America's Property Tax Advisor

Indiana - More Legislation for Assessing Big Box Stores

by Morgan Thomas, Chicago, March 2016

Indiana lawmakers are again working on legislation to regulate the assessment of "special use" commercial real estate like big box stores. This comes after critics complained that a law approved last year didn't go far enough.


The issue is whether a big box retail store's property tax value comes from the value of the store itself or the value of the real estate if it were vacant.


Current Law


Last year, the General Assembly approved Senate Enrolled Act 436 requiring the cost approach to value properties with a building size of at least 50,000 square feet and an effective age of ten years or less.


The law places restrictions on appeals, limiting property value comparisons to buildings that were used for similar purposes and have been for sale less than a year.


New Legislation


House Bill 1290 says that in addition to the factors under current law, the Department of Local Government Finance (DLGF) shall also provide for the classification of improvements on the basis of market segmentation.


There's no strict definition for what market segmentation means and the bill doesn't specify which factors should be considered. The bill also prohibits the holder of a tax sale certificate from making a property tax appeal.


Officials say if HB 1290 becomes law, most of the important details will be determined first by the DLGF and later by the tax courts, which could be a lengthy process.