Indiana Strikes Taxpayer Protections as Assessments Rise, June 15 Appeals Deadline Approaches | Faegre Drinker Biddle & Reath LLP

In its 2022 legislative session, the Indiana General Assembly eliminated important taxpayer protections against large property tax assessment increases by Indiana’s assessing officials. With these changes, a taxpayer is no longer entitled to have their assessment revert to the prior year’s lower value when the Assessor fails to prove their assessment increase is correct. 

By making this sweeping change effective as of the date the law was passed, lawmakers removed these taxpayer safeguards just in time for Indiana’s June 15 property tax appeal filing deadline. Throughout Indiana, taxpayers — particularly owners and lessees of industrial, multifamily and residential properties — will be challenging extraordinary increases without the benefit of what was one of the country’s most progressive taxpayer protections. Nonetheless, taxpayers should consider challenging unreasonable assessments, especially where their properties are hit with steep value increases.

Appeals must be filed on or before June 15, 2022. Taxpayers must file real-property tax-assessment appeals on or before June 15 to dispute their properties’ assessed values. Whether a taxpayer can contest the 2021 (pay 2022) or 2022 (pay 2023) tax year depends on when the assessor notified the taxpayer of the increase. In most counties, the appeal opportunity is for the 2022 tax year. In two of Indiana’s largest counties — Marion and Lake — appeal opportunities primarily are for the 2021 tax year. While taxpayers have a longer appeal window to challenge certain objective errors, failure to timely file will impair a taxpayer’s ability to argue for reductions.

For newly filed appeals, the General Assembly no longer requires assessors to prove their large increases are “correct.” Indiana’s legislature capitulated to demands by assessors that, for most appeals filed this year and future years, assessors no longer have the burden to prove their large increases (above 5%) are “correct.” Assessors even balked at a proposal that would require them simply to prove that their large assessment increases are “substantially correct.” The prior taxpayer protection effectively required assessors to support their large assessment increases with thoughtful analyses and credible market evidence (or risk reversion to the prior year’s much lower value). The legislature simultaneously abolished two other taxpayer protection statutes, which had assigned to assessors the burden of proof to show their changes to a property’s land classification or underlying parcel characteristics — the foundational components of their assessments — were correct.

Taxpayers retain fundamental appeals tools. Taxpayers reasonably should expect assessors to properly value their property. In the wake of a global pandemic, the Indiana legislature has eliminated one of the most effective tools — the reinstatement of a taxpayer’s prior assessed value where the assessor could not support their assessment increase — that limited substantial, unsupported assessment increases. The legislature rushed to implement this seismic, anti-taxpayer policy shift to apply to new appeals (i.e., appeals filed as soon as the legislation passed, in advance of the upcoming June 15 appeals deadline). Taxpayers can still challenge any assessment with the traditional valuation tools — including relevant market data analyzed using generally accepted appraisal and valuation principles — and they should appeal any excessive assessments.