ATTORNEY FOR PETITIONER:
DAVID L. PIPPEN
ATTORNEY AT LAW
Indianapolis, IN
STEVE CARTER
ATTORNEY GENERAL OF INDIANA
Indianapolis, IN
JOEL SCHIFF
DEPUTY ATTORNEY GENERAL
Indianapolis, IN
_____________________________________________________________________
IN THE
INDIANA TAX COURT
_____________________________________________________________________
WALKER MANUFACTURING CO., )
by T.E. CONNER and R.L. PORTER )
and CWB LTD PARTNERSHIP III, )
)
Petitioners, )
)
v. ) Cause No. 49T10-9701-TA-00006
)
DEPARTMENT OF LOCAL )
GOVERNMENT FINANCE,
See footnote
)
)
Respondent. )
OF THE STATE BOARD OF TAX COMMISSIONERS
_____
FOR PUBLICATION
July 11 , 2002
FISHER, J.
Walker Manufacturing by Thomas E. Conner, Robert L. Porter, and CWB LTD Partnership
III (Walker) appeals the final determinations of the State Board of Tax Commissioners
(State Board) of Walker’s 133 Petitions for the 1990–91 tax years and its
131 Petitions for the 1992 tax year assessing Walker’s land and improvements.
The Court restates the issues as:
I. Whether the Court has subject matter jurisdiction over Walker’s 133 Petitions; and
II. Whether Walker presented a prima facie case that its land and improvements for
the 1992 tax year should be reduced because its land was improperly classified
and because its improvements are entitled to grade and obsolescence adjustments.
For the following reasons, the Court DISMISSES Walker’s appeal of its 133 Petitions
for lack of subject matter jurisdiction and AFFIRMS that State Board’s final determinations
of Walker’s 131 Petitions.
FACTS AND PROCEDURAL HISTORY
Walker is a manufacturing business in the city of Ligonier in Noble County,
Indiana. It owns two parcels of land with an improvement on each
parcel. The parcel numbers are 075-030-155-00 (parcel 155) and 075-030-210-00 (parcel 210).
For the 1989–91 tax years, Walker filed with the Noble County Board
of Review (BOR) three Form 133 Petitions for Correction of Error (133 Petition)
for parcel 155 and its improvement, arguing that its improvement had been assessed
excessively for various building components and assessed for building components that were absent
from the improvement.
See footnote Walker also challenged parcel 155’s land classification. The
BOR denied Walkers petitions and forwarded them to the State Board.
On November 24, 1993, the State Board issued its final determination on Walker’s
133 Petitions.See footnote In particular, the State Board granted Walker no relief on
the issues of the various building components or land classification. Moreover, the
State Board assessed certain yard improvementsSee footnote for which Walker had not previously been
assessed.
On January 7, 1994, Walker appealed the State Board’s final determinations to this
Court. Among other things, Walker sought to challenge the fact that it
had been afforded no hearing on the State Board’s assessment of its yard
improvements. Walker also sought to challenge the use of what it believed
was subjective judgment by the State Board in reaching its final determinations.
Walker, however, did not timely initiate its original tax appeal; consequently, on
August 25, 1994, this Court dismissed Walker’s appeal for the lack of subject
matter jurisdiction.See footnote
Walker Mfg. v. State Board of Tax Comm’rs, Nos. 49T10-9401-TA-00009
& 49T10-9401-TA-00011 slip op. at 1–3 (Ind. Tax Ct. Aug. 25, 1994).
On September 27, 1994, Walker re-filed with the BOR its claims in subsequent
133 Petitions for the 1990–91 tax years.
See footnote In this second batch of
133 Petitions, Walker raised the same claims that this Court had dismissed one
month earlier for the lack of subject matter jurisdiction. The BOR again
denied Walker’s 133 Petitions. On October 27, 1994, the BOR forwarded Walker’s
133 Petitions to the State Board. On November 22, 1996, the State
Board issued final determinations denying Walker’s 133 Petitions yet again.
For the 1992 tax year, Walker filed with the BOR a Form 130
Petition for Review of Assessment for both parcels and improvements.See footnote The BOR
denied Walker’s 130 Petitions on November 17, 1993. On November 24, 1993,
Walker filed two Form 131 Petitions for Review of Assessment (131 Petition) with
the State Board. Walker argued that the assessment of the land and
improvements for parcels 155 and 210 should have been reduced for the 1992
tax year because the land was improperly classified and because the improvements were
entitled to grade and obsolescence adjustments. On November 22, 1996, the State
Board issued its final determinations. It made no changes to the land
classifications for either parcel, nor did it change the grade or obsolescence for
either improvement.
On January 3, 1997, Walker initiated an original tax appeal of the State
Board’s final determinations on its 131 and 133 Petitions. A trial was
held on September 2, 1998. The Court heard oral arguments on February
25, 1999. Additional facts will be supplied when necessary.See footnote
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. Thousand Trails, Inc.
v. State Bd. of Tax Comm’rs, 757 N.E.2d 1072, 1075 (Ind. Tax Ct.
2001). 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.
Furthermore, a taxpayer who appeals to this Court from a State Board final
determination bears the burden of showing that the final determination was invalid.
Id. The taxpayer must present a prima facie case by submitting probative evidence,
i.e., evidence sufficient to establish a given fact that, if not contradicted, will
remain sufficient. Id. Once the taxpayer presents a prima facie case,
the burden shifts to the State Board to rebut the taxpayer’s evidence and
support its findings with substantial evidence. Id.
Discussion
I. Subject Matter Jurisdiction
See footnote
The Indiana legislature has expressly provided that “[i]f a taxpayer fails to comply
with any statutory requirement for the initiation of an original tax appeal, the
tax court does not have jurisdiction to hear the appeal.”
Ind. Code
§ 33-3-5-11(a); Thousand Trails, 757 N.E.2d at 1075–76. A taxpayer may file
a 133 Petition when it discovers an error that “can be corrected without
resort to subjective judgment and according to objective standards[.]” Hatcher v. State
Bd. of Tax Comm’rs, 561 N.E.2d 852, 857 (Ind. Tax Ct. 1990).
If the State Board denies a taxpayer’s 133 Petition, the taxpayer may appeal
that denial, but it must do so by initiating an original tax appeal
within forty-five days of receiving the State Board's notice of its final determination.
Ind. Code § 6-1.1-15-5(c)–(d) (1998); see also Indiana Model Co., Inc. v.
State Bd. of Tax Comm’rs, 639 N.E.2d 695, 698 (Ind. Tax Ct. 1994)
(finding that Indiana Code Section 6-1.1-15-5 imposes a jurisdictional time limit on a
taxpayer initiating an original tax appeal).
This Court dismissed Walker’s 133 Petitions for the 1989–91 tax years for the
lack of subject matter jurisdiction because Walker did not timely initiate its tax
appeal. Walker Mfg., Nos. 49T10-9401-TA-00009 & 49T10-9401-TA-00011, slip op. at 1–3.
Walker, having re-filed the same claims in subsequent 133 Petitions for the 1990–91
tax years, is back before the Court. In regards to Walker’s re-filed
133 Petitions, Walker’s tax representative, M. Drew Miller of Landmark Appraisals, Inc., testified
as follows:
Q [Schiff]. Did you file a 133 petition for ’89, ’90 and ’91?
A [Miller]. Yes, we did.
Q. . . . And you got a final determination and you didn’t appeal,
correct?
A. I believe it was appealed.
Q. Where was it appealed to?
A. The Tax Court.
Q. It was appealed to the Tax Court?
A. And I believe it was filed late.
Q. So you were dismissed on it?
A. Correct.
Q. So your remedy was to bring another 133 appeal?
A. [The State Board] still failed to address the issues that we had before
them, but on the other hand picking up what I consider subjective [sic].
* * * *
Q. What authority, if you know, do you have to bring a second 133
appeal?
A. To my knowledge there isn’t any time limit that you can only file
one.
* * * *
A. [The 133 Petitions] were appealed twice.
. . . .
Most of it is the same issues that we’ve discussed today, the lack
of features that are assumed present.
. . . .
[W]e were appealing the addition of those [yard] improvements based on being picked
up with judgmental considerations without the opportunity to address those subjective areas, as
well as the interior components and exterior components that we feel should’ve been
deducted [sic].
See footnote
Q. But you tried that once and were dismissed?
A. [The State Board] ignored the issues[.]
Q. In other words, you tried to make that appeal to this court and
you were dismissed?
A. . . . . It was dismissed because of a mix-up in
the attorney’s officeSee footnote and they got filed late.
(Trial Tr. at 42–44 (footnotes added).)
Miller apparently was under the misapprehension that if Walker had missed the forty-five
day deadline for initiating an original tax appeal of its claims in its
first 133 Petitions, then all it needed to do was to re-file its
claims in subsequent 133 Petitions and appeal the State Board’s final determination of
those petitions within forty-five days. However, if Walker wished to appeal the State
Board's final determination of the claims that Walker made in its first batch
of 133 Petitions, then the law required Walker to initiate an original tax
appeal within forty-five days of receiving the State Board's final determination of those
claims.
See I.C. § 6-1.1-15-5(c)–(d); Indiana Model Co., 639 N.E.2d at 698.
The law did not authorize Walker to resurrect its claims by re-filing
its 133 Petitions with the BOR, nor did the time limit for initiating
an original tax appeal begin anew after Walker re-filed its 133 Petitions.
See I.C. 6-1.1-15-5(d).
In short, Walker—which has not shown that it raised any new issues in
its re-filed 133 Petitions—appears to be trying for a second bite at the
apple here. The law, however, provides Walker with no second bite at
the apple; when a taxpayer does not comply with the provisions of Indiana
Code Section 6-1.1-15-5, then this Court does not have subject matter jurisdiction over
the taxpayer’s claim. I.C. § 33-3-5-11(a); Indiana Model Co., 639 N.E.2d at
698. Cf. Lakeview Village, Inc. v. Board of County Commissioners of Johnson
County, 659 P.2d 187, 197 (Kan. 1983) (holding that time limit for initiating
a tax appeal under Kansas jurisdictional statute was a “limitation[] upon the right
itself, so that when time expires, the right to bring such an action
is extinguished”); Automobile Sales Co. v. Johnson, 122 S.W.2d 453, 458 (Tenn. 1938)
(holding that “when a statute which creates a right of action expressly limits
the time in which suit to enforce the right may be brought, .
. . limitation of the remedy is a limitation of the right.”).
The fact remains that pursuant to Indiana Code Section 6-1.1-15-5, Walker did not
timely appeal the State Board’s final determination of the claims Walker raised in
its first batch of 133 Petitions. Thus, the Court does not have
subject matter jurisdiction over those claims regardless whether Walker re-filed them in subsequent
133 Petitions.
See footnote
Were the Court to hold otherwise, Walker would be able to confer subject
matter jurisdiction on this Court after it has already dismissed Walker’s claims for
the lack of subject matter jurisdiction. No party, however, can confer subject
matter jurisdiction on this Court.
Lake County Council v. State Bd. of
Tax Comm’rs, 706 N.E.2d 270, 274 (Ind. Tax Ct. 1999), reversed on other
grounds. Moreover, were the Court to hold otherwise, it would nullify the
forty-five day time limit for initiating an original tax appeal of a State
Board final determination of a 133 Petition. This Court presumes that the
legislature did not intend to enact a nullity when it provided for the
forty-five-day time limit for initiating an original tax appeal from a State Board
final determination under Indiana Code Section 6-1.1-15-5(d)(1). See City Securities Corp. v.
Dep’t of State Revenue, 704 N.E.2d 1122, 1126 (Ind. Tax Ct. 1998) (holding
that the Court will not interpret the law in such a way as
to render a jurisdictional statute a nullity); Hatcher v. Indiana State Bd. of
Tax Comm’rs, 561 N.E.2d 852, 856 (Ind. Tax Ct. 1990) (refusing to interpret
the real property tax appeal process in such a way as to render
meaningless a limitation on the time to initiate an original tax appeal).
Accordingly, the Court again DISMISSES Walker’s appeal of its 133 Petitions for the
lack of subject matter jurisdiction.
II. 1992 Assessment of Parcels 155 & 210
The Court now considers whether Walker presented a prima facie case showing that
the assessments of the parcel 155 and 210 land and improvements for the
1992 tax year should be reduced because the land for both parcels was
improperly classified and because the improvements are entitled to grade and obsolescence adjustments.
Walker argues that, regarding these issues, the State Board did not support
its findings with substantial evidence. The State Board responds that Walker did
not present any probative evidence in support of its claims.
Before the State Board’s duty to support its findings with substantial evidence is
triggered, a taxpayer must satisfy its burden by submitting probative evidence sufficient to
establish a prima facie case. Thousand Trails, 757 N.E.2d at 1075.
In this case, Walker’s evidence for both parcels consisted of Millers “Assessment Review
and Analysis” (Analysis) for each parcel. (Pet’r Exs. 1–2.)
A. Land Classification
The State Board’s rules classify land as primary, secondary, or undeveloped, which affects
the land’s assessed value. Ind. Admin. Code tit. 50, r. 2.1-4-2(f) (1992);
White Swan Realty v. State Bd. of Tax Comm’rs, 712 N.E.2d 555, 561
(Ind. Tax Ct. 1999), review denied. As for the classification of the
land for parcel 155, Miller stated the following in his Analysis:
The land should be classified and priced as follows:
2.7 Acres Primary @ $5,000 = $13,500
7.3 Acres Undeveloped = 10,950
TOTAL TRUE TAX VALUE LAND $24,450
(Pet’r Ex. 2.) As for the classification of the land for parcel 210,
Miller stated the following in his Analysis:
The land should be classified and priced as follows:
1.8 Acres Primary @ $5,000 = $14,000
2.6 Acres Secondary @ $3,500 = 9,100
6.42 Acres Undeveloped @ $1,500 = 9,630
TOTAL TRUE TAX VALUE LAND $32,730
(Pet’r Ex. 1.) Miller’s contentions are merely conclusory because he did not
explain how he arrived at these subtotals or totals. Conclusory statements do
not constitute probative evidence; consequently, Miller’s contentions are not probative evidence. See
Miller Structures, Inc. v. State Bd. of Tax Comm’rs, 748 N.E.2d 943, 953
(Ind. Tax Ct. 2001).
B. Grade
In general, every improvement’s materials, design, and workmanship are collectively assigned a grade
from A to E, which represents a numeric multiplier that raises or lowers
an improvement’s assessed value. Ind. Admin. Code tit. 50, r. 2.1-4-3(f) (1992).
For structures with a grade of B, C, or D that qualify
for intermediate grade levels, the State Board’s rules provide for a +1, +2,
-1, or -2 designation suffixed to the grade designation. Id. Grades
that fall below an E are indicated by a -1 through a 4
suffixed to the grade designation. Id. Grades that fall above
an A are indicated by a +1 through a +10 suffixed to the
grade designation. Id.
For parcel 155, Miller stated in his Analysis that
[t]he subject property is substantially inferior to the base model as described in
the assessment manual. In addition, the subject lacks features that are included
in base price such as partitioning, type of heat and type of lighting
as well as the construction material of the exterior walls. To adjust
for these discrepancies, a grade no higher than a D or 80% factor
should be applied.
(Pet’r Ex. 2.) Miller also attached to the Analysis the value schedules
for three putatively comparable properties located in Waterloo, Kendallville, and Evansville, Indiana, respectively,
but offered no explanation of these schedules. (Pet’r Ex. 2.) As
for Walker’s request for a grade adjustment for parcel 210, Miller stated in
his Analysis that “[t]he subject property is substantially inferior to the base model
as described in the assessment manual. To adjust for these differences in
quality of materials and workmanship, a grade no higher than D-1 or a
70% factor should be applied.” (Pet’r Ex. 1.) Miller also attached
to this Analysis the value schedule of a putatively comparable property located in
New Paris, Indiana, but offered no explanation of the schedule. Again, Miller
presented nothing here but conclusory statements because he neither cited to any State
Board rule on grade that would support his conclusions as to the appropriate
grade for each improvement nor did he explain the significance of the attached
cost schedules. See Miller Structures, 748 N.E.2d at 953, 954. Accordingly,
Miller’s contentions do not constitute probative evidence of grade.
C. Obsolescence
The State Board’s rules define obsolescence as a functional or economic loss of
value. Ind. Admin. Code tit. 50, r. 2.1-5-1 (1992). As
for an obsolescence adjustment for parcel 155, Miller stated in his Analysis that
“[t]he subject suffers from the following highlighted causes of obsolescence depreciation. To
adjust of [sic] this ‘loss in value’ 30% obsolescence depreciation should be applied.”
(Pet’r Ex. 2.) As for an obsolescence adjustment for parcel 210,
Miller stated in his Analysis that “[o]bsolescence depreciation may need to be applied
if ‘reproduction cost’ exceeds 85% of market cost.” (Pet’r Ex. 1 (emphasis
added).) Miller neither explained what the “highlighted” causes of obsolescence were for
parcel 155, nor did he cite any State Board rule for the novel
proposition that an obsolescence adjustment may need to be applied where an improvement’s
reproduction cost exceeds its market cost by eighty-five percent. Miller’s claims therefore
are merely conclusory and not probative of obsolescence. See Miller Structures, 748
N.E.2d at 954.
Because Walker presented no probative evidence, it did not make a prima facie
case as to land classification, grade, or obsolescence. As a result, the
State Board’s duty to support its findings with substantial evidence was not triggered.
Thousand Trails, 757 N.E.2d at 1075. Accordingly, the Court AFFIRMS the
State Board’s final determination of Walker’s 131 Petitions.
CONCLUSION
For the foregoing reasons, the Court DISMISSES Walker’s 133 Petitions for the lack
of subject matter jurisdiction and AFFIRMS the State Board’s final determination of Walker’s
131 Petitions.
Footnote:
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. Pub. L. No. 198-2001, § 119(b)(2). Effective January 1,
2002, the Legislature created the Department of Local Government Finance (DLGF), and the
Indiana Board of Tax Review (Indiana Board).
Ind. Code §§ 6-1.1-30-1.1; 6-1.5-1-3
(West Supp. 2001); Pub. L. No. 198-2001, §§ 66, 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. 2002); Pub.
L. No. 198-2001, § 95. Nevertheless, the law in effect prior to
January 1, 2002 applies to these appeals. I.C. § 6-1.5-5-8. See
also Pub. L. No. 198-2001, § 117. Although the DLGF has been
substituted as the Respondent, this Court will still reference the State Board throughout
this opinion.
Footnote:
Parcel 155’s land and improvement were assessed as follows: for the
1989 tax year, $407,970; for the 1990 tax year, $410,870; and for the
1991 tax year, $414,840. The record does not reveal what Walker believed
its assessments should have been.
Footnote: The State Board assessed parcel 155 and its improvement as follows:
for the 1989 tax year, $411,940; and for the 1990–91 tax years, $414,840.
Footnote: The record does not reveal what the yard improvements were.
See
generally Ind. Admin. Code tit. 50, r. 2.1-4-5 (1992) (Schedule G) (providing cost
schedules for various commercial yard improvements).
Footnote:
Walker incorporates by reference the Court’s unpublished order into the present record.
Footnote: Walker concluded that it was time-barred from taking further action on its
133 Petition for the 1989 tax year. As for the 133 Petitions
for 1990–91 tax years, Walker argued that the assessment of parcel 155’s land
and improvement should have been $370,000 for each tax year.
Footnote: The assessment for parcel 155’s land and improvement was $410,870; the assessment
for parcel 210’s land and improvement was $908,940. The record does not
reveal what Walker believed the correct assessments should have been.
Footnote: The record often fails to clearly distinguish between parcels 155 and 210.
Consequently, the record is filled with considerable ambiguity. Because parties are
entitled to have their cases dealt with meaningfully, it is incumbent upon counsel
to clearly present the facts.
Whitley Products, Inc. v. State Bd. of
Tax Comm’rs, 704 N.E.2d 1113, 1121 n.16 (Ind. Tax Ct. 1998), review denied
(instructing taxpayers and the State Board to bear in mind that “judicial review
is facilitated when there is a well-developed factual record for the Court to
examine”).
Footnote:
The parties have not raised the issue of the Court’s subject matter
jurisdiction. Nevertheless, the Court may raise the issue sua sponte.
Thousand
Trails, Inc. v. State Bd. of Tax Comm’rs, 757 N.E.2d 1072, 1075 n.5
(Ind. Tax Ct. 2001).
Footnote:
Walker made the following claim in both its subsequent 133 Petitions:
“Current assessment includeds [sic] amounts for features which . . . are not
present in the subject property. Changes were made on a correction of
error form which included judgmental issues [sic] and should not have been changed.”
(Joint Ex. 1.)
Footnote:
The attorney to whom Miller referred is not the attorney representing Walker
in the instant case.
Footnote:
Taxes are due in May of the year following an assessment; therefore,
Walker’s subsequent 133 Petition for the 1990 tax year was also untimely because
Walker did not file it until September 1994—approximately five months after the three-year
time limit for requesting a refund for the 1990 tax year.
See
Ind. Code §§ 6-1.1-22-9(a); 6-1.1-26-1(2); Ind. Admin. Code tit. 50, rr. 4.2-3-12(g)(4); 4.2-3-14(f)
(1992).