Thе Petitioner, Fleet Supply, Inc. (Fleet Supply), appeals the Final Determination of the State Board of Tax Commissioners (State Board) establishing the assessed value of its property as of March 1, 1995. Fleet Supply presents the following issues for the Court's consideration:
I. Whether the State Board erroneously determined the Main Building's physical depreciation based upon a forty-year, instead of a thirty-year, life expectancy table;
II. Whether the State Board improperly deemed the subject improvements' conditions to be average;
III. Whether the State Board incorrectly applied a D grade to the Main Building; and
*648 IV. Whether the State Board's refusal to apply a negative influence factor to the subject land was erroneous. 1
FACTS AND PROCEDURAL HISTORY
Fleet Supply owns the subject property, a "discount retail facility," in Cass County, Indiana. (Oral Argument Tr. at 3.) Improvements on the parcel include a Main Building and two smaller, pole barns. Fleet Supply filed a Form 131 Petition for Review of Assessment with the Cass County Auditor on July 2, 1996. The petition challenged the Cass County Board of Review's (BOR) assessment of Fleet Supply's land at $48,330 and its improvements at $333,400. The State Board conducted an administrative hearing on Fleet Supply's petition on January 8, 1998. On April 28, 1998, the State Board issued its Final Determination. In the Final Determination, the State Board did not alter the assessed value of Fleet Supply's land but did lower the assessed value of its improvements to $291,100.
Fleet Supply filed an original tax appeal on June 4, 1998. The Court conducted a trial in this matter on March 19, 1999. On April 12, 2000, the Court heard oral arguments from the parties and thereafter took the case under advisement. Additional facts will be supplied where necessary.
ANALYSIS AND OPINION
Standard of Review
The Court givеs great deference to the State Board's final determinations when the State Board acts within the scope of its authority. Weigel Einters., Inc. v. State Bd. of Tax Comm'rs,
Discussion
I. Life Expectancy Table
Fleet Supply contends that the State Board applied the wrong life expectancy table in determining the physical depreciation of its Main Building. According to Fleet Supply, the State Board should have applied the thirty-year life expectancy table, not the forty-year life expectancy table. The regulations provide: "Physical depreciation is determined by the combination of age and condition. Each type of building has a life expectancy that is determined by the building components and the use of the building." tit. 50, r. 2.2-10-7(c) (1996). "To apply physical depreciation, the assessor must select the correct life expectancy table and identify the condition and age of the building." Id., r. 2.2-10-7(d). The regulations provide four differеnt life expectancy tables *649 for use in determining the physical depreciation of commercial and industrial buildings. Id., 22-10-7(c). These tables are located in the regulations at Inp.Ap-mimm.Cope tit. 50, r. 22-11-7 (1996). Among other things, the thirty-year life expectancy table is used to assess "light pre-engineered buildings" and the forty-year life expectancy table is used to assess "all fire-resistant buildings not listed elsewhere." Inp.Apmim.Cope tit. 50, r. 2.2-11- { (1996).
A fifteen perсent physical depreciation adjustment was assigned to the Main Building. (Joint Ex. 1 at 10, 12.) The State Board's Final Determination states that "After inspecting the structure, considering the assessor's statement and evidence, and reviewing 50 IAC 2.2-10 and 50 IAC 2.2-11, it is determined [that] the 40 year life table is proper. No change [of assessment] is made." (Joint Ex. 1 at 19.) To prove this decision incorrect, Fleet Supply was required to submit to the State Board probative еvidence sufficient to establish a prima facie case as to the invalidity of the application of the forty-year life expectancy table. CDI, Inc. v. State Bd. of Tax Comm'rs,
Fleet Supply argues that its main strue-ture was a light pre-engineered building, so its physical depreciation should have been determined via application of the thirty-year life expectancy table. Thus, Fleet Supply must have offered еvidence showing that its building had construction characteristics typical of a light pre-engi-neered building. Damon Corp. v. State Bd. of Tax Comm'rs, 738 N.BE2d 1102, 1111 (Ind. Tax Ct.2000) (involving kit building adjustment under prior regulations).
At the administrative hearing, Fleet Supply submitted an "Assessment Review and Analysis" (Review) addressing all of its challenges to the BOR's assessment. M. Drew Miller of Landmark Appraisals, Inc., Fleet Supply's taxpayer representative, prepared the Review. The Review stаted that the "County Board failed to accurately apply the correct amount of physical depreciation based upon a 830 year life expectancy." (Joint Ex. 2 at 3.) The Review also contained blurred, black-and-white copies of two photographs of the Main Building. (Joint Ex. 2 at 2.) In addition, Miller submitted a copy of the State Board's Final Determination of an appeal challenging the subject property's assessment as of March 1, 1992. (Joint Ex. 4.) This Final Determination for 1992 concluded that the thirty-year life expectancy table should be used to calculate the Main Building's physical depreciation. (Joint Ex. 4 at 2.) At trial, Miller made the following statement: "This building is ... a light pre-engineered structure.... It has a general retail use. There is no need for heavy flooring or heavy framing." (Trial Tr. at 16.) The State Board's hearing officer, Mark A. Bisch, also testified at trial, saying that the subject improvement had metal construction and concrete floors with some tile. (Trial Tr. at 37.)
Fleet Supply has not submitted probative evidence sufficient to establish a prima facie case regarding which economic life table should be applied in determining the Main Building's physical depreciation. The Review's statement and Miller's remarks at trial are conclusory in nature and therefore non-probative. CDI, Inc.,
II. Condition
Fleet Supply argues that the average condition assigned to the Main Building and two pole barns was erroneous. As noted supra, section I, detеrmining a building's condition is necessary for calculating its physical depreciation. Condition is the "degree of wear and tear displayed by a building" and "is determined relative to the age of the building." Inp.Apn-mm.CopE tit. 50, r. 2.2-10-7(b) (1996). "Condition measures the remaining usefulness of the building based on its age." Id. See also White Swan Realty v. State Bd. of Tax Comm'rs, T12 N.E.2d 555, 560 (Ind. Tax Ct.1999), review denied. A taxpayer challenging the condition of its building "must offer probative evidence concerning the condition of that improvement." White Swan Realty,
As regards condition, the Review stated that the buildings have "received minimal maintenance over the years, causing the condition to be less than average." (Joint Ex. 2 at 3.) Miller also testified that the Main Building hаd "some dents in the metal, stains in the ceiling tile, some areas of discoloration and scraping on the floor tile." (Trial Tr. at 17.) This, Fleet Supply asserts, demonstrates that the condition of the Main Building is less than average.
The Review offers only a conclusory observation and is therefore not probative as
*651
to condition. CDL Inc.,
IIL Grade
Fleet Supply challenges the D grade assigned to the Main Building by the State Board. In assigning the Main Building a D grade, the State Board aсtually lowered the building's grade from a C-1. See Inp.Apum.Cops tit. 50, r. 2.2-10-3 & -11-6 (Schedule F) (1996) (assigning D grade a multiplier of 80% and C-1 grade a multiplier of 95%). Fleet Supply argues that a D-1 grade should be applied to the Main Building, which would result in an additional ten percent downward adjustment of its base value. Id., r. 2.2-11-6.
To make its case, Fleet Supply was required to submit probative evidence sufficient to establish a prima facie case as to grade. CDI, Inc.,
Miller made similar, conclusory remarks at trial that are non-probative as to grade. (Trial Tr. at 12-18.) Miller stated that at the inspection following the administrative hearing, he "presented the building, walked the hearing officer through the building. And the regulations-or the descriptions of the models are part of the regulations." (Trial Tr. at 13.) According to Miller, the D grade was incorrect "[blased on other decisions that [he has} seen from the State Tax Board on similar buildings." (Trial Tv. at 14.) Miller's opinion was also based upon his experience in "seeing ... what [he] would consider an average quаlity building." (Trial Tr. at 15.) With respect to specific deviations, Miller stated that the building lacked: (1) "architectural attractiveness"; (2) partitioning; and (8) a display area. (Trial Tr. at 14.) He added that the Main Building had an "almost kit-type structure." (Trial Tr. at 14.)
These remarks fail to inform the Court as to how the Main Building differs from the model used to assess it and why a grade adjustment is appropriate.
4
Moreover, Miller failed to identify or describe any specific instance where the State Board has priced a similarly structured building below a D grade. CDI, Inc.,
Hearing Officer Bisch testified that, at the subject property's inspection, Fleet Supply pointed to no specific evidencе that justified assignment of a lower grade. (Trial Tr. at 88.) Bisch was not obligated to make the taxpayer's case for it. Whitley Prods., Inc. v. State Bd. of Tax Comm'rs,
IV. Negative Influence Factor
The final issue raised by Fleet Supply is whether the State Board should have applied a negative influence factor to its valuation of the subject parcel. Specifically, Fleet Supply contends that its parcеl is misimproved. An influence factor "refers to a condition peculiar to the acreage tract that dictates an adjustment to the extended value to account for variations from the norm." Inp.Apmm.Cop® tit. 50, r. 2.2-4-17(c)(8) (1996). See also id., r. 2.2-4-12 (1996); 2.2-4-1 (Supp.2000). An influence factor is expressed as a percentage increase or decrease in the subject land's assessed value, with the percentage representing the "composite effect of the factors that influence the value." Id., 22-4-17(c)(8). "The decision whether to apply an influence factor calls for subjective judgment." Wirth v. State Bd. of Tax Comm'rs,
The State Board determined that the "land is not misimproved and a negative influence factor is not warranted." (Joint Ex. 1 at 18.) In its brief, Fleet Supply contends that the predominate use of the parcels surrounding the subject parcel is not retail (as is the subject parcel) and therefore the misimprovement factor should have been applied. (Petr Br. at 9.) To support this claim, Fleet Supply refers to Miller's trial testimony, where he indicated that two parcels (to the north and *653 south of the subject parcel) have residential uses, one parcel is not used (the west parcel has a vacant grоcery store) and one parcel has a "special use" (the east parcel has a restaurant). (Pet'r Br. at 9) (citing Trial Tr. at 11.) Miller further stated that, in his opinion, the regulations require application of a negative influence factor if the "surrounding properties are of a different use." (Trial Tr. at 11.) The Review makes the statement that "The [BOR] failed to properly decrease the land value due to a misimprovement, ie., the subject parcel does not have the same use as the surrounding parcels." (Joint Ex. 2 at 3.) Also, Fleet Supply submitted Joint Exhibit 3, which is an unsigned letter from Miller to Hearing Officer Bisch. The letter is a response to a request by Bisch for additional information to be submitted after the administrative hearing. (Joint Ex. 3.) The letter states in part:
The assessor's land value is wrong because she failed to make a deduction due to the misimprovement as required in the assessment regulations.... The property south of the subject is of a different use as is the property to the north of the subject pareel. As more than 50% of the surrounding properties are of a different use, a 50% negative influence factor should be applied to the land. The influence factor is needed because it is required by the regulations.
(Joint Ex. 8.) In the letter, Miller requested that Bisch send him any "specifiс guidelines" provided or used by the State Board to determine the influence factor. (Joint Ex. 8.)
To properly identify a misimprovement, Fleet Supply needed to submit probative evidence sufficient to show that (1) its parcel did not have the same use as surrounding parcels and (2) the inconsistent usage negatively impacted the subject parcel's value. Inp.Apmim.Cops tit. 50, r. 2.2-4-10(a)(9)(E). CL Talesnick v. State Bd. of Tax Comm'rs,
Miller's interpretation of the regulations is mistaken. The regulations require an assessor to indicate on the property record card a "decrease [in the subject parcel's value] based on a misimprovemеnt to the land." Inp.Apmimn.CopE tit. 50, r. 2.2-4-10(a)(9)(E). See also id., r. 2.2-4-1"7(c)(8). Thus, contrary to Miller's understanding, a different usage does not automatically warrant application of a negative influence factor. Fleet Supply failed to provide evidence that the inconsistent usage lowered the value of its land. Therefore, Fleet Supply did not make a prima facie case that a negative influence factor should have been applied to its property.
CONCLUSION
Fleet Supply failed to make a prima facie case as to any of the issues it raised. Thus, the State Board was not required to support its Final Determination as to these issues with substantial evidence. CDI, Inc.,
*654 ORDER
Respondent, State Board of Tax Commissioners, by counsel, files its Motion for Publication of Memorаndum Decision.
No response or objection has been filed by the Petitioner.
The court, having considered same and being duly advised in the premises, now finds said motion should be GRANTED and that this court's opinion in this appeal should now be ordered published.
IT IS THEREFORE ORDERED as follows:
1. Respondent's "Motion for Publication of Memorandum Decision" is granted and this court's opinion heretofore handed down in this cause on March 13, 2001, marked "Not for Publication" in now ordered published.
Notes
. Fleet Supply also claims that the State Board's assеssment regulations in general violate the Indiana Constitution. However, the fact that the subject property was assessed under an unconstitutional regulation does not mean that the assessment will be invalidated on that basis. Whitley Prods., Inc. v. State Bd. of Tax Comn'rs,
. As discussed infra, section IV, Fleet Supply also submitted a letter from Miller to Bisch as evidence. (Joint Ex. 3.) Along with the letter, Miller submitted another photograph of the subject property. A copy of this photograph was submitted as part of Joint Exhibit 3. The black-and-white copy is also blurry. It is uncaptioned, and neither the letter nor any testimony by Miller explains what it shows. Thus, this lettеr is also non-probative and does not help Fleet Supply establish a prima [facie case on this issue. Heart City Chrysler v. State Bd. of Tax Comm'rs,
. As stated supra, the Main Building was assessed as a C-1 by the BOR. The two pole barns were given C grades. Thus, the Court is unsure whether the Review addresses the grade of the Main Building (the only building for which the State Board considered the grade issue), the two pole barns or all three structures. The ambiguity is not important, however, because the Review's observation is not probative as to any of the three buildings' grades.
. The Court reminds the taxpayer that it should advocate for objective adjustments, when possible, to account for a subject improvement's deviations from the model used to assess it; the subjective grade adjustment must be avoided where an adjustment using the base rate adjustment and/or unit-in-place tables is feasible. Clark v. State Bd. of Tax Comm'rs,