Authority: IC 6-1.1-8-42; IC 6-1.1-31-1

Affected: IC 6-1.1-8-26

Sec. 1. The following definitions apply throughout this section:

1. (1) "Abnormal obsolescence" means that obsolescence which occurs as a result of factors over which the taxpayer has no control and is unanticipated, unexpected, and cannot reasonably be foreseen by a prudent businessperson prior to the occurrence. Abnormal obsolescence is of a nonrecurring nature and includes:

   1. (A) unforeseen changes in market values;
   2. (B) adverse governmental action;
   3. (C) exceptional technological obsolescence; or
   4. (D) destruction by catastrophe;
2. that have a direct effect upon the value of the property of the taxpayer at the tax situs in question on a going concern basis.

3. (2) "Normal obsolescence" means the anticipated or expected reduction in the value of property that can be foreseen by a reasonable, prudent businessperson when property is acquired and placed into service. In general, it includes the:

   1. (A) expected, declining value through use;
   2. (B) gradual decline in value because of expected technological improvements;
   3. (C) gradual deterioration or obsolescence through the mere passage of time; and
   4. (D) general assumption that such property will have a minimum value at the end of its useful life.
4. Normal obsolescence is considered through the use of historical cost, short useful life, and accelerated federal tax depreciation in computing true tax value.
5. (3) "Obsolescence" means the reduction in value of property that occurs through use, technological improvements, passage of time, changes in market values, and physical deterioration or destruction.

(Department of Local Government Finance; 50 IAC 5.1-11-1; filed Dec 15, 1993, 5:00 p.m.: 17 IR 966; reinstated by IC 6-1.1-8-44, eff Jul 1, 2003; readopted filed Oct 21, 2025, 9:19 a.m.: 20251112-IR-050240632RFA)