Tax court affirms CVS valuation, stands by prior retail rulings

A CVS store in Bloomington has won its case against what it said were inaccurate tax assessments after the judge of the Indiana Tax Court rejected the argument that her previous rulings were inaccurate.

The case of Monroe County Assessor v. SCP 2007-c-26-002, LLC a/k/a CVS 3195-02, , deals with the CVS store located on North College Avenue in Bloomington.  After the Monroe County Assessor valued the property the store sat on at values between $3.8 and $3.9 million for every assessment between 2009 and 2013, CVS appealed to the Monroe County Property Tax Assessment Board of Appeals, arguing that the assessments were too high.

The county board affirmed the assessments, so CVS appealed to the Indiana Board of Tax Review, which received appraisal reports on the property for each year in question from both CVS and the county assessor, as well as a critique of CVS’ appraisal report completed by a third certified appraiser and submitted by the county appraiser.

In the review, the assessor claimed the CVS report “failed to capture all of the (subject property’s) utility by (CVS)” because it used data from properties that were used for a general retail purpose both pre-and-post-sale, rather than from properties that were specifically used “for a successful ongoing CVS operation.” Because of that, the assessor’s review found that CVS had measured the property’s market value, not its value-in-use.

The Indiana Board determined that the review carried no weight because it was founded on a misunderstanding of Indiana’s market value-in-use standard, which measures the value of properties for comparable uses as opposed to identical uses and also holds that market value and market value-in-use can coincide.

Similarly, in its review of the two appraisal reports, the Indiana Board found that the appraised values submitted by CVS’ income approach were the most credible indication of the market value-in-use and, thus, reduced the property’s value to be consistent with what CVS submitted, between about $2.1 million and $2.6 million for the tax years in question.

The Monroe County assessor appealed, arguing that previous cases decided by the Tax Court that the Indiana Board looked to for guidance in its review of the appraisal reports were decided incorrectly, thus making it “unreasonable” for the board to rely on those cases in its decision-making process.

However, Judge Martha Blood Wentworth wrote in a Friday opinion that the same argument had been rejected in three recent cases, including the most recent case, Howard Cnty Assessor v. Kohl’s Indiana LP, 57 N.E.3d 913, 916-19 (Ind. Tax Ct. 2016).

“Because the court believes its previous cases correctly explain the market value-in-use standard and that the court is not the proper arena to change a law, it continues to stand by its analyses in those cases and need not repetitively address the argument in this opinion,” Wentworth wrote.

The Monroe County Assessor also argued that the Indiana Board’s decision was “muddled, inconsistent … (and) doesn’t make sense.” But Wentworth wrote that such a claim was an invitation to revisit the claim that the Tax Court had incorrectly interpreted market value-in-use and establish bright-line rules for the application of comparable properties under the various approaches to value, an invitation she said she did not need to accept.

Thus, Wentworth found that the assessor failed to show that the board’s decision was contrary to law and capricious and, therefore, affirmed its decision.