ATTORNEYS FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
JAMES F. BEATTY GREGORY F. ZOELLER
JESSICA L. FINDLEY ATTORNEY GENERAL OF INDIANA
DONALD D. LEVENHAGEN JESSICA R. GASTINEAU
MEGAN M. PIAZZA WINSTON LIN
KATHRYN M. MERRITT-THRASHER DEPUTY ATTORNEYS GENERAL
LANDMAN BEATTY, LAWYERS, LLP Indianapolis, IN
Indianapolis, IN
FILED
ATTORNEY FOR AMICI CURIAE: Oct 05 2016, 12:29 pm
PAUL M. JONES, JR.
CLERK
PAUL JONES LAW, LLC Indiana Supreme Court
Court of Appeals
Indianapolis, IN and Tax Court
IN THE
INDIANA TAX COURT
HAMILTON SQUARE INVESTMENT, LLC, )
)
Petitioner, )
)
v. ) Cause No. 49T10-1505-TA-00018
)
HAMILTON COUNTY ASSESSOR, )
)
Respondent. )
ON APPEAL FROM A FINAL DETERMINATION OF
THE INDIANA BOARD OF TAX REVIEW
FOR PUBLICATION
October 5, 2016
FISHER, Senior Judge
Indiana’s property tax caps provide taxpayers with credits against their Indiana
property tax liabilities. See, e.g., IND. CODE § 6-1.1-20.6-7.5 (2016). The amount of a
credit depends on, among other things, a property’s classification (e.g., homestead,
residential, agricultural, or nonresidential) and its overall gross assessed value. See
I.C. § 6-1.1-20.6-7.5. This case concerns Hamilton Square Investment, LLC’s claim that
the Indiana Board of Tax Review erred in upholding the classification of its real property
and, thus, the allocation of its tax cap credits for the 2012 tax year. Hamilton Square is
correct.
FACTS AND PROCEDURAL HISTORY
Hamilton Square owns a 200-unit apartment complex situated on approximately
20 acres of land in Westfield, Indiana. (See Cert. Admin. R. at 87, 102-45, 152.) For
the 2012 tax year, the Hamilton County Assessor assigned the property an overall gross
assessed value of $5,030,900 ($1,411,000 for land and $3,619,900 for improvements).
(See Cert. Admin. R. at 102.) In arriving at this valuation, the Assessor classified about
70% of the property as residential (i.e., the apartment buildings, attached balconies, and
land thereunder) and 30% as nonresidential (i.e., the paving, storage/utility sheds, pool,
clubhouse, and all remaining land). (See Cert. Admin. R. at 149, 199-242.) Pursuant to
Indiana Code § 6-1.1-20.6-7.5, a 2% tax cap credit was then applied to the overall gross
assessed value of Hamilton Square’s residential property and a 3% tax cap credit was
applied to the gross assessed value of its nonresidential property. 1 (See Cert. Admin.
R. at 149-51.)
Believing the Assessor had erred in classifying its property, Hamilton Square filed
a Notice of Review with the Hamilton County Property Tax Assessment Board of
1
Indiana Code § 6-1.1-20.6-7.5 provided that the amount of a person’s tax cap credit was:
the amount by which the person’s property tax liability attributable to the
person’s . . . residential property exceed[ed] two percent (2%)[ or its] . . .
nonresidential real property exceed[ed] three percent (3%) . . . of the
gross assessed value of [its] property that [was] the basis for
determination of property taxes for that calendar year.
IND. CODE § 6-1.1-20.6-7.5(a)(2), (5) (2012).
2
Appeals (PTABOA) in May of 2013. The PTABOA, however, took no action on
Hamilton Square’s appeal. (See Cert. Admin. R. at 28.) As a result, on April 7, 2014,
Hamilton Square filed a Petition for Review with the Indiana Board. The parties
subsequently determined that the Indiana Board could resolve the matter by means of
summary judgment without an administrative hearing. (See Cert. Admin. R. at 28.)
On August 1, 2014, the parties filed their briefs and designated evidence2 with
the Indiana Board to support their motions for summary judgment. In its brief, Hamilton
Square claimed that it was entitled to judgment as a matter of law because the
Assessor’s classification of its property and the allocation of its 2012 tax cap credits
contravened Indiana Code §§ 6-1.1-20.6-4 and 6-1.1-20.6-7.5. (See, e.g., Cert. Admin.
R. at 90-97, 277-79.) More specifically, Hamilton Square asserted that the Assessor
misclassified some of its residential property by “limit[ing] the term ‘common areas’ to
those areas shared only by the actual dwelling units, such as common hallways, and
not those areas shared by the residents.” (See Cert. Admin. R. at 90-91.) The
Assessor, on the other hand, asserted that she was entitled to judgment as a matter of
law because her classification of Hamilton Square’s property and the allocation of its tax
cap credits comported with both statutes. (See, e.g., Cert. Admin. R. at 185-90, 267-
68.)
On April 1, 2015, the Indiana Board issued its final determination upholding the
Assessor’s classification of Hamilton Square’s property and the allocation of its tax cap
credits for the 2012 tax year. (See Cert. Admin. R. at 35.) In so doing, the Indiana
2
The Indiana Board’s final determination provides that the Assessor submitted, but did not
designate, her own affidavit as evidence. (See Cert. Admin. R. at 29.) The certified
administrative record, however, reveals otherwise. (See Cert. Admin. R. at 193 (designating the
affidavit of the Assessor as Exhibit A).)
3
Board explained that the Assessor’s classification of Hamilton Square’s property
comported with both statutes because under Indiana Code § 6-1.1-20.6-4, “common
areas shared by the dwelling units” were limited to the land and improvements within
the footprint of a multi-unit apartment building. (See Cert. Admin. R. at 34-35.)
Hamilton Square subsequently filed a petition for rehearing, but the Indiana Board
declined to rehear the matter. (Cert. Admin. R. at 36-46.)
On May 15, 2015, Hamilton Square initiated this original tax appeal. The Court
heard oral argument on January 22, 2016. Additional facts will be supplied if necessary.
STANDARD OF REVIEW
The party seeking to overturn a final determination of the Indiana Board bears
the burden of demonstrating its invalidity. Hubler Realty Co. v. Hendricks Cnty.
Assessor, 938 N.E.2d 311, 313 (Ind. Tax Ct. 2010). The Court will reverse a final
determination if it is arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law; contrary to constitutional right, power, privilege, or immunity; in
excess of or short of statutory jurisdiction, authority, or limitations; without observance of
procedure required by law; or unsupported by substantial or reliable evidence. IND.
CODE § 33-26-6-6(e)(1)-(5) (2016).
LAW
Indiana Code § 6-1.1-20.6 governs the computation and allocation of property tax
cap credits. See generally IND. CODE §§ 6-1.1-20.6-0.3 to -12 (2016). During the 2012
tax year, Indiana Code § 6-1.1-20.6-4 (hereinafter, “the Residential Property Statute”)
defined “residential property,” for purposes of this statutory scheme, as:
(1) A single family dwelling that [was] not part of a homestead and
the land, not exceeding one (1) acre, on which the dwelling
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[was] located.
(2) Real property that consist[ed] of:
(A) a building that include[d] two (2) or more dwelling units;
(B) any common areas shared by the dwelling units; and
(C) the land, not exceeding the area of the building footprint,
on which the building [was] located.
(3) Land rented or leased for the placement of a manufactured
home or mobile home, including any common areas shared
by the manufactured homes or mobile homes.
IND. CODE § 6-1.1-20.6-4 (2012) (amended 2013). “Nonresidential property” was
defined as real property that was 1) not a homestead or residential property and that 2)
consisted of a building, any other land improvement, and the land under the footprint of
the building or improvement. See IND. CODE § 6-1.1-20.6-2.5(1) (2012). Certain
undeveloped land was also included in the definition of “nonresidential property.” See
I.C. § 6-1.1-20.6-2.5(2).
ANALYSIS
On appeal, Hamilton Square claims that the Indiana Board erred when it limited
the term “common areas,” as used in the Residential Property Statute, to solely the land
and improvements within the footprint of a multi-unit apartment building (e.g., hallways
and stairways).3 (See Pet’r Br. at 13 n.8.) Hamilton Square maintains that for purposes
of the Residential Property Statute, common areas should also include land and
improvements beyond an apartment building’s footprint. (See, e.g., Pet’r Br. at 15-18.)
(See also Amici Curiae Br. of Gene B. Glick Co., Dominion Realty, Inc., Samaritan Co.,
& Stygall Co. at 5-7.)
3
Hamilton Square has also claimed that the Indiana Board’s final determination violates the
Indiana Constitution’s “uniform and equal” requirement. (See Pet’r Br. at 25-27; Pet’r Reply Br.
at 13-15.) The Court, however, need not address that issue because this case is resolved on
statutory grounds. See, e.g., Bethlehem Steel Corp. v. Indiana Dep’t of State Revenue, 597
N.E.2d 1327, 1330 (Ind. Tax Ct. 1992), aff’d by 639 N.E.2d 264 (Ind. 1994).
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The Assessor, on the other hand, claims that the language of the Residential
Property Statute unambiguously limited common areas to rental “building
improvements” (e.g., stairways and hallways) and excluded “standalone structures” and
their supporting land (e.g., clubhouses and sheds) just as the Indiana Board
determined. (See Oral Arg. Tr. at 13-15; Resp’t Br. at 7-8.) The Assessor explains that
this is so because in using the restrictive phrase “shared by the dwelling units” to modify
the phrase “any common areas,” the Residential Property Statute focused on the actual
dwelling units themselves and required the common areas to be “in physical proximity
with the dwelling units.” (See Resp’t Br. at 5-8.) (See also Resp’t Br. at 12-15
(asserting that another restrictive phrase, “not exceeding the area of building footprint,”
corroborated the physical proximity requirement).) The Court does not find persuasive
the Assessor’s argument that the terms “common area” and “footprint,” as used in the
Residential Property Statute, are interchangeable.
When a statute is susceptible to more than one interpretation, as it is here, it is
ambiguous and subject to judicial construction. City of Carmel v. Steele, 865 N.E.2d
612, 618 (Ind. 2007). In construing a statute, the Court’s primary goal is to determine
and implement the intent of the Legislature in enacting the statute. See Bd. of Comm’rs
of Cnty. of Jasper v. Vincent, 988 N.E.2d 1280, 1282 (Ind. Tax Ct. 2013). Generally,
the best evidence of this intent is found in the actual language of the statute itself, as
chosen by the Legislature. Washington Park Cemetery Ass’n v. Marion Cnty. Assessor,
9 N.E.3d 271, 273 (Ind. Tax Ct. 2014). Consequently, the Court will strive to give
meaning to each and every word used in the Residential Property Statute because it will
not be presumed that the Legislature intended to enact a statutory provision that is
6
superfluous, meaningless, or a nullity. See id.
As mentioned, Subsection (2) of the Residential Property Statute provides that “a
building that includes two (2) or more dwelling units” is residential property. See I.C. §
6-1.1-20.6-4(2)(A). Logic dictates that the multi-unit apartment building referred to in
Subsection (2) already consists of the building’s hallways and stairways. Thus,
confining common areas to the hallways and stairways of a multi-unit apartment building
would render the portion of the Residential Property Statute concerning common areas
superfluous (i.e., redundant). Accordingly, to give effect to the entire Residential
Property Statute, “common area” must be understood to include land and improvements
that are both attached to, and separated from, a multi-unit apartment building so long as
the area is available for the shared use of tenants.4 See, e.g., Cyril M. Harris,
DICTIONARY OF ARCHITECTURE & CONSTRUCTION 214 (3d ed. 2000) (defining “common
area” as “[a]n area either within a building or outside a building which is intended for use
of all occupants of the building or a group of buildings, but not for the free use of the
general public”).
Moreover, when the sections of the Residential Property Statute are read in
conjunction with one another rather than piecemeal, it is apparent that the Assessor has
misconstrued the import of the restrictive phrase, “not exceeding the area of the building
footprint” in Subsection 2(C) of the Residential Property Statute. (See Resp’t Br. at 12-
15.) See also Washington Park Cemetery, 9 N.E.3d at 273 (providing that statutes
containing multiple parts should be read as a whole rather than piecemeal). Indeed, the
4
In 2013, the Legislature amended Indiana Code § 6-1.1-20.6-4 and adopted Indiana Code §
6-1.1-20.6-1.2, which defined “common areas.” See P.L. 288-2013 §§ 21-22 (eff. Jan. 1, 2014).
While the parties dispute the applicability of these statutory provisions, (see, e.g., Pet’r Br. at 19-
25; Resp’t Br. at 8-13), the Court need not address the issue to resolve this matter.
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phrase in Subsection 2(C), “the land, not exceeding the area of the building footprint, on
which the building is located[,]” is linked to the rental dwelling unit (i.e., the building
containing at least two dwelling units), not the common areas. See I.C. § 6-1.1-20.6-
4(2). Similarly, the land restriction in Subsection (1), the acre of land surrounding “[a]
single family dwelling that is not part of a homestead[,]” is linked to a single-family rental
home that is not part of a homestead. See I.C. § 6-1.1-20.6-4(1). In turn, the land
restriction in Subsection (3), “[l]and rented or leased for the placement of a
manufactured home or mobile home,” is linked to the manufactured home or mobile
home rental. See I.C. § 6-1.1-20.6-4(3). Consequently, the actual structure and
language of the Residential Property Statute does not limit common areas to an
apartment building’s footprint as the Assessor has argued. See Indiana Dep’t of State
Revenue v. Horizon Bancorp, 644 N.E.2d 870, 872 (Ind. 1994) (stating that “[n]othing
may be read into a statute which is not within the manifest intention of the legislature as
gathered from the statute itself” (citation omitted)).
CONCLUSION
For the foregoing reasons, the final determination of the Indiana Board is
REVERSED. This matter is REMANDED to the Indiana Board so that it may instruct
the appropriate assessing officials to take actions consistent with this opinion.
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