ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
TAMATHA A. STEVENS STEVE CARTER
GOODIN, ORZESKE & STEVENS ATTORNEY GENERAL OF INDIANA
Indianapolis, IN Indianapolis, IN
KATHRYN SYMMES KIRK
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
KATY INDUSTRIES/DIEHL MACHINES, )
v. ) Cause No. 49T10-9701-TA-95
STATE BOARD OF TAX COMMISSIONERS, )
ON APPEAL FROM A FINAL DETERMINATION OF
THE STATE BOARD OF TAX COMMISSIONERS
NOT FOR PUBLICATION
October 29, 2001
Petitioner Katy Industries/Diehl Machines (Katy) appeals the July 23, 1998 final determination of
the State Board of Tax Commissioners (State Board) valuing its property for the
March 1, 1994 assessment date.
Whether Katys improvements are entitled to a change in grade?
Whether Katys improvements are entitled to additional obsolescence depreciation?
Whether Katys land is entitled to a negative influence factor adjustment?
FACTS AND PROCEDURAL HISTORY
Katy timely filed a Form 131 Petition for Review of Assessment (Form 131)
with the State Board challenging the 1994 assessment of its Wabash County, Indiana
property. In its Form 131, Katy claimed that its improvements were entitled
to an additional obsolescence adjustment, that its land was improperly valued, and that
its improvements were graded improperly. On November 22, 1996, the State
Board issued its final determination on Katys Form 131.
The Wabash County Commissioners (the Commissioners) subsequently requested the State Board to rehear
the matter. As a result, the State Board held another hearing on
June 30, 1998. On July 23, 1998, the State Board issued another
final determination in which it raised the grading on Katys improvements and upheld
its original award of a 50% obsolescence adjustment. At the same time,
the State Board rescinded its first final determination.
Katy filed an original tax appeal with this Court, and trial was held
on February 15, 1999. Additional facts will be supplied as necessary.
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 and abuse of discretion, or exceeds statutory authority. Id.
Katy bears the burden of showing the invalidity of the State Boards final
determination. See Clark v. State Bd. of Tax Commrs, 694 N.E.2d 1230,
1233 (Ind. Tax Ct. 1998). In bearing that burden, Katy may only
present evidence to this Court that it presented at the administrative level.
State Bd. of Tax Commrs v. Gatling Gun Club, Inc., 420 N.E.2d 1324,
1328 (Ind. Ct. App. 1981).
In its November 1996 final determination, the State Board found that, inter alia:
Upon visual inspection and in consideration of 50 IAC 2.1-4-3(f) . . .
the grades of buildings 1, 2, 3 and 4 are best described as
D+2, the grades of buildings 6 and 7 are best described as D-2,
the grade of building 5 is best described as D+1, the grade of
building 8 is best described as D and the grade of building 9
is best described as C.
(Stip. Ex. 1.) In its second final determination, however, the State Board
raised the grade on three of the buildings. Specifically, it raised the
grade on buildings 6 and 7 to D, and building 8s grade was
raised to a D+1. OBSOLESCENCE
To support the
grade adjustments, the State Board relied on the recommendation of its hearing officer,
who performed a site inspection of Katys buildings.
The hearing officer sufficiently
explained at trial why, based on her inspection and Regulation 17, she thought
the grade adjustments on the three buildings were warranted. (Trial Tr. at
the State Boards grade adjustments, Katy did not present any probative evidence to
support its claim. Indeed, all the Court could find as to what
Katys argument was based on was a statement made by Katys tax consultant
at the June 30, 1998 rehearing: we would agree with the States
[November] finding on the grading. (Stip. Ex. 14 at 4.) This
consultant was with the hearing officer at the time of the site inspection
and offered no evidence to refute the hearing officers observations. Likewise, counsel
for Katy never offered an opportunity for the consultant to testify at trial
in order to refute the State Boards findings. Accordingly, the State Boards
final determination on the issue of grade is AFFIRMED.
In its July final determination, the State Board awarded Katy a 50% obsolescence
depreciation adjustment on one of the improvements to the property. Katy, on
the other hand, seeks at least a 60% depreciation adjustment.
Originally, Katy submitted a replacement cost calculation, quantifying the amount of obsolescence it
sought as 86%. (See Stip. Ex. 7 at 4.) In its
calculation, Katy mainly relied on the fact that the improvement, which was over
one hundred years old, lacked adequate lighting and heating. Nevertheless, Katy used
a new, pre-engineered steel building as the basis for its model. Consequently,
while the State Board hearing officer used Katys calculation as a model to
calculate the obsolescence adjustment, she also made the necessary adjustments to account for
the appropriate amount of finish to be applied to the manufacturing area, irregular
floor plan, and wall height. (Trial Tr. at 28-31); (Respt Post-Tr. Br.
at 10.) For the aforementioned reasons, the Court finds that the State
Boards determination that Katys improvement is entitled to a 50% obsolescence adjustment is
NEGATIVE INFLUENCE FACTOR FOR LAND
Katy has also argued that its land is entitled to a negative influence
factor to account for its topography and the presence of the land in
a designated flood plain (sic). (Petr Post-Tr. Br. at 11.) This argument,
however, was raised and addressed in the State Boards first final determination only.
As a result, the record before this Court is devoid of any
evidence calculating the appropriate adjustment to be applied. Katy, therefore, is not
entitled to any relief on this issue.
For the foregoing reasons, this Court finds that Katy takes nothing by way
of its petition, and the final determination of the State Board is therefore
It also appears that the State Board placed some reliance
presented by Brenda Conner, the township assessor, at the rehearing. Ms. Conners
testimony was, however, merely her opinion that the grades should be raised.
(See Trial Tr. at 19-21.) An opinion alone carries no evidentiary value.
See Hoogenboom-Nofziger v. State Bd. of Tax Commrs, 715 N.E.2d 1018, 1023
(Ind. Tax Ct. 1999)
At trial, and in their briefs, the parties discuss the standard used
for establishing grade. More specifically, the parties debate whether an improvements grade
(i.e., the quality of materials, workmanship, and design) should be determined as of
the time the improvement is built, or as of the time of assessment.
Nevertheless, neither party presented any evidence to support their arguments, and therefore
the Court will not address the issue.
Footnote: In effort to further quantify its obsolescence entitlement, Katy had also offered
a comparison sales method. Nevertheless, Katy did nothing more than supply some
sales data from three supposedly comparable properties, as well some pages from an
appraisal textbook. Katys tax consultant made no mention of this method at
the State Board rehearing, nor did he testify about this method at trial.
Given Katys failure to explain and link the method to the instant
case, the Court will not now craft Katys argument.