PROPERTY TAX ASSESSMENT BD. OF APPEALS v. US Steel Corp.

Attorneys for Petitioners                          Attorneys for Respondent
Brian P. Popp                                      Thomas M. Atherton
Merrillville, Indiana                              Robert B. Clemens
Attorneys for the Lake County Property Tax Assessment         Ronald M.
Soskin
Board of Appeals and the Lake County Assessor                 David A.
Suess
                                             Indianapolis, Indiana
John S. Dull
Crown Point, Indiana
Attorney for the Lake County Auditor and Treasurer

Dock McDowell, Jr.
Merrillville, Indiana
Attorney for the Lake County Auditor and Treasurer
________________________________________________________________________

                                   In the
                            Indiana Supreme Court
                      _________________________________

                           No. 49S10-0309-TA-00401

Lake County Property Tax
Assessment Board of Appeals,
Paul G. Karras, in his
official capacity as Lake County
Assessor, Peter Benjamin, in his
official capacity as Lake County
Auditor,Peggy Holinga
Katona, in her official capacity as the
Lake County Treasurer, and Booker
Blumenberg, in his official
capacity as Calumet Township
Assessor,
                                             Petitioners (Respondents
                                        below),

                                     v.

United States Steel Corporation,
formerly United States Steel, LLC
                                             Respondent (Petitioner
                                        below).
                      _________________________________




         Appeal from the Indiana Tax Court, No. 49T10-0209-TA-00106
                    The Honorable Thomas G. Fisher, Judge
                      _________________________________

                           On Petition for Review
                      _________________________________

                              January 13, 2005

Sullivan, Justice.


      The amount of property  taxes  payable  for  an  individual  piece  of
property is set by allocating the total  dollar  amount  anticipated  to  be
required to meet the revenue needs of the taxing district among  all  pieces
of property in proportion  to  their  assessed  valuations.   As  such,  the
amount of property taxes payable for an individual piece  of  property  will
be a function of three major variables: (1) the assessed  valuation  of  the
individual piece of property; (2) the total dollar amount of revenue  to  be
raised; and (3) the total assessed valuation of all the pieces  of  property
in the taxing jurisdiction.


      The taxpayer here, United States Steel Corporation  (“USS”),  came  to
the view that  local  property  tax  officials  had  illegally  reduced  the
aggregate assessed valuation of the  property  in  the  taxing  jurisdiction
during the “assessment  years”  1994,  1995,  and  1996.[1]   If  so,  USS’s
property taxes for those years would have been too high.  On  May  5,  1998,
USS  filed  papers  (using  forms  denominated  “Form  133,   Petition   for
Correction of Error” and “Form 17T, Petition for  Refund”)  seeking  refunds
of the property taxes it contended had been illegally imposed  and  overpaid
for the 1994-1996 period.


      USS’s challenges were first denied by the Lake County Board of  Review
and then by the Indiana Board of Tax Review.[2]  USS  then  sought  judicial
review in the Indiana Tax Court.  The Tax Court concluded that  “[t]he  only
question is whether Lake County’s removal of  assessed  valuation  from  its
tax rolls (and, hence, the resulting tax rate) was,  as  a  matter  of  law,
illegal—a  question  that  falls  squarely  within  the  ambit  of  the  133
Petition.”  U.S. Steel Corp. v. Lake County  Prop.  Tax  Assessment  Bd.  of
Appeals, 785 N.E.2d 1209, 1216 (Ind. Tax Ct. 2003).   The  local  and  state
property tax authorities sought, and we granted, review of the  Tax  Court’s
decision.  Lake Co. Prop. Tax Assessment Bd. of  Appeals  v.  United  States
Steel Corp., 804 N.E.2d 749 (Ind. 2003).


                                 Discussion


      The principal ground on which the Board of Tax Review dismissed  USS’s
claims was that the Board had no subject  matter  jurisdiction  because  the
claims involved the county’s tax rate.  The  Tax  Court  pointedly  rejected
the Board’s disclaimer of  jurisdiction.   It  held  that  interpreting  the
Board’s  jurisdiction  so  narrowly,  i.e.,  that  the  Board   is   without
jurisdiction whenever the tax rate is implicated, would allow the  Board  to
“disclaim subject matter jurisdiction over all appeals  concerning  assessed
valuation.”  U.S. Steel, 785 N.E.2d at  1212-1213  (emphasis  in  original).
In point of fact, “the removal of the assessed value from Lake County's  tax
rolls . . . necessarily implicated the issue of  Lake  County’s  tax  rate.”
Id.  We agree with this analysis and adopt it.


      While we agree with the Tax Court that the local  and  state  property
tax authorities have subject matter jurisdiction over  the  type  of  claims
raised by USS, the question remains whether the procedures employed  by  USS
were in fact available to it.


      As we discuss in greater detail in the BP Amoco  case  decided  today,
during the years in question, Indiana Code Section  6-1.1-15-1  and  Indiana
Administrative  Code  Title  50,   Regulation   4.2-3-4   contained   appeal
provisions that allowed taxpayers to challenge  assessments  on  this  basis
for a current  year’s  assessment  on  Form  130.   Lake  County  Prop.  Tax
Assessment Bd. of Appeals v. BP Amoco  Corp.,  No.  49S10-0309-TA-00400,  __
N.E.2d __, slip op. at 2 (Ind. Jan. 13, 2005).  But here, USS did  not  file
its challenges until several years after the years  in  question.   Instead,
USS  proceeded  under  Indiana  Code   Section   6-1.1-15-12   and   Indiana
Administrative Code Title 50, Regulations 4.2-3-4, 12, and 14 and filed  its
claims on “Form 133, Petition for Correction of Error,” alleging  that  “the
taxes, as a matter of law, were illegal.”  U.S. Steel, 785 N.E.2d  at  1215.
So even though the nature of its challenge is quite different than  that  in
the BP Amoco case, the issue is essentially the same: whether  Indiana  Code
Section  6-1.1-15-12  and  Form  133  are  available  to  provide  USS   the
retrospective relief it seeks on the grounds it asserts.


      In its  opinion,  the  Tax  Court  focused  on  the  nature  of  USS’s
challenge.  Because USS’s contention was  that  Lake  County  officials  had
acted illegally, the Tax Court reasoned, this  was  precisely  the  kind  of
claim that the “illegal as a  matter  of  law”  provision  of  Indiana  Code
Section 6-1.1-15-12(a)(6) was designed to cover.  Id.[3]


      Although USS presents a more sympathetic case than the taxpayer in  BP
Amoco, we reach the same result.   Indiana  Code  Section  6-1.1-15-12(a)(6)
and Indiana Administrative Code Title 50, Regulation 4.2-3-12 authorize  the
use of Form 133 to  obtain  adjustments  to  assessments  and  property  tax
refunds where the taxes, as a matter of law,  have  been  determined  to  be
illegal.  BP Amoco, slip op.  at  8-9.   But  they  are  not  available  “to
challenge the methodology used in generating an assessment.”   Id.  (quoting
Ind. Admin. Code tit. 50, r. 4.2-3-12(a) (1992 & 1996)).  We  conclude  that
the legislative and regulatory scheme required  USS  to  set  forth  in  its
contentions that local property tax  officials  had  illegally  reduced  the
aggregate assessed valuation in  the  relevant  jurisdiction  on  Form  130,
subject to the time limitations  and  other  requirements  of  Indiana  Code
Section 6-1.1-15-1 and Indiana Administrative Code Title 50  Section  4.2-3-
4.  Because USS did not do so, no timely determination  was  made  that  its
taxes were illegal as a matter of law and relief under Indiana Code  Section
6-1.1-15-12 and Indiana Administrative Code Title 50  Sections  4.2-3-4,  12
and  14  on  Form  133  was  not  available.[4]   The  State  Board  of  Tax
Commissioners properly dismissed USS’s petitions.


                                 Conclusion


      The decision of the Tax Court in this case is  affirmed  in  part  and
reversed in part.  The decision of the  State  Board  of  Tax  Commissioners
dismissing USS’s appeals on Form 133 is affirmed.

Shepard, C.J., and Dickson and Boehm, JJ., concur.  Rucker, J.,  concurs  in
result.
-----------------------
[1] Indiana  Code  Section  6-1.1-17-1  provides  that  property  taxes  are
payable based  on  the  prior  year’s  assessed  valuation.   As  such,  the
assessments at issue in this case are those for  the  years  1994  (property
taxes with respect thereto payable in 1995), 1995  (payable  in  1996),  and
1996 (payable in 1997).
[2] On January 1, 2002, the Legislature abolished the  State  Board  of  Tax
Commissioners and established an Indiana Board of Tax Review.  Ind. Code  §§
6-1.5-2-1; 6-1.5-4-1 (Supp. 2001); 2001 Ind. Acts 198 §  95.   For  purposes
of this case, the Indiana Board has the power and authority previously  held
by the State Board.  As a result, even  though  BP  appealed  to  the  State
Board of Tax Commissioners, the Indiana  Board  of  Tax  Review  issued  the
final determination in this case.
      The same  legislation  also  replaced  individual  county  “Boards  of
Review” with county “Property Tax Assessment Boards of  Appeals.”   In  this
case, therefore, the Lake County Board of Review  is  now  the  Lake  County
Property Tax Assessment Board of Appeals.
[3]  Included  in  the  Tax  Court’s  analysis  is  a  discussion   of   the
applicability of a  distinction  frequently  made  in  cases  disputing  the
availability of Form 133—whether the appropriate tax officials are  required
to make an objective or subjective determination.  For  the  reason  we  set
forth in BP Amoco, slip op. at 6, n.5, we find it unnecessary to  apply  the
objective/subjective distinction to resolve this case.
[4] We recognize that USS might conceivably be  entitled  to  relief  if  it
meets  the  requirements  of  the  hypothetical  Taxpayer  “C”  in   Indiana
Administrative Code Title 50, Regulation  4.2-3-12(g)(1)(D).   However,  USS
advances no claim in that regard in this case.