The Indiana Supreme Court decided late Thursday to not review a case involving the Howard County assessor and Kohlâs, a decision that could cost Indiana counties billions of dollars in tax revenue.
After oral arguments were heard by the court Thursday morning, a majority of justices denied Howard Countyâs petition for review of the case, meaning a previous Indiana Tax Court ruling in favor of Kohlâs will stand.
A Supreme Court document shows that Chief Justice Loretta Rush and Justice Steve David voted to review the case. Justices Robert Rucker, Mark Massa and Geoffrey Slaughter voted to deny the petition to review.
The ruling, which likely ends the case, is a major victory for big-box stores in Indiana, who now stand to pay less in property taxes, costing counties significant amounts of tax revenue. Itâs unclear how the ruling could affect other property classes, although county officials have expressed concerns about a âdomino effect.â
Effectively, the case amounted to whether vacant big-box stores, also known as âdark boxes,â can be used as comparable properties when deciding a propertyâs market value. County officials fought the approach, saying it didnât appropriately reflect Indiana market value-in-use standard.
“Very disappointed,” said Howard County Assessor Mindy Heady Friday. “Kind of shocked. I thought our attorney did such a great job yesterday, so I thought they were going to hear it.”
About the effect of the ruling, Heady said the county will “have to play it by ear.”
However, Heady expressed optimism about the chance that legislators could in the next General Assembly session pass legislation to outlaw using “dark box sales” as comparable properties.
“It’s not over,” said Heady. “They won the battle, but we are still fighting.”
In the case, Kohlâs officials say their roughly 88,000-square-foot Boulevard Crossing store was over-assessed from 2010 to 2012 by millions of dollars in combined totals.
After Kohlâs appealed the valuation of its property, the Howard County Property Tax Assessment Board of Appeals affirmed the countyâs assessments. However, the Indiana Board of Tax Review later ruled, on Dec. 31, 2014, that Howard County over-assessed the Kohlâs property.
The IBTR ruling was affirmed on Sept. 7 by the Indiana Tax Court.
Since those rulings, Howard County officials have fought the position staked out by Kohlâs representatives.
âThere really isnât a discrepancy in 48 states which are market value. Indiana is not market value,â noted Center Township Assessor Sheila Pullen following Thursdayâs hearing. âWe are market value-in-use, and there is a value to the user. That (vacant) property isnât as valuable as a property that is in use.â
Representing Kohlâs in the case was attorney Greg Jones,…