Indianapolis Racquet Club, Inc. v. STATE BD. OF TAX COM'RS, No. 49T10-9607-TA-00088
| Decision Date | 31 January 2000 |
| Docket Number | No. 49T10-9609-TA-00126., No. 49T10-9609-TA-00119, No. 49T10-9607-TA-00088 |
| Citation | 722 N.E.2d 926 |
| Parties | INDIANAPOLIS RACQUET CLUB, INC., Petitioner, v. STATE BOARD OF TAX COMMISSIONERS, Respondent. Racquet Square Associates, Ltd., Petitioner, v. State Board of Tax Commissioners, Respondent. |
| Court | Indiana Tax Court |
Stephen E. DeVoe, B. Keith Shake, Michael R. Harping, Henderson, Dailey, Withrow & DeVoe, Indianapolis, Indiana, Attorneys for Petitioner.
Jeffrey A. Modisett, Attorney General of Indiana, Ted J. Holaday, Deputy Attorney General, Indianapolis, Indiana, Attorneys for Respondent.
Petitioners Indianapolis Racquet Club, Inc. (IRC) and Racquet Square Associates, LTD. (RSA) (collectively Racquet Club) appeal three final determinations of the State Board of Tax Commissioners (State Board) denying Racquet Club's appeals challenging the validity of the 1989 assessments of IRC's indoor and outdoor tennis facilities and RSA's office building complex. In these original tax appeals, Racquet Club presents the following two issues for consideration:
I. Whether the subject properties were improperly classified in the Marion County Land Valuation Order, in violation of IND.CODE ANN. § 6-1.1-31-6 (West 1989) and the Indiana Assessment Manual, see IND. ADMIN. CODE tit. 50, r. 2.1-1-1 to -6-1 (1992) ; and
II. Whether the base rate for IRC's indoor tennis facility was incorrectly determined using the GCM health club model, see IND. ADMIN. CODE tit. 50, r. 2.1-4-7 (1992) , instead of the GCI light warehouse model, see id. .
IRC is an Indiana corporation formed in 1965 that owns indoor and outdoor tennis facilities located at 8249 Dean Road in Indianapolis (Dean Road Property). The Dean Road Property consists of sixteen indoor and eight outdoor tennis courts and associated facilities. RSA is an Indiana limited partnership that owns an office building complex located at 4141 East 82nd Street in Indianapolis. The complex, which lies adjacent to the Dean Road Property, consists of three one-story office buildings.
The issues presented arise from the 1989 assessment of three individual parcels. Racquet Club separately appealed the assessment of each parcel. The procedural history of these appeals is as follows. Parcel number 8051129 (Parcel A) is part of the Dean Road Property. It contains eight outdoor tennis courts. The Washington Township Assessor issued a Notice of Assessment to IRC regarding Parcel A on November 22, 1989. IRC filed a Form 130 petition for review with the Marion County Board of Review (BOR) on December 22, 1989. The BOR conducted a hearing on the petition on April 24, 1990. On November 30, 1990, the BOR issued a ruling adverse to IRC. Thereafter, on December 28, 1990, IRC filed a Form 131 petition for review with the State Board, which conducted a hearing on September 27, 1995. The State Board issued its final assessment determination on June 14, 1996. Thereafter, IRC filed an original tax appeal regarding Parcel A with this Court on July 29, 1996.1
Parcel number 8048124 (Parcel B) is also part of the Dean Road Property. It contains sixteen indoor tennis courts and associated facilities. The Washington Township Assessor issued a Notice of Assessment regarding Parcel B on November 22, 1989. IRC filed a Form 130 petition for review with the BOR on December 22, 1989. The BOR conducted a hearing on the petition on December 19, 1990. Subsequently, on February 8, 1991, the BOR issued a ruling adverse to IRC. IRC filed a Form 131 petition for review with the State Board on March 11, 1991. The State Board conducted a hearing on the petition on September 27, 1995 and issued its final determination on August 7, 1996. IRC filed an original tax appeal regarding Parcel B with this Court on September 23, 1996.2
Parcel number 8048125 (Parcel C) is adjacent to and directly east of Parcel A. The Washington Township Assessor issued a Notice of Assessment regarding Parcel C on November 22, 1989. RSA filed a Form 130 petition for review with the BOR on December 22, 1989. The BOR conducted a hearing on the petition on August 9, 1990. On August 31, 1990, the BOR issued a ruling sustaining the township assessor's valuations. RSA filed a Form 131 petition for review with the State Board on October 1, 1990. The State Board conducted a hearing on the petition on September 27, 1995. Thereafter, on August 16, 1996, the State Board issued its final determination. RSA filed an original tax appeal on September 30, 1996.3 The Court conducted a trial involving all three parcels on May 2, 1997.4 On October 22, 1997, the Court heard oral argument on these cases. Additional facts will be supplied where necessary.
The Court gives the final determinations of the State Board great deference when the State Board acts within the scope of its authority. See Wetzel Enters., Inc. v. State Bd. of Tax Comm' rs, 694 N.E.2d 1259, 1261 (Ind.Tax Ct.1998)
. Accordingly, the Court reverses final determinations of the State Board only when those decisions are unsupported by substantial evidence, are arbitrary or capricious, constitute an abuse of discretion, or exceed statutory authority. See id. Racquet Club bears the burden of demonstrating that the State Board's final determinations are invalid. See Clark v. State Bd. of Tax Comm'rs, 694 N.E.2d 1230, 1233 (Ind. Tax Ct.1998).
Racquet Club challenges the validity of the 1989 Marion County Land Valuation Order (Order) as applied to Parcels A, B, and C. Specifically, Racquet Club contends that Parcels A, B and C were improperly included with surrounding commercial properties in the Order, in violation of IND.CODE ANN. § 6-1.1-31-6 (West 1989) and the Indiana Assessment Manual. As regards the appeal of Parcel B, Racquet Club asserts that taxing authorities applied the wrong model to 90% of the indoor tennis courts facility. The Court will separately consider each issue.
Racquet Club asserts that Parcels A, B and C were improperly classified within the Order, to the extent they were included as part of the area designated as page 22 in Section IV of the Order. This area, which the Court shall refer to as the "82nd Street Corridor,"5 is described in the Order as "Allisonville Road W. to Keystone on 86th St. fr Dean Rd. Keystone No. to I-465 Interch fr 86th St."6 (Resp't Ex. G.) "Primary" land for this commercial property ranged from three to four dollars per square foot; "usable undeveloped" land ranged from ninety cents to one dollar and twenty cents per square foot. (Resp't Ex. G.) Racquet Club argues that Parcels A, B and C should have been included within the area designated as page 24A in Section IV of the Order, which area is described as "Township—other."7 (Resp't Ex. G.) Values for "Primary" land in this latter category ranged from one dollar and fifty cents to three dollars per square foot; values for "usable undeveloped" land ranged from forty-five to ninety cents per square foot. (Resp't Ex. G.)
Before addressing Racquet Club's argument, the Court first reviews some basic principles of Indiana's property tax assessment laws, policies and procedures. The Indiana Constitution provides, "The General Assembly shall provide, by law, for a uniform and equal rate of property assessment and taxation and shall prescribe regulations to secure a just valuation for taxation of all property, both real and personal." IND. CONST. art. X, § 1. See also IND.CODE ANN. § 6-1.1-2-2 (West 1989) (). As this Court noted in Indianapolis Historic Partners v. State Board of Tax Commissioners:
This provision has long been held to require: (1) uniformity and equality in assessment, (2) uniformity and equality as to rate of taxation, and (3) a just valuation for taxation of all property. The purpose of these constitutional requirements is to distribute the burden of taxation upon principles of uniformity, equality, and justice.
694 N.E.2d 1224, 1228 (Ind.Tax Ct.1998) (citations omitted). The General Assembly has charged the State Board with interpreting the state's property tax laws and seeing that all property assessments are made in the manner prescribed by law. See IND.CODE ANN. § 6-1.1-35-1 (West 1989) (amended 1997). INDIANA CODE ANN. § 6-1.1-31-6 (West 1989) in part provides the following mandatory guidelines for the State Board to follow in establishing rules governing the assessment of real property:
In fulfilling its duties, the State Board is afforded a great deal of discretion. See Poracky v. State Bd. of Tax Comm'rs, 635 N.E.2d 235, 236 (Ind.Tax Ct.1994)
(quotation omitted). The State Board exercises its discretion in part by promulgating land valuation orders. See id. Land valuation orders are administrative rules. See Precedent v. State Bd. of Tax Comm'rs, 659 N.E.2d 701, 704 (Ind. Tax Ct.1995). The party claiming that the land valuation order is invalid bears the burden to show the order is not in accordance with law. See Poracky, 635 N.E.2d at 237.
The procedure for promulgating land valuation orders is governed by statute. See IND.CODE ANN. §...
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