ATTORNEY FOR PETITIONER:
DAVID L. PIPPEN
ATTORNEY AT LAW
ATTORNEYS FOR RESPONDENT:
ATTORNEY GENERAL OF INDIANA
KAREN L. HSU
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
DANA CORPORATION, )
v. ) Cause No. 49T10-9812-TA-190
DEPARTMENT OF LOCAL )
ON APPEAL FROM TWO FINAL DETERMINATIONS
OF THE STATE BOARD OF TAX COMMISSIONERS
NOT FOR PUBLICATION
July 25, 2003
Dana Corporation (Dana) appeals the final determinations of the State Board of Tax
Commissioners (State Board) valuing its land for the 1991, 1992, and 1996 assessment
years (years at issue). The issue for the Court to decide is
whether the State Board erred when it refused to award Danas land a
95% negative influence factor.
See footnote For the following reasons, the Court AFFIRMS the State
Boards final determination.
FACTS AND PROCEDURAL HISTORY
Dana owns land and a commercial improvement in Wayne County, Indiana. Dana
appealed both the 1991 and 1992 assessment of its property to the Wayne
County Board of Review (BOR), arguing that its improvement was entitled to 95%
obsolescence depreciation. The BOR denied both appeals. Dana appealed the BORs
decisions to the State Board. On November 22, 1996, the State Board
issued one final determination on both of Danas appeals, granting some, but not
all of the obsolescence depreciation requested by Dana. Dana appealed the State
Boards final determination to this Court, which issued a remand order on July
29, 1998, pursuant to the parties request.
At the State Boards remand hearing, Dana argued that because its land experienced
some environmental contamination, its improvement was entitled to 95% obsolescence depreciation or, in
the alternative, that its land was entitled to a 95% negative influence factor.
On October 27, 1998, the State Board issued a final determination denying
Danas requests.See footnote
On December 10, 1998, Dana initiated an original tax appeal for the years
at issue. On September 29, 1999, the Court held a trial.
The Court heard oral arguments on April 26, 2001. Additional facts will
be supplied as needed.
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 Commrs, 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 taxpayers evidence and
support its findings with substantial evidence. Id.
The sole issue is whether the State Board erred when it refused to
award a 95% negative influence factor to Danas land.
See footnote Under the State
Boards rules, an influence factor refers to a condition peculiar to the acreage
tract that dictates an adjustment to the extended value [of the land] to
account for variations from the norm.
Ind. Admin. Code tit. 50, r.
2.2-4-17(c)(8) (1996). The amount of the influence factor is expressed as a
percentage that is either added to or subtracted from the assessed value of
the acreage, depending on whether it is a positive influence factor or a
negative influence factor. See id. A taxpayer who seeks a negative
influence factor must submit probative evidence that (1) identifies the propertys deviation from
the norm and (2) quantifies the effect of that deviation on the propertys
value. See Talesnick v. State Bd. of Tax Commrs, 756 N.E.2d 1104,
1108 (Ind. Tax Ct. 2001). Because the State Board found that Danas
land suffers from environmental contamination, the Court holds that Dana submitted probative evidence
showing that its land deviates from the norm. (See Joint Ex. 1
at 19.) Thus, the remaining question is whether Dana submitted probative evidence
quantifying the effect of the contamination on its lands value.
In its brief, Dana states that it submitted the following evidence to the
State Board: actual amounts spent on remediation [of Danas contaminated land] .
. ., the Indiana Department of Environmental Management approved Closure Program . .
., reports from the contamination monitoring professionals . . ., and the cost
estimate contained in the closure plan[.] (Petr Post Hrg Br. at 67
(internal citations omitted).) Dana then argues that the evidence supports a 95%
negative influence factor and that the State Board failed to utilize this evidence.
(Petr Post Hrg Br. at 7.)
Dananot the State Boardbears the initial burden of quantifying its requested negative influence
factor. See Talesnick, 756 N.E.2d at 1108. Thus, Dana needs to
show a causal link between (1) the contamination and (2) a reduction in
property value; its evidence does not do so. See id. Because
Dana has not shown how its evidence substantiates a 95% negative influence factor,
it has not presented a prima facie case.
For the aforementioned reasons, the Court AFFIRMS the State Boards final determination.
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), 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); 2001 Ind. Acts 198 §§ 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); 2001
Ind. Acts 198 § 95. Nevertheless, the law in effect prior to
January 1, 2002 applies to these appeals. I.C. § 6-1.5-5-8. 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
In addition, Dana raises various state and federal constitutional claims that this
Court has declined to reach in previous cases.
See, e.g., Barth, Inc.
v. State Bd. of Tax Commrs, 756 N.E.2d 1124, 1127 n.1 (Ind. Tax
Ct. 2001). Because Danas claims and supporting arguments are identical to those
previously rejected by the Court, the Court will not address them.
At some point, Dana appealed its 1996 assessment. On or about
the same date the State Board issued its final determination on remand for
Danas 1991 and 1992 appeals, it issued a final determination on Danas appeal
for 1996. However, the State Board lost the transcript and audiotapes for
its 1996 decision. Nevertheless, because Danas 1996 assessment appeal deals with the
same property and raises the same issue as the 1991 and 1992 appeals,
the parties have agreed to join all three tax years into this appeal.
See Trial Tr. at 45.)
In its brief, Dana provides a short, general overview of some case
law on obsolescence without actually connecting it to its request for obsolescence.
See Petr Post Hrg Br. at 45.) Dana is mistaken if it
believes that its cursory mention of obsolescence will move this Court to specifically
address whether and how the facts of the instant case support possible obsolescence
depreciation for its improvement. If Dana wanted this Court to reach the
issue of obsolescence, then it needed to present a cogent argument based on
specific citations to evidence, not merely suggest obsolescence as a topic for discussion.
See Clark v. Dept of Local Govt Fin., 779 N.E.2d 1277, 1282
n.4 (Ind. Tax Ct. 2002) (stating that with respect to obsolescence, the taxpayer
must carefully, methodically, and in detail brief this Court as to what the
amount of obsolescence should be and why).
Subsequent to oral argument, Dana presented the Court with supplemental authority that
discusses how to value contaminated property. While the valuation techniques discussed within
the document are interesting, Dana does not apply any of the techniques to
its own valuation. As a result, Danas supplemental authority does nothing to
help its case.