Marion Cnty. Assessor v. Coll. Park Club, Inc.

Decision Date05 April 2022
Docket NumberCause No. 21T-TA-00001
Citation186 N.E.3d 1214
Parties MARION COUNTY ASSESSOR, Petitioner, v. COLLEGE PARK CLUB, INC., Respondent.
CourtIndiana Tax Court

ATTORNEY FOR PETITIONER: JESSICA R. GASTINEAU, SPECIAL COUNSELTAX LITIGATION OFFICE OF CORPORATION COUNSEL, Indianapolis, IN

ATTORNEY FOR RESPONDENT: BRADLEY D. HASLER, DENTONS BINGHAM GREENEBAUM LLP, Indianapolis, IN

WENTWORTH, J.

The Marion County Assessor appeals from the Indiana Board of Tax Review's final determination granting College Park Club, Inc.’s real property a common area property tax exemption under Indiana Code § 6-1.1-10-37.5 for tax years 2016 and 2017. Upon review, the Court affirms the Indiana Board's final determination.

FACTS AND PROCEDURAL HISTORY

College Park is the not-for-profit homeowners’ association for the residential subdivision of College Park Estates, located in Indianapolis, Indiana. (See, e.g., Cert. Admin. R. at 3 - 4, 27-28, 37-38, 155.) College Park owns the approximately six acre vacant lot within the community known as the "Colby Green Area," which is used as green space. (See Cert. Admin. R. at 3 - 4, 27-28, 37-38, 155, 162). College Park purchased the land that comprises the Colby Green Area from the Jewish Federation of Greater Indianapolis, Inc. in July of 2014. (See Cert. Admin. R. at 27-28.) While under the Jewish Federation's ownership, that land was exempt from property taxation. (See, e.g., Cert. Admin. R. at 4, 36.)

On September 23, 2016, the Assessor sent a letter to College Park stating that he had become aware of the change in ownership of the land in the Colby Green Area. (See Cert. Admin. R. at 36.) The letter explained that the previously granted property tax exemption would be suspended until College Park provided

an affidavit as required under [ Indiana Code §] 6-1.1-11-4, signed under the penalties of perjury, which:
• Identifies the new owners of the property[; and]
• Indicates that the property continues to meet the requirements for an exemption under [ Indiana Code §§] 6-1.1-10-21, [ ] 6-1.1-10-16, [ ] 6-1.1-10-24 or other.
*****
If you have not provided the Marion County Assessor's office with the affidavit by October 23, 2016, you are hereby notified that your exemption is suspended, and will continue to be suspended until such time as the requirements of IC 6-1.1-11-4 are satisfied.
Please note, for the exemption to continue the year following the change[,] a completed form 136 must be timely filed by April 1, 2017.

(Cert. Admin. R. at 36.)

On October 14, 2016, College Park responded by email to the Assessor's letter. (See Cert. Admin. R. at 39.) Through various documents attached to that email, College Park provided the Assessor with: (1) notice that the Colby Green Area qualified for an exemption under Indiana Code § 6-1.1-10-37.5 as common area property, (2) College Park's governing documents, and (3) the various versions of the covenants and restrictions for the residential community. (See Cert. Admin. R. at 39-97.) The Assessor did not respond to College Park's email. (See Cert. Admin. R. at 169-70, 182.)

Sometime in 2017, however, the Assessor instructed College Park that for the land in the Colby Green Area to qualify for the exemption under Indiana Code § 6-1.1-10-37.5, it needed to be re-platted with the words "Common Area" appearing on the recorded document. (See, e.g., Cert. Admin. R. at 171, 177-78.) College Park had the Colby Green Area re-platted and recorded that document on December 15, 2017. (See Cert. Admin. R. at 35, 171, 177-78.)

In 2018, College Park learned that the Colby Green Area received the common area property tax exemption for 2018 going forward, but not for the 2016 and 2017 tax years. Accordingly, College Park filed two Forms 130 ("Notice[s] to Initiate An Appeal") contending that the exemption had been improperly denied for both the 2016 and 2017 tax years. (See Cert. Admin. R. at 3 - 4, 7 - 8.) When the Marion County Property Tax Assessment Board of Appeals failed to act on the appeals in a timely manner, College Park transitioned them to the Indiana Board. (See Cert. Admin. R. at 1 - 2, 5 - 6.) See also IND. CODE § 6-1.1-15-1.2(k) (2018) (indicating that when a property tax assessment board of appeals failed to conduct a hearing on an appeal within 180 days of its filing, an appeal could be initiated directly with the Indiana Board).

The Indiana Board held a telephonic hearing on June 23, 2020, and issued a final determination in the matter on November 18, 2020. (See Cert. Admin. R. at 143, 151.) In its final determination, the Indiana Board explained that under Indiana Code § 6-1.1-10-37.5(f), after a taxpayer notifies an assessor of the recorded common area property, the assessor is required to respond within thirty days. (See Cert. Admin. R. at 147-48 ¶¶ 17-18.) The Indiana Board concluded that because College Park provided proper notice, but the Assessor had failed to respond in a timely manner, the Colby Green Area land was deemed to be an exempt common area by default in both 2016 and 2017 under Indiana Code § 6-1.1-10-37.5(g). (See Cert. Admin. R. at 143 ¶ 2, 148-49 ¶¶ 19, 21.)

The Assessor initiated an original tax appeal on January 4, 2021. The Court heard the parties’ oral argument on July 27, 2021. Additional facts will be supplied as necessary.

STANDARD OF REVIEW

The party seeking to overturn an Indiana Board final determination bears the burden of demonstrating its invalidity. CVS Corp. v. Searcy, 137 N.E.3d 1053, 1055 (Ind. Tax Ct. 2019). Accordingly, the Assessor must demonstrate to the Court that the Indiana Board's final determination in this matter is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law; contrary to constitutional right, power, privilege, or immunity; in excess of or short of statutory jurisdiction, authority, or limitations; without observance of the procedure required by law; or unsupported by substantial or reliable evidence. See IND. CODE § 33-26-6-6(e)(1)-(5) (2022).

LAW

The common area property tax exemption, which is at the heart of this litigation, is codified at Indiana Code § 6-1.1-10-37.5 and provides, in relevant part, as follows:

(a) As used in this section, "common area" means a parcel of land, including improvements, in a residential development that:
(1) is legally reserved for the exclusive use and enjoyment of all lot owners, occupants, and their guests, regardless of whether a lot owner makes actual use of the land;
(2) is owned by:
(A) the developer, or the developer's assignee, provided such ownership is in a fiduciary capacity for the exclusive benefit of all lot owners in the residential development, and the developer has relinquished all rights to transfer the property other than to a person or entity that will hold title to the property in a fiduciary capacity for the exclusive benefit of all lot owners;
(B) each lot owner within the residential development, equally or pro rata; or (C) a person, trust, or entity that holds title to the land for the benefit of all lot owners within the residential development;
(3) cannot be transferred for value to another party without the affirmative approval of:
(A) all lot owners within the residential development; or
(B) not less than a majority of all lot owners within the residential development, if majority approval is permitted under the bylaws or other governing documents of a homeowners association, or similar entity;
(4) does not include a Class 2 structure (as defined in IC 22-12-1-5 ); and
(5) is not designed or approved for the construction of a Class 2 structure.
The term includes, but is not limited to, a lake, pond, street, sidewalk, park, green area, trail, wetlands, signage, swimming pool, clubhouse, or other features or amenities that benefit all lot owners within the residential development.
*****
(d) Notwithstanding any other provision of this article, a common area is exempt from property taxation, provided that the common area easements and covenants restricting the use and conveyance of common areas to lot owners are recorded, and notice is provided, to the appropriate county or township assessor.
(e) A county or township assessor shall designate an area as a common area after:
(1) receiving notice as provided in subsection (d); and
(2) determining that the area is a common area.
(f) If a county or township assessor determines that the area is not a common area, or determines that the area fails to meet the requirements of subsection (d), then the county or township assessor shall send a written statement to the owner of the common area not later than thirty (30) days after receiving the notice under subsection (d). The written statement shall contain:
(1) the specific provisions on which the county or township assessor based the determination; and
(2) a statement that the owner of the common area shall have thirty (30) days to address the specific provisions provided in subdivision (1), and to establish the area as a common area that meets the requirements of subsection (d).
(g) If a county or township assessor fails to send a written statement to the owner of a common area as required by this section, then the area for which notice was provided in subsection (d) shall be considered a common area for purposes of this section.
(h) Once an area has been designated a common area, no subsequent refiling of a common area property tax exemption is required unless an area designated as a common area subsequently fails to meet the definition of a common area as provided in this section.

IND. CODE § 6-1.1-10-37.5(a), (d) - (h) (2016).

ANALYSIS

On appeal, the Assessor contends that the Indiana Board abused its discretion in determining that the Colby Green Area was entitled to the common area property tax exemption under Indiana Code § 6-1.1-10-37.5(g) because he did not provide a written statement to College Park as required by Indiana Code § 6-1.1-10-37.5(f). (See, e.g., [Assessor's] Br. ("Pet'r Br.") at 1.)1 In support, the Assessor first maintains that...

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