Componx, Inc. v. Indiana State Bd. of Tax Com'rs, 49T10-9607-TA-00076
| Decision Date | 07 August 1997 |
| Docket Number | No. 49T10-9607-TA-00076,49T10-9607-TA-00076 |
| Parties | COMPONX, INC., Petitioner, v. INDIANA STATE BOARD OF TAX COMMISSIONERS, Respondent. |
| Court | Indiana Tax Court |
John R. Rumple, Sharpnack, Bigley, David & Rumple, Columbus, for Petitioner.
Jeffrey A. Modisett, Attorney General, Ted J. Holaday, Deputy Attorney General, Indianapolis, for Respondent.
Componx, Inc. (Componx) appeals the State Board of Tax Commissioners' (State Board) final determination that assessed their building for the March 1, 1993 assessment date. Componx raises two issues on appeal:
I. Whether the State Board properly denied the application of Instruction Bulletin 91-8 to Componx's building.
II. Whether the State Board properly calculated the square footage of Componx's building.
The Court holds that the State Board's denial of the Instructional Bulletin "kit" adjustment was arbitrary, capricious, and unsupported by substantial evidence, and that the square footage of the mezzanine is unsupported by the evidence. This Court remands the matter to the State Board.
Componx's building was valued for the March 1, 1993 assessment under the GCI-Light Warehouse model, but was not given the type of "kit" building adjustment described in Bulletins 91-8 and 92-1. Componx disagreed with this assessment and appealed by filing a Form 131 Petition for Review with the Washington County Board of Review. Componx's main claim was that the building should have been classified as an economy "kit" building and received the reduction in base rate. The County denied the Petition, and Componx subsequently appealed to the State Board.
The State Board also denied the petition for the "kit" adjustment. It based its denial on the fact that Componx's building had slight variations from the basic "kit" building. Componx, on the other hand, claims that although its building may vary somewhat from the classic "kit" model, these slight variations in design are not enough to completely disqualify it from receiving the In addition to denying Componx's petition for a "kit" adjustment, the State Board also found that the second floor of Componx's building was a mezzanine, and the building was of mixed use--29% office space and 71% light warehouse. Componx contends that the calculations of the square footage made by the State Board pertaining to these new findings were in error. Additional facts will be provided as needed.
reduction. Instead, Componx argues that the modifications can be accounted for by an increase in grade factor. In essence, Componx asserts that the building is still of the "low cost economical version" that would qualify it for the 50% reduction in base rate.
State Board determinations are accorded great deference when the Board is acting within the scope of its authority. Bender v. State Bd. of Tax Comm'rs, 676 N.E.2d 1113, 1114 (Ind.Tax Ct.1997). Therefore, a final determination made by the State Board will only be reversed if it is unsupported by substantial evidence, constitutes an abuse of discretion, exceeds statutory authority, or is arbitrary or capricious. Id.
Due to the fact that not all pre-engineered "kit" buildings are eligible for the 50% reduction in base rate, the State Board issued Bulletins 91-8 and 92-1 in order to give assessors guidance as to which buildings should receive the reduction. Bulletin 91-8 outlines in detail the different variations of "kit" buildings and which deviations from the basic "kit" model can cause buildings to be disqualified from the 50% reduction in base rate.
According to the State Board's final assessment, Componx's building was not eligible to receive the "kit" building adjustment. Like any party appealing an administrative decision, Componx has the burden of proving that this denial by the State Board was incorrect. Herb v. State Board of Tax Comm'rs, 656 N.E.2d 890, 893 (Ind.Tax Ct.1995). By comparing the features of the Componx building with those that are listed in the Bulletin, Componx has shown that the State Board's decision to deny the adjustment was unsupported by substantial evidence.
The State Board's main justification for disallowing the "kit" adjustment for Componx's building rested on the fact that the thickness of the hard steel used in the support system was 3/16 of an inch. It argued that such a thickness in hard steel was substantial enough to disqualify the building from receiving the reduction in base rate. However, undisputed testimony at trial by the taxpayer's witness revealed that 3/16 is actually very lightweight. Tr. at 18. The witness pointed out that the presence of the supporting round posts in the center of the building would not be necessary if the hard steel was of adequate thickness. Therefore, the hard steel support system was actually quite thin and only able to withstand minimal load tolerances. Tr. at 18.
Not only is the support system the Componx building only 3/16-inch thick, it is also the type of system that Bulletin 91-8 describes as used most prominently in buildings that qualify for the "kit" adjustment. The Bulletin issued by the State Board explains that Instructional Bulletin 91-8 at 4.
Componx's support system, the "cold form open cee channel system," is made from light weight steel. The system derives its support from the "C" shape of the beams. In addition to having an "open cee channel support system," Componx's building also has steel pole columns that are placed 25 feet apart....
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