Wednesday, October 27, 2010

Desperate for Cash, County Does Retroactive Property Tax Assessments

I'd be curious as to whether this is going on in other parts of the state.

My client, who lives in Nevada, has a company that builds houses for the disabled. He has built a number of houses in Indiana, including eight in Grant County, i.e. Marion, Indiana. The houses were built on in 2003, but the assessing official didn't get around to assessing the property until 2007. Thus the property for years was billed as a vacant lot rather than with the new house on it.

What Grant County has done, I can only assume in an effort to get more tax revenue in the era of property tax caps, is to go back and issue "special assessments" for the period 2004-2006, charging him with property taxes for that period he would have been paying had the Grant County Assessor (actually back then it might have been the township assessor) done his job and timely assessed the houses. Not only that, they have also billed my client for penalties for not paying the higher tax bill for 2004-2007 (which would have reflected a house n the property), even though the county had never sent him a bill for those taxes on which penalties were assessed.

The county's position is that it was my client's responsibility to track down government officials and ask them to reassess the property. He didn't hide anything - building permits were filed, deeds were recorded, etc. Frankly, he didn't know they had not reassessed. The taxes were escrowed in mortgages and he owns so many houses he wasn't tracking reassessment dates on them to make sure government officials did their jobs.

A separate issue is that Grant County officials continue to mail notices to the wrong place. On one property they were mailing things to the 2003 owner of the property. On another, they had a Westfield, Indiana address listed for my client who lives in Nevada and never lived in Westfield. Anyone who has dealt with counties know that they often mail tax notices to the wrong address.

Returning to the original issue - retroactive special assessments - I'm confident of prevailing in Indiana's appellate court once I traverse the local Grant County PTABOA. Indiana law says that when there is a reassessment it takes effect the NEXT assessment date. Here Grant County is doing a reassessment and then trying to apply it backwards to years prior.

I'd be curious though if this is just a Grant County phenomenon or whether county government officials are doing retroactive assessments in other parts of the state. Please let me know. My law firm email address is


JeffW said...

I was the victim of the 'wrong address' for county charges when I bought my home in Lagrange County. Charges I didn't even know about. I offered to pay all back charges as soon as they finally found me. But could they waive the penalties? No chance. "What are you going to do?" was the attitude.

Unigov said...

Well that stinks. How do they charge a penalty in that case ? Oh, it's Indiana, so anything goes....

From Wikipedia:

Retroactive taxes are not ex post facto laws. Calder v. Bull, 3 U.S. 386, 390-91 (1798). Substantive due process challenges to retroactive tax laws are given rational basis review. United States v. Carlton.

Shawn said...

Buying property in the States makes sense, but it's something that you have to think about and you need to get some advice.

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Stew said...

I know this is a bit non-current to be posting a comment on this blog but just to share, you'd be surprised that other states did in fact replicated this tax model that Nevada did back in 2010. The list goes on but for some reason, New York can only add more tax burdens to its residents. I don't know if that's preposterous or what. inheritance advance los angeles