The Indiana Board of Tax Review recently ruled that a Meijer store located in Indianapolis should have been assessed at the equivalent of $30 per square foot, not at $83 per square foot as originally determined by the Marion County Assessor in 2012. This means Meijer would only be responsible for paying almost one-third less than the original assessment.

The court’s decision covered 9 years of assessments, going back as far as 2002. Therefore, Marion County could owe Meijer a $2.4 million refund. According to Meijer, it will not be pursuing property-tax appeals for all of its Indiana stores. Instead, Meijer is hoping to enter into a settlement agreement with Marion County.

The Marion County Assessor’s office has not yet confirmed whether it will appeal the decision to a higher court. Unless this decision is successfully appealed and reversed, this case will change how all Indiana big-box stores are assessed in the future. In coming to its conclusion, the court agreed with Meijer’s assertion that “big-box” stores should be valued looking strictly at the value of the “box,” not the “highest and best use” value. Valuing the store based only on the value of the “box” means treating all big-box stores the same, whether operational or vacant.

Since millions of tax dollars are at stake, which many counties depend on for revenue, the Indiana legislature was quick to respond on Tuesday, February 17, 2015, with a bill addressing tax bills on big-box stores. The bill, which would require certain special-purpose properties to be assessed based on the cost of construction for the first seven years, unanimously passed the Indiana Senate Tax and Fiscal Policy Committee.

Because the assessed value of commercial property can greatly affect Indiana commercial real estate owners, the attorneys are Bowers Harrison are closely monitoring this issue as it develops. Please subscribe to our blog or check back for more details. If you have any questions regarding the assessed value of your land, or any other real estate issues, please contact us at (812) 426-1231.