HOA fight for tax refunds can’t be heard due to lack of jurisdiction

The Indiana Court of Appeals has dismissed motions brought by two homeowners associations, finding the Marion Superior Court cannot order the county treasurer to refund the associations for overpayment of taxes.

After Muir Woods Section One Association and Nantucket Bay homeowners associations filed real estate appeal petitions for the 2006 tax year, their respective parcels in question were determined to have an assessed value of $0. Both completed forms to reflect those assessments, and the Marion County treasurer issued refund checks to both Muir Woods and Nantucket Bay for $11,481.42 and $11,290.29, respectively. The checks were not cashed by either HOA.

Later, Nantucket Bay and Muir Woods each filed a “Complaint to Collect Determined Overpaid Real Estate Tax” that were eventually consolidated, arguing that the issued refund checks were allegedly deficient. However, the Marion Superior Court dismissed the complaints with prejudice and denied the homeowner associations’ subsequent motion to correct error.

A panel of the appellate court affirmed the dismissal, rejecting the homeowner associations’ argument that because the refund checks were unaccompanied by written final determinations from which to appeal, and the Indiana Legislature had not yet enacted Indiana Code Section 6-1.1-26-2.1, they had no means to get the controversy to the Indiana Tax Court.

“The Homeowners Associations argue that the Taxing Authorities simply changed their position after the time for appealing the zero assessments had passed and now refuse to abide by their agreements. They assert that no construction of tax law or tax expertise is required; rather, they are simply entitled to every dollar they paid in taxes for the subject parcels,” the appellate court observed.

“Based upon a zero assessment, the tax liability would be zero,” it continued. “But the Homeowners Associations do not have a written settlement agreement providing for a sum certain to be refunded, as opposed to credited to a future tax year.”

Pointing to Robinson v. Dep’t of Local Gov. Finance, 99 N.E.3d 684, 688 (Ind. Ct. App. 2018), the appellate court found that Muir Woods Section One Assn., Inc., et al. v. Marion County Treasurer, et al., 18A-CC-02643 “squarely involves interpretation and application of substantive tax law by a state agency charged with implementing that law and, as such, ‘arises under’ the tax laws of this state.” Additionally, it noted that without a final determination by the Indiana Board of Tax Review, there is no available petition for judicial review with the Indiana Tax Court.

It therefore concluded that the trial court lacked subject matter jurisdiction to order the treasurer to issue refunds for the overpayment of taxes to Nantucket Bay and Muir Woods, affirming the dismissal.