Wednesday, September 09, 2015
Ind. Gov't. - Marion County and the big-box reassessment issues
Today Chelsea Schneider has posted a long Indianapolis Star story headed "Are big-box retailers getting a tax break at schools’ expense?" The story begins:
Last December, when a state board effectively reduced property taxes for a Meijer on 96th Street in Indianapolis and a Kohl’s in Howard County, it sounded a warning bell for local governments.ILB: The new CVS ruling is available here. More from the Star story:
The Meijer and Kohl’s used the sale prices of vacant stores in other locations to successfully argue their fully-stocked, fully-operational stores were assessed too highly for tax purposes.
In the industry, it’s known as using “dark sales.” And while county governments may not like it — or think it’s fair — big-box retailers counter that using the vacant properties actually gets closer to an accurate assessed value. And the Indiana Board of Tax Review has been inclined to agree.
With the board’s two decisions, concern grew among county officials, who don’t agree with the strategy some big-box stores employ to try and cut their property taxes.
Lawmakers placed some restrictions on the strategy this year, but county assessors say the new law passed in April didn’t go far enough. They point to a new case out of Monroe County where a CVS used vacant sales in its appeal — and won.
“This is the biggest threat to the tax base right now,” said Drew Carlson, chief financial officer for the Marion County Auditor’s office.
How big? In Marion County alone, an analysis estimated a $7.8 million financial loss if the strategy became the common method for valuing those properties.
The big loser? Schools in the county run the risk of losing the most at an estimated $3.2 million, according to projections by the Association of Indiana Counties.
At the heart of the debate: County officials argue the “dark sales” method runs counter to their belief that values should coincide with the cost to construct a building. Big-box store owners argue that since the building is constructed for a specific purpose, they can’t typically turn around and sell that building for the same price. Thus, their assessments are set too high.ILB: Here is a list of earlier ILB posts on this issue:
Counties believe any sales used as comparisons in determining a property’s assessed value need to be an “apples to apples” comparison, said David Bottorff, executive director of the Association of Indiana Counties. A Meijer potentially could sell a building to a Wal-Mart and be deemed a comparable sale. But if Meijer sold its building to a consignment shop that didn’t use the full functionality of the building that wouldn’t be a comparable sale, Bottorff said.
Grant Monahan, the head of the Indiana Retail Council said lawmakers should let changes they passed last session play out before revisiting the issue. In those changes, lawmakers placed limits on properties that could be used for comparison purposes.
“No retailer is attempting to avoid paying his or her fair share of property taxes,” Monahan said. The fact retailers are appealing and so far winning these cases shows Monahan that “they were over-assessed from the very beginning.” * * *
The author of this year’s legislation, state Sen. Brandt Hershman, said he’s planning to look into the issue further and is reviewing the CVS decision.
Some assessors’ fears go beyond the big-box stores. They worry restaurants and smaller businesses could latch onto the strategy and seek property tax reductions.
In Hancock County, the big concern is the trickle down to those types of businesses, County Assessor Mary Noe said. “Looking at the supermarkets, the Walgreens and the CVS’s.” Noe said. “Things of that nature being the next step in this approach to value.”
Updating this post from earlier this afternoon, here now is the August 19th 38-page IBTR ruling in CVS v. Monroe County Assessor. The ruling discusses the 2015 legislation beginning at p. 28:#86. After the Tax Court decided the cases discussed...
Posted in The Indiana Law Blog on September 8, 2015 03:36 PM
On August 25th and August 26th the ILB had posts on the Indiana Board of Tax Review's mid-August ruling "in favor of CVS on its appeal of the county’s assessments of its College Avenue location from 2009 to 2013," per...
Posted in The Indiana Law Blog on September 8, 2015 01:27 PM
Updating this post from yesterday, WTTV4's Jill Glavan reported very late last evening in a story headed "Assessor calls tax court ruling in favor of Bloomington CVS store ‘sickening.’" A few quotes:BLOOMINGTON, Ind. (Aug. 25, 2015) — A tax court...
Posted in The Indiana Law Blog on August 26, 2015 08:31 AM
Updating a long list of ILB entries on appeals of the assessments of big box stores, Ernest Rollins of the $$ Bloomington Herald Times reports today in a story that begins:The Indiana Board of Tax Review has ruled in favor...
Posted in The Indiana Law Blog on August 25, 2015 12:12 PM
Updating this July 7th post from the ILB, Megan Banta in the Bloomington Herald-Times on Friday had more of her continuing coverage of this issue. Some quotes from Friday's $$ H-T story: In the midst of an ongoing debate about...
Posted in The Indiana Law Blog on August 10, 2015 08:31 AM
Following on the ILB's comprehensive July 7th post on this topic, the Fort Wayne Journal Gazette on Sunday had a long editorial on the tax rulings and the "dark store" effect....
Posted in The Indiana Law Blog on July 13, 2015 08:59 AM
The ILB's first major post on this issue was on Jan. 18th, and quoted the IBJ, the FWJG and the LCJ, as well as linked to both the Meijer and Kohl opinions. This was followed by about half-a-dozen subsequent posts,...
Posted in The Indiana Law Blog on July 7, 2015 10:08 AM
The ILB has several posts earlier this year on the appraisal/assessment of big box stores. This Jan. 29th story by Rachel Bunn has in the Bloomington Herald-Times about the Dec. 1 and Dec. 31 Indiana Tax Board rulings in Meijer...
Posted in The Indiana Law Blog on May 5, 2015 11:30 AM
Supplementing this morning's earlier post, Daniel Suddeath's Jan. 27th story in the New Albany News and Tribune, here republished at Indiana Economic Digest, is headed "Major retailers' tax challenge in New Albany costs city's law firm its job." It begins:NEW...
Posted in The Indiana Law Blog on January 29, 2015 09:42 AM
Updating this ILB post from Jan. 18th, about the Dec. 1 and Dec. 31 Indiana Tax Board rulings in Meijer and Kohl's, respectively, Rachel Bunn has a $$ story today in the Bloomington Herald-Times. Some quotes: Monroe County could lose...
Posted in The Indiana Law Blog on January 29, 2015 09:09 AM
The 50-page Dec. 1, 2014 Indiana Board of Tax Review decision in Meijer Stores LP v. Marion County Assessor is the subject of a long Jan. 17th story in the IBJ, reported by Kathleen McLaughlin. A few quotes:Big-box retailers could...
Posted in The Indiana Law Blog on January 18, 2015 02:02 PM
Posted by Marcia Oddi on September 9, 2015 10:12 AM
Posted to Indiana Government