A change in state law is having an impact on how much local governments collect in taxes from businesses, but officials aren’t sure exactly what the shift will mean.
Appeals filed by Meijer and other big-box retailers on stores around central Indiana, including in Greenwood, prompted a change in state legislation.
Now, that legislation has delayed a case that could force the county to refund at least one retailer more than $1 million in property taxes. Other officials are questioning if the legislation is working as it should, after another large retailer won an appeal at the state level.
The issue stems from appeals by Meijer, and potentially other big-box retailers, that compared the value of their property to closed stores, which county assessors argue should not be allowed. But earlier this year, a state board disagreed, siding with Meijer and requiring Marion County to repay the retailer millions in overpaid property taxes.
County officials and statewide organizations asked for a change, and state lawmakers approved the new legislation. That new law took effect this year and deals with multiple issues involving property taxes. One of the key pieces involves buildings newer than 10 years old that are occupied by the original owner. Comparable sales used to determine that building’s value for property tax purposes should include properties that have been for sale for less than a year and are used for similar purposes, according to the legislation.
That law was a key reason cited last month when the state delayed a hearing between Johnson County and Meijer for its appeals, which go back multiple years and could total a refund of more than $1 million in property taxes.
Now, both sides will need to determine what the new legislation means for the case, said Dustin Huddleston, an attorney who is representing the county in the case.
“That changed the landscape, and the board of tax review said we need to pause and see if the legislation impacts the case, and we agreed it did,” Huddleston said.
Huddleston will now do more research into the legislation, and its impact on the case, before the hearing that was rescheduled for February.
But officials also are watching a new case and how it is impacted by the legislation.
Last month, the Indiana Board of Tax Review sided with CVS on an appeal of its assessment in Bloomington. The state board ruled that CVS had been over-assessed and, as a result, overtaxed for five years.
The assessor there had hoped the new legislation would help boost her case of why the assessment was correct. Now, she and other officials are considering going back to the legislature to try to get the rules changed again, more strongly laying out what property owners, such as big-box retailers, can and can’t use as a comparison to value their property.
CVS has appealed its assessments on properties in Johnson County before, but the cases have always been settled locally and never needed to go to the state board, county Assessor Mark Alexander said.
Alexander closely follows other cases because it gives him insight into Johnson County’s cases, with how they compare and what is the same and different. He said he also regularly talks with other county assessors about how they value properties, such as properties along Interstate 65.
But he isn’t ready to say the new legislation isn’t having the intended impact just because of one case, he said.
Uniform guidelines for how all properties should be assessed would be nearly impossible, because they all will be interpreted differently, he said.
But he added he does hope the state sees the need to give clear guidance.