The Indiana Tax Court affirmed that it had subject matter jurisdiction over a trust’s claims of an invalid annexation and storm water charges on its farmland, but ultimately found that the Indiana Board of Tax Review did not err in upholding the assessment of the land.
During the 2016 tax year, co-trustees Nancy Daw and Stephen Hoback owned 54.05 acres of land in McCordsville. Of that land, 37 acres were leased to a farmer who used no-till practices to cultivate and harvest field corn and soybeans, while the remainder of the land was unsuitable for farming and remained in its natural state.
Upon receiving a property assessed value of $88,400 by the Hancock County assessor, the co-trustees appealed, arguing that their property tax liability was incorrect because the ordinance that purported to annex their farmland to the town was invalid. They also claimed they did not owe nearly $3,000 in delinquent storm water charges and penalties that resulted from the town’s unauthorized imposition of a tax, and that 1.05 acres of their land should have been assessed as nontillable land because it was incapable of being farmed.
In January 2018, the Indiana Board of Tax Review declined to address the co-trustee’s annexation and storm water claims due to a lack of statutory authority. It also determined that while the co-trustees had shown that 1.05 acres of their land should have been assessed as nontillable land, they failed to show that their assessment should be changed in any other manner.
On appeal to the Indiana Tax Court, the co-trustees argued the Tax Court had subject matter jurisdiction over the annexation and storm water claims. It also contended the Indiana Board erred in its assessment.
The court agreed that it indeed had subject matter jurisdiction over the co-trustees’ annexation and storm water claims because the claims satisfied the “arising under” requirement to bring a case under tax law to the Indiana Tax Court.
However, the court also found favor with the county’s assessment of the farmland and ultimately remanded the case to the board with instructions to first consider whether the town or another entity should be joined as a party under Indiana Trial Rule 19.
“The Indiana Board is the finder of fact and consequently must weigh the evidence and judge the credibility of witnesses,” Senior Judge Thomas G. Fisher wrote. “…Therefore, when litigants present the Indiana Board with claims that it lacks the authority to resolve, such as constitutional challenges, the Indiana Board must still make factual findings regarding those claims to facilitate the Court’s subsequent review and resolution of the issues presented.
“…In this case, the Indiana Board cannot resolve the issue whether the tax was properly imposed because it lacks the authority to determine the validity of the annexation and storm water ordinances; nonetheless, the Indiana Board must still make factual findings for the Court to use in resolving the matter,” Fisher concluded.
In addition to the T.R. 19 determination, the board must also “conduct another hearing ont eh Co-Trustees’ annexation and storm water claims, allowing the parties to introduce additional evidence should they so desire, and enter specific findings of fact thereto.”