ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
DAVID L. PIPPEN STEVE CARTER
ATTORNEY AT LAW ATTORNEY GENERAL OF INDIANA
Indianapolis, IN Indianapolis, IN
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
COMMUNITY HOSPITAL FOUNDATION, )
v. ) Cause No. 49T10-9811-TA-173
DEPARTMENT OF LOCAL )
ON APPEAL FROM A FINAL DETERMINATION OF
THE STATE BOARD OF TAX COMMISSIONERS
July 21, 2003
Community Hospital Foundation (Foundation) appeals a final determination of the State Board of
Tax Commissioners (State Board) valuing its property for the March 1, 1995 assessment
date. The issue is whether the State Board erred in classifying the
ditch on Foundations land as primary land. For the reasons stated below,
the Court REVERSES and REMANDS the State Boards final determination.
FACTS AND PROCEDURAL HISTORY
Foundation owns land and improvements in Lawrence Township, Marion County, Indiana. On
the land is a ditch located in front of the parking lot.
For the March 1, 1995 assessment, Foundations entire parcel was classified as primary.
Foundation challenged the assessment to the Marion County Board of Review (BOR) arguing
that the portion of its land containing the ditch should be reclassified as
unusable undeveloped. The BOR denied relief to Foundation.
Foundation subsequently appealed the BORs decision to the State Board. On June
8, 1998, the State Board conducted an administrative hearing. In its final
determination issued October 6, 1998, the State Board did not adjust the assessment.
Foundation appealed to this Court on November 12, 1998. This Court held
oral argument on December 20, 2000. Additional facts will be supplied
STANDARD OF REVIEW
This Court gives great deference to final determinations of the State Board. Wetzel
Enters. Inc. v. State Bd. of Tax Commrs, 694 N.E.2d 1259, 1261 (Ind.
Tax Ct. 1998). Accordingly, this Court will reverse a State Board final
determination only if it is unsupported by substantial evidence, is arbitrary or capricious,
constitutes an abuse of discretion, or exceeds statutory authority. Id.
Moreover, the taxpayer bears the burden of showing the invalidity of the State
Boards final determination. See Clark v. State Bd. of Tax Comm'rs, 694
N.E.2d 1230, 1233 (Ind. Tax Ct. 1998). To do so, the taxpayer must
present probative evidence regarding the alleged assessment error. Id. Probative evidence
is evidence sufficient to establish facts that, if not contradicted, will remain sufficient.
Osolo v. Elkhart Maple Lane Associates, 789 N.E.2d 109, 111 (Ind. Tax
Ct. 2003). Once the taxpayer presents probative evidence, the State Board must
deal with it in a meaningful manner. Clark, 694 N.E.2d at 1235.
In addition, a taxpayer may only present evidence to this Court originally
presented at the administrative level. See State Bd. of Tax Comm'rs v.
Gatling Gun Club, Inc., 420 N.E.2d 1324, 1328 (Ind. Ct. App. 1981).
The issue is whether the State Board erred in classifying Foundations ditch as
primary land. Foundation contends it provided probative evidence showing the land should
have been classified as unusable undeveloped. The State Board argues Foundation did
not present a prima facie case and the assessment should stand. The
State Board is incorrect.
For the 1995 general reassessment, land was classified according to its use.
See Ind. Admin. Code tit. 50, r. 2.2-4-1(18) (1996). For example:
Primary commercial or industrial land refers to the primary building or plant site.
The following are examples of primary land:
Land located under buildings.
Regularly used parking areas.
Regularly used yard storage.
Necessary support land.
* * * * *
Unusable undeveloped commercial and industrial land means vacant
land that is unusable for commercial or industrial purposes.
* * * * *
Id. (emphasis added). See also Ind. Admin. Code tit. 50, r. 2.2-4-17(b)
(stating that primary land is the amount of acreage necessary to support the
existing facility and its purposes). However, necessary support land is not defined.
Foundation argues it provided probative evidence showing the land should be reassessed as
unusable undeveloped. At the State Board hearing, it introduced the detailed testimony
of its tax consultant, Denise Praul. She testified that because of the
downward and upward slopes of the ditch and that fact that the ditch
was landlocked, it was unusable for any commercial purpose. (Stip. R. at 28.)
Prauls testimony was supported by aerial photographs and a plat map depicting
the outlay of the ditch, its steep incline/decline and how it was landlocked.
(Stip. R. at 39 and 40.) The Court finds that Foundations evidence
is sufficient to establish that the State Board erred in classifying the ditch
as primary. The burden then shifted to the State Board to support
its findings with substantial evidence. See Thousand Trails, Inc. v. State Bd.
of Tax Commrs, 757 N.E.2d 1072, 1075 (Ind. Tax Ct. 2001).
The State Board argues that necessary support land is land necessary to support
the facility and its commercial purpose. (Respt Br. at 4.) Cf. Osolo, 789
N.E.2d at 109 (holding that necessary support land was that land absolutely required
and essential to support the operation of and the continued functioning as a
commercial entity.) The State Board then contends the ditch is necessary support
land because it provides drainage, a foundation for the building, and offers the
building protection from the street. This contention, however, is insufficient to show
how the ditch was necessary to support the facility and its commercial purpose.
Furthermore, there is no evidence in the record showing that if the
ditch were removed, the current use of the primary property would discontinue.
See Id. Thus, the State Board has not supported its findings with
For the foregoing reasons, this Court REVERSES the State Boards final determination and
REMANDS it to the Indiana Board of Tax Review (Indiana Board)
to reclassify Foundations ditch as unusable undeveloped land.
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 § 6-1.1-30-1.1 (West Supp. 2001)(eff. 1-1-02); 2001 Ind. Acts 198 §
66, and the Indiana Board of Tax Review (Indiana Board). Ind. Code
§ 6-1.5-5-3 (West Supp. 2001)(Eff.1-1-02); 2001 Ind. Acts 198 § 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); 2001
Ind. Acts 198 § 95. Nevertheless, the law in effect prior to
January 1, 2002, applies to these appeals. Id. 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.
All cases that would have been remanded to the State Board are
now remanded to the Indiana Board of Tax Review (Indiana Board).
Code § 6-1.1-15-8. Final determinations made by the Indiana Board are subject
to review by this Court pursuant to the Ind. Code § 6-1.1-15.
Ind. Code §§ 6-1.5-5-7; 3-33-5-2.