PETITIONER APPEARING PRO SE: ATTORNEYS FOR RESPONDENT:
RANDALL COLE STEVE CARTER
Tell City, IN ATTORNEY GENERAL OF INDIANA
TED J. HOLADAY
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
WRC COMPANY BY RANDALL COLE, )
v. ) Cause No. 49T10-0104-TA-33
DEPARTMENT OF LOCAL )
ON APPEAL FROM A FINAL DETERMINATION
OF THE STATE BOARD OF TAX COMMISSIONERS
NOT FOR PUBLICATION
June 27, 2002
WRC Company (WRC) appeals the final determination of the State Board of Tax
Commissioners (State Board) establishing the assessed value of WRCs property as of March
1, 1995. WRC raises two issues, which the Court restates as:
Whether WRCs land was entitled to more than the 50% negative influence factor
already applied to it for the floodplain that existed on part of WRCs
Whether WRCs apartments interior stairways should have been assessed using a different base
rate than the apartment building.
For the reasons stated below, the Court AFFIRMS the State Boards final determination
on both issues. FACTS AND PROCEDURAL HISTORY
WRCs property is located in Troy Township, Perry County, Indiana. WRCs property
consists of twelve lots
with an apartment building that occupies six of those
Under the Perry County Land Order, the base rate values for
platted commercial lots in WRCs area ranged between $100 to $150 per front
foot. The township assessed WRCs property at $125 per front foot.
The township valued WRCs land at $19,500 and valued the improvements at $128,170.
WRC then filed a Form 130 Petition for Review with the Perry County
Board of Review (BOR). WRC argued, among other things, that its assessment
should be reduced because one-half of its property was in a floodplain, that
its assessment of its apartment building should not have included its interior stairways,
and that the measurement of its asphalt was incorrect. The BOR gave
WRC a 50% negative influence factor on four of its unimproved lots in
the floodplain (Lots 7-10),
lowered the grade of the apartment building to a
D+2, and assigned 10% obsolescence depreciation to its asphalt paving. As a
result, the BOR lowered WRCs assessment of its land to $16,870 and its
improvements to $115,930.
On February 5, 1997, WRC filed a Form 131 Petition with the State
Board, who denied WRCs petition. WRC subsequently appealed to this Court.
On November 1, 2000, pursuant to a joint motion, this Court ordered the
petition remanded to the State Board. On remand, WRC argued that it
should have received more than a 50% negative influence factor for the floodplain
on its property because a prior State Board final determination from its 1989
assessment granted it a 65% negative influence factor on Lots 1-6 and 95%
negative influence factor on Lots 7-12. WRC also argued that the assessment
of its apartment building should be reduced because of its interior stairways.
The State Board conducted its remand hearing and issued its final determination on
March 1, 2001. The State Board refused to increase the negative influence
factor to WRCs property because it found that WRC had failed to present
probative evidence supporting its argument for a greater negative influence factor. The
State Board also found that its regulations did not provide for an adjustment
to the base rate when an apartment has an interior stairway. Finally,
pursuant to the parties stipulation, the State Board reduced the measurement of WRCs
paving area. Thus, the State Board decreased the assessment of WRCs improvements
to $109,870 but affirmed the assessment of WRCs land at $16,870.
WRC filed this original tax appeal on April 11, 2001. This Court
conducted a trial on November 29, 2001. Additional facts will be supplied
ANALYSIS AND OPINION
Standard of Review
The Court gives great deference to the State Boards final determinations when the
State Board acts within the scope of its authority. Wetzel Enters., Inc.
v. State Bd. of Tax Commrs, 694 N.E.2d 1259, 1261 (Ind. Tax Ct.
1998). Accordingly, this Court reverses final determinations of the State Board only
when those decisions are unsupported by substantial evidence, are arbitrary or capricious, constitute
an abuse of discretion, or exceed statutory authority. Id.
The taxpayer bears the burden of demonstrating the invalidity of the State Boards
final determination. Clark v. State Bd. of Tax Commrs, 694 N.E.2d 1230,
1233 (Ind. Tax Ct. 1998). The taxpayer must present a prima facie
case, which is a case in which the evidence is sufficient to establish
a given fact and which if not contradicted will remain sufficient. Damon
Corp. v. State Bd. of Tax Commrs, 738 N.E.2d 1102, 1106 (Ind. Tax
Ct. 2000) (citations and internal quotation marks omitted). To establish a prima
facie case, the taxpayer must offer probative evidence concerning the alleged error.
King Indus. v. State Bd. of Tax Commrs, 699 N.E.2d 338, 343 (Ind.
Tax Ct. 1998).
I. Negative Influence Factor
WRC contends that the State Board erroneously declined to increase WRCs 50% negative
influence factor to account for the fact that half of its lots are
in a floodplain. Specifically, WRC argues that Lots 1-6 should have been
assigned a 65% negative influence factor while Lots 7-12 should have received a
95% negative influence factor because a 1989 State Board final determination previously applied
those particular influence factors to WRCs property. The State Board does not
dispute that half of WRCs lots are in a floodplain but argues that
WRC has failed to make a prima facie showing that the 50% negative
influence factor already awarded to these floodplain lots is erroneous. The State
Board further argues that WRC has failed to present any probative evidence to
support the application of any negative influence factor to WRCs remaining lots where
the apartment building sits.
An influence factor refers to a condition peculiar to the lot that dictates
an adjustment, either positive or negative, to the extended value to account for
variations from the norm. Ind. Admin. Code tit. 50, r. 2.2-4-10(a)(9) (1996).
To apply an influence factor, an assessor must identify the deviations from
the norm in the property. White Swan Realty v. State Bd. of
Tax Commrs, 712 N.E.2d 555, 562 (Ind. Tax Ct. 1999), review denied.
These deviations are then expressed as a percentage that represents the composite effect
of the factor that influences the value. Id. A taxpayer seeking
to have a negative influence factor applied has the burden to produce probative
evidence that would support an application of a negative influence factor and a
quantification of that influence factor. Phelps Dodge v. State Bd. of Tax
Commrs, 705 N.E.2d 1099, 1106 (Ind. Tax Ct. 1999), review denied.
WRC argues that it is entitled to an increase in its negative influence
factor on all of its lots because half of its lots (Lots 7-12)
are in a floodplain. The State Board did not dispute that these
six lots are in the floodplain. The State Board agreed that the
existence of the floodplain on these six lots would support an application of
a negative influence factor. (State Bd. Tr. at 36.) Indeed, the
State Board affirmed the 50% negative influence factor that the BOR had given
to WRC for four of the lots in the floodplain. However, WRC
still has the burden of showing the quantification of that influence factor for
these floodplain lots. See Phelps Dodge, 705 N.E.2d at 1106. Furthermore, WRC
has the burden of showing probative evidence that would support an application of
a negative influence factor to the lots not in the floodplain (Lots 1-6)
and a quantification of that influence factor. See id.
To try to meet its burden of showing that it is entitled to
a higher negative influence factor, WRC introduced evidence of a 1996 State Board
final determination issued in response to the appeal of WRCs 1989 reassessment in
which the State Board applied a 65% influence factor to Lots 1-6 and
a 95% influence factor to Lots 7-12. WRC argues that because these
65% and 95% influence factors were applied to its property before, it is
entitled to these same influence factors in this case. WRC is mistaken.
In original tax appeals, each assessment and each tax year stands alone.
Quality Farm and Fleet, Inc. v. State Bd. of Tax Commrs, 747
N.E.2d 88, 93 (Ind. Tax Ct. 2001). The fact that WRCs property
received these influence factors in one tax year is not necessarily indicative of
the influence factor for a subsequent reassessment. Thus, the State Boards final
determination from a 1989 appeal is not probative as to how the property
should be assessed for the 1995 tax year.
WRC also introduced into evidence a property record card of a comparable property
(half of Block 163) that was located down the street from its property
(Block 104). (See Petr Exs. 2 & 6.) The property record
card shows that the property originally received a 50% negative influence factor for
being located in the floodplain but later received a 90% influence factor after
a State Board final determination. Other than stating that both properties were
comparable because they were on the same block and were in the floodplain,
WRC provided no explanation of how the property was comparable. However, a
statement that properties are comparable is nothing more than a conclusion, and conclusory
statements do not constitute probative evidence. Quality Farm and Fleet, 747 N.E.2d
at 93. Thus, WRC has failed to provide the State Board with
probative evidence to support its position on the negative influence factor issue.
Accordingly, this Court AFFIRMS the State Boards determination that the lots in the
floodplain are entitled to a 50% negative influence factor.
II. Base Rate
WRC argues that it was entitled to a reduction to its base rate
for the interior stairways in its apartment building. Specifically, WRC claims that
the apartments interior stairways should have been assessed using a different base rate
than the apartment building because the stairways were lit but did not have
heating, air conditioning, or plumbing. The State Board argues that WRC is
not entitled to relief on this issue because WRC did not present any
evidence to show that the interior stairways were not already factored into the
base price used in pricing apartment units.
Under Indianas property tax assessment system, assessors use cost schedules to determine the
base reproduction cost of a particular improvement. Inland Steel Co. v. State
Bd. of Tax Commrs, 739 N.E.2d 201, 223 (Ind. Tax Ct. 2000), review
denied. Schedule A of the State Boards regulations includes cost schedules listing
the base prices for different commercial, industrial, and residential improvements. See Ind.
Admin. Code tit. 50, r. 2.2-11-6 (1996). To compute the base rates
for an improvement, an assessor must locate the model that best matches the
improvement being assessed. Barth, Inc. v. State Bd. of Tax Commrs, 756
N.E.2d 1124, 1132 (Ind. Tax Ct. 2001). The State Boards regulations describe
a model as a conceptual tool used to replicate reproduction cost of a
given structure using typical construction materials. The model assumes that there are
certain elements of construction for a given use type. Ind. Admin. Code
tit. 50, r. 2.2-10-6.1(a)(1) (1996). The base prices in Schedule A for
the various models have corresponding values for the different floor levels. The
cost of each floor level includes the cost of some structural components.
Ind. Admin. Code tit. 50, r. 2.2-10-6.1(a)(3) (1996).
The Court agrees with the State Board that WRC has failed to show
that the interior stairways were not reflected in the base price of the
cost schedules used for pricing apartments. Indeed, the regulations state that stairways
and access ways are included as a structural component in the prices for
the different floor levels. Ind. Admin. Code tit. 50, r. 2.2-10-6.1(a)(3)(B)(ii).
Because the stairways were taken into consideration in the cost schedules used for
calculating the base price of WRCs apartment, WRC has failed to meet its
burden of showing that its apartment was erroneously assessed. Thus, this Court
AFFIRMS the State Boards final determination on this issue.
For the aforementioned reasons, the Court AFFIRMS the State Boards final determination on
The State Board of Tax Commissioners (State Board) was originally the
Respondent in this appeal. However, as of December 31, 2001, the legislature
abolished the State Board. P.L. 198-2001, § 119(b)(2). Effective January 1,
2002, the legislature created the Department of Local Government Finance (DLGF),
§ 6-1.1-30-1.1 (West Supp. 2001)(eff. 1-1-02); P.L. 198-2001, § 66, and the Indiana
Board of Tax Review (Indiana Board). Ind. Code § 6-1.5-1-3 (West Supp.
2001)(eff. 1-1-02); P.L. 198-2001, § 95. Pursuant to Indiana Code § 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 § 6-1.5-5-8 (West Supp. 2001)(eff. 1-1-02); P.L. 198-2001, § 95. Moreover,
the law in effect prior to January 1, 2002 applies to these appeals.
Ind. Code § 6-1.5-5-8 (West Supp. 2001)(eff. 1-1-02); P.L. 198-2001, §§ 95,
117. Although the DLGF has been substituted as the Respondent, this Court
will still reference the State Board throughout this opinion.
The twelve lots made up Block 104 in Troy Township.
See Petr Ex. 2.) Lots 1, 2, 11, and 12 each
measure 48 feet x 70 feet, while Lots 3-10 each measure 48 feet
x 140 feet.
WRCs apartment building occupies Lots 1-6.
Footnote: The Court notes that the township assessor did not assess Lots
11 and 12 during the 1995 assessment. (State Bd. Tr. at 24,
74.) The Court will make no determination as to these lots.
Footnote: WRC also appears to argue that its property is improperly
assessed because if one were to convert its property into acreage, then its
land would have been assessed higher than the land order section on acreage
would allow. However, WRCs commercial land is divided into platted lots.
The plain language of the land order for commercial and industrial platted land
requires that WRCs land be assessed on a front foot basis. (State
Bd. Tr. at 71.) Therefore, WRCs land was correctly was assessed under
the platted section of the land order on a front foot basis, and
WRCs argument has no merit.
See McDonalds Corp. v. Indiana State Bd.
of Tax Commrs, 747 N.E.2d 654, 657-58 (Ind. Tax Ct. 2001)