Property Tax Assessment Appeal Issues Continue

Last session, county officials sought drastic changes to Indiana’s property tax assessment methodology in reaction to two decisions from the Indiana Board of Tax Review (IBTR) involving “big-box” retail stores (e.g., a Meijer and a Kohl’s store). Officials complained that assessment appeals were being wrongly decided because the IBTR allowed the consideration of the sale price of like buildings that had been closed and were vacant at the time of the transaction as evidence of the value of the operating stores. Assessing officials called these transactions “dark sales” and contended such sales should be precluded from being considered in determining the assessment of like structures that remain open and occupied by large retail entities. The legislative result was something of a standoff between county officials and affected taxpayers. The ultimate legislation (SB 436) left a lot to be desired since the interested parties maintained such disparate viewpoints. They were – and remain – fundamentally divided on how real estate should be valued under Indiana law.

The issue came to the forefront again last month when the IBTR issued another decision that resulted in a significant reduction to a large commercial entity; this time, a CVS Pharmacy store in Bloomington. Interestingly enough, this case did not involve a “big-box” and was not based on the application of “dark sales” (even though you would have thought so from the way it was being publicly described by many.) Nevertheless, it was cited as another case where the IBTR had somehow gotten it wrong and was making a bad decision.

The situation essentially reveals: Assessors and county officials believe that large national chains should be taxed more because they are large national chains (and refuse to acknowledge the state of the law which just doesn’t support their higher assessments.) The IBTR has merely been doing its job, applying case law that has developed from Tax Court decisions issued since 2010 and before.

What’s more, assessors and county officials do not want to assess the property based on its fair market value, they want to assess it based on the value of the business operations that take place on the property — what I call “value to the user.” Property tax is supposed to be a tax on the value of real estate, not a tax on the investment value that real estate has to the owner. This debate arises out of the statutory and administrative rule definitions that govern our assessment system. Indiana defines true tax value as something different than the market value-in-exchange (what the property could sell for); instead it creates a hybrid standard referred to as “market value-in-use”. This hybrid was created to protect some properties from higher taxes. The best example is when a highly valuable piece of prime commercial real estate is actually used for agricultural or residential purposes.

But now there is a movement to interpret market value-in-use as a means for taxing the value the property has to its specific user, i.e., the national retail chain owner. This is not only subjective, unfair and inequitable; it is unworkable. It would result in nearly identical buildings being assessed at widely differing values based on the financial status and circumstances of the particular owner. Such a standard is contrary to our Indiana Constitution and would effectively undermine the integrity of our entire assessment system.

It is an important issue and appears it is going to be taken back up next month by the Interim Committee on Fiscal Policy, which has scheduled meetings for October 7, 13 and 21.

Gas Discounts Could (Slightly) Ease Pain at the Pump

This gas price situation is a real downer. I haven’t been this depressed about something since Duane Bickett left the Colts in 1994.

It not only directly takes more money out of commuters’ pockets, but it also causes the costs of transporting goods to skyrocket, which of course gets passed on to consumers. It’s madness, I say. But the Indy Star ran a report today showing what types of gas discounts are available at some Hoosier businesses.

Costco
Members who use the Costco American Express co-branded credit card to buy gas at Costco stations receive 3 percent back at the end of the year. The cash reward can be redeemed at Costco.

Kroger
Kroger lets consumers accumulate fuel points on their loyalty cards in 100-point increments. Each 100 points is worth 10 cents off a gallon of gas. There are three ways to earn 100 points. Buy $100 in the store, fill two qualifying prescriptions in the pharmacy or buy $50 in gift cards.

You can accumulate up to 1,000 points and get up to $1 off per gallon of gas up to 35 gallons.

Use a Kroger-branded Visa card and get 5 cents off per gallon on top of that.

The grocer also has a partnership with Shell stations. Customers can use Kroger points there by swiping their loyalty card but can redeem only 100 points at a time. So 10 cents off per gallon is the maximum.

Meijer
Use a Meijer store credit card or Meijer-branded MasterCard and get 5 cents off per gallon. There are limited-time promotions when that discount is bumped up to 10 cents per gallon. Occasionally, store purchases generate a free gas coupon at the checkout for $2 or more off.

Ricker’s
Sign up for the loyalty program and receive up to 10 cents off every gallon of gas. You have to be at least 18 years old and have a U.S. checking account and an active email address. The cards are used like a debit card and are linked to your checking account. To get the fuel discount, you must pay with the loyalty card.

Sam’s Club
Members receive 5 cents off per gallon at Sam’s Club fuel centers.

Shell
Use a Shell MasterCard and receive a 5 percent rebate on fuel purchased.

Speedway
Earn points on a membership card by making purchases. For example, receive 20 points per $1 spent, excluding restricted items, for purchases of food, drink and merchandise. Also receive 10 points per gallon of fuel purchased. Customers can redeem the points for discounts on gas. Earn 1,750 and receive 10 cents off per gallon; 4,375 and earn 25 cents off; 8,750 and earn 50 cents off.

Swifty
This one’s easy. Pay with cash and get 3 cents off per gallon.

Walmart
Buy a Walmart gas gift card and save 3 cents per gallon. Any amount from $10 to $1,000 can be added to the card. In some cases, consumers who use their Walmart store-branded credit card to buy gas will get 5 cents off per gallon.