Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
A Hamilton County woman should have filed her application for a homestead deduction before the end of 2020 to qualify for that assessment year, the Indiana Tax Court ruled Friday in affirming an Indiana Board of Tax Review final determination.
According to court records, Pamela Slatten purchased a home in Carmel and completed and signed an application for Indiana’s homestead deduction on Dec. 31, 2020.
On Jan. 5, 2021, Slatten recorded a memorandum of contract documenting her purchase with the Hamilton County Recorder’s Office and filed her completed homestead deduction application with the Hamilton County auditor.
The auditor granted Slatten the homestead deduction for the 2021 assessment year, but denied the deduction for the 2020 assessment year because she believed the law required Slatten to record her memorandum of contract by Dec. 31, 2020.
Slatten appealed the 2020 homestead deduction denial first to the Hamilton County Property Tax Assessment Board of Appeals and then to the state’s tax review board.
The tax review board held a telephonic hearing in October 2021 and denied Slatten’s request for relief in February 2022.
Slatten then appealed to the Indiana Tax Court, which held oral arguments in August 2022.
The Tax Court affirmed the tax review board’s ruling, finding Slatten had not demonstrated that the board’s final determination was contrary to law or constituted an abuse of discretion.
On appeal, the case presented the issue of when a taxpayer must record a memorandum of contract documenting a property’s purchase to qualify for the homestead deduction.
New Indiana Tax Court Judge Justin McAdam wrote the decision — his first since taking the bench last year.
McAdam found that in order for Slatten to receive the homestead deduction for the 2020 assessment year, her property needed to be a homestead in 2020. Therefore, she needed to record her memorandum of contract in 2020.
“The Court is sympathetic to the concerns raised by Slatten. The statute does not reveal the legislative purpose for the recordation requirement. It may be intended as a safeguard against fraud or for administrative effectiveness as Section 37(a)(2)(B)(ii) applies to prospective sales that are not yet complete. But, regardless of the reason, this Court, like any other, may not usurp legislative prerogative by construing a statute in a manner contrary to its plain language,” McAdam wrote.
Slatten also offered an alternative argument that two other statutory provisions operate to independently extend the time to record a memorandum of contract to Jan. 5 of the year following the assessment year.
McAdam first addressed the Section 45(f) claim.
“She asserts this language allowed her until January 5, 2021, to record her memorandum of contract because that is the day she filed her homestead deduction application,” McAdam wrote. “The Court disagrees. Section 45(f) provides that ‘[a] person who is required to record a contract with a county recorder in order to qualify for a deduction under [Indiana Code § 6-1.1] must record the contract, or a memorandum of the contract, before, or concurrently with, the filing of the corresponding deduction application.’ IND. CODE § 6-1.1-12-45(f) (2020) (amended 2022). That section, though, merely establishes the sequence of two actions (recording and filing). It mandates that any required recording be done before or at the same time as the filing of the deduction application.”
McAdam further explained that the provision places a limit on the time allowed for recording by prohibiting a taxpayer from recording a contract or memorandum of contract after filing a deduction application.
Next, McAdam addressed Slatten’s Section 37(b)(2) claim.
“The Court disagrees with this argument as well. Section 37(b)(2) states that the homestead deduction applies to an assessment year ‘only if’ an individual has an interest in the homestead on the assessment date or ‘any date in the same year after an assessment date that a [homestead deduction application] is filed[.]’ I.C. § 6-1.1-12- 37(b)(2). The Legislature’s use of the phrase ‘only if’ indicates that the provision is intended to set forth a necessary, but not a sufficient, condition for qualification,” he wrote.
The case is Pamela Slatten v. Hamilton County Assessor, 22T-TA-4.
Please enable JavaScript to view this content.