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(a) "Net Assessed Value" or "Taxable Value" represents the "Gross Assessed Value" less certain deductions for mortgages,
<br />veterans, the aged, the blind, economic revitalization areas, resource recovery systems, rehabilitated residential property,
<br />solar energy systems, wind power devices, hydroelectric systems, geothermal devices and tax-exempt property. The "Net
<br />Assessed Value" or "Taxable Value" is the assessed value used to determine tax rates.
<br />Pursuant to State law, personal property is assessed at its actual historical cost less depreciation, in accordance with 50 IAC
<br />4.2, the DLGF's Rules for the Assessment of Tangible Personal Property. Effective January 1, 2016, state law annually
<br />exempts from property taxation new tangible business personal property with an acquisition cost of less than $20,000.
<br />Pursuant to State law, real property is valued for assessment purposes at its "true tax value" as defined in the Real Property
<br />Assessment Rule, 50 IAC 2.4, the 2011 Real Property Assessment Manual ("Manual"), as incorporated into 50 IAC 2.4 and
<br />the 2011 Real Property Assessment Guidelines, Version A ("Guidelines"), as adopted by the DLGF. P.L. 204-2016, SEC. 3,
<br />enacted in 2016, retroactive to January 1, 2016, amends State law to provide that "true tax value" for real property does not
<br />mean the value of the property to the user and that true tax value shall be determined under the rules of the DLGF. As a
<br />result of P.L. 204-2016, the DLGF has begun the process of amending the Manual. In the case of agricultural land, true tax
<br />value shall be the value determined in accordance with the Guidelines and IC 6-1.1-4, as amended by P.L. 180-2016.
<br />P.L. 180-2016 revises the factors used to calculate the assessed value of agricultural land. This legislation is retroactive to
<br />the January 1, 2016 assessment date and applies to each assessment date thereafter. The revised factors enacted in the
<br />legislation may reduce the total assessed value of agricultural land, which could shift property tax liability from agricultural
<br />property owners to other property owners. In addition, the reduction in the assessed value of agricultural land may result in a
<br />reduction of the total assessed value. Lower assessed values may result in higher tax rates in order for a unit to receive its
<br />approved property tax levy.
<br />Except for agricultural land, the Manual permits assessing officials in each county to choose any acceptable mass appraisal
<br />method to determine true tax value, taking into consideration the ease of administration and the uniformity of the
<br />assessments produced by that method. The Guidelines were adopted to provide assessing officials with an acceptable
<br />appraisal method, although the Manual makes it clear that assessing officials are free to select from any number of appraisal
<br />methods, provided that they produce "accurate and uniform values throughout the jurisdiction and across all classes of
<br />property". The Manual specifies the standards for accuracy and validation that the DLGF uses to determine the acceptability
<br />of any alternative appraisal method.
<br />(b) Indiana Code 6-1.1-20.6 provides taxpayers with a tax credit for all property taxes in an amount that exceeds the gross
<br />assessed value of real and personal property eligible for the credit (“Circuit Breaker Tax Credit”).
<br />Property taxes for residential homesteads are limited to 1% of the gross assessed value of the homestead; property taxes for
<br />agricultural, other residential property and long term care facilities are limited to 2% of their gross assessed value; and
<br />property taxes for all other real and personal property are limited to 3% of gross assessed value. Additional property tax
<br />limits have been made available to certain senior citizens.
<br />Since July 1, 2012, property tax revenue subject to reduction by the Circuit Breaker Tax Credit under Indiana Code 6-1.1-
<br />20.6-9.8 is classified as either "protected taxes" or "unprotected taxes." "Protected Taxes" include taxes levied to pay debt
<br />service or lease rental on obligations payable from ad valorem property taxes. A debt service fund containing Protected
<br />Taxes is funded first by the taxing unit before property taxes are deposited into any other funds.
<br />The Constitutional Provision excludes from the application of the Circuit Breaker Tax Credit property taxes first due and
<br />payable in 2012, and thereafter, that are imposed after being approved by the voters in a referendum. The Statute codifies
<br />this exception, providing that, with respect to property taxes first due and payable in 2012 and thereafter, property taxes
<br />imposed after being approved by the voters in a referendum will not be considered for purposes of calculating the limits to
<br />property tax liability under the provisions of the Statute.
<br />In accordance with the Constitutional Provision, the General Assembly has, in the Statute, designated Lake County and St.
<br />Joseph County as "eligible counties" and has provided that property taxes imposed in these eligible counties to pay debt
<br />service and make lease rental payments for bonds or leases issued or entered into before July 1, 2008 or on bonds issued or
<br />leases entered into after June 30, 2008 to refund those bonds or leases, will not be considered for purposes of calculating the
<br />limits to property tax liability under the provisions of the Statute, through and including December 31, 2019.
<br />CITY OF SOUTH BEND
<br />FOOTNOTES
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