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Tax Court reverses doubled Clark County assessments

May 21, 2018

The Clark County assessor must reduce its valuation of a Jeffersonville property by roughly $1 million for the 2011 through 2013 tax years after the Indiana Tax Court found the assessor abused her discretion in the assessment process.

During the years at issue, Nova Tube Indiana LLC owned two parcels of land in Jeffersonville covering 29.1 acres. Though the property was assessed at $2.2 million in 2010, the Clark County assessor more than doubled that value the three following years, assessing the property at or above $4.7 million in 2011, 2012 and 2013.

Nova Tube – a mechanical steel tubing manufacturer – appealed those assessments in October 2013, but the Clark County Property Tax Assessment Board of Appeals affirmed. Before that ruling, Nova Tube sold the property to the Port of Indiana for $6.1 million in May 2014.

The company then appealed to the Indiana Board of Tax Appeals, which found that the county assessor had met her burden of proving the assessment increase in 2011 was correct under Indiana Code section 6-1.1-15-17.2.  Specifically, the board determined the assessment values were supported by evidence that the property was sold in a “market value” transaction, and that the market was relatively stable during the years at issue.

In response, Nova Tube countered that the sale was not a market value transaction because the Port was “atypically motivated” given its status as a government entity and its ownership of adjacent land. The company also presented an appraisal in conformance with the Uniform Standards of Professional Appraisal Practice that valued the property at $2.9 million in 2011.

The board ultimately upheld the 2011 assessment and the 2012 and 2013 assessment based on the same evidence. After its request for rehearing was denied, the company appealed to the Indiana Tax Court in Nova Tube Indiana II LLC v. Clark County Assessor, 49T10-1708-TA-13, which ruled in its favor Friday.

While Tax Court Judge Martha Wentworth upheld the board’s finding that the May 2014 sale of the property was a market value transaction, she also found the assessor’s evidence failed to show the 2014 sales price was “directly related to any of the appropriate valuation dates for the years at issue.” The evidence also did not show why the more than doubling of the assessment in 2011 was correct given other evidence that showed relatively flat market growth from 2009 to 2014, Wentworth wrote.

The assessor relied on two cases — Hubler Realty Co. v. Hendricks Cnty. Assessor, 938 N.E.2d 311, 315 n.5 (Ind. Tax. Ct. 2010) and Fisher v. Carroll Cnty. Assessor, 74 N.E.3d 582 (Ind. Tax Ct. 2017) — to support her position that the May 2014 sale was related to the valuation dates at issue, but Wentworth found that those two cases differed from the issues in the instant case.

“Therefore, the Court finds that the Indiana Board abused its discretion by finding that the May 2014 sales price was sufficiently related to each of the March 1 valuation dates,” Wentworth wrote. “Consequently, the Assessor did not meet her initial burden of proving that her assessment increases were correct.”

Thus, Wentworth remanded the case for the assessor to assess the property at the three values offered in Nova Tube’s appraisals — $2.9 million, $3 million and $3.1 million.

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