State Board of Tax Commissioners v. Town of St. John

TAX BOARD COMMISSION STATE OF

ERS, below), (Respondent al., Appellees JOHN, et

TOWN OF ST. (Petitioners below).

No. 49S10-9806-TA-340.

Supreme of Indiana. 4, 1998.

Dec. General, Modisett, Attorney

Jeffrey A. Jon General, Laramore, Attorney India- Deputy napolis, Appellant. Atherton, Overman, Dutton &

Thomas M. Falk, Indiana Civil Indianapolis, Kenneth J. Union, Indianapolis, Peter H. Do- Liberties nahoe, Funk & Hill Fulwider McDowell P.C., Mathews, K. Indianapolis, James Gil- Herrin, Tuohy day, Gleason Mercer & Wood Indianapo- Waples, Indianapolis, Richard A. lis, Appellees. Pippen, L. Appraisals, David

Landmark Indianapolis, Amicus Curiae.

DICKSON, Justice. REVIEW

ON PETITION FOR of Tax Commissioners The State Board Board”) (“State appeals from the validity judgment regarding the Tax Court’s property tax assessment of the Indiana part. part and reverse affirm tem. We Tax initially the Indiana case arose in This petitions by three tax- individual Court on County, K. Gil- James payers from Marion Shelton, E. Dimple William day, Clarine Wise, by the Town of St. John petition fifty- approximately a class of on behalf of con- The Tax Court its residents. seven of petitions, conducted bench solidated that Indiana’s July and found trial in /R”).The has for our statutory petitioned system of taxation current decision, review the Tax Court Town unconstitutional. St.John was Comm’rs, III TV.1 in St. John and St. John reflected Bd. Tax 665 N.E.2d 965 1996) (“St. I”). (Ind.Tax Upon appeal To seek our review of a Board, we affirmed the decision, adversely must file party a affected holding Assembly that the General Court’s petition Appellate Rule a for review. Ind. equal rate of provide for a uniform must petition granted, If is we ordi the will taxation on property assessment and based narily only presented the consider issues wealth, legislative that discre noted review, petition the for and we thereafter in the of valuation method is tion selection modify only to prior Tax Court decision the review, judicial subject reversed the Tax opinion the determined in extent our conclusion that the Indiana Constitu Court’s these John 675 N.E.2d issues. St. exclusively requires pre an absolute and tion 320.2 system, and cise fair market value returned alleg- petition The State Board’s for review to the to resume consid the case Tax Court that in error es the Tax Court’s decision was remaining of the issues. Boehm v. eration respects. granted in numerous review (Ind. John, Town St. 328 of petition the construe State Board’s 1996) (“St. II"). remand, John On (1) present following whether the issues: preliminary opinion finding a Court issued 6-l.l-31-6(c) uncon- Indiana section is Code components that of Indiana’s tax (2) stitutional; whether the cost schedules system violated the constitutional valuation by prop- used the State Board to determine requirements, and it ordered the State Board (3) unconstitutional; erty whether value are future to “make real assessments competent the Board must all consider system of under a that purposes for taxation appeals filed evidence of wealth objective reality.” an incorporates Town of (4) 11, 1999; May on or whether after Comm’rs, v. State Bd. Tax 690 St. John of standing. the Town of John had St. (Ind. 1997) (“St. 370, 398 Tax N.E.2d John authority regarding and limitations III”). Following hearing to determine an a system property of assessment and Indiana’s bringing appropriate deadline for the assess- Property in the Taxation taxation are found compliance, into constitutional ment the Constitution Indiana: of judgment final the Tax Court entered its Assembly by provide, The General shall Board to consider all which ordered law, prop- equal a uniform and rate of for competent evidence of wealth erty assessment and taxation and shall county appeals filed with the review boards just prescribe regulations to valu- secure a May 11, 1999, on or after and remanded to property, ation taxation of all both real for Board for further consideration of the State personal. petitioners. specific claims of the Town 1(a).3 Const, Comm’rs, discharge § v.State Bd. 691 Ind. To this X, St. John (“St. (Ind.Tax 1998) responsibility, constitutional the General As- 1390 John originally initially petition appeal] that, State Board filed a chal- as if filed” in this Court 1. The ton specified, grant lenging in St. the Tax Court's decision John unless otherwise (Ind.Tax 1997). Subsequently, automatically N.E.2d 370 vacates the decision of transfer petition incorpo- 11(B)(3). a Appeals. App. filed second Court R. prior petition rating the claims of error in its asserting challenging also new claims St. John language 3.This resulted from a constitutional 1998). (Ind. 691 N.E.2d 1387 The Tax ap- adopted provision amendment in 1966. The opinions in III and St. IV all peared as fol- in the 1851 Constitution proceeding, arise from same which final lows: judgment was not entered until St. John IV. Assembly provide by law for Thus, General shall single appeal we view as a from both a uniform and rate of assessment opinions. Tax Court taxation; prescribe and shall such as for taxation of shall secure valuation procedure applicable 2. This is different from excepting property, personal, all both real and Appeals our review of Court of decisions. educational, municipal, literary, only upon granting such Appellate provides Rule 11 scientific, religious purposes, Appeals, or charitable petition to the Court of transfer from exempted specially Supreme jurisdiction of law. Court has "all issues sembly agency, guage created an administrative requires of the statute that conclusion. Board, State, (Ind. delegated responsi- to it the Price v. bility establishing classify 1993); Co., rules to Indianapolis Ry. Smith v. St. tangible property according 425, 427-28, (1902). assess to its Ind. 63 N.E. 6-1.1-30-1, §§ “true tax value.” Ind.Code Applying Clause, Taxation 6-1.1-31-1, legislature 6-1.1-31-6. The does Court found “the explicitly define the term “true tax value” because, according unconstitutional” to the delegates but to the State Board authori- admission, impossi- State Board’s own “it [is] to define the term. 6-1.1-31- Ind.Code present system ble under the to determine 6(c) (“True tax value is value determined system’s compliance with the under the rules of the state board provision.” St. John 690 at N.E.2d 376- commissioners.”). However, it must be added). (emphasis 77 The Court further upon specified statutory based factors4 “and that, present system found “[b]ecause any other factor that the board determines comparison does not allow of assessments to by just § proper.” rule is 6- Ind.Code data, objective satisfy it cannot the constitu- 31—6(b)(7).Thus, regula- the assessment 1.1— requirements tional equali- of prescribed by tions and schedules in the assessment.” Id. 378 Board determine “true tax value.” Ind. Ad- added). (emphasis observed, The court (“Title 50”). 50, min. Code tit. art. 2.2 figure produced by “True Tax Value is a application of a closed set of self-referential Constitutionality of the Statute rules and formulas contained Title 50. The State Board contends that Everything needed to calculate True Tax ruling Court erred in that Indiana Code sec- 50; Value set forth Title evidence of 1.1—31—6(e) tion violates the Indiana Con- 6— value external to Title 50 is irrelevant.” Id. stitution. Emphasizing at 374. its belief that alleged Our standard of review for “requires Constitution of of violations the Indiana Constitution is well property assessment and taxation based established. St John 675 N.E.2d at 321. world, objective a real prop- measure of Every statute stands before us clothed with wealth,” erty the Tax Court concluded that presumption constitutionality until system proper- “Indiana’s True Tax Value clearly by contrary showing. overcome 1.1—31—6(c) ty taxation under section 6— Rendleman, State v. 603 N.E.2d 1334 Title 50 violates the Indiana Constitu- (Ind.1992); Adoptive Parents M.L.V. & implementing tion-” Id. at 398. In its Wilkens, AL.V. v. 1058 IV, entry judgment in St. John (Ind.1992); McGinnis, Eddy expressly prior opin- characterized its State, (Ind.1988); Miller v. 517 holding ion in III St. John that the statu- (Ind.1987). party N.E.2d The chal tory provision, Indiana section 6—1.1— Code lenging constitutionality of the statute 31-6(c), “is unconstitutional.” St. John proof, bears the burden of and all doubts are 691 N.E.2d at 1388. Rendleman, against party. resolved that first We observe the clear thrust 1334; Wilkens, N.E.2d at 598 N.E.2d at general rationale Court’s de 1058; Miller, 517 at 71. If two rea unconstitutionality termination of is directed interpretations sonable of a statute are avail able, regulatory system implement at the Title 50 one of which is constitutional and the value,” not, ing “true tax not the statute itself. path other we will choose that which statutory provision expressly permits upholding the referenced statute because we by presume legislature finding will not violated the Tax Court in its of unconstitu unambiguous tionality the constitution unless the lan- states: Const, X, (1851). respect § property, Ind. 4. With 1966 amend- to real the factors in- supplemented permissible classification, size, location, use, ment emptions the list of ex- clude intangible personal property, to include depreciation, improvements, "pro- cost of specified tangible personal property, and vehicles subjected to an excise tax. The 1966 modifica- ductivity earning capacity of land.” Ind.Code 1.1—31—6(b). § 6— analysis. tions do alter our consideration provide must (e) of real respect to the assessment With determines “[a]ny factor that the board not mean fair other value does property, true tax §§ 6— just by proper.” is the value True tax value rule is market value. Ind.Code 6-1.1-3l-6(a)(2)(viii). 31—6(a)(l)(ix), state rules of the under the determined 1.1— requires that addition, legislature of tax commissioners. board include instructions assessment rules Board’s 1.1—31—6(c). § This subsection Ind.Code 6— tax value of real determining true “[t]he sec- of Indiana Code appears in the context in this factors listed on the property based the stan- establishes tion 6-1.1-31-6 any factor that other subsection Board’s real for the State dards proper.” by rule is board determines Although the Tax regulations. 1.1—31—6(b)(7)(emphasis add- § explicitly III does Court in St. John 6— Ind.Code ed). local assess- Similarly, in its orders to infirmity finds in it identify the constitutional officials, provision legislature instructs 6(c),the language ing subsection factors may understand consider township that the Tax Court assessors suggests “the 6-l.l-31-6(c) by to be con- the state prescribed section Indiana Code to those addition II. trary decision of the to this Court’s if the use of tax commissioners board stated: approved factors is first additional 6-l.l-31-5(b) (emphasis fair market careful and accurate board.” While Ind.Code may added). the Clearly, legislature well be intends value assessment the requirements closest to our constitution’s regulations to accommodate the Board State equal rates of assessment just for uniform and that it finds unenumerated factors valuation, just and for and taxation proper. market solely upon strict fair tem based reasonable, inter- constitutional Because a required either expressly not value is available, con- statute is we pretation of this constitution, by purpose the the the text of 6-l.l-31-6(c) Indiana Code section strue framers, byor the subse- of its and intent exclusively is not mean that “true tax value” quent case law. value. necessarily to fair market identical or II, (emphasis N.E.2d at 327 St. John the provision prohibit This does added). in promulgating Board from prohibition an absolute interpreted If based, in or whole “true tax value” is as “true considering fair market value apparent The upon property wealth. part, in 6(c) value,” be constitu- subsection would tax present regula- Board’s failure of the State that tionally infirm.5 we observe fair market determined that tions to have not unam- this subsection is language not render “just proper” does value is interpretations are reasonable biguous. Two statutory unconstitutional. provision command may read either to possible. It the Tax Court’s determination reverse We consist of tax never that “true value” 1.1—31—6(c)is section that Indiana Code 6— to instruct that“true fair market value or unconstitutional. necessarily exclusively identi- or value” is not Constitutionality of Cost Schedules 2. cal to fair market value. Tax that Board contends statutory provisions are instructive. Other the Board’s cost conclusion that Court’s of both real respect to the classification With clearly er are unconstitutional schedules6 improvements, the State property and argu- supported by is not Because this assertion of the assessment footnote to its discussion 5. In a land, ment, however, State Board comments we assume that the agricultural the Tax Court windbreaks, land, independent such as classes of "[o]ther that this as an did not intend to habitats, lands, strips, wildlife forest filter for our review. issue per $1 acre.” St. John specifically valued at are III, (citing §§ 6- at 373 n. 3 690 N.E.2d Ind.Code Although parties referred to these as have 6-1.1-6-14, 6.2—9,6-1.1-6.7-9, and 6-1.1- 1.1— tables,” employ term "cost sched- we "cost 6.5-8). that the Tax State Board observes Court, ules,” which accords with as did implicitly several opinion invalidates Court "also ' See, e.g., regulations. designations in the special-use setting land such values for statutes 2.2-7-11, 2.2-8-7, r. r. tit. r. Code Ind. Admin. Preliminary habitats.” and wildlife as forests 2.2-9-Ó. at 4. Support Petition for Review Brief 6(b)(5). adopted by the Pursuant to rules concluded The Tax Court roneous. Board, by appli- this cost is determined of State Tax Clause violate schedules cation of its cost schedules. they do not Admin. because Ind. the Indiana Constitution 2.2-2-2(b) (assessing r. officials tit. equal proper rate of in a uniform and result Code Board’s rules assess- must followthe State taxation and do not accu assessment reproduction ing property). The cost of real property wealth. St John rately measure not the actual applied assessments is to be at 382. 690 N.E.2d item, reproducing an rather cost of but II, approved of the In St. Court “ in the specified cost” as “reproduction ‘the framers that Tax Court’s determination III, 690 cost schedules. St. John Board’s taxpay- 10, § that each 1 intended of Article noted, the As the Tax Court N.E.2d at 373. proportion its property wealth bear er’s ” Tax “the heart of the True cost schedules are tax burden.’ St. John the overall system.” Id. at 377. Value I, II, (quoting at 324 675 N.E.2d 970). However, recognized we reviewing a decision of the of valuation could be varying methods Court, findings aside the we “shall not set uniformity of assessment used and that clearly unless judgment of the required, provided that method is Rule 10. This Ind. Tax Court erroneous.” are and the burdens resulting valuations pro standard of review as is the same uniformity. St. John are distributed with 52(A). con Trial Rule vided found: at 327. We to the the evidence most favorable sider requires that Indiana Constitution [T]he from re judgment appeal and refrain system achieve substan- property tax our City weighing the evidence. Chidester tially rates uniform (Ind.1994). Hobart, taxation and authorizes clearly only Findings erroneous when are variety of meth- legislature to allow a support them no facts to record contains just valuation. such ods to secure inferentially. directly or Gibson either Ass’n, equal rate of Coop. and Inc. v. County Id. The uniform Farm Bureau held, taxation, (Ind.1994); Greer, 313, must be and we In assessment N.E.2d 315 643 Ass’n, Id. at 328. on wealth.” Inc. dianapolis “based & Visitors Convention However, Inc., that our state emphasized Newspapers, we also 577 Indianapolis v. (Ind.1991). require the 208, does not constitution 211-12 In conduct N.E.2d solely on a fair system to be based review, recognize taxation Indiana we ing our Collectively, these at 327. market value. Id. develop and established to Tax Court was system provide require that the principles prompt, expertise in the apply specialized substantially that are of assessment fair, rates of state uniform resolution property wealth. equal based on uniform and Revenue v. Dep’t cases. Clinic, P.C., Caylor-Nickel any appeal of foregoing expressly While (Ind.1992). Therefore, regard to with subjective 1313 the invalidation of the Tax Court’s pur particular are within the issues which (e.g., neighbor- present rale elements of the Court, cautious obsolescence),7 we exercise condition, of the Tax hood, the view grade, Id. deference. argues no evidence the Board ruling that the Tax Court’s supports record deci- Tax Court’s foundation for the design of the cost schedules the basic the assessment conclusion that sion is its unconstitutional. objectively verifia- based on system must be a review of the assessment data to enable property assess- ble Board’s real The State uniformity equality, system to ensure by include required statute to rules are ment taxpayers have factors, ensure that individual and to determining various for instructions “right of unifor- personal means to assert reproducing “the cost of of which is one assess- equality” as to individual mity 6-1.1-31- improvements.” Ind.Code regulations the 2001 the for subjective asserts that ele- Noting revised the that it has 7. change Reassessment, conceptually Reassessment “will General the 2001 General ments for by adding assessing system market- ap- Indiana's in this not defend them Board "does concepts.” Appellant at 9. Brief of value The State peal.” at 14 n. 12. Brief of Schools”); Ind. Const. system of Common at 376 & n. 690 merits. St. Assembly IX, (duty §§ of General point, the Tax Court latter Upon law, support of institu by for the “provide, that, because exist- emphasized its view deaf, mute, of the tions for the education any value ing system precludes evidence blind; treatment of the and for the and the schedules or found the cost which is not insane,” for the “provide institutions and to Board, by as- approved otherwise juvenile offend reformation of correction and considering from other prevented are sessors ers”). affir provisions constitutional These wealth, thus relevant evidence legislature enact laws matively require the ability to achieve undermining system’s subject cer purposes, specified public uniformity equality applied to individ- provisions do not qualifications, but such tain Id. at 376-77. ual assessments. rights individuals entitlement create Assembly to By instructing the General pur particular seeking to benefit from law, “provide, by for a uniform See, e.g., qualifications. poses specified and taxation” rate of assessment (Ind. Cohn, Ratliff just to secure “prescribe and to 1998) IX, requires (although Article section property,” the taxation of all valuation for ju provide institutions for legislature to requires cre- Property Taxation offenders, an individ it does not create venile uniform, just system. equal, of a ation to be housed right for all such offenders ual constitutional text does institutions); by Fleener v. only in Y.A. such personal right of abso- expressly provide a (Ind.Ct.App.1995) Bayh, 657 N.E.2d equality in assessment lute IX, duty imposed by Article sec (legislative provision is not also note that this rate. We provide for treatment of tion 1 to institutions constitution, 1 of our state located Article duty impose insane does not “absolute protects liberty generally individual suffering from mental for individuals care” rights government action. and limits illness). X when Article As we noted conclude that at the was under consideration Constitutional requires the General Assem Taxation Clause pro- delegate who 1860-61, Convention system of bly provide for a Read, it, acknowledged the as- posed Daniel uniformity, and taxation characterized language provision’s pirational nature of the proper equality, and valuation based expect the full implied “that he did not wealth, require but the Clause does precise exacti- achievement of absolute precise exactitude as to the absolute and II, at 323. Del- John 675 tude.” St. uniformity equality of each individual and “ egate emphasized, ‘The rule will be Read system must also assure assessment. The law, people and part organic and the of taxpayers have a reasonable that individual up to to a Legislature will endeavor work system challenge whether the opportunity to ” manifestly just equitable.’ Id. and rule so by regulations and was prescribed statute op the Debates and (quoting 1 REPORT at 323 assessments, applied to individual properly (comments (Dec. 4,1860) of PROCEEDINGS personal, does not create but Clause Read)). Delegate uniformity equality. right of substantive delegation of function to the express This an to indi not establish entitlement It does Property Taxation legislature under evaluation of assessments for abstract vidual provided wealth, is not unlike several others nor does it mandate property Const, See, independent property art. wealth e.g., Ind. of in our constitution. consideration Assembly app or tax VIII, in individual assessments (duty § 1 of the General evidence law, general and uniform “provide, by for a eals.8 that the assessment The Tax Court found Clause does fact that the Taxation Clause, Law Ind. property violated the Due Course of require of tem the abstract evaluation Const, 12, I, taxpayers give deprives it “because rise wealth as to individual assessments world, objective right right property to introduce real wealth of their to substantive challenge St. order to assessments.” appeals assessments evidence in of individual evidence in III, Although the State rights 690 N.E.2d at 388. existing procedural John does not diminish finding directly challenge this judicial did not Board taxpayers to seek administrative of review, holding Prop- that the petition for our its review. II, legisla

As we noted St. John of regula- others.” Id. The State Board’s provide regulations tive discretion to to se required tions are not to use all three stan- by cure valuation is limited the constitu dard market-value measures of value in its requirements equal tional of uniform and system. assessment taxation, property rate of assessment and above, system as noted must compliance with such limitations is sub provide rates of assessment that are substan- II, ject judicial review. St. John tially uniform property based on judicial N.E.2d at 328. Such relief is avail wealth, requires regulations and this that the system able when the assessment fails ade grounded data, objectively be verifiable quately provide uniformity equali although system solely “a based strict reason, ty general. For this fair expressly market value is required.” require Court is correct to St. John 675 N.E.2d at 327. The State Board’s be based on argued Board to the Tax Court objectively verifiable data to enable review of system adequately determines system generally pro to assure that it by separate wealth the use of cost schedules uniformity equality prop vides based on by for various classes of meas- erty wealth. uring property. the “value in use” of assessed argues require- The State Board objectively “euphem- ment of verifiable data The Tax pres Court found that the istically adoption mandates of market value.” system’s separate ent cost schedules for dif Brief of at 16. The State Board types ferent prevented of uniformi contends that the Tax Court is incorrect if its III, equality. St. John 690 N.E.2d at decision, announced in III and St. 377. To the extent the Tax Court’s deter means that the assessment mination be understood to assert that incorporate must all three standard market- procedures different or cost schedules can value measures value noted used, never disagree. we The General As sales, (comparable reproduction cost sembly may adopt different methods of as depreciation, capitaliza- minus and income sessment for different classifications of tion). See St. John 690 N.E.2d at 382 n. property in order to achieve represents planned 27. The Board that its equality. State Bd. revisions of the assessment would not Co., Lyon Comm’rs v. & 172 Ind. Greenleaf satisfy such a standard.9 The Tax Court 272, (1977) App. declared: “The Board must measure Co., (citing Clark v. Vandalia R.R. 172 Ind. wealth order to meet the dictates (1909) (method assessing 86 N.E. 851 only of the Indiana Constitution. This can property permitted railroad in order to se through application objective be done cure a fair valuation of the whole application data and an of real world factors equitable among and an distribution affecting property values.” Id. at 382. Ob- affected); counties Comm’rs serving recognized the three valuation meth- Johnson, County Johnson 173 Ind. ods, acknowledges the Tax Court that “some (1909) (classification per N.E. 590 of banks inappropriate valuation methods are for some practical place mitted where effect is to the types property.” Id. at 382 n. 27. It result); footing taxing on the in authorizes the classes same State Board to “assess certain Smith, property by certain methods to the exclusion ex rel. Lewis v. 158 Ind. erty provides neighborhood, grade, Taxation Clause no such substan- assessments for and ob- right finding. changed tive incorporate nullifies this solescence have been concepts. market value information and 9. The State Board asserts: permits taxpayers reproduction rule to use cost appeals. system, data in their which planning But this for the 2001 General Reassess- ment, far more is oriented toward market value than proposed the State Board has a rule that previous permits the rule and which the intro- considers market-value information but does incorporate approaches appeals kind not duction (reproduction one of market data in all three to market costs, income), but not sales or value. The cost tables are based on actual cost data, they satisfy applied not the Tax and are at of value so would Court’s strict market- 100% verifiable, they objective, readily approach. will be value taxpayers. Adjustments understandable to Brief of at 19-20. (1902) (statute system in “true tax value” permitting mort- cluded that the 64 N.E. 18 estate)). equality uniformity use of gage general on real the deduction violated alone make the different methods does not Property Taxation requirements the However, although system unconstitutional. The Tax Indiana Constitution. Clause of the used, the classifi- methods different that the current assessment Court found differing properties cannot be cation of the “any method to as a fails to use tem whole arbitrary upon be based but rather must (em- wealth,” id. at 381 property determine inhering proper- in the naturally differences that the cost sched- phasis original), in Greenleaf, Ind.App. at ty. Lyon & formulas, de- arbitrary figures “are ules (citing at State ex rel. Lew- applied to by the Board and termined 20). is, at 158 Ind. at 64 N.E. little or no property local assessors with claim, worth,” the “value in use” As to or id. at reference to actual value that, applicable Tax Court found under that, explains because 382. The Court schedules, physical cost “it is the characteris world, objective “system eschews real use, improvement, its tics of an data, equality or no verification of either that, governs reproduction costs” and there property uniformity of taxation based on fore, system measure does not use. St. possible.” n. 11. wealth is Id. at 376 at 382. The Tax Court the Tax The State Board contends property prohibit the evaluation of did clearly erroneous. Court’s determination is upon value in use but rather wealth based argues It that the cost schedules were based found that the was defective commercially man- upon a available valuation methodology. in Id. its As ual modified to account for actual costs noted, require the constitution does not an Indiana. upon highest assessment to be based property. best use of the Id. at 379. Focus Citing Report Fair Mar- of the Indiana ing upon taxpayer’s actual use of land (“DeBoer Study Report”), conduct- ket Value improvements, possible rather than the ed at the direction of the State Board and choose, potential purchasers may uses which 64C, admitted as State Board Exhibit way altogether appropriate an to evaluate that “the Board as- Court found property purpose of wealth for the assess types property unequally,” sesses different Property ment and taxation under the Taxa noting property that residential was assessed property tion Clause. We find that valuation 62%, 81%, at commercial at indus- upon for assessment based value in use is a 72%, agricultural prop- trial at reasonable measure of wealth. A 54%, erty at n. at of market value. Id. uniform and assessment land evidence, Citing supporting accurately improvements based value Court found that the State Board has not require use would not offend constitutional any way equality identified measure ments. except by present system taxation under the constitutionally per- it is while using market information. Id. 379. As system apply the assessment missible for supra, although as- discussed each individual differing different valuation methods separate valu- sessment need not consist of classifications, including the assess- value, ation of fair market the State Board’s upon value ment of some classifications based regulations must be based on use, upon highest than and best use rather objectively verifiable data to enable review of requires Taxation generally it and to ensure that wealth assessment methodolo- provides uniformity equality based on gies general equality result property wealth. across all the classifications. noted, supra, previously As we cannot set Independent regarding from its statements findings judgment the Tax aside the and use, separate in the issues of value cost erroneous, clearly Court unless a standard schedules, mandatory use of mar- standard requires that the record contain no methods, measurement and entitle- ket-value judgment. supporting facts We extend ment to individual assessments based on worth, special the Tax property further con- cautious deference to Court’s Court reweigh ground system expertise, we do not the evi- that the True Tax Value is most favor- violates the Indiana Constitution. dence but consider that which judgment. to the able III, St. John 690 N.E.2d at 398-99. Arguing already process in it is in the record There exists evidence drafting promulgating imple- rule to findings support the Tax Court’s that the ment a new assessment under which lack sufficient relation to ob cost schedules properties all will be reassessed March uniformity jectively data to ensure verifiable 2001, the State Board asks this Court to wealth, property equality based on permit appeals assessments and to continue significant support findings its lack of existing under the rules until the new uniformity equality property across clas operative and to reverse the Tax Court’s Board has not demon sifications. requiring order “real world evidence” after findings clearly strated that these are erro 11,1999. May grant equivalent relief on neous. grounds. other We affirm the Tax Court’s determination explained supra, schedules, Property As existing lacking cost Taxation the Indiana Constitution meaningful property reference to wealth and right does not establish a substantive to indi resulting significant in deviations from sub- evaluating property vidual assessments equality, stantial violate the wealth, nor does it mandate the consideration Property Taxation Clause of the Indiana independent property wealth in evidence Constitution. the Clause does not appeals. persons individual tax Because fil require property the consideration of all ing appeals possess tax no constitutional in enti wealth evidence individual assessments or present tlement to what the Tax Court de appeals therefrom. It does not mandate the evidence,” “competent scribed as real world use of strict market value or the use of its we reverse the Tax order that the Court’s three measurement standards. It does not State Board must consider such evidence. prohibit the use of different assessment request The State Board’s that the deadline methodologies differing property classifi- cations, use, be vacated is thus moot. or assessment based on value provided that the result is substantial unifor- Standing for Town of St. John

mity equality property based on wealth all across classifications. Finally, argues Board 3. Use of Wealth Evidence brought by claims the Town of St. John were properly never before the Court and The Tax Court ordered the State Board to should be dismissed. This issue was raised “make future real assessments for II, in St. John where we determined that the purposes system that of taxation under a present Board had failed to the issue objective incorporates reality,” an Appel for review accordance with Indiana 398, although St. late Rule 18. 675 N.E.2d at 320 n. 4. compliance Court did not set deadline II, John granted because we had not review also with this mandate. The court ordered issue, to consider the we declined to disturb competent all State Board “consider Zorn, Bielski v. finding in the Tax Court’s presented real world evidence to the State (Ind.Tax 1994), procedural 627 N.E.2d 880 by persons filing appeals county [with case, antecedent to the that the Tax 11,1999,” May or after review] boards of subject jurisdiction. St. matter Court had that, John St. 691 N.E.2d at 675 N.E.2d at 320 n. 4. We decline the interim: the State Board’s invitation to revisit this (1) real tax shall be assessments issue. made in accordance with the current Conclusion (2) tem, any challenges to real governed by judgment assessments shall be the ex- of the Tax Court is affirmed (3) law, isting part part. real tax assess- and reversed in We remand subject challenge ments are not on the this cause to the Tax with instructions system apply to different val- Judgment Entry of the assessment modify its Order 2,1998, remanded this cause to differing property March classi- uation methods for “any real world Board to consider fications, including the assessment of some evidence,” St John upon in use rather classifications based value proceedings consistent with and for further highest than and best use. opinion.10 this respectfully I dissent from the J., SHEPARD, C.J., SELBY, part concur. cost conclusion in court’s buildings improve- schedules for and other SULLIVAN, J., concurs and dissents with at the time ments used the Tax Board separate opinion. litigation relevant to this are unconstitution- BOEHM, J., participating. by taking al. The schedules were created information from a national commercial cost SULLIVAN, Justice, concurring and dis- guide developing replacement appraisal for senting. costs, val- depreciated values and insurable join Today necessary it we find buildings improvements. and other ues of defining parameters in of state tax guide The cost data in the was then taken policy by declaring part of the tax it and validat- into the field where was tested can unconstitutional. While there in against known construction costs here ed so, power separation no of our to do of doubt testing and vali- Indiana. Based on field gen- it. powers demands cautious use of See dation, adjusted the cost data was then if Liquor erally Indiana Wine & Wholesale State, (Ind.1998); necessary to actual costs in Indiana. reflect Citi- Foster, ap- resulting schedules were then zens Nat’l Bank Evansville v. cost (Ind.1996).11 1236, 1241 I can think property. plied to all classes of See Record we can be more confident of of no area where (testimony at 1144^1147 of consultant who ability process- the normal democratic schedules); Respondent’s developed cost they working es should than taxation. (Marshall (valuation Exh. 5 Valuation Service commercial, Residential, agri- industrial compiled by manual the firm Marshall & protect pursue cultural interests can well CA)). Swift, Angeles, Contrary Los to the policy tax respective their interests state conclusion, majority’s appears approach legislative before the branches executive objectively to me to be based on verifiable judicial intervention. without (national data, adjusted data cost for actual having- The decision to address the merits costs), applied uniformly across made, parts been I concur in 3 and of the I classifications. see no violation of majority’s opinion. agree I with much also X, 1,§ of the Indiana Constitution. part particular, agree I with its Although disagree majority’s I with the conclusion that the Indiana tax as- issue, analysis I of the cost schedules note I, system does not violate art. sessment that the Tax Board has advised us that its X, of the and that art. Indiana Constitution governing rules the next reassessment “will 1,§ personal does not create a substantive conceptually change assessing sys- Indiana’s right equality. I also con- constitutionally permissible by adding concepts.” cur that it is for tem market-value responding duty to the State Board’s 11. Both of these cases address the of the 10. In addition to claims, taxpayers attempt to raise several deciding question court to avoid constitutional tax deci- issues in their brief. Review of court when the case can be resolved on other-than- only by filing a sions is available in this Court grounds. suggest respectfully constitutional I Appellate petition pursuant for review Rule only aspect that the issue of cost schedules—the supra accompanying 2 and text. 18. See note of the found unconstitution- provides ”[a]ny party adversely affected This rule by grounds al—could have been resolved on opportu- a final decision of the Tax Court" an by applying prin- law mootness or administrative nity petition App. for review of that decision. ciples. 18(C). taxpayers petition filed no R. any Accordingly, review of issues this case. any presented we decline to address issues not petition review. reason, I at 9. For this Brief effectively moot.

see the issue as CHARLTON, Appellant

Michael W. (Defendant below), Indiana, Appellee

STATE of (Plaintiff below).

No. 84S00-9608-CR-00570.

Supreme Court of Indiana.

Dec.

Case Details

Case Name: State Board of Tax Commissioners v. Town of St. John

Court Name: Indiana Supreme Court

Date Published: Dec 4, 1998

Citation: 702 N.E.2d 1034

Docket Number: 49S10-9806-TA-340

Court Abbreviation: Ind.