciation to its improvement. Each of these arguments will be
addressed in turn.
I. Refund of Taxes
In IRC, this Court determined that under the plain meaning of Indiana Code
See footnote , claims for refund of any property taxes paid for the tax
years 1991 and 1992
were due no later than May 10, 1995 and
May 10, 1996 respectively. Id., slip. op. at 6. Because IRCs
claims for refund for tax years 1991 and 1992 were not filed until
November 12, 1996, the Court affirmed the Indiana Boards determination denying them as
untimely. Id., slip op. at 6, 9.
IRC argues that this result is incorrect because the provisions of Indiana Code
§ 6-1.1-26-1 are not applicable. Rather, IRC argues that because it initiated
its appeal pursuant to Indiana Code § 6-1.1-15-12 (i.e., the Form 133), only
the provisions of chapter 15 apply to its claims for refund. (Petr
Pet. for Rehg at 2-3.) Specifically, IRC asserts that Indiana Code §
If a review or appeal authorized under this chapter results in a reduction
of the amount of an assessment . . . the taxpayer is entitled
to a credit in the amount of any overpayment of tax on the
next successive tax installment, if any, due in that year. If, after
the credit is given, a further amount is due the taxpayer, he may
file a claim for the amount due.
Ind. Code Ann. § 6-1.1-15-11 (West 2000) (amended 2002) (emphasis added). As
IRC correctly notes, Indiana Code § 6-1.1-15-11 contains absolutely no time limit
for filing a claim [for refund.] (Petr Pet. for Rehg at 4.)
Consequently, IRC claims that it is simply impossible for its 1991 and
1992 refund claims to be untimely.
See footnote Depreciation
IRCs argument, however, ignores the relationship between Indiana Code §§ 6-1.1-15 and 6-1.1-26.
There is no doubt that under Indiana Code § 6-1.1-15-11, once the
appropriate credit was applied to IRCs next successive tax installment and IRC determined
that there was still money remaining, it could, at that point, file a
claim for refund.
See A.I.C. § 6-1.1-15-11. Nevertheless, Chapter 15, titled
Procedures for Review and Appeal of Assessment and Correction of Errors, provides no
information as to how to file that claim. It is at this
point that Indiana Code § 6-1.1-26 (Refunds for Erroneous or Excessive [Property] Tax
Payments) applies. See Mechanics Laundry & Supply, Inc. v. Indiana Dept of
State Revenue, 650 N.E.2d 1223, 1232 (Ind. Tax Ct. 1995) (stating that where
words are used at one place in an Act, they will be construed
as used in the same sense at other places in the Act, unless
the clear context of the statute requires a different meaning). See also
Roehl Transp., Inc. v. Indiana Dep't of State Revenue, 653 N.E.2d 539, 542
(Ind. Tax Ct.1995) (explaining that when the Court considers two or more statutes
that relate to the same general subject matter, it will not read the
statutes piecemeal, but rather will read them in pari materia and construe them
Indiana Code § 6-1.1-26-1 unambiguously provides that a claim for refund must be
. . . filed within three (3) years after the taxes were first
due. A.I.C § 6-1.1-26-1(2) (emphasis added).
See footnote IRCs taxes resulting from the 1991
and 1992 assessments were first due on May 10, 1992, and May 10,
See IRC, slip op. at 5-6. Thus, when IRC filed
its claims for refund for the 1991 and 1992 tax years on November
12, 1996, they were outside the statutorily imposed three-year time limit and were,
therefore, properly denied.
In essence, what IRC is really arguing for is equitable relief: it
believes it is unreasonable to impose a limitation of any period of time
to recover a property tax refund in this case because the appeal has
drag[ged] on for more than three years. (See Petr Pet. for Rehg
at 6-7.) Such an assertion ignores the fact that, given the relationship
between Indiana Code § 6-1.1-15-11 and Indiana Code § 6-1.1-26-1, the legislature made
the right to recover a refund conditional
upon the claim being filed
within three years of the date the taxes were first due.
See footnote Thus,
a taxpayers right to recover a refund occurs only after the requirements of
Indiana Code § 6-1.1-26-1 have been met. Where the [l]egislature has by
statute created a right, afforded a remedy and prescribed a procedure to be
followed in connection with the remedy, that procedure must be strictly followed.
Marhoefer Packing Co., Inc. v. Indiana Dept of State Revenue, 301 N.E.2d 209,
219 (Ind. Ct. App. 1973) (citation omitted).
[A]ll time period limitations . . . have an inherent capability of working
inequities in particular cases. [This Court does] not believe, however, that such
eventuality obviates the necessity for observing clearcut statutory requirements. Id. at 218.
Accordingly, for the foregoing reasons, this Court did not err in affirming
the Indiana Boards determination denying IRC property tax refunds for tax years 1991
and 1992. IRCs Petition is therefore DENIED with respect to this issue.
In its Petition, IRC asserts:
For [the] 1989 [assessment], the improvements at IRCs Dean Road facility were originally
classified as a [General Commercial M[ercantile] Health Club. A 35% [physical] depreciation
adjustment was applied[.]
IRC appealed the assessment  of the tennis court area of these improvements.
IRC did not appeal the assessment of the lobby and locker room
areas. This Court ruled that the tennis court area should not have
assessed as a GCM Health Club. The Court remanded for a new
determination of the proper use type for the tennis court area.
At the re[mand] hearing, neither side raised any issue regarding the 35% depreciation
adjustment for the lobby and locker room areas[.] No evidence was offered
by either side that a different depreciation percentage should be used for that
When the [Indiana] Board performed the reassessment it applied a 30% depreciation adjustment
not only to the tennis court area . . . but also to
the lobby and locker rooms[.] This directly contravenes I[ndiana ]C[ode] 6-1.1-15-8(a)(2) which
provides, Upon remand, the Indiana [B]oard may take action only on those issues
specified in the decision of the tax court. As there had been
no judicial review sought by either side of the assessment of the lobby
and locker room areas, this Courts remand could not have specified the assessment
of those areas for action by the Indiana Board. Accordingly, the Indiana
Board was prohibited by law from changing the depreciation adjustment applicable to the
lobby and locker room areas.
IRC properly raised this issue in its [initial appeal to] this Court.
However, this Court did not address or resolve the issue in its opinion.
Thus, on rehearing, IRC is entitled to have this issue addressed by
the Court. This Court should do so now by ordering the Indiana
Board to restore the depreciation adjustment for the lobby and locker room areas
(Petr Pet. for Rehg at 8-9 (internal citations omitted) (footnote added).) The
Lobby and Locker Room Areas
When this Court initially ruled on IRCs 1989 assessment appeal, it held that
the evidence shows that the tennis facilitys features clearly better match those of
the light warehouse model than those of the health club model. Therefore,
the Court concludes that IRC has carried its burden to show that the
State Board abused its discretion by applying the wrong model in assessing the
Indianapolis Racquet Club, Inc. v. State Bd. of Tax Commrs, 722 N.E.2d 926,
939 (Ind. Tax Ct. 2000) (IRC I), revd on other grounds by 743
N.E.2d 247 (Ind. 2001). The Court subsequently remanded the matter for the
State Board to apply the model that most closely resembles the physical structure
of the tennis facility . . . and [to] recalculate the facilitys reproduction
costs based upon that model. Id. at 941. In addition, the
[IRC] is reminded that, on remand, it bears the burden of going forward
with probative evidence . . . concerning the appropriate model to use in
calculating the base rate for the . . . indoor tennis facility at
issue, including but not limited to evidence regarding the proper grade to be
assigned [to] the subject improvement.
Id. (internal citation and footnote omitted).
On August 16, 2001, when the State Board conducted the remand hearing, Indiana
Code § 6-1.1-15-8 provided that
[i]f a final determination by the state board of tax commissioners regarding the
assessment of any tangible property is vacated, set aside, or adjudged null and
void under the finding, decision, or judgment of the Indiana tax court, the
matter . . . shall be remanded to the state board of tax
commissioners for reassessment and further proceedings as specified in the decision of the
tax court. Upon remand the state board of tax commissioners may take
action only on those issues specified in the decision of the tax court.
Ind. Code Ann. § 6-1.1-15-8(a) (West 1995) (amended 2002). This Court remanded
IRCs 1989 assessment with respect to the tennis court area of the facility
only. Thus, it was improper for the Indiana Board to change the
amount of physical depreciation applied to the lobby and locker rooms of the
facility. The Court therefore GRANTS IRCs Petition with respect to this issue
and REMANDS it to the Indiana Board with instructions to reinstate the application
of a 35% physical depreciation factor to IRCs lobby and locker room areas,
effective beginning with the 1991 assessment. Tennis Court Area
IRC also asserts in its Petition that the Court failed to address its
claim that the tennis court area of its facility is entitled to 45%
physical depreciation. The Respondent, the Washington Township Assessor, concedes that that portion
of IRCs improvement is entitled to 45% physical depreciation. (Respt Resp. to
Pet. for Rehg at 5-6.) Consequently, IRCs Petition with respect to this
issue is GRANTED. The Court REMANDS the issue to the Indiana Board
to instruct the local assessing officials to apply a 45% physical depreciation factor
to IRCs tennis court area, effective beginning with the 1991 assessment.
For the foregoing reasons, the Court DENIES IRCs Petition for Rehearing with respect
to issue I. The Court GRANTS IRCs Petition for Rehearing with respect
to issues II(A) and II(B). The Court therefore REMANDS those issues to
the Indiana Board to instruct the local assessing officials to award IRCs improvement
with the proper amount of physical depreciation effective with the 1991 assessment, consistent
with this opinion.
SO ORDERED this 28th day of May, 2004.
Thomas G. Fisher, Judge
Indiana Tax Court
Stephen E. DeVoe
B. Keith Shake
Michael R. Harpring
HENDERSON DAILY WITHROW & DEVOE
2600 One Indiana Square
Indianapolis, IN 46204
Attorney General of Indiana
By: Ted J. Holaday
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
Starting with the March 1, 1991 assessment date, the State Board
of Tax Commissioners (State Board) applied a 50% reduction to the base rates
of certain, light pre-engineered buildings.
See King Indus. Corp. v. State Bd.
of Tax Commrs, 699 N.E.2d 338, 339 (Ind. Tax Ct. 1998). The
base rate reductions, known as kit building adjustments, were to account for the
low-cost of, and economical quality of material used in, these buildings. Id.
State Board Instructional Bulletin 91-8 provided guidance to assessors in determining which
buildings qualified for the reduction. See Componx, Inc. v. State Bd. of
Tax Commrs, 741 N.E.2d 442, 447 (Ind. Tax Ct. 2000).
The administrative record indicates that IRC did not file its Forms
at the earliest, January 25, 2001. (See Cert. Admin. R.
at 336-42; Respt Br. at 11.) Nevertheless, the Indiana Board gave IRC
the benefit of the doubt and considered them filed as of November 12,
1996 the day IRC filed its Form 133 Petition for Correction of
Error. (See Respt Br. at 11.)
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); 2001 Ind. Acts 198 § 95. Thus, when
a final determination was issued on IRCs appeal in April 2002, it was
issued by the Indiana Board.
Indiana Code § 6-1.1-26-1 provides that
A person . . . may file a claim for the refund of
all or a portion of a tax installment which he has paid.
However, the claim must be:
(1) filed with the auditor of the county in which the taxes were
filed within three (3) years after the taxes were first due;
(3) filed on the form prescribed by the state board of accounts and
approved by the state board of tax commissioners; and
(4) based upon one (1) of the following grounds:
(i) Taxes on the same property have been assessed and paid more than
once for the same year.
(ii) The taxes, as a matter of law, were illegal.
(iii) There was a mathematical error either in the computation of the assessment
upon which the taxes were based or in the computation of the taxes.
Ind. Code Ann. § 6-1.1-26-1 (West 2000) (amended 2002) (emphasis added).
In other words, IRC contends the time for IRC to file
that claim for the amount remaining due after credit does not even start
until after IRC receives the credit on its next tax installment, and that
credit proves insufficient. (Petr Pet. for Rehg at 3.)
Footnote: Stated another way, when a taxpayer files a claim for refund,
it is only entitled to go back three years for relief. Limitation
periods for claims for refunds are . . . justified by the need
for predictability of revenues by public agencies.
Marhoefer Packing Co., Inc. v.
Indiana Dept of State Revenue, 301 N.E.2d 209, 215 (Ind. Ct. App. 1973)
(internal quotation and citation omitted). Indeed, [i]f no time limitation were placed
upon refund claims, budgetary and fiscal planning would be rendered unduly difficult in
that the amount of revenue available at any given time to defray the
expenses of government would be uncertain as subject to stale claims. Id.
Footnote: More specifically, the requirements of Indiana Code § 6-1.1-26-1 are conditions
precedent to the statutory right of refund. A condition precedent is either
a condition which must be performed before an obligation becomes binding or a
condition which must be fulfilled before the duty to perform an existing obligation
arises. Graybar Elec. Co. v. State Bd. of Tax Commrs, 723 N.E.2d
491, 495 (Ind. Tax Ct. 2000) (citation omitted).
Indeed, when IRC filed its verified petition for judicial review with this
Court, it alleged:
[t]he physical depreciation for the entire building was determined by the [Indiana] Board
to be 30[%]. There is no probative evidence for such a determination.
. . . [T]he forty year life expectancy [table] is to be used
for wood joist apartments, offices, and medical facilities, parking garages, all fire resistant
buildings not listed elsewhere, railroad siding, elevated steel tanks, masonry stacks, retaining walls,
and dock facilities[.] The 40 year life expectancy table is the correct
table for all the building except . . . the Tennis Court Area.
The depreciation for all of the building except for the Tennis Court
Area should be 35%. . . . The depreciation for the Tennis Court
Area should be 45%.
(Petr V. Pet. for Judicial Review of a Final Determination of the Indiana
Board of Tax Review at 10-11, filed June 3, 2002.)
Footnote: This result may seem odd in light of the fact that
simultaneous with the filing of this order, the Court also issues an order
in which it denies IRC a physical depreciation adjustment with respect to its
1989 assessment. More specifically, in that order, this Court held that IRCs
facility (both the tennis court area and the lobby/locker room areas) was not
entitled to a depreciation adjustment because the issue was not raised in its
verified petition for judicial review, nor did IRC address the issue in either
its written briefs or its oral argument.
See Indianapolis Racquet Club, Inc.
v. Washington Township (Marion County) Assessor, Cause No. 49T10-0206-TA-60 (Ind. Tax Ct. May
28, 2004) (order denying petition for rehearing).
This Court may only decide those issues placed before it. Because IRC
raised the issue with this Court in its request for relief for the
1991 assessment, the Court addresses the issue. Having failed to place the
issue before the Court with respect to the appeal of its 1989 assessment,
however, IRC was denied the relief for that assessment.