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Lake County tax case dismissed for lack of subject matter jurisdiction

April 9, 2018

A northern Indiana trial court must dismiss a case it originally transferred to the Indiana Tax Court, the Indiana Court of Appeals ruled Monday after finding insufficient evidence to prove the tax court’s jurisdiction.

After the Department of Local Government Finance issued its first “weighed average” township assistance property tax rate in 2015, the town of Griffith sought to transfer out of Calumet Township under Indiana Code section 36-1-1.5-2. That section, enacted in 2013, allows “eligible municipalities” to transfer to an adjacent township if their original township has a township assistance property tax rate that is 12 times higher than the statewide average.

The DLGF informed Griffith that it did not qualify as an “eligible municipality” under the new weighted average calculation. Meanwhile, then-Attorney General Greg Zoeller issued an opinion finding the legislature intended for an “arithmetic mean” formula to be used to calculate the statewide average township assistance property tax rate. The DLGF subsequently announced it would use the “arithmetic mean” considering Zoeller’s opinion, causing Griffith to believe it was eligible for transfer.

Thus, the town requested and obtained a special election in Lake County to vote on the town’s transfer out of Calumet Township, but Kimberly Robinson — acting individually and as Calumet Township trustee — field for declaratory and injunctive relief against the town and DLGF to stop the transfer process. DLGF moved to dismiss, arguing the Indiana Tax Court had exclusive subject matter jurisdiction, and the Lake Superior Court agreed and ordered the case to be transferred to the tax court.

Robinson filed an interlocutory appeal, but the Indiana Court of Appeals agreed with the subject matter jurisdiction ruling in a Monday opinion. Judge Terry Crone wrote for the unanimous appellate panel that the instant case “arises under” tax law because it “principally involves” a collection of a tax or assessment.

“Although not a direct challenge to a tax collection, this case clearly revolves around an earlier step in the taxation or assessment process,” Crone wrote.

However, the court declined to determine whether Robinson exhausted all her administrative remedies and received a “final determination” from the DLGF, the second requirement that must be met to send the case to the Tax Court. Thus, the appellate panel remanded the case with instructions for the trial court to dismiss Robinson’s complaint.

The case is Kimberly K. Robinson, in her official capacity as Trustee of Calumet Township, Indiana, and as a resident and taxpayer of Calumet Township v. Indiana Department of Local Government Finance and Town of Griffith, Indiana, 45A03-1707-PL-1643.

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