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
    Indianapolis, IN
    

_____________________________________________________________________

    IN THE INDIANA TAX COURT _____________________________________________________________________

INDIANAPOLIS RACQUET CLUB, INC.,                                          )
                                                                               )
    Petitioner,                                                                )
                                                                               )
    v.                                                                         )   Cause No. 49T10-0206-TA-59
                                                                               )
WASHINGTON TOWNSHIP                                                            )              
(MARION COUNTY                                                                 ) ASSESSOR,         )
                                                                               )
    Respondent.                                                                )    
 _____________________________________________________________________
     
                                                 

ORDER ON PETITIONER’S PETITION FOR REHEARING


NOT FOR PUBLICATION
May 28, 2004


FISHER, J.

    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 Court’s 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 IRC’s Petition and having held a hearing thereon, the Court now DENIES IRC’s Petition in part and GRANTS it in part.
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. See footnote
    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 IRC’s 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, 2001.See footnote
    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 BOR’s 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 IRC’s Form 133 petition was timely, and that it was entitled to the kit building adjustment for 1991. Nevertheless, the Indiana Board determined that IRC’s 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 years only.
    IRC subsequently filed an original tax appeal. After hearing the parties’ oral arguments, this Court issued an opinion in which it affirmed the Indiana Board’s final determination. IRC, slip op. at 9-10.
    On March 8, 2004, IRC filed a Petition for Rehearing. The Court held a hearing on IRC’s Petition on April 19, 2004. Additional facts will be supplied as necessary.
ANALYSIS & ORDER

    In its Petition, IRC argues that the Court’s decision in IRC was erroneous for two reasons. First, it argues that the Court improperly denied IRC’s claim for refund of taxes paid for tax years 1991 and 1992. Second, IRC argues that the Court failed to address the Indiana Board’s 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 § 6-1.1-26-1 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 IRC’s claims for refund for tax years 1991 and 1992 were not filed until November 12, 1996, the Court affirmed the Indiana Board’s 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. (Pet’r Pet. for Reh’g at 2-3.) Specifically, IRC asserts that Indiana Code § 6-1.1-15-11 governs:
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.]” (Pet’r Pet. for Reh’g at 4.) Consequently, IRC claims that it is simply impossible for its 1991 and 1992 refund claims to be “untimely.” See footnote
    IRC’s 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 IRC’s “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 Dep’t 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 harmoniously).
    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 IRC’s taxes resulting from the 1991 and 1992 assessments were first due on May 10, 1992, and May 10, 1993. 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 Pet’r Pet. for Reh’g 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 taxpayer’s 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 Dep’t 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 Board’s determination denying IRC property tax refunds for tax years 1991 and 1992. IRC’s Petition is therefore DENIED with respect to this issue.

Depreciation

    In its Petition, IRC asserts:
For [the] 1989 [assessment], the improvements at IRC’s 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 portion.

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 Court’s 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. See footnote 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 to 35%.

(Pet’r Pet. for Reh’g at 8-9 (internal citations omitted) (footnote added).) The Court agrees.

Lobby and Locker Room Areas

    When this Court initially ruled on IRC’s 1989 assessment appeal, it held that
the evidence shows that the tennis facility’s 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 tennis facility.

Indianapolis Racquet Club, Inc. v. State Bd. of Tax Comm’rs, 722 N.E.2d 926, 939 (Ind. Tax Ct. 2000) (“IRC I”), rev’d 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 facility’s reproduction costs based upon that model.” Id. at 941. In addition, the Court stated:
[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 IRC’s 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 IRC’s 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 IRC’s 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 IRC’s improvement is entitled to 45% physical depreciation. (Resp’t Resp. to Pet. for Reh’g at 5-6.) Consequently, IRC’s 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 IRC’s tennis court area, effective beginning with the 1991 assessment.
CONCLUSION

    For the foregoing reasons, the Court DENIES IRC’s Petition for Rehearing with respect to issue I. The Court GRANTS IRC’s 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 IRC’s improvement with the proper amount of physical depreciation effective with the 1991 assessment, consistent with this opinion. See footnote
SO ORDERED this 28th day of May, 2004.

        _____________________________
            Thomas G. Fisher, Judge
            Indiana Tax Court
Distribution:

Stephen E. DeVoe
B. Keith Shake
Michael R. Harpring
HENDERSON DAILY WITHROW & DEVOE
2600 One Indiana Square
Indianapolis, IN 46204

Steve Carter
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
Room N-1058(A)
Indianapolis, IN 46204


Footnote: 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 Comm’rs, 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 Comm’rs, 741 N.E.2d 442, 447 (Ind. Tax Ct. 2000).


Footnote: The administrative record indicates that IRC did not file its Forms 17T until, at the earliest, January 25, 2001. (See Cert. Admin. R. at 336-42; Resp’t 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 Resp’t Br. at 11.)


Footnote: 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 IRC’s appeal in April 2002, it was issued by the Indiana Board.

Footnote:      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 originally paid;
(2) 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).


Footnote: 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.” (Pet’r Pet. for Reh’g 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 Dep’t 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 Comm’rs, 723 N.E.2d 491, 495 (Ind. Tax Ct. 2000) (citation omitted).

Footnote:      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%.

(Pet’r 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 IRC’s 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.