The Indiana Board of Tax Review (IBTR) addresses Indiana’s burden-shifting rules in virtually every decision. Following are several recent rulings determining the burden of proof in various situations.

Addition of paving was structural improvement, giving Taxpayer the burden of proof.  Patel v. St. Joseph County Assessor (Patel I), Pet. Nos. 71-007-12-1-4-00002 and 71-007-13-1-4-00002 (Feb. 22, 2016) [2012 and 2013 assessments]. The subject property’s assessment increased by 400% from 2011 to 2012.  But Taxpayer had added additional paving between the 2011 and 2012 assessment dates.  Under Ind. Code § 6-1.1-15-17.2(c), the burden-shifting provision does not apply if the assessment under review is based on structural improvements, zoning or uses “that were not considered in the assessment for the prior tax year.” Accordingly, the burden remained with Taxpayer for 2012.

IBTR relies on assessment upon which Taxpayer was billed.  Patel v. St. Joseph County Assessor (Patel II), Pet. Nos. 71-007-12-1-4-00003 and 71-007-13-1-4-00003 (Feb. 22, 2016) [2012 and 2013 assessments]. The County Board (the PTABOA) apparently increased the subject property’s 2011 assessment from $564,800 to $808,400.  “Because neither party offered any documentary evidence regarding the increase, the reason for the increase and whether the PTABOA acted within its authority, remain[] unclear.”  The parties agreed Taxpayer was billed based on the higher assessment for 2011-pay-2012. “[T]hat is the 2011 assessment as last corrected, and therefore, according to Ind. Code § 6-1.1-15-17.2(a)(3), serves as the baseline for determining who has the burden for the 2012 appeal.”  Because the 2012 assessment of $622,700 was lower, Taxpayer had the burden for the 2012 appeal.

Burden of proof in subsequent year under appeal normally depends on IBTR’s final determination as to immediately preceding year – unless a party concedes the burden.  In the Patel II ruling – involving appeals of both the 2012 and 2013 assessments – the IBTR found:  “The burden for the 2013 assessment year will depend on the Board’s findings for 2012.”  However, in Patel I – also involving the 2012 and 2013 assessments – the Assessor accepted the burden of proof, because the subject property’s value had increased from $40,000 to $51,000 year-over-year.  The IBTR observed, “Normally, in an appeal that covers two or more years, the burden for a latter year is ultimately determined by the Board’s finding in the previous year’s appeal.”  However, because the Assessor was represented by counsel and she accepted the burden, the IBTR accepted that concession and assigned the 2013 burden to the Assessor. 

If Assessor has the burden of proof, Taxpayer still has the burden to show the assessment should be lower than the prior year’s value.  In Patel I, where Assessor accepted the burden for the 2013 appeal, the IBTR noted, “To the extent the [Taxpayer] seeks an assessment below the 2012 level of $40,000, he has the burden to prove that lower value.”  See also Price v. Noble County Assessor, Pet. No. 57-009-14-1-5-10203-15 (Feb. 5, 2016) [2014 assessment] (If the Assessor has the burden and fails to meet it, the property’s assessment “reverts to the previous year’s level or to another amount shown by probative evidence.”)

Assessor had burden, where contested assessment was more than 5% above prior year’s value determined by PTABOA.  Hoovler v. Clinton County Assessor, Pet. No. 12-012-13-1-1-00001 (Feb. 12, 2016) [2013 assessment].  The PTABOA reduced the subject property’s 2012 assessment.  Taxpayer appealed the 2013 assessment, which was more than 5% above the PTABOA’s valuation for 2012.  The IBTR explained:

Generally, a taxpayer seeking review of an assessment must prove the assessment is wrong and what the correct value should be. Indiana Code § 6-1.1-15-17.2 creates an exception to that rule where (1) the assessment currently under appeal represents an increase of more than 5% over the previous year’s assessment for the same property, or (2) a successful appeal reduced the previous year’s assessment below the current year’s level, regardless of the amount.

Both exceptions applied in this case.  Assessor had the burden of proof.  See also Price v. Noble County Assessor, Pet. No. 57-009-14-1-5-10203-15 (finding Assessor had burden, where Taxpayers successfully appealed their 2013 assessment and the 2014 assessment was a 10.2% increase over that amount).

Assessor had burden, where property’s assessment had increased by more than 5%, even where assessment may have been based on income approach.  McKibben v. Delaware County Assessor, Pet. No. 18-003-12-1-4-00121 (Oct. 2, 2015) [2012 assessment].  Indiana Code § 6-1.1-15-17.2(d) “applies to real property for which the gross assessed value of the real property was reduced by the assessing official or reviewing authority in an appeal conducted under IC 6-1.1-15, except where the property was valued using the income capitalization approach in the appeal.”  The parties agreed that the 2012 assessment was more than 5% above the property’s 2011 assessment.  But the Assessor claimed the 2012 assessment was based on the income capitalization approach to value, so that Taxpayer had the burden of proof.  But Section 17.2(d) applies when the prior year’s appeal was decided using the income capitalization approach.  It does not apply “where a taxpayer is claiming the burden should shift because the assessment increased by more than 5%.”  There was no evidence showing that the property’s assessment was appealed for 2011.  Assessor had the burden of proof.

IBTR would not apply piecemeal approach to determining burden.  Hauch v. St. Joseph County Assessor, Pet. No. 71-003-12-1-5-00293 (Oct. 21, 2015) [2012 assessment].  After some preliminary confusion as to whether Taxpayers were appealing only land value, the ALJ assigned the burden of proof to the Taxpayers.  Reviewing the record (including the property record card) and noting that the entire assessment for the property – both land and improvements – increased by more than 5%, the IBTR reversed.  The land and improvements comprised a single economic unit.  The IBTR “will disregard a piecemeal approach to determining burden.”

Burden-shifting statute does not apply to Form 133 Petition.  Allen v. St. Joseph County Assessor, Pet. No. 71-003-08-3-5-00003 (Oct. 29, 215) [2008 assessment].  The IBTR noted that the burden shifting provisions of Ind. Code § 6-1.1-15-17.2 do not apply to appeals initiated with Form 133 petitions. This was a reversal of the ALJ’s preliminary determination that the Assessor had the burden.

Combination of parcels did not necessarily defeat burden-shifting statute.   Davis v. Lawrence County Assessor, Pet. No. 47-004-12-1-1-00008 (Oct. 22, 2016) [2012 assessment].  Between the 2011 and 2012 assessment dates, Assessor combined the subject parcel with a contiguous land parcel.  The IBTR was “not persuaded that a parcel combination prior to the assessment year necessarily precludes the application of the statute.”  No evidence was presented showing the contiguous parcel’s 2011 assessment, so the IBTR could not determine the total assessment for the prior year.  Consequently, Taxpayer kept the burden of proof.  The IBTR also did not interpret the statute “to shift the burden based on an increase in one component [e.g. land or improvements] of the assessment.”

Reclassification of land from agricultural to non-agricultural was a change of property’s underlying characteristics; Assessor had burden of proof under Ind. Code § 6-1.1-4-4.4 as to reclassified land, and Taxpayer had the burden as to land correctly reclassified.  Indiana Limestone v. Monroe County Assessor, Pet. No. 53-006-11-1-5-00080 et al. (Oct. 19, 2015) [2011 – 2014 assessments].  Indiana Code § 6-1.1-4-4.4(b) provides:

If the assessor changes the underlying parcel characteristics, including age, grade, or condition, of a property, from the previous year’s assessment date, the assessor shall document:

(1) each change; and

(2) the reason that each change was made.

In any appeal of the assessment, the assessor has the burden of proving that each change was valid.

For the years at issue, the contested acreage ranged from approximately 738 to 879.  The IBTR agreed that “the Assessor has the burden to show she properly re-classified the land from agricultural to non-agricultural.” And if “she fails to meet her burden on that issue for any portion of the property, that portion must be valued using the soil-productivity method outlined in the 2011 Real Property Assessment Guidelines.”

The Assessor agreed that she would accept the burden of proof based on the property’s overall change of assessment under Ind. Code § 6-1.1-15-17.2.  However, the parties did not submit evidence identifying the subject property’s 2010 assessment, and the property’s composition changed year-to-year, by as much as 150 acres.  “As the party seeking to take advantage of the burden-shifting statute, Indiana Limestone needed to walk [the IBTR] through those issues and provide the information necessary to apply the statute.”  Because it did not do so, Taxpayer had the burden of proof regarding any property shown to have been properly reclassified as non-agricultural by the Assessor.