ATTORNEYS FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
PAUL M. JONES, JR. BRIAN A. CUSIMANO
BRIGHAM E. MICHAUD MARILYN S. MEIGHEN
JONES PYATT LAW, LLC ZACHARY D. PRICE
Greenwood, IN Carmel, IN
Indianapolis, IN
IN THE
INDIANA TAX COURT
NESTLÉ USA, INC., )
) FILED
Petitioner, )
)
Sep 23 2026, 3:26 pm
v. ) Case No. 25T-TA-00020 CLERK
Indiana Supreme Court
) Court of Appeals
and Tax Court
MADISON COUNTY ASSESSOR, )
)
Respondent. )
ON APPEAL FROM A FINAL DETERMINATION OF
THE INDIANA BOARD OF TAX REVIEW
FOR PUBLICATION
September 23, 2026
MCADAM, J.
Nestlé USA, Inc. appeals from a final determination by the Indiana Board of Tax
Review and raises two issues common in property tax valuation disputes: the operation
of Indiana’s property tax burden-shifting statute and the proper weight for the Board to
assign to competing evidence. Both Nestlé and the Madison County Assessor provided
the Board with an appraisal of Nestlé’s industrial facility and both supported these
appraisals with expert testimony at the administrative hearing. The Board ultimately
found the Assessor’s appraisal to be the most persuasive evidence of value for each of the six tax years at issue. However, the Board’s application of Indiana Code
§ 6-1.1-15-17.2—the now-repealed statute governing shifts in the burden of proof in
certain property tax appeals—prevented the Board from adopting the Assessor’s value
for every disputed year. For 2019 to 2021, the Board found neither party’s appraisal met
its burden and reverted the assessments to the 2018 assessment. For the 2018, 2022,
and 2023 assessments, the Board adopted the Assessor’s appraisal valuation. Nestlé
challenges both the Board’s application of Section 17.2 and the sufficiency of the
evidence it relied upon to adopt the Assessor’s values and to reject Nestlé’s values. The
Court finds that the Board correctly applied Section 17.2, made its findings based on
substantial evidence, and did not abuse its discretion. The Court affirms the Board’s
final determination in its entirety.
FACTS AND PROCEDURAL HISTORY
Nestlé owns an industrial building of approximately one million square feet
situated on roughly 183 acres in Anderson, Indiana. The facility is used to manufacture
coffee creamers and other ready-to-drink beverages. The facility has interstate and rail
access and houses a mix of food-grade and general manufacturing, warehouse, dock,
office, and utility space, a portion of which is chilled for cold storage. Most of the facility
was constructed in 2008, with smaller additions in later years.
The Madison County Assessor assessed the subject property as follows:
Tax Year Land Value Improvement Value Total Assessment
2018 $3,916,500 $44,648,400 $48,564,900
2019 $3,916,500 $46,901,800 $50,818,300
2020 $3,916,500 $47,556,600 $51,473,100
2021 $3,916,500 $48,028,100 $51,944,600
2022 $3,916,500 $50,234,000 $54,150,500
2023 $3,916,500 $50,238,500 $54,155,000
2
Nestlé appealed these assessments to the Madison County Property Tax
Assessment Board of Appeals (“PTABOA”), which issued determinations upholding the
values for tax years 2018 to 2022. Nestlé then appealed the determinations for 2018 to
2022 to the Indiana Board of Tax Review and later appealed the 2023 assessment after
the PTABOA failed to issue a determination within 180 days.
The appeals for all years were heard together before the Board during a
multi-day evidentiary hearing at which both parties presented appraisal testimony. At
the outset of the hearing, the administrative law judge asked the parties for any
argument on the burden of proof; Nestlé acknowledged that it bore the burden and the
Assessor concurred.
Both parties submitted expert appraisals to estimate the value of the subject
property. Nestlé’s appraisal employed a cost approach and a sales comparison
approach, but no income approach to value the property, and did not develop an
independent land value determination, instead concurring in the existing land
assessment. The Assessor’s appraisal employed the cost, sales comparison, and
income approaches and independently valued the land. Each appraisal certified
compliance with the Uniform Standards of Professional Appraisal Practice (USPAP),
and the two reached materially different opinions of value, with Nestlé’s yielding the
lower valuation for every year.
Tax Nestlé’s Reconciled Value Assessor’s Reconciled Value
2018 $32,000,000 $48,000,000
2019 $31,900,000 $50,000,000
2020 $31,500,000 $53,500,000
2021 $31,900,000 $55,500,000
2022 $33,300,000 $57,000,000
2023 $33,900,000 $55,000,000
3
The Board found that Nestlé’s appraisal was supported by only one reliable
approach to value—its sales comparison approach estimate—and that its conclusions
lacked support along several dimensions. Regarding Nestlé’s cost approach, the Board
concluded it had little persuasive value, explaining (i) that the appraisal did not
independently value the subject property’s land, (ii) that the case-study underlying the
appraisal’s external-obsolescence estimate was unverified and unsubstantiated, and (iii)
that the external-obsolescence estimate lacked evidence to support the combination of
data used by the appraiser. Regarding Nestlé’s sales comparison approach, the Board
found it to be only “marginally credible” because (i) most of the comparable sales were
much older than the subject property, (ii) the appraiser conceded that all but one was
inferior to it, and (iii) the appraiser made significant adjustments to the leased
comparables without ever comparing their lease rates to market rent. (Cert. Admin. R.
at 3001 ¶ 32.) Lastly, the Board found that the appraiser’s failure to develop an income
approach was inconsistent with the appraiser’s reliance on leased comparables in his
sales comparison approach.
Turning to the Assessor’s appraisal, the Board concluded that it was “reliable
evidence of value for each of the dates at issue.” (Cert. Admin. R. at 3017 ¶ 68.) The
Board explained that it presented three reliable approaches to value “with good quantity
and quality of data” and found that it provided “excellent explanations for [its]
adjustments.” (Cert. Admin. R. at 3013 ¶ 59, 3024 ¶ 88.) Regarding the Assessor’s cost
approach, the Board concluded it was “a reliable and persuasive estimate of the subject
property’s value for each of the dates at issue.” (Cert. Admin. R. at 3015 ¶ 63.) It
credited the appraiser’s independent land valuation, found that the depreciation
4
estimate “appropriately accounted for the physical condition of the property,” and
determined its obsolescence estimate was the “most reliable” in the record. (Cert.
Admin. R. at 3014–15 ¶¶ 60–63.) The Board also noted that the appraisals use of data
from its income approach in its cost approach “undercut[ ] the independence of [the]
cost approach.” (Cert. Admin. R. at 3014–15 ¶ 62.) Regarding the Assessor’s sales
comparison approach, the Board found that it was credible and probative though not
“particularly persuasive” because of the “lack of good comparable sales.” (Cert. Admin.
R. at 3016 ¶ 65, 3023–24 ¶ 86.) Finally, regarding the Assessor’s income approach, the
Board found it to be a reliable estimate while expressing reservations that the “depth” of
underlying data “was not ideal.” (Cert. Admin. R. at 3024 ¶ 87.)
The Board compared the two appraisals and concluded that the Assessor’s
appraisal supplied the most persuasive evidence of the subject property’s value in the
record. The Board found that “[n]either appraiser presented a single comparable that
reflected the subject property in all . . . aspects” because of its unique size, age, and
physical characteristics. (Cert. Admin. R. at 3022 ¶ 82.) It found the Assessor’s cost
approach to be the only reliable estimate between the two appraisals, driven in large
part by Nestlé’s failure to independently value the land and the relative strength of the
Assessor’s obsolescence adjustments. It found the Assessor’s sales comparison
approach superior to Nestlé’s but found that both appraisals were “not particularly
persuasive” because both “suffered from a lack of compelling data.” (Cert. Admin. R. at
3023–24 ¶ 86.) Finally, it rejected Nestlé’s contention that an income approach was
inappropriate and concluded that the Assessor’s valuation—the only one in the record—
was a reliable estimate.
5
Applying the governing burden-of-proof statutes, the Board adopted the values in
the Assessor’s appraisal for the 2018, 2022, and 2023 assessment years, but could not
do so for 2019 through 2021 because the burden had shifted. The Board found that the
Assessor’s appraisal did not exactly and precisely match the assessments for the 2019
through 2021 assessment years and therefore concluded that the Assessor did not
carry its burden to prove the assessment correct. It found that Nestlé met its burden of
production but not its burden of persuasion in those years, because the Assessor’s
appraisal persuaded the Board that Nestlé’s conclusion of value was incorrect. Because
neither party carried its burden of persuasion, the assessments for those years (2019 to
2021) reverted to the value the Board determined for 2018.
Nestlé timely initiated this original tax appeal, and the Court heard oral argument.
STANDARD OF REVIEW
This Court’s review of the Board’s final determinations is governed by Indiana
Code § 33-26-6-6, the provisions of which closely mirror those controlling judicial review
of administrative decisions under Indiana’s Administrative Orders and Procedures Act
(“AOPA”). The party seeking to overturn a final determination of the Board bears the
burden of demonstrating its invalidity. IND. CODE § 33-26-6-6(b) (2018). To prevail,
Nestlé must demonstrate that it has been prejudiced by a final determination that is
arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
contrary to constitutional right, power, privilege, or immunity; in excess of or short of
statutory jurisdiction, authority, or limitations; without observance of the procedure
required by law; or unsupported by substantial or reliable evidence. IND. CODE
6
§ 33-26-6-6(e); Lowe’s Home Ctrs., Inc. v. Monroe Cnty. Assessor, 160 N.E.3d 263,
268 (Ind. Tax Ct. 2020).
DISCUSSION
On appeal, Nestlé claims that the Board’s final determination should be
overturned for two principal reasons: first, it contends that the Board misapplied the
burden-shifting statute and, second, it argues that many of the Board’s conclusions
were outside its discretion or unsupported by substantial evidence. The Assessor
defends the Board’s valuation but advances two counterclaims of its own. It contends
that the burden-shifting statute should not have applied to the 2019 through 2021
assessment years because assessments based on structural improvements are
excluded and that it did not have the opportunity to discuss the burden-shifting
application at the Board’s administrative process. Before turning to Nestlé’s claim about
the evidentiary support of the Board’s findings, the Court will address both parties’
arguments regarding the burden-shifting statute.
I. The Board correctly applied Indiana Code § 6-1.1-15-17.2.
Because the Board’s decision in this appeal determined the subject property’s
assessment values for tax years 2018 through 2023, two different burden-shifting
statutes govern allocation of the burden of proof, but the parties argue about only one—
Indiana Code § 6-1.1-15-17.2. Previously, Section 17.2 explained the circumstances
which would shift the burden of proof from the taxpayer to the county. IND. CODE
§ 6-1.1-15-17.2 (2018). However, in 2022, the Indiana legislature repealed Section 17.2
and replaced it with Indiana Code § 6-1.1-15-20. Pub. L. No. 174-2022, § 34, 2022 Ind
Acts 2347–49. The parties and the Board all agree that this change leaves tax years
7
2018 to 2021 governed by the old statute and tax years 2022 to 2023 governed by the
new statute. (Cert. Admin. R. at 3017–18 ¶¶ 69–71; Pet’r’s Br. at 10; Resp’t Br. 11, 33.)
As neither party raises an argument challenging the Board’s application of Section 20,
the Court will focus its statutory analysis on Section 17.2.
Both parties take issue with the Board’s application of Section 17.2’s legal
framework and ask the Court to remand the case, but the parties disagree about what
Board action requires a remand. Nestlé argues that the Board exceeded its statutory
authority in its application of Section 17.2 to the facts in this case when it (1) used the
Assessor’s appraisal to evaluate Nestlé’s appraisal and (2) found that Nestlé’s appraisal
did not meet its burden while also finding that same appraisal was “sufficiently
supported” and a “credible opinion of value.” (Pet’r’s Br. 8.) The Assessor focuses on
the procedural aspects of the Board’s application of Section 17.2, claiming that the
Board (1) failed to correctly apply the law by ignoring the exclusion from Section 17.2,
which prevents burden shifting when the assessment is based on structural
improvements, and (2) abused its discretion by failing to give the Assessor the chance
to address the burden-shifting statute at the administrative level.
The Court finds none of these four arguments persuasive and will address
Nestlé’s challenges first before turning to the Assessor’s two alternative arguments.
A. The Board correctly applied Indiana Code § 6-1.1-15-17.2 by
examining all evidence to find that Nestlé did not carry its burden.
Nestlé first claims that the Board violated Section 17.2 by considering the
Assessor’s appraisal alongside Nestlé’s appraisal to determine whether Nestlé had met
its burden to “prove the correct assessment” for tax years 2019 through 2021. Nestlé
argues that, once the Board found the Assessor’s appraisal fell short of the burden of
8
proof because it did not exactly and precisely match the assessment, the burden shifted
to Nestlé and “the Board should have considered only Nestlé’s [a]ppraisal.” (Pet’r’s Br.
at 7.) From Nestlé’s perspective, Indiana Code § 6-1.1-15-17.2 does not allow the
Board to consider an assessor’s appraisal when evaluating whether the taxpayer has
met its burden of proof. The Court disagrees. The statute is silent on the question, and
an appraisal that is insufficient to prove “the assessment is correct” may still be
probative of the value of the subject property.
Subsection (b) of Indiana Code § 6-1.1-15-17.2 is the locus of the dispute. It is
straightforward and applies only to appeals when an assessment has increased by
more than five percent over the previous year. It provides:
[T]he county assessor or township assessor making the assessment has
the burden of proving that the assessment is correct in any review or
appeal under this chapter and in any appeals taken to the Indiana board of
tax review or to the Indiana tax court. If a county assessor or township
assessor fails to meet the burden of proof under this section, the taxpayer
may introduce evidence to prove the correct assessment. If neither the
assessing official nor the taxpayer meets the burden of proof under this
section, the assessment reverts to the assessment for the prior tax year[.]
IND. CODE § 6-1.1-15-17.2(b) (2018). The statute has three primary functions, two of
which directly alter the normal rules of property tax appeals: (1) The first reallocates the
initial burden of proof from the taxpayer to the assessor, reversing the normal rule
assigning the burden to the taxpayer as the one challenging the assessment. (2) The
second follows the normal appeal process, allowing the taxpayer to prove the correct
assessment. And (3) the third specifies that the default remedy is the prior year’s
assessment in the event that neither party meets their burden, reversing the normal rule
that would otherwise leave the challenged assessment in place. See Eckerling v.
Wayne Twp. Assessor, 841 N.E.2d 674, 677 (Ind. Tax Ct. 2006); Lake Cnty. Assessor
9
v. O’Day Holdings, LLC, 249 N.E.3d 677, 685 (Ind. Tax Ct. 2024); Madison County
Assessor v. Kohl's Indiana, LP, 272 N.E.3d 592, 600 (Ind. Tax Ct. 2025).
Indiana courts look to the plain language of statutory text to determine its
meaning. Indiana Alcohol & Tobacco Comm’n v. Spirited Sales, LLC, 79 N.E.3d
371, 376 (Ind. 2017). When interpreting statutes, a court must first decide “whether the
Legislature has spoken clearly and unambiguously on the point in question.” City of
Carmel v. Steele, 865 N.E.2d 612, 618 (Ind. 2007). “Clear and unambiguous statutes
leave no room for judicial construction” and do not require “any rules of construction.” Id.
Instead, the words of such a statute are understood in their “plain, or ordinary and
usual, sense” unless doing so would be “plainly repugnant to the intent of the legislature
or of the context of the statute.” IND. CODE § 1-1-4-1 (2026). Courts cannot expand or
contract the meaning of an unambiguous statute by reading in language to correct
supposed omissions or defects and may not substitute language that they feel the
legislature may have intended. United Parcel Serv., Inc. v. Indiana Dep’t of State
Revenue, 281 N.E.3d 97, 102 (Ind. Tax Ct. 2026).
The plain language of Section 17.2 does not speak to whether the Board may
consider an assessor’s evidence regarding the correctness of the assessment in
evaluating the taxpayer’s burden. Fidelity to the plain and ordinary meaning requires
equal accounting of what a statute does not say just as much as what it does say. See
ESPN, Inc. v. Univ. of Notre Dame Police Dep’t, 62 N.E.3d 1192, 1195 (Ind. 2016).
Section 17.2 addresses only the allocation of the burdens of proof and the default
remedy; there is nothing in the text that indicates an intention to alter the normal
adjudicative process for weighing evidence and evaluating it against the burden of
10
persuasion. The only thing that Section 17.2 says about the taxpayer’s evidence is that
“the taxpayer may introduce evidence to prove the correct assessment.” IND. CODE
§ 6-1.1-15-17.2. But that is just an affirmative grant of permission to the taxpayer to
offer proof of an alternative value. It is not a limitation on the use of evidence offered by
the assessor. Section 17.2 does not place any limitation on or provide any direction
about the Board’s use of the evidence presented by each party.
Examining the precise contours of an assessor’s burden of proof is instructive in
resolving the question presented here. Section 17.2 requires the assessor to prove that
the challenged “assessment is correct.” IND. CODE § 6-1.1-15-17.2. Under that text, a
determination by the Board that the assessor’s evidence does not satisfy the assessor’s
burden of proof is not a determination that the assessor’s evidence lacks all probative
force. It is only a determination that the evidence does not exactly and precisely prove
the accuracy of the assessment. See Southlake Indiana, LLC v. Lake Cnty. Assessor,
(“Southlake III”) 181 N.E.3d 484, 489 (Ind. Tax Ct. 2021) (holding that the word “correct”
in Section 17.2 requires that an appraisal “exactly and precisely conclude to” the
challenged assessment), trans. denied. Even when it does not exactly match the
assessment, an assessor’s evidence may still shed light on the true tax value of the
property. It may still persuasively demonstrate, for example, that the subject property
should be assessed at a higher or lower value than the challenged assessment, as was
the case here. (See Cert. Admin. R. at 3024–25 ¶ 90 & n.11.) In establishing the burden
of proof, Section 17.2 sets a high bar for the assessor, but it does not direct the Board
to ignore persuasive evidence of value offered by the assessor when evaluating the
taxpayer’s proposed assessment.
11
Nestlé insists that the Indiana Supreme Court’s decision in Southlake Indiana,
LLC v. Lake Cnty. Assessor, (“Southlake II”) unequivocally answers the question
presented and bars consideration of the Assessor’s appraisal. 174 N.E.3d 177, 180
(Ind. 2021). But Nestlé presses the Supreme Court’s holding too far. The holding of
Southlake II is a narrow one. There the Court held that, when the Board determines that
the parties’ evidence is “lacking” and thus “that neither party met its burden of proof,”
the assessment reverts to the assessment for the prior tax year. Southlake II, 174
N.E.3d at 179. As was the case in Southlake II, that means that the Board cannot
fashion its own assessment value by “[m]aking the adjustments it [finds] warranted” to
the parties’ evidence or appraisals. Id. The Supreme Court’s holding, therefore, only
resolves the question of whether the Board may assign a value other than the
reversionary value (i.e., the prior year assessment) when the Board finds that both
parties’ appraisals are insufficient to prove the value of the property. It says nothing
about whether evidence introduced by the party not having the burden of proof may be
brought to bear on the evaluation of whether the party having the burden of proof has
met that burden.
In its attempt to avoid the narrowness of the holding in Southlake II, Nestlé points
to a comment by the Supreme Court that the legislature is empowered to limit the
Board’s discretion in property tax appeals. Responding to this Court’s then-articulated
concern that restricting the Board’s ability to resolve conflicting evidence would be
problematic, the Supreme Court said:
12
In the tax court’s view, applying section 17.2’s plain language would mean
the state board could not resolve conflicting probative evidence, an
outcome the tax court viewed as improper: “To require the Indiana Board
to determine weight and credibility subject to the rigid and formulaic
approach advocated by Southlake (i.e., that it should have examined the
[assessor’s] appraisal on a ‘stand-alone’ basis) would actually remove the
Indiana Board’s ability to resolve any issues arising from conflicting
evidence.” Southlake, 160 N.E.3d at 1169–70. How the tax court
described the state board’s limited discretion may be correct. But that
result, whatever its policy merits, is the legislature’s call and not ours. We
apply the statute as written and do not second guess the legislature’s
decision to limit the state board’s flexibility when assessed values increase
by more than the five-percent threshold.
Southlake II, 174 N.E.3d at 179–80 (alteration in original). Nestlé asserts that this
statement establishes a rule requiring the Board to examine the Assessor’s appraisal on
a stand-alone basis.
Nestlé’s interpretation of this analysis is wrong. Contrary to Nestlé’s contention,
Southlake II expresses neither an endorsement nor a refutation of the Tax Court’s
concern. Instead, the opinion acknowledges that such a concern “may be correct” and
places the resolution of the concern with the legislature. Southlake II, 174 N.E.3d at 180
(emphasis added). The opinion provides no analysis of the statute that would support
the position advanced by Nestlé here. It provides context for the Supreme Court’s
important point about the separation of powers and the discretion of the legislature to
make policy determinations. 1
1
Nestlé also argues that this Court’s decision in Madison Cnty. Assessor v. Kohl’s Indiana, LP bears on the analysis here. 272 N.E.3d 592, 600 (Ind. Tax Ct. 2025). Nestlé quotes the decision for the principle that an appraisal must meet the preponderance standard “standing alone and independent of the Assessor’s competing appraisal.” (Pet’r’s Br. at 8–9 (quoting Kohl’s, 272 N.E.3d at 600).) In Kohl’s, the Court found that the Board failed to perform the statutorily required preponderance analysis when it found only that the Kohl’s appraisal valuation was more likely the true tax value of the property than the Assessor’s appraisal valuation but did not find that the Kohl’s valuation was more likely than not the value of the subject property. Id. Accordingly, Nestlé reads the quote out of context. When read within the context of the holding in Kohl’s, it is clear that the Court was distinguishing between a preponderance analysis and the
13
The statutory silence is dispositive, leaving the status quo undisturbed. The
legislature is presumed to know the prevailing law when it adopts new legislation and to
craft legislation with that background in mind. See Garrison v. Sevier, 165 N.E.3d 996,
999 n.1 (Ind. Ct. App. 2021); IBEW Loc. 305 v. Allen Cnty. Assessor, 278 N.E.3d 395,
403 (Ind. Tax Ct. 2026). Accordingly, absent language altering the background law, a
statute should be read in harmony with that law. The relevant background law here is
the law that governs the adjudicative process and the consideration of the parties’
evidence. “[I]t is a well-established principle of law that all relevant evidence
introduced in the trial court must be considered regardless who introduced it.” Ellis v.
Thompson, 8 N.E.2d 430, 432 (Ind. Ct. App. 1937) (en banc). For more than a century,
Indiana’s fact-finding courts and administrative bodies have operated according to the
principle that “[when] a fact in issue is established by competent relevant evidence, it
matters not which party introduced it, or what other purpose he had in view in offering
it.” Inland Steel Co. v. Ilko, 103 N.E. 7, 9 (Ind. 1913); cf. Mirant Sugar Creek, LLC v.
Indiana Dep’t of State Revenue, No. 71T10-0803-TA-18, 2010 WL 2400436 at *3 (Ind.
Tax Ct. June 16, 2010) (allowing testimony by the respondent’s agent to be offered by
the petitioner against the respondent). As Section 17.2 says nothing about the
application of these principles, the Court must conclude that the legislature did not alter
them and that they continue to apply under Section 17.2.
evaluation of two appraisals exclusively against each other without regard for the burden of persuading the Board of the property’s true tax value. The Court’s references to an appraisal “standing alone and independent” is not a disallowance of competing evidence, but instead a requirement that the Board “determine (1) if the assessment is ‘more likely than not’ incorrect and (2) what alternative value is ‘more likely than not’ the true tax value of the property.” Kohl’s, 272 N.E.3d at 600.
14
It is no surprise that Section 17.2 is silent on the question raised by Nestlé.
Barring consideration of contrary evidence from an adverse party would neuter the
adversarial process altogether and lead to conflicting findings of fact. Reviewing
evidence from both parties when acting as a fact-finder is axiomatic in an adversarial
system and a fundamental part of the truth-seeking function inherent in the adjudicative
process. Courts and adjudicative bodies like the Board are not in the habit of siloing
evidence based on the identity of the party offering the evidence. A party is therefore
free to make their adversary’s case by admitting key facts or by offering other evidence
proving their point; a defendant who admits the elements of the plaintiff’s case on the
stand has no one to blame but himself. Cf. Peak v. Campbell, 578 N.E.2d 360, 361 (Ind.
1991) (“If an element [of the case] is admitted by the defendant, then the plaintiff no
longer has the burden of proving the admitted element.”). Moreover, siloing evidence
risks conflicting findings of fact where the one party’s evidence demands an inference
while the second party’s evidence demands the directly opposite inference (e.g., Party
A’s evidence requires an inference of a $1M assessment and Party B’s evidence
requires an inference of a $500k assessment). These challenges are in direct tension
with the fundamental structure of the adjudicative process and undermine its very
purpose.
This is not to say that the legislature could not have prescribed how the Board
was to weigh the evidence by statute. As the Supreme Court aptly explained in
Southlake II, the Board is a creation of the legislature and subject to its mandates. The
legislature is, of course, free to exercise its legislative authority as it chooses.
Southlake II, 174 N.E.3d at 180. It could have, subject to applicable constitutional
15
limitations, crafted Section 17.2 to limit the Board to looking only at the evidence of the
party with the burden in reaching its judgment as to that burden. Yet the text is silent on
that issue, and this Court may not read such a limitation into the text where one does
not exist. See Universal Health Realty v. Fluty, 144 N.E.3d 857, 862 (Ind. Tax Ct. 2020)
(clear, unambiguous statutory language “may not be expanded or contracted” by the
courts).
B. Nestlé did not meet its burden of proof because it did not meet the
burden of persuasion.
Regardless of whether Section 17.2 allows the Board to consider the Assessor’s
appraisal in evaluating whether Nestlé met its burden to prove the correct assessment,
Nestlé did not carry its burden of proof.
As noted by the Supreme Court in Southlake II, the legislature used the phrase
“burden of proof” in Section 17.2 and not “burden of production.” Southlake II, 174
N.E.3d at 180. The burden of proof includes both a burden of production and a burden
of persuasion. Id. This requires a party to both (1) “introduce enough evidence on an
issue to have the issue decided by the fact-finder,” id. at 180 (quoting BLACK’S LAW
DICTIONARY (11th ed. 2019)), and (2) “convince the fact-finder to view the facts in a way
that favors that party,” Burden of persuasion, BLACK’S LAW DICTIONARY 244 (11th ed.
2019). The burden of persuasion in property tax appeals is defined by statute and
requires proof to the level of a preponderance. See IND. CODE § 6-1.1-15-4(j) (2018);
Madison Cnty. Assessor v. Kohl’s Indiana, LP, 272 N.E.3d 592, 600 (Ind. Tax Ct. 2025).
Applied here, the preponderance standard required Nestlé to prove that its proffered
value more likely than not represented the value of the subject property. See Kohl’s,
272 N.E.3d at 600.
16
In its final determination, the Board, as the finder of fact, found that Nestlé
satisfied the burden of production by presenting a minimally credible valuation but did
not satisfy its burden of persuasion. (Cert. Admin. R. at 3024–25 ¶¶ 90–91.) That
distinction is decisive. A party does not carry its burden of persuasion merely by offering
credible evidence; it must persuade the trier of fact that its proposed assessment value
is more likely than not correct. See Kohl’s, 272 N.E.3d at 600–01 (an appraisal’s
“analysis and conclusions of value must stand on their own . . . [and] convince the finder
of fact to the level of a preponderance”; conclusory assertions of credibility “are not
enough”). Weighing the evidence in the record, the Board found that the most
persuasive assessment value was proffered by the Assessor’s appraisal, but that this
value was different from the original assessment. (Cert. Admin. R. at 3024–25 ¶¶ 88–
90.) Persuaded that the valuation presented by the Assessor more likely than not
represented the value of the subject property, the Board concluded that Nestlé failed to
meet its burden of proving the correct assessment. (Cert. Admin. R. at 3024–25 ¶¶ 90–
92 & n.11, 3026 ¶ 94.)
Even if the Board had set aside the Assessor’s appraisal entirely, Nestlé’s
evidence would not require the Board to adopt Nestlé’s appraisal valuation, as the
Board’s findings repeatedly note the lack of persuasive value in Nestlé’s appraisal. In its
final determination, the Board found Nestlé’s sales comparison approach “minimally
credible” and the appraisal’s conclusions to be “sufficiently supported (albeit barely).”
(Cert. Admin. R. at 3001 ¶ 33.) It concluded that Nestlé’s reconciled value was
“supported by only one reliable approach, the sales-comparison approach” and that
“th[e] approach [was not] particularly persuasive given the data presented.” (Cert.
17
Admin. R. at 3024 ¶ 88.) The Board found that Nestlé’s appraiser did not develop an
independent land value, meaning his cost approach was incomplete. (Cert. Admin. R.
at 3022–23 ¶ 84.) Likewise, it found that Nestlé’s appraiser failed to adequately support
his five percent functional-obsolescence adjustment with objective evidence,
demonstrated a lack of understanding of the case study underlying his external
obsolescence adjustment, and omitted critical supporting data for these adjustments
from his work file. (Cert. Admin. R. at 3000–01 ¶ 31.) The Board noted that Nestlé’s
comparable sales were mostly much older than the subject property and that its
appraiser even concluded that all but one were inferior to Nestlé’s property. (Cert.
Admin. R. at 3001 ¶ 32.) The Board took issue with the appraiser’s large adjustments to
leased comparables without analyzing whether those properties were leased at market
rent, concluding that those adjustments were “suspect at best.” (Cert. Admin. R. at
3024 ¶ 86.) And, finally, the Board expressed skepticism with Nestlé’s choice not to
develop an income approach at all. (See Cert. Admin. R. at 3001 ¶ 33.)
A finding of credibility is not a finding of persuasiveness as evidenced by the
Board’s findings that both appraisers presented credible estimates of value. (See Cert.
Admin. R. at 3001 ¶ 33, 3016 ¶ 68.) The Board’s half-hearted determination that
Nestlé’s appraisal is “minimally credible” in no way requires a finding of persuasive
value; on the contrary, the deficiencies identified in the appraisal are enough, on their
own, to support the Board’s conclusion that Nestlé’s appraisal is unpersuasive. The
Board’s conclusion rests on findings the Board made about Nestlé’s appraisal on its
own terms, not in comparison with competing evidence. Because neither party carried
its burden of persuasion, as articulated in Section 17.2, for the 2019 through 2021
18
assessment years, the Board correctly reverted the assessment to the value the Board
determined for 2018. 2
C. The Assessor waived its structural-improvements exclusion
argument by failing to raise it before the Board.
The Assessor first contends that the burden-shifting provision of Section 17.2
should not have been applied to the 2019 to 2021 tax years because the assessment
was based on structural improvements that qualified for a statutory exception. He claims
that the increase in the 2019 assessment was attributable to the ASRS addition
completed in 2018 and that such an improvement prevents the burden from shifting
under Indiana Code § 6-1.1-15-17.2(c). 3 The application of the burden-shifting rule to
the Assessor in this case is consequential—if the Assessor were relieved of the
exactitude required by the burden of proof in Section 17.2, then the Assessor’s
appraisal might well have been accepted. The Court disagrees with the Assessor.
The Assessor waived this exception by failing to raise it before the Board.
Generally, the Tax Court is “bound by the evidence and issues raised at the
administrative level,” meaning that any issue not raised before the Board is waived and
“may not be considered by the Court.” Kosciusko Cnty. Assessor v. Dalton Corp.,
158 N.E.3d 1286, 1291 (Ind. Tax Ct. 2020) (citation omitted); IND. CODE § 33-26-6-3. At
2
Nestlé also claims that the Board exceeded its authority and made the Assessor’s argument for it. The decisions Nestlé invokes condemn other, broader practices like the Board’s supplying evidence, legal theory, or arguments that a party failed to provide. See CVS Corp. #2519-01 v. Prince, 149 N.E.3d 323, 328 (Ind. Tax Ct. 2020); Long v. Wayne Twp. Assessor, 821 N.E.2d 466, 471 (Ind. Tax Ct. 2005). Here, the Board did none of this. It simply weighed evidence that both parties placed in the record and discharged its duty, as trier of fact, to determine the relevance and weight of that evidence. See IND. CODE § 6-1.1-15-4(p); 52 IND. ADMIN. CODE 2-7-2(c) (2018).
3
An automated storage and retrieval system (ASRS) is a series of steel racks with a protective covering that holds palletized products and uses automated cranes traveling along the racks to store and retrieve pallets. (Cert. Admin. R. at 0233, 0498, 1504–05, 1540–41.)
19
the outset of the hearing, the administrative law judge invited argument on the burden of
proof, and the Assessor concurred that Nestlé bore the burden without asserting any
exception. (Cert. Admin. R. at 3032–33.) The Assessor acknowledged the same at oral
argument. (Oral Arg. at 59.) The Board was not obligated to construct, on its own
initiative, an exception the Assessor neither asserted nor supported. See CVS,
149 N.E.3d at 327.
D. The Assessor had an adequate opportunity to address the correct
application of the burden-shifting statute before the Board.
The Assessor also argues that it lacked notice and a fair opportunity to address
the application of Section 17.2 to the 2019 through 2021 assessment years because the
Board allocated the burden to Nestlé at the hearing and only later, in its final
determination, shifted the burden to the Assessor for those years. (See Resp’t Br. at
10–13.) The Assessor disclaimed any constitutional due-process challenge at oral
argument, confirming that it was not making a due-process claim. (Oral Arg. at 58.) The
Court therefore confines its analysis to the Assessor’s statutory and procedural
argument. So confined, the argument fails.
The operation of the burden-shifting statute is a matter of law, and its application
to multi-year challenges before the Board has been made clear by this Court. When
determining whether an assessment increase triggers a burden shift, Indiana Code
§ 6-1.1-15-17.2(a) explains that the prior year’s assessment “as determined by the
reviewing authority” should be used to calculate the change. As this Court explained in
Marion Cnty. Assessor v. Square 74 Assocs., LLC, the plain language of Section 17.2
places no timing restriction on this determination by the reviewing authority, meaning
that a determination made for a prior year during an appeal should be used when
20
performing the statutory inquiry for the following year during that same appeal. 228
N.E.3d 542, 548–49 (Ind. Tax Ct. 2024). Such an approach is consistent with the goal of
judicial economy, allowing for the resolution of multi-year disputes with a common issue
in a single appeal. Id. at 549. One consequence of such efficiency is the
interdependence of the burden allocation for a given tax year and the Board’s
assessment determination for the prior year. This interdependence is inherent in a
consolidated, multi-year posture like the one accepted by both parties in their joint case
management plans in this case. (See Cert. Admin. R. at 81–84, 96–99, 116–120.) The
Board’s preliminary allocation of the burden at the hearing could not bind its ultimate
allocation, which could not be fixed until the prior-year values were determined.
The Assessor presented evidence for every year under appeal and had a full
opportunity to do so. The administrative law judge even invited argument on the burden
of proof and the parties chose not to examine the issue further. (Cert. Admin. R. at
3032–33.) That the Assessor, in hindsight, might have marshaled its proof differently is
a matter of litigation strategy, not a deprivation of a fair opportunity to be heard. This
Court’s guidance from Square 74 was published prior to the Board’s hearing, and the
Assessor should have anticipated the possibility that the burden could change in
subsequent years based on the evidence. Compare Square 74, 228 N.E.3d 542
(opinion issued February 14, 2024), with (Cert. Admin. R. at 2989 ¶ 6) (Board hearing
began July 29, 2024). The Court declines to remand on this ground.
II. The Board did not abuse its discretion when evaluating the subject
property’s use and based its findings on substantial evidence.
Nestlé frames its remaining challenge as a single, multi-faceted claim of the
Board “fail[ing] to give weight to the evidence presented by Nestlé and adopt[ing] the
21
values in the Assessor’s [a]ppraisal in contravention of Indiana’s [true tax value]
([market value-in-use]) standard.” (Pet’r’s Br. at 13.) However, this challenge is
appropriately understood as two different claims: first, that the Board abused its
discretion by failing to correctly apply the market value-in-use standard when evaluating
the parties’ evidence of the subject property’s use; and, second that the Board failed to
support several of its findings with substantial evidence. The Court will address each of
these claims in turn.
A. The Board did not err in finding that the Assessor’s comparable
sales reflected the subject property’s current use.
Nestlé argues that the Board erred by adopting the values in the Assessor’s
appraisal, which Nestlé believes identified the subject property’s use too broadly.
(Pet’r’s Br. at 13, 15–18.) In Nestlé’s view, that overbroad identification led the
Assessor’s appraiser to draw from too broad a market when selecting comparable
sales, which negatively affected his obsolescence analysis and each of his three
valuation approaches. (Pet’r’s Br. at 15–18; Oral Arg. 7–8, 13–14, 85.) Nestlé argues
that, by crediting the Assessor’s appraisal as the most persuasive evidence of value,
the Board effectively adopted the flawed conception of use running through it. Nestlé
advances two specific claims in support of this contention. First, it argues that the
Board’s acceptance of the Assessor’s sales comparison approach “runs afoul” of
Indiana Code § 6-1.1-31-6(d). 4 (Pet’r’s Br. at 15.) Second, it argues that the comparable
4
Nestlé frames part of this argument in terms of highest and best use, contending that its appraiser’s identification of the property’s highest and best use as continued use as an industrial food processing and distribution facility “directly aligns” with Indiana market value-in-use standard. (Pet’r’s Br. at 15.) However, the Board made no independent findings of highest and best use; the phrase appears in its final determination only in its description of Nestlé’s appraisal. (See Cert. Admin. R. at 2993 ¶ 18.) A property’s highest and best use has a limited relationship with its market value-in-use: if the property’s current use is consistent with its
22
sales used in the Assessor’s sales comparison approach valuation do not meet the
standard for similarity required by Indiana law.
The Court is satisfied that the Board’s determination regarding the similarity of
the comparable sales used by the Assessor’s appraiser in his sales comparison
approach is not an abuse of discretion and is supported by substantial evidence. An
abuse of discretion requires a finding that the Board’s decision is clearly against the
logic and effect of the facts and circumstances before it or a misinterpretation of the law.
Hubler Realty Co. v. Hendricks Cnty. Assessor, 938 N.E.2d 311, 315 n.5 (Ind. Tax Ct.
2010). The Board’s findings are supported by substantial evidence if “more than a
scintilla” of evidence supports the findings so that a reasonable mind might accept it as
adequate to support a conclusion. Starke Cnty. Assessor v. Porter–Starke Servs., Inc.,
88 N.E.3d 814, 820 (Ind. Tax Ct. 2017). Here, the Board determined that the Assessor’s
sales comparison approach was probative and credible though “not particularly
persuasive” because of the lack of “compelling data” on comparable sales. (Cert.
Admin. R. at 3016 ¶ 65, 3023–24 ¶ 86.) Nestlé’s challenge amounts to a claim that the
Board’s finding—that the Assessor’s comparable sales reflected the subject property’s
current use—is inconsistent with the evidence in the record. After review, the Court
finds that the evidence reasonably supports the Board’s conclusions.
highest and best use, and there are regular exchanges within its market so that ask and offer prices converge, the property’s market value-in-use will equal market value because the sale price fully captures the property’s utility. Millennium Real Estate Inv., LLC v. Benton Cnty. Assessor, 979 N.E.2d 192, 196 (Ind. Tax Ct. 2012). Outside that circumstance, highest and best use is an inquiry directed to market value, not to the current use that governs market value-inuse. The Court therefore has no occasion to decide whether “industrial” or “industrial food processing” is the correct label for the subject property’s highest and best use.
23
Real property in Indiana is assessed at its “true tax value,” which the legislature
has directed the Department of Local Government Finance to define in Indiana Code
§ 6-1.1-31-6(f). True tax value is neither fair market value nor the value of the property
to the user. IND. CODE § 6-1.1-31-6(c), (e) (2018). True tax value is instead defined as
market value-in-use or the value of a property for its current use, as reflected by the
utility received by the owner or by a similar user. 2021 REAL PROPERTY ASSESSMENT
MANUAL (“Manual”) (incorporated by reference at 50 IND. ADMIN. CODE 2.4-1-2) at 2.
Unlike market value, which reflects the price a property would fetch in an open market
regardless of its use, market value-in-use is “the price that would induce the owner to
sell the real property, and the price at which the buyer would purchase the real property
for a continuation of use of the property for its current use.” Manual at 2 (emphasis
added). Thus, unlike market value which seeks to ascertain the price a property would
fetch in the open market, market value-in-use seeks to ascertain the price a property
would command for the use to which it is currently being put.
For purposes of assessment, this Court has long construed current use broadly
when evaluating comparable uses. Howard Cnty. Assessor v. Kohl’s Indiana LP, 57
N.E.3d 913, 918 (Ind. Tax Ct. 2016). Properties used for “the same general purpose”
are understood to deliver the same utility. Stinson v. Trimas Fasteners, Inc., 923 N.E.2d
496, 501 n.10 (Ind. Tax Ct. 2010). “[T]he Court has repeatedly rejected the contention . .
. that a property’s market value-in-use can only be measured in relation to other
identical users and not in relation to participants within [a] market generally.” Marion
Cnty. Assessor v. Washington Square Mall, LLC, 46 N.E.3d 1, 9 (Ind. Tax Ct. 2015).
24
Identifying whether a property’s current use is sufficiently similar to the use of
another is a case-specific inquiry that requires a fact-finder to compare the utility
received for a specific use of a given property. See Majestic Props., LLC v. Tippecanoe
Cnty. Assessor, 241 N.E.3d 642, 645 (Ind. Tax Ct. 2024). A valuation does not reflect
true tax value if the purportedly comparable sales “have a different market or submarket
than the current use of the improved property based on a market segmentation
analysis” conducted in conformity with generally accepted appraisal principles. IND.
CODE § 6-1.1-31-6(d).
In its determination, the Board correctly applied these legal standards to the facts
in this case to determine that the Assessor’s appraisal did not violate Indiana Code
§ 6-1.1-31-6(d). Nestlé had argued to the Board that the Assessor’s sales comparison
approach ran afoul of Section 6-1.1-31-6(d) because the Assessor’s appraiser used
sales of food distribution and warehouse properties rather than food processing or
manufacturing properties. (Cert. Admin. R. at 3021 ¶ 81; see Cert. Admin. R. at 2952–
53, 2962.) It argued that its own appraiser’s non-food-processing comparables were
acceptable because they were cold storage facilities with physical characteristics similar
to the subject property. (Cert. Admin. R. at 3021–22 ¶ 81.) As noted above,
Section 6-1.1-31-6(d) excludes sales of purportedly comparable properties that compete
in a different market or submarket than the subject property. See IND CODE
§ 6-1.1-31-6(d). In considering Nestlé’s argument, the Board concluded that the
properties the Assessor’s appraiser selected as comparables do compete in the same
market as the subject property and therefore satisfy the statute. (Cert. Admin. R. at
3022 ¶ 82.) The Board based its conclusion on the fact that “similar users to Nestlé
25
would consider purchasing non-food processing facilities and converting them to their
use.” (Cert. Admin. R. at 3022 ¶ 82.) It also relied on the fact that both appraisers used
the “same sale of a food distribution facility” and that “both appraisers agreed that it was
acceptable to use comparables beyond food manufacturing or processing facilities.”
(Cert. Admin. R. at 3022 ¶ 82.) Nestlé points to testimony from its appraiser that food
processing and manufacturing facilities do not compete in the same market as general
manufacturing facilities because they have different physical characteristics. (See Cert.
Admin. R. at 3330–32.) The presence of competing testimony, however, does not
compel a different conclusion in this case. The facts relied upon by the Board are
capable of supporting the inference that the two types of properties do compete in the
same market. The Board was well within its discretion to weigh the evidence as it did
and accept the view advanced by the Assessor’s appraiser over the one advanced by
Nestlé’s.
As to Nestlé’s second claim, the Board’s finding that the Assessor’s sales
comparison approach was probative and credible, if not very persuasive, is consistent
with the evidence. The Assessor’s six comparable sales included five used for food
distribution, food packaging production, ethanol and sugar or sweetener production, or
beverage manufacturing and distribution, and one used for general industrial
manufacturing. (Cert. Admin. R. at 3007 ¶ 46.) That “similar users to Nestlé would
consider purchasing non-food processing facilities and converting them to their use”
(Cert. Admin. R. at 3022 ¶ 82,) more than supports a finding of comparability under
Indiana’s broad use standard. It suggests that non-food processing facilities can offer
26
similar utility to users like Nestlé, meaning such comparables cannot be categorically
excluded.
Similarity is measured based on the comparative utility for each use. See
Majestic Properties, 241 N.E.3d at 645. Adapting non-food processing facilities to the
needs of users like Nestlé may require significant renovations to accommodate the
specific use of food processing. But this was accounted for by the Assessor’s appraiser
through adjustments to his comparable sales for factors such as office space, clear
height, docks, HVAC, and functional utility. (See Cert. Admin. R. at 3008 ¶ 47.)
Adjustments like these are why property valuation is seen as a matter of forming
opinions, rather than an exact science. See Washington Square Mall, LLC, 46 N.E.3d at
11–12. Adjustments, even those based on strong data, are hypotheticals requiring
reliance on assumption and extrapolation, which in turn supports the Board’s hesitation
to assign much persuasive weight to the comparables despite finding them probative
and credible. The presence of contrary testimony from Nestlé’s appraiser regarding
comparability simply created an issue of fact for the Board to resolve. The evidence in
the record does not dictate a different result.
B. The Board’s findings are supported by evidence and align with the
facts and circumstances in the record.
Nestlé contends that several issues exist with the Board’s analysis of the two
appraisals in this case. Nestlé contends that the Board erred in its evaluation of Nestlé’s
land valuation, functional obsolescence, external obsolescence, sales comparison
approach, lack of an income approach, and evaluation of appraiser expertise. For
appeals such as this, the Board is the trier of fact and must determine the relevance and
weight to be assigned to the evidence before it. See IND. CODE § 6-1.1-15-4(p); 52 IND.
27
ADMIN. CODE 2-7-2(c). The Court may not substitute its judgment for the Board’s by
reweighing the evidence or reassessing the credibility of witnesses. Chevrolet of
Columbus, Inc. v. Bartholomew Cnty. Assessor, 230 N.E.3d 400, 403 (Ind. Tax Ct.
2024). The Court finds no reason to set aside the Board’s determination on any of these
grounds and will address each of Nestlé’s claims in turn.
1. Land Valuation
Nestlé argues that the Board abused its discretion in finding that Nestlé’s
appraiser did not value the subject property’s land and finding that the omission
undercut the reliability of his cost approach and his credibility. (Pet’r’s Br. at 18–20.)
Nestlé contends that its appraiser did value the land because “[h]e undertook significant
research of land sale comparables and discussed them at the hearing.” (Pet’r’s Br. at
19.) But despite this review and testimony, the record supports the Board’s finding.
The Board’s findings were not “clearly against the logic and effect of the facts
and circumstances before it.” Hubler Realty, 938 N.E.2d at 315 n.5 (stating the abuse of
discretion standard). Nestlé’s appraiser did not present an independent analysis
regarding the value of the land, which he explicitly acknowledged in his testimony to the
Board:
So while I guess there as an indication that I didn’t do a land valuation, we
didn’t have or I didn’t have a problem with the value that the Assessor had
applied to the property, so therefore, I think we concurred with the value
that the Assessor has on the land.
(Cert. Admin. R. at 3062.) While Nestlé’s appraiser did discuss comparable land sales
in his testimony before the Board, he did not include that review or the accompanying
analysis in his appraisal report or present sufficient detail in his testimony to permit the
28
Board to evaluate his conclusion. (See Cert. Admin. R. at 253, 3061–61, 3492–96.) In
his appraisal report, Nestlé’s appraiser merely says:
Based upon my analysis of the market and considering the Madison
County Assessor's estimate of land value, I concur with the land value
estimate of $3,916,500, or $21,358 per acre. Therefore, no appeal of the
land value estimate [is warranted] for the purpose of this appraisal and the
value estimate contained herein.
(Cert. Admin. R. at 253.) Statements unsupported by probative evidence are conclusory
and of little use to the Board. See, e.g., Marinov v. Tippecanoe Cnty. Assessor, 119
N.E.3d 1152, 1156 (Ind. Tax Ct. 2019) (noting generalized statements without
supporting evidence are merely conclusory and are not sufficient to overturn an
assessment). Taken together, the evidence does not compel a different conclusion than
the one the Board reached. The lack of analysis and supporting data, especially in light
of the Assessor’s independent land valuation indicating that the current land
assessment was approximately forty-five percent too low in 2018, (Cert. Admin. R. at
3023 ¶ 84,) firmly supported the Board’s conclusion.
2. Functional Obsolescence 5
Nestlé argues that the Board abused its discretion by finding that Nestlé’s
appraiser did not adequately support his five percent functional-obsolescence
adjustment factor. In his appraisal report, Nestlé’s appraiser explained that he arrived at
his functional-obsolescence adjustment factor based on interviews with “a number of
brokers from several national real estate firms throughout the U.S.” (Cert. Admin. R. at
256.) The Board agreed that the property suffers functional obsolescence, but it found
5
"Functional obsolescence is either a physical element that buyers are unwilling to pay for or a deficiency that impairs the utility of a property when compared to a more modern replacement, leading to a loss in value . . . . It is caused by factors internal to the property and is evidenced by conditions within the property.” Inland Steel Co., 739 N.E.2d 201 (Ind. Tax Ct. 2000).
29
the appraiser’s five percent quantification poorly supported, observing that vague
references to brokers’ opinions carry little weight, particularly when set against
objectively verifiable evidence. (Cert. Admin. R. at 3000 ¶ 31.) The Court is
unpersuaded that the Board’s decision was against the logic and effect of the facts
before it.
The Board was well within its discretion to conclude that Nestlé’s obsolescence
adjustment was not well supported. The record is consistent with the Board’s
characterization of the facts: the appraiser’s report attributes the figure to interviews with
brokers at several national firms and to a review of building height multipliers, without
tying the resulting percentage to verifiable market data. (See Cert. Admin. R. at 256,
296, 3168–69.) Nestlé’s appraiser testified that these interviews were simply “general
discussions” with the brokers about the “perceptions of buyers” based on their “years of
discussion[s] . . . on these types of properties.” (Cert. Admin. R. at 1594–96.) Reports of
opinions expressed by other persons who are not witnesses before the Board are of
little value as they cannot be tested or evaluated. Here, Nestlé’s appraiser provided no
further data or analysis to support the opinions on which his functional-obsolescence
adjustment was based. The Board is the finder of fact and as such is empowered to
weigh the credibility and reliability of the evidence before it, which is precisely what it did
in reaching its conclusion.
30
3. External Obsolescence 6
Nestlé also challenges the Board’s finding that Nestlé’s appraiser failed to
sufficiently support his external-obsolescence conclusions. (Pet’r’s Br. at 22–25.)
Nestlé’s appraiser concluded that the subject property suffered fifty percent external
obsolescence, a figure derived from a case study of four food-processing sales that had
transacted at between roughly thirty-nine and fifty-four percent of their estimated
depreciated replacement cost. (Cert. Admin. R. at 2996 ¶ 24.) The Board took issue
with two aspects of the appraiser’s case-study analysis—the lack of supporting data for
the analysis and the comparability of the case-study data to other data used in the cost
approach estimate—and concluded that the external-obsolescence estimate was
unreliable and lacked credibility. (Cert. Admin. R. at 3000–01 ¶ 31.) Nestlé responds
that providing the underlying appraisal work file for the case study is not required by
appraisal standards and that the Board categorically rejected Nestlé’s market-extraction
case-study technique. (Pet’r’s Br. at 24–25.) After reviewing each of these claims, the
Court finds no reason to disturb the Board’s findings.
Regarding the first concern, the Board was well within its discretion to accord
less weight to appraiser’s case-study analysis due to Nestlé’s failure to include
corroborating evidence in the record. The Board found that this failure diminished the
appraiser’s credibility because of the relatively large impact (50% decrease in value) of
the external-obsolescence adjustment on the study’s conclusions. (Cert. Admin. R. at
3000–01 ¶ 31.) Nestlé does not contest the Board’s conclusion that its appraiser did not
6
External obsolescence is a loss of value caused by factors external to the property, such as an oversupply of that type of property in the market, light or noise pollution, crime, or inharmonious land use. Meijer Stores Ltd. Partnership v. Smith, 926 N.E.2d 1134 (Ind. Tax Ct. 2010).
31
include all of the supporting data underlying his case-study analysis. (See Pet’r’s Br. at
25.) Instead, Nestlé points to the fact that inclusion of the underlying work file is not
required by appraisal standards and that the Board admitted the case study without the
underlying work file. (Pet’r’s Br. at 25.) But neither of these considerations affect the
Board’s ability to evaluate the credibility of the case study. Appraisal standards define
best practices for performing appraisals, while admissibility is fundamentally a question
of relevance. See Ind. Evid. R. 402. The Board’s credibility finding does not depend on
whether appraisal standards compel the inclusion of underlying work files or their
relevance to the matters to be proved; it is instead grounded in the Board’s judgment of
believability. See Evidence, BLACK’S LAW DICTIONARY 699 (11th ed. 2019) (defining
“credible evidence” as evidence “worthy of belief”). The absence of corroborating data
prevented the Board from reviewing and testing the analysis that resulted in the
appraiser’s conclusion. Analysis tends to become conclusory when it is not
accompanied by the data, assumptions, and methodology underlying it. It was
reasonable for the Board to find conclusory statements less believable.
Regarding Nestlé’s second concern, the Board’s finding about the reliability of
the external-obsolescence adjustment was consistent with the evidence before it. The
Board concluded that the external-obsolescence adjustment could not be reliably
compared to the replacement cost estimate for the subject property. (Cert. Admin. R. at
3000 ¶ 31, 3023 ¶ 85.) This is because the appraiser mixed apples and oranges in his
cost approach valuation by netting actual, property-specific costs from the properties in
his case study against general, market-wide averages of the subject property’s
replacement cost new drawn from the Marshall Valuation Service (MVS). (Cert. Admin.
32
R. at 2996 ¶ 24, 3000–01 ¶ 31; see Cert. Admin. R. at 546–47, 3306–07 (both
appraisers recognizing the generality of MVS data).) The Board found that this mixing of
two different types of data (ad hoc actuals and generalized estimates) significantly
diminished the reliability of the analysis because the appraiser “did not know whether
the actual cost estimates were similar or dissimilar to the MVS cost figures.” (Cert.
Admin. R. at 3000–01 ¶ 31.) The Board did not hold that a market-extraction case study
is an impermissible technique; it found Nestlé’s study unreliable for reasons rooted in
the appraiser’s own testimony.
Nestlé’s response to the Board’s critique reflects a misunderstanding of the
findings on which this case turns. Nestlé needed to convince the Board that two types of
data could be compared, but Nestlé instead focuses on the actual versus estimated cost
distinction, relying on an unstated premise that actual costs are per se more accurate
than estimated costs for the analysis its appraiser completed. (See Pet’r’s Br. at 23–25.)
The Board’s expressed concern, however, was not about the comparative accuracy of
estimated and actual costs; it was about comparing an obsolescence percentage
extracted by measuring a sale price against one property’s actual costs with a
replacement cost for the subject property drawn from estimates derived from broad
groups of market data. That Nestlé’s appraiser could not say whether the two sets of
figures were similar directly impacts the obsolescence adjustment because the size and
direction of that gap are unknown.
Despite Nestlé’s claim, the Board’s determination does not require an appraiser
to “perform an appraisal-level analysis of every comparable used in his report.” (Pet’r’s
Br. at 23 (quoting Cert. Admin. R. at 3001 ¶ 31).) It simply faulted Nestlé’s appraiser for
33
being unable to say whether the actual costs he used for the case-study properties were
comparable to the MVS figures he used for the subject property. Now, before this Court,
Nestlé has not identified any generally accepted appraisal principles to support its
appraiser’s analysis or otherwise explain how the two cost figures are comparable.
Failing that, there is no basis to overturn the Board’s conclusion here.
4. Sales Comparison Approach
Nestlé argues that the Board’s criticism of its appraiser’s sales comparison
approach is unsupported. It contends that his comparable sales were more physically
similar to the subject property than the Assessor’s and that he performed a comparative
analysis that the Board ignored. (Pet’r’s Br. at 26–28.) The Board found that Nestlé’s
comparable sales lacked similarity to the subject property, that they were older and
inferior to it, and that the appraiser’s “significant adjustments to the leased comparables
were largely unsupported” because he did not compare the lease rates to market rent.
(Cert. Admin. R. at 3001 ¶ 32.) The Court does not agree with Nestlé’s criticisms.
The record evidence is more than sufficient to support the Board’s findings that
the comparables were, on the whole, older and inferior to the subject property. Nestlé’s
appraiser’s own reconciliation of his sales comparables shows that his comparables
were built between 1958 and 2007, with effective ages ranging from fifteen to fifty years,
compared to an effective age of eighteen years for the subject property. (Cert. Admin.
R. at 295.) He confirmed in testimony that one comparable was built “30 years prior to
the date of construction for the subject” and that another, on which he had applied a
fifty-year effective age against the subject’s eighteen, was built in 1958 with additions
only through 1996. (Cert. Admin. R. at 3209, 3230–31.) Nestlé’s appraiser rated most of
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his fourteen comparables inferior to the subject property and adjusted their indicated
values upward accordingly—for submarket location, for land-to-building ratio, for age
and condition, for clear height, and for percentage of office space, treating one or two
comparables as similar or superior in each category. (Cert. Admin. R. at 293–97.)
Finally, Nestlé’s appraiser testified that his report did not compare the quality of his
comparables and the subject property, did not separately rate their condition, and made
percentage adjustments to the comparables “primarily based on subjective judgment.”
(Cert. Admin. R. at 3301–02.) Nestlé’s contrary evidence, including its appraiser’s
testimony about physical characteristics and his qualitative property rights adjustments,
does not compel a different finding. By raising these arguments that the Board has
already considered, Nestlé effectively asks this Court to weigh them differently. (See
Cert. Admin. R. at 2998 ¶ 28, 3001 ¶ 32.) The Court will not do so, and Nestlé’s
preference for a different weighing is not a ground for reversal.
5. Lack of Income Approach
Nestlé argues that the Board erred in faulting its appraiser for declining to
develop an income approach and in finding that choice inconsistent with the appraiser’s
reliance on leased, income-generating comparables. (Pet’r’s Br. at 28–30.) The premise
of Nestlé’s argument is that the Board was bound to accept its appraiser’s professional
judgment that market participants would not consider an income approach for a property
of this kind. The Board was not required to accept that judgment, and the record it
examined supports the finding it made instead.
The Board’s findings are supported most clearly by two facts in the record. First,
Nestlé’s appraiser relied on leased-fee sales in his own sales comparison approach,
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adjusting those sales downward because only leased-fee interests were acquired. (Cert.
Admin. R. at 290, 2998 ¶ 27, 3015–16 ¶ 66.) Second, the Assessor’s appraiser included
a fully developed income approach using comparable lease and rent data, including an
extensive market-rent analysis for one comparable that was sold subject to a lease.
(See Cert. Admin. R. at 3007 ¶ 47.) The Assessor’s appraiser expounded in his
testimony on his decision to complete an income approach, explaining that “there’s
market evidence out there that buyers and sellers do, in fact, acquire leased properties
or rent properties like this” and that “it’s typical market practice to consider income.”
(Cert. Admin. R. at 3383, 3456.) From these facts, in context, the Board found that data
from leased comparable facilities was considered by both appraisers and that “some
portion of market participants consider the income approach.” (Cert. Admin. R. at
3016 ¶ 66, 3024 ¶ 87.) While Nestlé’s appraiser testified that he did not develop an
income approach because “[b]ased on [his] experience and knowledge with these types
of properties, they do not lease,” (Cert. Admin. R. at 3226), the Board was not required
to find that testimony persuasive.
Nestlé’s appraisal and its appraiser’s testimony are sufficient evidence to support
the Board’s finding that the appraiser’s stated reason for omitting an income approach
was in tension with his own use of leased comparables. The Board did not hold that an
income approach must be completed in all appraisals; it found the explanation Nestlé’s
appraiser gave for declining to develop one—that properties like the subject do not
lease—difficult to reconcile with his reliance on leased-fee sales, and it weighed his
credibility accordingly. Nestlé offered explanations for its appraiser’s choices, but again,
those explanations were before the Board, which was entitled to weigh them and to find
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them incapable of resolving the tension in the position of Nestlé’s appraiser. An expert’s
opinion does not compel the fact-finder to adopt it. Despite this list of grievances, Nestlé
remains unable to show that its complaints amount to more than requests to reweigh
evidence.
6. Appraiser’s Familiarity with Indiana Standards
Nestlé contends that the Board contradicted itself by recognizing its appraiser as
a skilled expert with significant experience in industrial property while discounting that
experience because of his limited familiarity with Indiana and the market value-in-use
standard. (Pet’r’s Br. at 19, 30–31.) In its final determination, the Board makes the
following finding:
[Nestlé’s appraiser] is a skilled expert with significant experience in the
appraisal of industrial property, though the value of this experience is
tempered somewhat by his lack of familiarity with Indiana and the market
value-in-use standard. In particular, his decision to rely on the current
assessment rather than develop his own independent land valuation
drastically undercuts the reliability of his cost approach.
(Cert. Admin. R. at 3000 ¶ 30.) The Board does not offer any other explanation for its
conclusion that Nestlé’s appraiser is unfamiliar with Indiana’s valuation standards. The
Court agrees that the Board’s finding was unsupported but finds the error harmless.
Nestlé’s argument here is more persuasive, as the failure to develop an
independent land value says little about its appraiser’s familiarity with Indiana law or
with the market value-in-use standard in particular. The Assessor identifies no other
evidence in the record substantiating the finding, and the record contains the
appraiser’s testimony describing a substantial history of appraising industrial properties
in Indiana and his understanding of the market value-in-use standard. (See Cert. Admin.
R. at 3046–47; 3125–27.)
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Nonetheless, Nestlé has not shown that this error was prejudicial, as required by
Indiana Code § 33-26-6-6(e). Only those errors that are likely to alter the outcome
warrant reversal. See Ciceu v. Knox Cnty. Assessor, 232 N.E.3d 662, 666–67 (Ind. Tax
Ct. 2024); accord Kohl’s, 272 N.E.3d at 602 (“An error is generally considered harmless
when it would not affect the outcome of the case.”). The Board’s conclusions rejecting
Nestlé’s appraisal are well-supported by its critique of its substantive analysis and
evidentiary shortfalls. As explained above, the Board separately found the cost
approach incomplete due to the lack of an independent land valuation, the lack of
support for obsolescence adjustments, dissimilar and inferior comparable sales,
unsupported leased-comparable adjustments, and the lack of an income approach.
Each of those findings rests on evidence in the record and stands independently of any
finding by the Board about the familiarity of Nestlé’s appraiser with Indiana law. Nestlé
has not shown that setting this one finding aside would require a reevaluation of the
Board’s conclusion of value. The error is therefore harmless, and the Court will not
remand on this basis.
CONCLUSION
The final determination of the Indiana Board of Tax Review is therefore
AFFIRMED.
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