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Part 2:  Assessing the Impact of Property Tax Appeals on Your Community

By Matt Eckerle, Principal, June 01, 2017

In a recent edition, I discussed the impact property assessment appeals using the “dark store” theory can have on your tax base, tax rate, potential to increase tax cap losses and even reduce the revenues from a TIF area. In this edition I’ll look at the concept of market segmentation and provide you options to mitigate or evaluate property tax appeals.

During its 2016 session the General Assembly directed the Department of Local Government Finance to create new assessment rules requiring properties be evaluated and assessed based upon their market segments. In other words, comparable property cited for an assessment must be in the same market or submarket as the property being evaluated. Details for the new DLGF market segmentation rule are expected soon (or synopsis of the rule if released in time.)

Understanding and mitigating the impact of appeals:

While the topic of dark stores has been getting the most attention as of late, property tax appeals on any property can possibly have a significant effect on the financial situation in your community. In order to develop strategies to address this issue, you must first understand how pending appeals may impact your community. Indiana Code requires that county Assessors provide quarterly updates on outstanding appeals to the fiscal officer of each unit. This information can be used to evaluate the potential impact you face and develop a strategy to address those effects.

In St. Joseph County, the cities of South Bend and Mishawaka have partnered with the County to defend assessments that have been appealed by local retailers. The effects of these appeals spread beyond one unit, so you may be able to find willing partners within your county to work together to counter the impacts of appeals settlements.

If you are working on an economic development project that requires an incentive, there are options available to mitigate the risk of appeals before the new development occurs:

  • Units can develop incentive criteria that include the expected assessed value of the project
  • Create open communication with incentive recipients about assessment expectations and issues
  • For TIF bonds that benefit a specific project a taxpayer agreement can be used to protect the revenue stream in case of assessment issues
  • Your community can negotiate agreements for minimum assessments of new incentivized developments.
  • TIF or abatement agreements can contain “no appeals” clauses that limit an incentive recipient’s ability to file an appeal during and immediately following the term of an incentive.

Umbaugh can assist you in calculating potential exposure due to outstanding or possible appeals. When you have questions about property tax appeals and how they can affect your community, please contact us at .(JavaScript must be enabled to view this email address).

Information in this article was believed current as of the date of publication. As you know, changes occur frequently. The information presented is of a general educational nature. Before applying to your specific circumstances, please contact us at


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