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
ELIXIR INDUSTRIES, )
v. ) Cause No. 49T10-0005-TA-61
DEPARTMENT OF LOCAL )
ON APPEAL FROM A FINAL DETERMINATION
OF THE STATE BOARD OF TAX COMMISSIONERS
NOT FOR PUBLICATION
September 16, 2003
The Petitioner, Elixir Industries (Elixir), appeals the final determination of the State Board
of Tax Commissioners (State Board) valuing its industrial improvement for the 1995 tax
The issue for the Court to decide is whether the
State Board erred when it denied a reduction to the base rate of
Elixirs improvement to account for its office partitioning.
For the reasons stated below, the Court AFFIRMS the final determination of the
FACTS AND PROCEDURAL HISTORY
Elixir owns an industrial improvement with an office component in Elkhart County, Indiana.
Elixir filed a Form 131 Petition for Review of Assessment (Form 131)
with the State Board on October 7, 1997, claiming that an it should
receive a reduction in its 1995 assessment to account for partitioning in its
office. The State Board held a hearing on the matter on March
1, 2000. On March 30, 2000, the State Board issued its final
determination denying Elixirs request.
On May 4, 2000, Elixir initiated an original tax appeal. The parties
stipulated to the record and, on September 6, 2001, presented oral arguments to
this Court. 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 its authority. Wetzel Enters., Inc. v. State Bd.
of Tax Commrs, 694 N.E.2d 1259, 1261 (Ind. Tax Ct. 1998). This
Court will reverse a final determination by the State Board only when its
findings are unsupported by substantial evidence, are arbitrary or capricious, constitute an abuse
of discretion, or exceed statutory authority. Id.
Further, a taxpayer who appeals to this Court from a State Board final
determination must demonstrate that the final determination was incorrect. Thousand Trails, Inc.
v. State Bd. of Tax Commrs, 757 N.E.2d 1072, 1075 (Ind. Tax Ct.
2001). The taxpayer must present a prima facie case by submitting probative
evidence. Id. Probative evidence is evidence sufficient to establish a given
fact that, if not contradicted, will remain sufficient. Id.
The issue in this case is whether the State Board erred when
it denied a reduction to the base rate of Elixirs improvement to account
for its partitioning. More specifically, Elixir claimed its improvement does not have
the typical amount of office partitioning assumed in the General Commercial Industrial Model
(GCI) applied in its assessment.
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. See also Ind. Admin. Code tit. 50, r. 2.2-11-6 (1996).
To help classify structures, the State Board has categorized improvements into several models.
Ind. Admin. Code tit. 50, r. 2.2-11-1 to 3 (1996). Models
are conceptual tool[s] 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 State Boards regulations also provide for adjustments to be
made to the base price when an improvement varies from the model criteria.
Ind. Admin. Code tit. 50, r. 2.2-10-6.1(c) (1996).
Elixir claims that the GCI model assumes that its entire office area is
fully divided by partitions. (Cert. Admin. R. at 15 -16.) However,
Elixir claims that while its office has numerous movable partitions, only 50% of
the office has permanent partitions. (Cert. Admin. R. at 16.) Therefore,
Elixir requests a Unit Cost Adjustment of $5.15 be applied to the partitioning
in its office area. (Cert. Admin. R. at 16.) See also
Ind. Admin. Code tit. 50 r. 2.2-11-6 (Sched. C)(1996). (Stating that, the GCI
model assumes typical partitioning in an office with a cost of $10.35 per
square foot of floor space; the unit cost adjustment table indicates the cost
per square foot of partitioning space is $5.15).
To establish a prima facie case, this Court requires that taxpayers present probative
evidence regarding the alleged assessment error. Hoogenboom-Nofziger v. State Bd. of Tax
Commrs, 715 N.E.2d 1018, 1023 (Ind. Tax Ct. 1999). This Court has
previously held that in cases such as this one, taxpayers can meet their
burden by showing that their partitioning is not typical by converting the cost
figures contained in 50 IAC 2.2-11-6 into the typical linear footage of partitioning
assumed by the model and then comparing that to the actual linear footage
of partitioning present in the subject improvement. Sollers Pointe Co. v. Dept
of Local Govt Fin., 790 N.E.2d 185, 188-89 (Ind. Tax Ct. 2003).
In the instant case, however, Elixir has merely submitted two photographs of its
partially partitioned office and the testimony of its tax consultant, Mr. Drew Miller,
who stated that the office has only 50% partitioning. Elixers presentation of
photographs without explanation as to how they relate to its requested adjustments is
not probative evidence. See Heart City Chrysler v. State Bd. of Tax
Commrs, 714 N.E.2d 329, 333 (Ind. Tax Ct. 1999).
The petitioners in Sollers Point provided the State Board with detailed measurements of
their partitioned offices and calculated the difference between their reproduction costs versus those
found in the GCI model. Sollers Point, 790 N.E.2d at 189.
This is the quantum of proof required to establish that an improvement is
entitled to an adjustment for non-typical partitioning. Such proof is lacking in
this case: the only thing that Elixirs photographic evidence proves is that,
indeed, there is some partitioning in its office. That is all it
proves. Therefore, this partition petition must be denied for want of a
tape measure and calculator.
Elixir has not presented probative evidence to support its request for a base
rate reduction to account for its office partitioning. Thus, for the foregoing
reasons, the State Boards final determination is AFFIRMED.
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 this opinion.
In addition, Elixirs counsel raises various state and federal constitutional claims
that this Court has declined to reach in previous cases.
Barth, Inc. v. State Bd. of Tax Commrs, 756 N.E.2d 1124, 1127 n.1
(Ind. Tax Ct. 2001). Because Elixirs claims and supporting arguments are identical
to those previously rejected, this Court will not address them.