Reversal: Tax liability can’t exceed 1% of property’s gross assessed value

The Indiana Tax Court has reversed an Indiana Board of Tax Review’s final determination, answering the dispositive issue of whether an assessor should have capped a homeowner’s 2013 property tax liability at 1% instead of 2% of her property’s gross assessed value.

In 2011, Vanessa Purdom purchased a single-family home in Vincennes that received the homestead standard deduction in 2011-2012 and again in 2014. However, her property did not receive the standard deduction for the 2013 tax year.

Purdom appealed to the Indiana Board in 2014, claiming the Knox County assessor erred by not applying the standard deduction to her property for the 2013 tax year. Although it acknowledged that Purdom’s property met the definition of a “homestead” to qualify for the standard deduction, the Indiana Board of Tax Review concluded it was ineligible because she had failed to prove that she had filed a certified statement as required by Indiana Code § 6-1.1-12-37(e), had otherwise properly applied for the deduction, or was exempt from the application requirement.

Two years later, Purdom filed a petition to correct error with the assessor for the same property and the 2013 tax year, but because no action was taken on her appeal, she again appealed to the Indiana Board. This time, she asserted that the assessor imposed a 2% tax cap instead of the 1% tax cap amount that applies to property defined as “homestead” property. But the assessor asserted that Purdom’s property tax liability was not entitled to the 1% tax cap because her property had not been granted a standard deduction for 2013.

The Indiana Tax Court reversed the Indiana Board’s final determination that Purdom’s property was not entitled to the 1% tax cap, but Tax Court Judge Martha Wentworth noted that both parties’ arguments in the case missed the mark.

“Purdom urges reversal because, among other similar arguments, the Indiana Board did not revisit the question of whether her property should have received the standard deduction in 2013. In response, the assessor claims the 1% tax cap cannot apply because Purdom’s property did not receive the standard deduction in 2013,” Wentworth wrote.

“… While neither party precisely identified the dispositive question of law in this matter, the assessor did not dispute that Purdom’s property was eligible for the 2013 standard deduction. Moreover, both the record evidence and the Indiana Board’s own finding indicate Purdom’s property was eligible, although not entitled, to the 2013 standard deduction because she did not properly apply,” Wentworth wrote. “Therefore, the Court finds that Purdom’s property was eligible for the standard deduction and her tax liability should not have exceeded 1% of her property’s gross assessed value on the March 1, 2013, assessment date for the 2013 calendar year.”

The Tax Court thus remanded the case of Vanessa A. Purdom v. Knox County Assessor and Knox County Property Tax Assessment Board of Appeals, and Indiana Board of Tax Review, 18T-TA-32 for action consistent with the decision.

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