The Herald Bulletin

November 28, 2013

Tax issue surrounds trustee request

Is tobacco store tax-exempt?

By Ken de la Bastide The Herald Bulletin
The Herald Bulletin

---- — ANDERSON – A request by the Anderson Township trustee’s office to vacate an alley has turned into a dispute over the payment of property taxes.

The request is to remove an alley from public right-of-way behind Anderson Discount Tobacco. The alley parallels 1th Street and runs from Central Avenue to Main Street. The tobacco store is located on one of three parcels owned there by the township trustee.

The request was tabled by the City Council on Nov. 14 and continued last Monday. It could be considered at the council’s Dec. 12 meeting.

But since 2008, neither Anderson Discount Tobacco nor the Anderson Township trustee has paid property and personal property taxes on the business.

Madison County Assessor Larry Davis and Auditor Jane Lyons believe the tobacco store should be paying those property taxes. An opinion by the Indiana Department of Local Government Finance supports that position saying that since the property is being rented by a private for-profit business, it is not eligible for a government exemption from paying taxes.

Currently there is $3,375.15 in back taxes owed on the property not including penalties and interest for 2012. There is $2,279.30 owed on the 2011 taxes that were due in 2012.

Lyons said the property was listed for a tax sale by the county but was removed from the list by Judge Thomas Newman Jr.

She said the trustee believes the property should not be taxed because it’s owned by a government entity.

“It has always been the opinion of the Auditor’s office, even before I became auditor, that since they were making money from the business, it should be taxed,” she said.

Lyons said she won’t remove it from the list and that the Anderson Township trustee can seek an exemption from the Property Assessment Board of Appeals or the DLGF.

Davis said he believes it was assessed in 2011 when several other properties no longer owned by a government entity were taxed.

According to county records, the property was assessed in 2010 at $81,300 and the assessed value in 2013 is $25,000.

“To be an exempt property, the prominent use has to be for the public good,” he said. “The owner has to prove it’s entitled to the exemption. When that happens it shifts the tax burden to other property owners.”

Davis said the township trustee has not filed for an exemption for the property.

“They probably would not be granted the exemption,” Davis said.

Trustee Brenda Jones said the request for vacating the alley is meant to combine the three properties owned by her office.

The property is rented to Brandon Dillon for $400 per month.

“We can’t find any records that the trustee paid taxes,” she said. “If the law states property taxes are owed, I will ask Dillon to pay the taxes.”

Fredrick Spencer, the attorney representing Jones, said the property and an empty lot were purchased in 1981.

“We have documents from the assessor’s office that the property was tax exempt,” he said. “I know there is a tax bill on the lot. It is a separate issue from the vacating of the alley, but is up in the air.”

Spencer said the city of Anderson wanted to purchase the property for the construction of a new City of Anderson Transit System bus terminal, but the Anderson City Council removed the funding from the budget.

“I have not been involved in any discussion on the sale of the property,” he said.

Follow Ken de la Bastide on Twitter@KendelaBastide, or call 640-4863.