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
B.L. CURRY & SONS, INC., )
v. ) Cause No. 49T10-0004-TA-38
DEPARTMENT OF LOCAL )
ON APPEAL FROM A FINAL DETERMINATION OF
THE STATE BOARD OF TAX COMMISSIONERS
NOT FOR PUBLICATION
NOVEMBER 5, 2003
B.L. Curry & Sons, Inc. (Curry) appeals the State Board of Tax Commissioners
(State Board) final determination valuing its real property for the 1992 tax year.
The issue for the Court to decide is whether the State Board
erred when it refused to assign obsolescence depreciation to Currys improvement.
See footnote For
the following reasons, the Court AFFIRMS the State Boards final determination.
FACTS AND PROCEDURAL HISTORY
Curry, a veneer manufacturing company, owns land and an improvement in New Albany,
Indiana. For the 1992 assessment year, local assessing officials valued Currys land
and improvement at $224,000 with no obsolescence depreciation assigned to the improvement.
Curry appealed the assessment to the Floyd County Board of Review (BOR); the
BOR denied Currys appeal. Curry then appealed the BORs decision to the
State Board, arguing that its improvement should have been assigned obsolescence depreciation.
On December 15, 1995, following an administrative hearing, the State Board issued a
final determination affirming the BORs decision.
Curry subsequently filed an original tax appeal. On December 2, 2000, this
Court reversed the State Boards determination and remanded the action to the State
Board for further proceedings.
On February 10, 2000, the State Board conducted a remand hearing and on
February 22, 2000, issued its final determination again affirming the BORs decision.
Curry filed another original tax appeal with this Court. On September 6,
2001, this Court heard the parties oral arguments. Additional facts will be
supplied as necessary.
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. Hamstra Builders, Inc.
v. Dept of Local Govt Fin., 783 N.E.2d 387, 390 (Ind. Tax. Ct.
2003). Thus, 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. When appealing
to this Court from a State Board final determination, the taxpayer bears the
burden of showing that the final determination is invalid. Id.
Curry contends that the State Board erred when it refused to assign obsolescence
to its improvement. Both Curry and the Floyd County assessing official
agreed that causes of obsolescence existed within Currys improvement. Accordingly, Curry bore
the burden of presenting evidence at the remand hearing quantifying the amount of
obsolescence depreciation to be applied to its improvement. See Clark v. State
Bd. of Tax Commrs, 742 N.E.2d 46, 51 (Ind. Tax. Ct. 2001), review
denied (a taxpayer who believes it is entitled to obsolescence must first identify
causes of obsolescence and then quantify the amount of obsolescence to be applied);
see also Heart City Chrysler v. State Bd. of Tax Commrs, 714 N.E.2d
329, 333-34 (Ind. Tax. Ct. 1999) (stating that when parties agree as to
the existence of certain causes of obsolescence, the only issue to consider is
the quantification of obsolescence).
To support its claim, Curry presented an Assessment Review and Analysis (Analysis) prepared
by its property tax consultant, Mr. M. Drew Miller (Miller) of Landmark Appraisals.
In the Analysis, Curry asserts that its property suffers from obsolescence because
its add-on construction creates certain inefficiencies: it has inadequate warehouse space and floor
load capacity, it has no heat source or distribution system in the building
except for the office, it has inadequate vehicle access, and it has outdated
brick and block construction. (See Stip. R. at 63.) The Analysis
then quantifies the obsolescence at either 26% or 58%, based on Millers mathematical
calculations. (See Stip. R. at 66.) Miller then concludes that, based
upon the inherent flaws in each calculation, [an] estimated . . . amount
of obsolescence to be applied to the subject property is 50%. Id.
Additionally, the Analysis contains photographs of and the property record card on
Currys improvement; a property record card on and photographs of a veneer company
located in Dubois County; and an article discussing the process of identifying functional
obsolescence, as well as a generalized description of each of the methods behind
Obsolescence must be tied to an actual loss in property value; in the
commercial context, that usually means the loss of income generated by the property.
Clark v. State Bd. of Tax Commrs, 694 N.E.2d 1230, 1238 (Ind.
Tax. Ct. 1998). Here, Curry presented a list of factors that may
be causing obsolescence to its improvements but failed to show how those factors
are causing an actual loss of value to its property (i.e., how they
are causing Curry to lose money). See id. See also Miller
Structures, Inc. v. State Bd. of Tax Commrs, 748 N.E.2d 943, 954 (Ind.
Tax. Ct. 2001). For example, Curry needed to support its allegation that
add-on construction has created . . . added production and material handling costs[,]
(see Stip. R. at 63), with calculations indicating the amount of the additional
handling costs incurred. These additional costs could then be translated into an
Furthermore, Currys submission of photographs, record cards, and articles, without an explanation as
to how they illustrate a loss of value to its improvement, is not
evidence as to the quantification of obsolescence. For instance, Millers submission of
a property card and photographs of another veneer plant fails to illustrate the
actual losses in Currys property value.
In essence, Curry merely submitted information
at its hearing and expected the State Board to make its case for
it. The State Board is not required to make a taxpayers case
for it. See Whitley Prods., Inc. v. State Bd. of Tax Commrs,
704 N.E.2d 1113, 1120 (Ind. Tax. Ct. 1998), review denied. Consequently, the
State Board did not err when it declined to award obsolescence depreciation to
Curry, having failed to link the factors causing obsolescence with an actual loss
in value, failed to make a prima facie case quantifying the amount of
obsolescence to which it believed it was entitled. 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),
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
§ 6-1.5-1-3 (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. 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, Curry 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 Currys claims and supporting arguments are identical to those
previously rejected by the Court, the Court will not address them.
On April 24, 1998, this Court issued an opinion in
State Board of Tax Commissioners, 694 N.E.2d 1230 (Ind. Tax. Ct. 1998).
In essence, Clark set forth what this Court expects from taxpayers and the
State Board in appeals involving issues of obsolescence. See Clark, 694 N.E.2d
at 1241. As a result of that directive, this case was remanded
to the State Board for further consideration in light of Clark; additionally, the
Court ordered that the State Board exclude certain evidence from consideration.
Obsolescence is defined as either a functional or an economic loss of
value. Ind. Admin. Code tit. 50, r. 2.1-5-1 (1992). Functional obsolescence
is caused by internal factors within a property; economic obsolescence is caused by
factors external to the property. See id.
Perhaps Curry submitted this information in an attempt to show the differences
in construction between a modern plant and Currys plant. Nevertheless, there is
no attempt by Curry to translate those differences into an actual loss of