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Kokomo Urban Development, LLC v. Heady

Tax Court of Indiana

May 13, 2019

KOKOMO URBAN DEVELOPMENT, LLC, Petitioner,
v.
MINDY HEADY, in her official capacity as HOWARD COUNTY ASSESSOR, Respondent.

          ON APPEAL FROM A FINAL DETERMINATION OF THE INDIANA BOARD OF TAX REVIEW

          ATTORNEY FOR PETITIONER: PAUL M. JONES, JR. ATTORNEY AT LAW Greenwood, IN.

          ATTORNEYS FOR RESPONDENT: CURTIS T. HILL, JR. ATTORNEY GENERAL OF INDIANA MEREDITH McCUTCHEON WINSTON LIN DEPUTY ATTORNEYS GENERAL Indianapolis, IN

          WENTWORTH, J.

         Kokomo Urban Development, LLC has challenged the final determination of the Indiana Board of Tax Review that held when calculating property tax liability, the property tax cap designated in Indiana Code § 6-1.1-20.6-7.5 is applied before, not after, the application of an economic revitalization area deduction. Upon review, the Court affirms the Indiana Board's final determination.

         FACTS AND PROCEDURAL HISTORY

         Kokomo Urban owns a moderate-income apartment complex in Kokomo, Indiana.[1] (See, e.g., Cert. Admin. R. at 146-52.) Given the property's location in an economic revitalization area ("ERA"), Kokomo Urban was entitled to receive a 100% "property tax deduction" for the 2015 tax year and a 50% deduction for the 2016 tax year. (See, e.g., Cert. Admin. R. at 62-79, 113-14 ¶¶ 4-6.)

         With the 100% deduction, Kokomo Urban owed no property tax for the 2015 tax year. (See Cert. Admin. R. at 113 ¶¶ 4-5, 184.) For the 2016 tax year, the Howard County Auditor calculated Kokomo Urban's property tax liability as $47, 720.46. (Cert. Admin. R. at 114 ¶ 9, 184.) The Auditor calculated that amount as follows:

1) $2, 424, 200 (gross assessed value of Kokomo Urban's improvements) x 50% (ERA deduction) = $1, 212, 100;
2) $1, 212, 100 $32, 500 (gross assessed value of Kokomo Urban's land)[2] = $1, 244, 600;
3) $1, 244, 600 x 3.8342% (tax rate) = $47, 720.46

(See Cert. Admin. R. at 113-14 ¶¶ 2-3, 6-9.) The Auditor determined that no adjustments to her calculation were necessary because the computed property tax liability did not exceed the property's maximum 2% property tax cap as set forth in Indiana Code § 6-1.1-20.6-7.5. (Cert. Admin. R. at 113-14 ¶¶ 2, 7, 9-10.) Her calculation of the property's 2% tax cap amount was:

1) $2, 424, 200 (gross assessed value of Kokomo Urban's improvements) $32, 500 (gross assessed value of Kokomo Urban's land) = $2, 456, 700;
2) $2, 456, 700 x 2% = $49, 134

(Cert. Admin. R. at 114 ¶ 7.)

         Kokomo Urban challenged the computation of its 2016 property tax liability, first with the Howard County Property Tax Assessment Board of Appeals and then with the Indiana Board. (See Cert. Admin. R. at 1-5.) Throughout those appeals, Kokomo Urban argued that under Indiana Code § 6-1.1-20.6-7.5, its maximum property tax liability was capped at approximately $25, 000, calculated as follows:

1) $2, 424, 200 (gross assessed value of Kokomo Urban's improvements) x 50% (ERA deduction) = $1, 212, 100;
2) $1, 212, 100 $32, 500 (gross assessed value of Kokomo Urban's ...

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