Miller Structures, Inc. v. IND. STATE BOARD OF TAX COM'RS
| Decision Date | 26 March 2001 |
| Docket Number | No. 49T10-9701-TA-67.,49T10-9701-TA-67. |
| Citation | 748 N.E.2d 943 |
| Parties | MILLER STRUCTURES, INC., Petitioner, v. INDIANA STATE BOARD OF TAX COMMISSIONERS, Respondent. |
| Court | Indiana Tax Court |
David L. Pippen, Indianapolis, IN, Attorney for Petitioner.
Steve Carter, Attorney General of Indiana, Joel Schiff, Deputy Attorney General, Indianapolis, IN, Attorneys for Respondent.
Miller Structures, Inc. (Miller) appeals the State Board of Tax Commissioners' (State Board) final determinations that assessed its properties as of the March 1, 1991 and the March 1, 1992 assessment dates. Miller presents the following issues for this Court's review on appeal, which the Court restates as:
I. whether the State Board exceeded its statutory authority in its final determinations on Miller's 133 and 131 petitions because the hearing officers did not receive written prescriptions of duties;
II. whether the State Board's final determination on Miller's 133 Petition that Miller's building on Parcel One was not entitled to a grade or kit building adjustment is supported with substantial evidence; and
III. whether the State Board's final determinations on Miller's 131 Petitions that Miller was not entitled to kit building adjustments, reductions in grade, or obsolescence depreciation adjustments are supported by substantial evidence.1
Miller owns two parcels of real estate in Elkhart County, Indiana. Each parcel has improvements on it. The parcels are numbered XX-XX-XX-XXX-XXX (Parcel One) and XX-XX-XX-XXX-XXX (Parcel Two). On April 30, 1992, Miller filed a Form 133 Petition for Correction of Error (133 Petition) for Parcel One with the State Board for 1991 claiming that the building in question was metal and that the assessing officials did not take that into consideration when computing its assessment. In addition, on June 15, 1993, Miller filed Form 131 Petitions for Review of Assessment (131 Petition) with the State Board for both Parcels One and Two for 1992 claiming that the incorrect base rate was used and the incorrect amount of obsolescence depreciation was applied to both parcels. On March 22, 1996, the State Board held a hearing on both 131 Petitions. A hearing was not held on the 133 Petition.
On November 22, 1996, the State Board issued final determinations on all three of the challenged assessments. Its final determination regarding the March 1, 1991 assessment of Parcel One concluded that the parcel did not qualify for a kit building adjustment. The State Board's final determination regarding the March 1, 1992 assessment of Parcel Two concluded in relevant part that while the light manufacturing structure was not entitled to a kit building adjustment it should be graded a C-2, that the light warehouse building qualified for the kit adjustment, that the assessment did not violate the Indiana Constitution, and that no obsolescence depreciation should be granted. The State Board's final determination regarding the March 1, 1992 assessment of Parcel One concluded in relevant part that the structure was not entitled to a kit building adjustment, that the proper grade of the structure was C-2, that the assessment did not violate the Indiana Constitution, and that the structure was not entitled to obsolescence depreciation.
On January 6, 1997, Miller filed its original tax appeal in this Court. A trial was held on December 18, 1998. Additional facts will be provided as necessary.
This Court gives final determinations of the State Board great deference when the State Board acts within the scope of its authority. Freudenberg-NOK General Partnership v. State Bd. of Tax Comm'rs, 715 N.E.2d 1026, 1028-29 (Ind. Tax Ct.1999). Accordingly, this Court reverses final determinations of the State Board only when they are unsupported by substantial evidence, are arbitrary or capricious, constitute an abuse of discretion, or exceed statutory authority. Id. at 1029.
In addition, a taxpayer challenging the validity of the State Board's final determination bears the burden of demonstrating the invalidity of the final determination. Clark v. State Bd. of Tax Comm'rs, 694 N.E.2d 1230, 1233 (Ind.Tax Ct.1998). The taxpayer must present a prima facie case, which is a case in which the evidence is "sufficient to establish a given fact and which if not contradicted will remain sufficient." Damon Corp. v. State Bd. of Tax Comm'rs, 738 N.E.2d 1102, 1106 (Ind.Tax Ct.2000) (citations and internal quotation marks omitted). The taxpayer must offer probative evidence concerning the alleged error to establish a prima facie case. King Indus. v. State Bd. of Tax Comm'rs, 699 N.E.2d 338, 343 (Ind. Tax Ct.1998); Whitley Prods., Inc. v. State Bd. of Tax Comm'rs, 704 N.E.2d 1113, 1119 (Ind.Tax Ct.1998),review denied. "Once the taxpayer carries the burden of establishing a prima facie case, the burden shifts to the State Board to rebut the taxpayer's evidence and justify its decision with substantial evidence." Clark, 694 N.E.2d at 1233. The State Board must do more than merely assert that it assessed the property correctly to carry its burden. Loveless Const. Co. v. State Bd. of Tax Comm'rs, 695 N.E.2d 1045, 1049 (Ind.Tax Ct.1998),review denied. Instead, the State Board must offer an authoritative explanation of its decision to rebut the taxpayer's prima facie showing. Id.
The first issue is whether the State Board exceeded its statutory authority in its final determinations on Miller's 133 and 131 petitions because the hearing officers did not receive written prescriptions of duties. Miller contends that neither hearing officers Edward Airhart nor Mary Ann Boulac received any written prescription of duties.2
When the State Board receives a petition for review, it is required to conduct a hearing at its earliest possible opportunity. IND. CODE ANN. § 6-1.1-15-4(a) (West 2000). See also Hoogenboom-Nofziger v. State Bd. of Tax Comm'rs, 715 N.E.2d 1018, 1021 (Ind.Tax 1999)
. The State Board has the authority to, by written order, appoint a hearing officer to conduct the hearing. IND. CODE ANN. §§ 6-1.1-30-11(a) & 4-22-5-1 (West 2000). In that appointment order, the State Board is required to prescribe the duties of the hearing officer. IND. CODE ANN. §§ 6-1.1-30-11(a) & (b) & 4-22-5-1. At trial, Airhart testified that the State Board appointed him by means of a written order, but did not prescribe his duties and obligations as a hearing officer over this particular matter. (Trial Tr. at 7-8.) Boulac testified that she was assigned to the cases via an existing contract that she had with the State Board and that the State Board provided her with a format and guidelines to follow. (Trial Tr. at 17.)
While the State Board may not have followed the proper procedures here, there is no evidence presented by Miller and this Court has found no evidence that Miller objected to the authority of either Airhart or Boulac to hear its appeals at the administrative level. In original tax appeals, the general rule is that the Court is bound by the issues and evidence raised at the administrative level. Hoogenboom-Nofziger, 715 N.E.2d at 1022. Therefore, where a taxpayer fails to raise an issue at the administrative level, the issue is waived and may not be considered by the Court. Id. Miller's failure to object constituted its acceptance of Airhart and Boulac as having the authority to act as hearing officers. Therefore, Miller has waived this issue and may not raise it for the first time on appeal to this Court. See id.
The second issue is whether the State Board's final determination on Miller's 133 Petition that Miller's building on Parcel One was not entitled to a grade or kit building adjustment is supported by substantial evidence. Miller seems to argue that the State Board should have applied either a kit building adjustment or a grade adjustment to the building because part of the building was made of metal.
At the State Board level, Miller simply asserted on its 133 Petition: "Metal Bldg. Correction Should Be Applied." No formal hearing was held, but the State Board's hearing officer, Airhart, inspected the exterior of the building. (Trial Tr. at 8.) Apparently assuming that Miller's statement on the 133 Petition was a request for a kit building adjustment, Airhart determined that the building was not entitled to a kit building adjustment because it had concrete block seven or eight feet high on the bottom part of the building. (Trial Tr. at 12.)
Miller was required to present a prima facie case that its building was entitled to the "adjustment" it was seeking. See Damon Corp., 738 N.E.2d at 1106. The only thing that Miller has done is make the bare assertion that its building was metal so a correction should be applied. That statement without more tells this Court nothing. Bare allegations do not constitute a prima facie case. Alcoils, Inc. v. State Bd. of Tax Comm'rs, 727 N.E.2d 795, 801 (Ind.Tax Ct.2000). Therefore, Miller has not established a prima facie case with regard to this issue. Hence, the State Board's duty to refute Miller's evidence is not triggered. See id. Thus, the Court AFFIRMS the State Board's final determination of Miller's 133 Petition.
This final section deals with Miller's 131 Petitions. In this section, the Court will address Miller's assertion that it was entitled to a kit building adjustment. The Court will also address Miller's contention that it should receive a downward adjustment to grade if it is not granted the kit building adjustment. In addition, this Court will address Miller's contention that it is entitled to an obsolescence depreciation adjustment.
The issue is whether the State Board's final determinations that Miller was not entitled to kit building adjustments are supported by...
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