INDIANAPOLIS (AP) — Some local government officials around Indiana are worried that big-box retailers can still successfully push for large cuts in their property tax bills despite a state law passed this year that placed restrictions on the practice.
At issue is whether retailers should have their buildings assessed for property taxes based on their value as active stores or as vacant structures up for sale.
Local officials fear big tax revenue losses — and shifts in taxes to homeowners — after Meijer won an appeal cutting an Indianapolis store's 2012 assessed value of $19.7 million by nearly two-thirds. That was followed by an Indiana Board of Tax Review ruling in August that a Bloomington CVS store had been over-assessed for five years starting in 2009, which could lead to a $150,000 refund to the company.
The Meijer decision has forced Marion County to refund more than $2 million, though the county is appealing the decision to the Indiana Tax Court, The Indianapolis Star reported.
Marion County has 29 big-box properties with active tax assessment appeals, although not all are necessarily using the closed-store value argument, county Assessor Joseph O'Connor said.
"It's very concerning to me," O'Connor said. "Not only as an assessor, but a homeowner in Marion County. When we see these large reductions in value, it is usually on the backs of homeowners and other taxpayers."
The law change approved by legislators this year placed restrictions on such appeals, limiting property value comparisons to properties that have been for sale for less than year and were used for similar purposes.
That change "was a Band-Aid, but not a total fix," Monroe County Assessor Judy Sharp told the Indianapolis Business Journal.
"It was too open-ended, said Sharp, who is president of the Indiana County Assessors Association.
Stephen Paul, an Indianapolis attorney who represented retail stores in opposing the 2015 legislation, said retailers would certainly fight any additional limits on their appeals.
"I'm confident stores will oppose any further push," Paul said. "The stores have bent over backwards to cooperate with local government. . There could be (a push to repeal this year's law) if the assessors aren't going to be reasonable about it."
Senate Tax Committee Chairman Brandt Hershman, a Republican from Lafayette who sponsored this year's bill, said the issue could be reviewed during the 2016 legislative session, but cautioned against acting solely in reaction to last month's CVS decision.
"I don't want one case to pass judgment on the effectiveness of a new law," he said. "The jury is still out. If this is the precursor to a pattern of continuing decisions, that's something we would take into account."
