Copy the document below which was prepared by the attorney John Price, get it notorized, then mail a copy certified mail to your local assessor's office and your county treasurer.
Request for Refund of Taxes Improperly Collected
The undersigned taxpayer requests a refund of taxes assessed and collected contrary to the Constitution of the State of Indiana, as follows: Factual Background
A. Assessment of Real Property
4.1 In response to the holdings of the State’s highest Court the Indiana General Assembly adopted legislation requiring general reassessment of all real property in the State of Indiana as of March 1, 2002 and March 1, 2006. The Indiana Department of Local Government Finance adopted and distributed its 2002 Real Property Assessment Manual (“Manual”) for use by the State’s County and Township Assessors. The Manual states that assessment of real property in the State of Indiana is to be based on “fair market value data of property wealth”. Indiana’s taxing authorities have attempted to implement a “property wealth” (market based) system of assessing and taxing real estate in the State of Indiana. B. Extension of Statutory Tax Adoption Deadlines
6.1 In the 2007 Session of the Indiana General Assembly the members thereof adopted amendments to I.C. 6-3.5-1.1-3 (Increase of Tax Rate; Ordinance; Requisites)
6.4 On July 11, 2007 Respondent Governor Daniels “directed the Department of Local Government Finance and the Department of Revenue to extend the deadlines for counties to adopt local option income taxes” (Order Extending the Deadlines for Adoption of Property Tax Relief Local Option Income Taxes issued on July 30, 2007 – In accordance with the Respondent Governor’s directive, the Department of Local Government Finance issued the attached July 30th Order purportedly extending the deadlines for adoption of local option income taxes from the statutory deadline of August 1, 2007 to October 1, 2007.
6.5 On August 2, 2007 Respondent Governor Daniels “directed the Department of Local Government Finance and the Department of Revenue to extend the deadlines for counties to adopt a local option income tax to address public safety needs” (based on adoption of other taxes as set forth in the directive. (Order Extending the Deadlines for Adoption of Public Safety Local Option Income Tax issued on August 3, 2007. In accordance with the Respondent Governor’s directive, the Department of Local Government Finance issued the attached August 3rd Order purportedly extending the deadlines for adoption of a local option income tax for public safety needs from the statutory deadline of August 1, 2007 to October 1, 2007.
6.6 On August 24, 2007 the Respondent Governor Daniels purportedly issued an additional ‘directive’ extending the statutory August 1, 2007 deadline (which had just been ‘extended’ to October 1, 2007) to December 31, 2007. The official website of the Indiana Department of Local Government Finance does not contain any evidence of a further extension of either deadline for adoption of local income tax rate increases by the Department, nor are any Orders posted memorializing such an action by said Department.
6.7 The July 30, 2007 Order purports to be issued under “the authority granted under IC 6-3.5-1.1-24(i); IC 6-3.5-1.1-26(i); IC 6-3.5-6-30(q); and IC 6-3.5-6-32(i)”. None of the cited statutes grant to the Department of Local Government Finance, nor to the Governor, the authority to alter, suspend or amend statutory deadlines adopted by the Indiana General Assembly.
6.8 The August 3, 2007 Order purports to be issued under “the authority granted under IC 6-3.5-1.1-25(j) and IC 6-3.5-6-31(j)”. Neither of the cited statutes grants to the Department of Local Government Finance, nor to the Governor, the authority to alter, suspend or amend statutory deadlines adopted by the Indiana General Assembly.
6.9 The Governor in attempting to void and set aside statutory deadlines enacted by the legislative branch engaged in non-discretionary acts in violation of the Indiana Constitution. (Article 3; Article 5, Section 15 – Indiana Constitution). The statute as enacted establishes dates for adoption of income tax rate increases. The Governor signed the bill enacting those restrictions. Had he disagreed with the restrictions in the enacted bill he could have vetoed the enacted bill, but once he signed it into law, he had a duty to enforce its provisions. (Article 5, Section 15 – Indiana Constitution)
C. Vastly Different Rates in Taxing Districts
7.1 The counties within the State of Indiana use multiple taxing districts within the same jurisdiction. For example, in Marion County there are 97 taxing districts, which has resulted in vastly differing rates. Petitioners make two alternative arguments: (1) that the multiple district plan is facially invalid because it has the effect of generating wide disparities in tax rates within different sub-localities and, alternatively, (2), the current system is invalid as applied. Rates within said taxing districts are as disparate as 2.2 to 4.8, thus, the differential in tax rate within the same community from lowest to highest rate is over 110 percent. These differential effects in tax rates can not be justified under Article 10, Section 1’s requirements of a “uniform and equal rate of property assessment and taxation.”
7.2 Under prevailing case law the “uniform and equal” rate provision in Article 10, Section 1 requires that property be assessed in a manner reflecting actual value. The Supreme Court of Indiana has declared that “the great object of Article 10, section 1 was to ensure that property taxes were imposed on all forms of property wealth equally and uniformly” (italics in original) and that each taxpayer’s property wealth “bear its proportion of the overall property tax burden.” In that uniformity and equality requires fairness in assessing particular properties, the same standard must certainly require that similar rates apply across districts within the same locality, such as a county.
7.3 Recent cases have reiterated that the purpose of this Constitutional provision was to avoid what the current system ensures. In 1850 Representative Read initially proposed the language of Article 10, Section. 1. The purpose of the Framers governs the interpretation of the State Constitution. The purpose of Article 10, Section 1 is to insure that all taxpayers in Indiana bear their equivalent proportion of the tax burden. The multiple taxing district system in Indiana, as currently in place, no longer meets the uniform and equal requirements of Article 10, Section 1 in arriving at a just valuation.
7.4 The differential tax rates are the result of intentional state discrimination. While absolute uniformity cannot be expected, differential effects of over 100 percent simply do not comport with the requirements of Article 10, Section 1. The Respondents are estopped from claiming that these widely differing rates are simply the unintended “disparate effects” of a decentralized taxing system. Each district’s taxing authorities are state actors and their decisions are attributable to the State. The State, therefore, is responsible for the gross differential in tax rates across districts, evidencing an intentional decision to discriminate across district lines.
D. Article 8, Section 2 – Common School Fund
8.1 Article 8, Section 2 of the Constitution of the State of Indiana provides for a Common School Fund, and sets forth in detail the sources of funding allowed for said Common School Fund. The last clause of Article 8, Section states: “Taxes on the property of corporations, that may be assessed by the General Assembly for common school purposes.”
8.2 In spite of what is certainly a restrictive Constitutional provision as set forth above, the State of Indiana has levied and collected, and continues to levy and collect, taxes on residences in the State of Indiana, a practice not authorized in Article 8, Section 2 to provide funds for the Common School Fund.
E. Practices of Assessors in Assessing Real Estate in Indiana
1. Assessment of Real Estate Excluding Foreclosures and Tax Sales 9.1 Upon information and belief, assessors in the State of Indiana are instructed and directed by the Indiana Department of Local Government Finance that they are to exclude foreclosures and tax sales when they assess residences based upon market value (“property wealth”). 9.2 Upon information and belief, up to 37% of residential title transfers in Marion County, and an unknown amount in other counties, arise from foreclosures and tax sales. 9.3. Excluding foreclosures and tax sales when assessing values of residences skews and distorts the true market value (“property wealth”) of residences in the State of Indiana, contrary to the Indiana Constitution and prevailing law, rules and regulations.
2. Assessment of Real Estate with Flawed Methodology
9.4 Upon information and belief, assessors in Indiana are instructed and directed by the Indiana Department of Local Government Finance that in assessing the market value (“property wealth”) of residences in the State of Indiana they are to exclude and not include in their calculations high and low sales in a neighborhood to obtain average comps.
9.5 Upon information and belief, assessors are also instructed and directed by the Indiana Department of Local Government Finance that in assessing the market value (“property wealth”) of residences in the State of Indiana they are to not go back and readjust the adjusted high and low sales to their actual sale prices, which has the result of leaving actual high sale priced homes, in many cases, assessed lower than actual low sales priced homes.
3. Assessment of Office Towers
9.6 Upon information and belief, owners of the State’s largest and most valuable office towers filed tax appeals of assessments/taxes on said office towers. The appeals were successful in nine of ten cases, resulting in lower assessments/taxes on said office towers.
9.7 Upon information and belief, when assessors in jurisdictions including said office towers granted said appeals the assessors then proceeded to lower the grade of other office towers in their area of jurisdiction to Grade B, because the major office towers had been downgraded from Grade A to Grade B.
4. Assessment Tools/Methods/Systems Accorded to Assessors
9.8 Upon information and belief, the State of Indiana and the Indiana Department of Local Government Finance has not provided to county and township assessors the tools, methods and systems necessary to properly, uniformly and equally assess the real estate contained within their jurisdictions.
9.9 As a result of the foregoing, the county and township assessors in the State of Indiana have been hindered, blocked and prohibited from properly, uniformly and equally assessing the real estate, residential, commercial and industrial, within their jurisdictions.
9.10 As a result of the foregoing inability of the county and township assessors in the State of Indiana to properly, uniformly and equally assess the real estate, residential, commercial and industrial, the Petitioners and the members of the proposed class, the homeowners of the State of Indiana, have suffered significant financial harm and loss. 5. Interpretation and Application of Prevailing Law
9.11 Upon information and belief, many of the assessing officials in the State of Indiana have assessed real estate within their jurisdictions based upon improper, inaccurate and incorrect interpretations of the Indiana Constitution, prevailing statutes, and prevailing case law as handed down by the Indiana Tax Court and the Indiana Supreme Court.
9.12 As a result of the foregoing inability of the county and township assessors in the State of Indiana to properly, uniformly and equally assess the real estate, residential, commercial and industrial, based upon prevailing case law, the Petitioners and the members of the proposed class, the homeowners of the State of Indiana, have suffered significant financial harm and loss.
F. State Law Prohibiting Assessment at Market Value of Developers’ Real Estate
10.1 IC 6-1.1-4-12 (Circumstances Under Which Undeveloped Land May be Reassessed) prohibits Indiana’s assessors from assessing certain real estate at market values (“property wealth”) as a part of their duties as assessment officials.
10.2 Under the foregoing statute, when a “land developer” (defined broadly as “a person that holds land for sale in the ordinary course of the person’s trade or business”) purchases land, even if the land is rezoned or subdivided into lots, no matter what price the purchaser paid for the land, the assessor responsible for assessing the land is prohibited by said statute from reassessing the land at the purchase price, until and unless the purchaser obtains a building permit for construction of a building on the land, commences construction of a structure on the land, or transfers title of the land to another purchaser.
10.3 As a consequence, real estate purchased, generally at significantly high development stage prices, is prohibited from reassessment under said statute at the actual market price paid for the real estate, until certain later events may occur, which could be many months or even years later, thus warping the actual market value of said real estate to the advantage of the purchaser.
10.4 Purchasers of residential real estate in the State of Indiana enjoy no similar statutory exception from reassessment.
G. Imposition of Property Taxes on Residences in Excess of Public Services Attributable to Said Residences
11.1 Upon information and belief, in numerous instances the property taxes imposed in the State of Indiana on residences located within the State bear no relationship to the public services, including school costs, attributable to said residences.
11.2 Thus the tax burden imposed on said residences does not comply with Constitutional and statutory requirements of uniformity and equality in taxation, nor are said taxes a “just valuation”, under said Constitution and laws, under the over-all taxation system of the State of Indiana.
11.3 In that property taxes on homes in the State of Indiana, in numerous instances, extract a disproportionate share of total taxes from homeowners, to that extent property taxes are not uniform and equal, nor a just valuation. H. Tax Abatements
12.1 Upon information and belief, certain, selected real estate in the State of Indiana enjoys abatement from property taxes, generally real estate in the commercial and industrial categories, generally for several years.
12.2 Residential real estate in the State of Indiana is generally not accorded the abatement status that is frequently granted to commercial and industrial real estate.
12.3 The tax burden imposed on said residences, because abatements are generally not granted nor allowed, does not comply with Constitutional and statutory requirements of uniformity and equality in taxation, nor are said taxes a “just valuation”, under said Constitution and laws, under the over-all taxation system of the State of Indiana.
I. Certain Real Estate in Indiana is Assessed Upon Income Capitalization Methods and Not Market Value (Property Wealth)
13.1 IC 6-1.1-4-39.5 provides that in Indiana a “riverboat” used for gaming purposes under IC 4-33-2-17 is not assessed on the basis of how the market may value the riverboat, but may instead be assessed on the lowest of three appraisal approaches, including the income capitalization approach, which will almost always yield the lowest assessment, not at all likely to be even close to the market value of such an asset.
13.2 The Indiana General Assembly has written into State code numerous similar approaches to assessment of selected favored categories of real estate, allowing the owners of said favored real estate to be assessed at significantly less than market value (property wealth), contrary to the Constitution of the State of Indiana, and prevailing case law construing said Constitution.
Submitted on this_________day of ______________, 2007, by the following taxpayer of _____________Township, _______________ County, Indiana.
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________________________ __________________________(name & address, parcel Number, etc.)