Indiana Property Tax

Indiana State Senate Bill 436, targeted at changing how “special purpose” properties are valued, The bill appears to have strong bi-partisan support.

The bill proposes that “special purpose” property is valued according to the taxpayer’s federal tax records. It states that only the cost approach should be used for appraisal purposes and improvement costs should be dictated by the federal tax depreciation records of the owner. Essentially, the bill eliminates the application of economic or functional obsolescence and more importantly the market and income approaches.

If passed, special purpose property would be defined as buildings of 50,000 square feet or more (i.e. big box stores), fast-food restaurant chain properties, manufacturing plants, movie theaters, industrial properties, chain stores and the like that have one or more of the following characteristics:

  1. Built with a unique physical design that enhances the utility to the owner for whom the structure was built
  2. Made using special construction materials that enhance the utility to the owner for whom the structure was built
  3. Designed with a layout that enhances the utility to the company for whom the structure was built

This is a major shift in real estate valuation for tax purposes and will impact the malls, movie theaters and other big box retail owners who’s tax bills would be stagnant in shifts in the economy.
Please contact Frank Lima (flima@hilcoglobal.com) regarding this matter or any other real or personal Property Tax questions or concerns.