September 25, 2016

Earlier this year, the Indiana General Assembly passed legislation known as HEA 1290, which was signed by Governor Pence.  HEA 1290 added a new subsection to Indiana Code 6-1.1-31-6 that provides: “[w]ith respect to the assessment of an improved property, a valuation does not reflect the true tax value of the improved property if the purportedly comparable sale properties supporting the valuation have a different market or submarket than the current use of the improved property, based on a market segmentation analysis. Any market segmentation analysis must be conducted in conformity with generally accepted appraisal principles and is not limited to the categories of markets and submarkets enumerated in the rules or guidance materials adopted by the department of local government finance.” HEA 1290 provides that the Department of Local Government Finance (“DLGF”) to adopt guidance on the meaning of this new provision in the context of Indiana’s property tax system.  Based on discussions with the DLGF, taxpayers can anticipate the DLGF to issue preliminary draft guidance later this year.