ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
MELISSA G. MICHIE MARILYN S. MEIGHEN
TAX CONSULTANTS, INC. ATTORNEY AT LAW
Columbus, IN Carmel, IN FILED
Aug 07 2023, 2:10 pm
BRIAN A. CUSIMANO CLERK
ATTORNEY AT LAW Indiana Supreme Court
Court of Appeals
Indianapolis, IN and Tax Court
IN THE
INDIANA TAX COURT
WENDY H ELWOOD TRUST, )
)
Petitioner, )
)
v. ) Cause No. 23T-TA-00002
)
BARTHOLOMEW COUNTY ASSESSOR, )
)
Respondent. )
ON APPEAL FROM A FINAL DETERMINATION OF
THE INDIANA BOARD OF TAX REVIEW
FOR PUBLICATION
August 7, 2023
WENTWORTH, J.
The Wendy H Elwood Trust (the “Trust”) challenges the Indiana Board of Tax
Review’s final determination that its petitions for a correction of error for assessment
years 2018 and 2019 were untimely. Upon review, the Court affirms the Indiana Board’s
final determination.
FACTS AND PROCEDURAL HISTORY
In 2016, Carr Road Development, LLC owned several undeveloped, vacant lots in
what was to become the Tipton Lakes Subdivision. (See Cert. Admin. R. at 53-56, 109,
148-49.) During its period of ownership, Carr Road Development invested at least $1.5
million in the subdivision. (See Cert. Admin. R. at 66, 149.) This included excavating the
land and installing vital infrastructure such as water/sewer hookups, sidewalks, curbs,
and various roadways. (See Cert. Admin. R. at 66-76, 149.)
In 2017, Mark Elwood reached out to Jeffrey Bush, the manager of Carr Road
Development, expressing his interest in purchasing four contiguous lakefront lots to
construct his primary residence. (See Cert. Admin. R. at 108-09.) Elwood and Bush
reached a verbal agreement in which Elwood agreed to purchase the four lakefront lots,
and Bush agreed to oversee the re-platting of the four lots into two lots before closing.
(See Cert. Admin. R. at 108-09, 157.) Elwood and Bush did not, however, formalize their
gentleman’s agreement in a written contract. (See Cert. Admin. R. at 108-09, 157.) After
Elwood and his wife, Wendy, found an existing home to purchase as their primary
residence, Elwood contacted Bush in an attempt to withdraw from the sale. (See Cert.
Admin. R. at 108-09, 157.) Bush, however, indicated that he had relied on their verbal
agreement and was intent on proceeding with the sale. (See Cert. Admin. R. at 65, 108-
09, 157.) The Elwoods decided to proceed with the purchase, intending to resell the
contiguous lots thereafter. (See Cert. Admin. R. at 65, 108.) Accordingly, on December
11, 2017, the Trust 1 purchased Lots 8 and 9, which are the subject of this appeal, from
Carr Road Development for $1,550,000. (See Cert. Admin. R. at 62-64, 66.)
At the time of the sale, it appears that both lots had been receiving the benefit of
1
The certified administrative record does not provide any information regarding the formation or
purpose of the Trust. (See, e.g., Cert. Admin. R. at 135 ¶ 9.) The Indiana Board, however,
presumed that “one or both of the Elwoods [were] beneficiaries [of the Trust] and that one of them
[was] the trustee.” (Cert. Admin. R. at 135 ¶ 9.)
2
the “developer’s discount”2; thus, their assessments were calculated by applying a
negative 99 percent influence factor 3 to the extended value of each lot. (See, e.g., Cert.
Admin. R. at 46, 49, 62-64.) As a result, the 1.07 acres encompassing Lot 8 had an
assessed value of $1,900, while the 0.88 acres spanning Lot 9 carried an assessment of
$2,000. (See Cert. Admin. R. at 46, 49, 62-64.)
In 2018, however, the Bartholomew County Assessor removed the developer’s
discount from each lot, increasing the assessment of Lot 8 to $729,100 and of Lot 9 to
$705,600. (See, e.g., Cert. Admin. R. at 46, 49, 148.) While these assessment valuations
remained the same in 2019, they were reduced to $412,600 and $416,100 respectively,
in 2020. (See Cert. Admin. R. at 47-48, 50-51.) Sometime thereafter, the Elwoods
initiated the re-platting of their two lots, dividing them back into four lots, to facilitate their
resale. (See Cert. Admin. R. at 108, 112, 157-58.)
On May 27, 2020, the Trust filed three Form 130 appeals with the Assessor,
challenging the removal of the developer’s discount for each of the 2018 to 2020
assessment years. (See, e.g., Cert. Admin. R. at 133 ¶ 1.) Specifically, for the 2018 and
2019 assessment years, the Trust’s Form 130 appeals requested relief under the
correction of error appeal procedure, which is reserved for correcting only objective
errors. (See, e.g., Cert. Admin. R. at 7-8, 23-24.) See also Bushmann, LLC v.
2
“The ‘developer’s discount[,]’ [which] is designed to encourage developers to buy farmland,
subdivide [it] into lots, and resell the lots[,]” typically allows land developers to “‘reap[] the benefit’
of [] lower agricultural land assessment[s].” REAL PROPERTY ASSESSMENT GUIDELINES FOR 2011
(“Guidelines”) (incorporated by reference at 50 IND. ADMIN. CODE 2.4-1-2 (2011) (amended
2020)), Ch.2 at 80-81. See also, e.g., IND. CODE § 6-1.1-4-12 (2023) (the “Developer’s Discount
Statute”).
3
An “influence factor” is a “multiplier that is applied to the value of land to account for
characteristics of a particular parcel of land that are peculiar to that parcel. The factor may be
positive or negative and is expressed as a percentage.” Guidelines, Glossary at 12.
3
Bartholomew Cnty. Assessor, 187 N.E.3d 355, 357-58 (Ind. Tax Ct. 2022). Under this
procedure, an appeal must be initiated no “later than three (3) years after the taxes were
first due.” See IND. CODE § 6-1.1-15-1.1(a)-(b) (2020); see also Bushmann, 187 N.E.3d
at 357-60. In contrast, for 2020, the Trust opted for the appeal procedure that allows all
assessment errors to be addressed, provided that the appeal is filed within the shorter
appeal deadline prescribed under Indiana Code § 6-1.1-15-1.1. 4 (See, e.g., Cert. Admin.
R. at 133 ¶ 1.) See also I.C. § 6-1.1-15-1.1(a)-(b).
On April 6, 2021, the Bartholomew County Property Tax Assessment Board of
Appeals (“PTABOA”) conducted a hearing on the Trust’s appeals. (See, e.g., Cert.
Admin. R. at 13.) On July 15, 2021, the PTABOA issued three final assessment
determinations (“Forms 115”) that reinstated the developer’s discount for each of the
assessment years at issue. (See, e.g., Cert. Admin. R. at 11-13.) The PTABOA’s
decision resulted in substantial assessment reductions, amounting to over $700,000 for
2018 and 2019, and over $400,000 for 2020. (See, e.g., Cert. Admin. R. at 46-51.)
Dissatisfied with the PTABOA’s decisions, the Assessor appealed all three of the
PTABOA’s determinations to the Indiana Board on September 1, 2021, and the Indiana
Board conducted a hearing on July 28, 2022. (See, e.g., Cert. Admin. R. at 17-18, 144.)
During the hearing, the Assessor claimed that the PTABOA’s reinstatements were
improper because subjective judgment, not an objective “yes or no" query, was necessary
to determine whether the developer’s discount applied. (See Cert. Admin. R. at 150.)
Consequently, she argued that because the Trust’s 2018 and 2019 appeals required
4
The Trust’s 2020 appeal documentation is not included in the certified administrative record.
(See Cert. Admin. R.) But see IND. CODE § 6-1.1-15-6(b)(1) (2023) (specifying that the certified
administrative record is to include, among other things, copies of all notices, petitions, motions,
and pleadings submitted to the Indiana Board by the parties).
4
subjective judgment, they were filed after the applicable deadline under Indiana Code §
6-1.1-15-1.1(b) and were time-barred. (See Cert. Admin. R. at 150.)
The Assessor also asserted that the Trust presented evidence throughout the
administrative proceedings that failed to demonstrate the Elwoods’ eligibility for the
developer’s discount. (See Cert. Admin. R. at 148-51.) For example, she emphasized
evidence alleged to be contrary to a finding that the Trust was a land developer: 1) it was
Carr Road Development, not the Trust, that incurred the costs related to land
development and infrastructure installation; 2) Elwood openly described himself as being
in the “people business” and not in land development; and 3) Elwood acquired the two
lots intending to build his own residence. (See Cert. Admin. R. at 148-51.) In addition,
the Assessor claimed that because the lots were valued at only $1,434,700 in 2018, their
assessments should be increased to align with the Trust’s 2017 purchase price of
$1,550,000. (See Cert. Admin. R. at 77, 150-52.)
The Trust responded that the Assessor’s removal of the developer’s discount was
illegal as a matter of law. (See Cert. Admin. R. at 161.) In support, the Trust claimed it
was acting as a land developer because at the time of actual purchase, it intended to
resell the two lots, having subsequently re-platted them back to four lots to enhance their
marketability. (See Cert. Admin. R. at 156-58, 161.) The Trust further asserted that the
developer’s discount should never have been removed because none of the statutory
events that allowed a reclassification of the property had occurred. (See Cert. Admin. R.
at 155-56.)
On December 21, 2022, the Indiana Board issued its final determination, finding in
favor of the Assessor on the 2018 and 2019 appeals and the Trust on the 2020 appeal.
5
Specifically, the Indiana Board determined that the Trust’s 2018 and 2019 appeals were
untimely because ascertaining a taxpayer’s eligibility for the developer’s discount indeed
depended on the application of subjective judgment. (See Cert. Admin. R. at 138-39 ¶¶
20-24, 142 ¶ 38.) As a result, the Indiana Board found that the PTABOA had no authority
to reinstate the developer’s discount for those years, and the Assessor’s request to
increase the 2018 and 2019 assessments was time-barred. (See Cert. Admin. R. at 136-
40 ¶¶ 12-25.) Additionally, the Indiana Board found that the Trust’s 2020 appeal was
timely “[a]nd [that] the Assessor, who had the burden of proof, failed to make a prima
facie case for changing the PTABOA’s determinations.” (See Cert. Admin. R. at 140-42
¶¶ 28-37, 142-43 ¶ 39 (emphasis added).) Accordingly, for the 2018 and 2019 tax years,
the Indiana Board reinstated the original assessments of $729,100 for Lot 8 and $705,600
for Lot 9 and, for the 2020 tax year, the Indiana Board upheld the PTABOA’s assessments
of $5,200 for each lot. (See Cert. Admin. R. at 133 ¶ 2, 142-43 ¶¶ 38-39.)
On February 4, 2023, the Trust initiated this original tax appeal, challenging the
Indiana Board’s determination for only the 2018 and the 2019 tax years. The Court
conducted oral argument on July 13, 2023. Additional facts will be supplied as necessary.
STANDARD OF REVIEW
The party seeking to reverse an Indiana Board final determination bears the
burden of demonstrating its invalidity. Square 74 Assocs. LLC v. Marion Cnty. Assessor,
138 N.E.3d 336, 340 (Ind. Tax Ct. 2019). Consequently, the Trust must demonstrate to
the Court that the Indiana Board’s final determination in this matter 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,
6
or limitations; without observance of the procedure required by law; or unsupported by
substantial or reliable evidence. See IND. CODE § 33-26-6-6(e)(1)-(5) (2023).
LAW
When the Trust filed its three Form 130 appeals in 2020, Indiana Code § 6-1.1-15-
1.1, in relevant part, stated:
(a) A taxpayer may appeal an assessment of a taxpayer’s tangible
property by filing a notice in writing with the township assessor,
or the county assessor if the township is not served by a township
assessor. Except as provided in subsections (e) and (h), an
appeal under this section may raise any claim of error related to
the following:
(1) The assessed value of the property.
(2) The assessment was against the wrong person.
(3) The approval[,] denial[,] or omission of a deduction, credit,
exemption, abatement, or tax cap.
(4) [A] clerical, mathematical, or typographical mistake.
(5) The description of the real property.
(6) The legality or constitutionality of a property tax or
assessment.
A written notice under this section must be made on a form
designated by the department of local government finance. A
taxpayer must file a separate petition for each parcel.
(b) A taxpayer may appeal an error in the assessed value of the
property under subsection (a)(1) any time after the official’s
action, but not later than the following:
(1) For assessments before January 1, 2019, the earlier of:
(A) forty-five (45) days after the date on which the
notice of assessment is mailed by the county; or
(B) forty-five (45) days after the date on which the tax
statement is mailed by the county treasurer,
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regardless of whether the assessing official
changes the taxpayer’s assessment.
(2) For assessments of real property, after December 31,
2018, the earlier of:
(A) June 15 of the assessment year, if the notice of
assessment is mailed by the county before May 1
of the assessment year; or
(B) June 15 of the year in which the tax statement is
mailed by the county treasurer, if the notice of
assessment is mailed by the county on or after May
1 of the assessment year.
*****
A taxpayer may appeal an error in the assessment under subsection
(a)(2), (a)(3), (a)(4)[,] (a)(5), or (a)(6) not later than three (3) years
after the taxes were first due.
I.C. § 6-1.1-15-1.1(a)-(b). In 2018, the Developer’s Discount Statute, in relevant part,
read as follows:
(a) As used in this section, “land developer” means a person that
holds land for sale in the ordinary course of the person’s trade or
business. . . .
(b) As used in this section, “land in inventory” means:
(1) a lot; or
(2) a tract that has not been subdivided into lots;
to which a land developer holds title in the ordinary course of the land
developer’s trade or business.
(c) As used in this section, “title” refers to legal or equitable title,
including the interest of a contract purchaser.
*****
(e) Except as provided in subsections (i) and (j), if:
(1) land assessed on an acreage basis is subdivided into lots; or
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(2) land is rezoned for, or put to, a different use;
the land shall be reassessed on the basis of its new classification.
*****
(i) Subject to subsection (j), land in inventory may not be reassessed
until the next assessment date following the earliest of:
(1) the date on which title to the land is transferred by:
(A) the land developer; or
(B) a successor land developer that acquires title to the land;
to a person that is not a land developer;
(2) the date on which construction of a structure begins on the
land; or
(3) the date on which a building permit is issued for construction
of a building or structure on the land.
(j) Subsection (i) applies regardless of whether the land in inventory
is rezoned while a land developer holds title to the land.
IND. CODE § 6-1.1-4-12 (2018) (amended 2019). 5 In 2020, the statute was amended to
clarify that for purposes of the developer’s discount, “the definition for ‘land developer’
. . . is based on [the] satisfaction of the requirements” stated in Indiana Code § 6-1.1-4-
12. See Pub.L. No. 154-2020, § 2. (See also Cert. Admin. R. at 105-06.)
ANALYSIS
On appeal, the Trust claims the Indiana Board’s finding that its 2018 and 2019
appeals were untimely constitutes an abuse of discretion that warrants reversal given the
unique circumstances of this case. (See, e.g., Pet’r Br. at 1; Oral Arg. Tr. at 9.) The
5
The 2019 amendment of the Developer’s Discount Statute has no bearing on the outcome of
this case. See Pub.L. No. 257-2019, § 13.
9
primary issue in this case, as framed by the Court, is whether determining a taxpayer’s
eligibility for the developer’s discount requires objective or subjective judgment. 6 The
answer to this question governs whether the Trust’s 2018 and 2019 appeals were timely.
The Trust admits that even though a determination of the Elwoods’ eligibility for
the developer’s discount would generally require subjective judgment, it does not in this
case. 7 (See Oral Arg. Tr. at 3-14.) Instead, it claims that the unique facts of this case
dictate a purely objective “yes or no” judgment, rendering its 2018 and 2019 appeals
eligible for the three-year limitation period under Indiana Code § 6-1.1-15-1.1(b). (See,
e.g., Pet’r Br. at 5-6; Oral Arg. Tr. at 9.) Specifically, the Trust argues that because the
Elwoods were well-known in the community and to the members of the PTABOA, the
facts as presented were a certainty, eliminating the need for any subjective analysis. (See
Pet’r Br. at 4-6; Oral Arg. Tr. at Oral Arg. 10-11.) Accordingly, the Trust claims that the
Indiana Board overlooked these unique circumstances that only necessitated the use of
objective judgment to determine the Elwoods’ eligibility for the developer’s discount in
2018 and 2019. (See Pet’r Br. at 6-9; Oral Arg. Tr. at 7-10.) The Court disagrees.
The Trust’s argument is unique, but well-known facts to individuals on an
administrative board or within a community do not convert a subjective issue into an
6
The Trust also raises the issue that the developer’s discount should be applied to the 2018 and
2019 assessments pursuant to the equitable “clean-hands doctrine.” (See Pet’r Reply Br. at 1-
2.) This Court is authorized to entertain equitable claims, especially in cases like this, where
fairness of a monetary burden may be at issue. See Gertz v. Porter Cnty. Assessor, 187 N.E.3d
978, 984 n.8 (Ind. Tax Ct. 2022). Here, however, the Trust failed to raise its equitable claim at
the administrative level; thus, the claim is waived and may not be considered by this Court on
appeal. See, e.g., Riley-Roberts Park, LP v. O’Connor, 186 N.E.3d 162, 175 (Ind. Tax Ct. 2022),
review denied.
7
Despite the lack of evidence in the record in support, the Trust has consistently portrayed itself
and the Elwoods as indistinguishable. (See, e.g., Cert. Admin. R. at 135 ¶ 9.) Because the
Assessor has made no challenge to this assertion, the Court will also refer to them as
indistinguishable.
10
objective one. An analysis of the facts must still occur to consider the views of each of
the opposing litigants. Accordingly, in this case, the “unique facts” must be evaluated
against the statutory requirements to be deemed a land developer.
The plain language of the Developer’s Discount Statute defines a “land developer”
as “a person that holds land for sale in the ordinary course of the person’s trade or
business[,]” a threshold requirement for eligibility for the developer’s discount. See I.C. §
6-1.1-4-12(a) (emphasis added). As recognized by the Indiana Board, however, there is
no bright-line test or finite objective standard to establish when the customary or regular
practice in a taxpayer’s trade or business involves holding land in inventory. (See Cert.
Admin. R. at 139 ¶ 23 (stating that the fact-sensitive determination is “a far cry from the
type of ‘simple true or false finding of fact’ that qualify an issue as objective” (citation
omitted)).) Here, the facts initially reveal that the Elwoods did not intend to hold the lots
in inventory, but to construct their family home. (See Cert. Admin. R. at 108-09.) Later,
however, the Elwoods decided to sell the property because they found a home elsewhere.
(See Cert. Admin. R. at 65, 108-09.) While the record shows that the Elwoods did have
the land replatted to better market it for resale, (see, e.g., Cert. Admin. R. at 108), the
record also shows that only Carr Road Development did any “development” of the land.
(See, e.g., Cert. Admin. R. at 109.) Moreover, the Trust did not present any direct
evidence showing that the Elwoods were in the trade or business of land development.
(See Cert. Admin. R. at 80-124, 153-59.) This juxtaposition of facts indicates that
subjective analysis is required to determine whether the Elwoods were indeed land
developers that held the four lots in inventory.
Deciding which of these facts, if any, are dispositive in determining whether the
11
Elwoods were land developers eligible for the developer’s discount requires subjective
analysis: interpreting the relevance and importance of the objective facts and evaluating
one’s intent involves subjectivity. Consequently, the Trust has not demonstrated that the
Indiana Board abused its discretion and that its final determination must be reversed.
CONCLUSION
For the foregoing reasons, the Court AFFIRMS the Indiana Board’s final
determination.
12