When it comes to assessment definitions and the confidentiality of tax audits, the Indiana code is in fairly good shape. However, there have been incidents that have raised the eyebrows of some Hoosier farmers. Indiana Farm Bureau’s goal for this legislative priority is therefore focused on ensuring that local officials follow current law.
Indiana Code (IC) 6-1.1-4-13 (titled “Agricultural land; assessment; soil productivity factors”) clearly covers the guidelines for the assessment or reassessment of agricultural lands. The law defines what is to be considered agricultural use such as land used for livestock or livestock products, commercial aquaculture, grains, timber, vegetables, nursery stock and a host of other uses. During previous sessions at the Statehouse, INFB members and staff worked to expand the definition of agricultural use in this law to its current language in order to protect farmers during assessment.
“We tried to expand the definition because some assessors want to categorize farmland that they may think is assessed too low to a higher land use classification,” said Katrina Hall, INFB director of public policy. “In Indiana, property is assessed based on its use, and that’s really the key consideration when determining the assessment of farmland.”
Even with the updated language in the code, there have been inconsistencies with the way some assessors are interpreting the law. Hall said there was one instance where the land under one INFB member’s hog barns was assessed as commercial industrial instead of farmland. She said that land can’t be used for anything other than the hogs; therefore, it should be assessed as farmland.
“There are assessors who are not sticking to the guidelines,” said Hall. “Basically, what we want the assessors to do is adhere to the law.”
Hall said when INFB members receive a notice of assessment, called a “Form 11,” they should not overlook it. If a tax bill or the value of farmland property changes drastically, she said, farmers need to immediately call or meet with the assessor to get an explanation. If a member feels like their farmland hasn’t been evaluated properly, Hall said they should file an appeal.
(An appeal begins with filing a Form 130, “Taxpayer’s Notice to Initiate an Appeal,” with the local assessing official. The appeal should detail the pertinent facts of why the assessed value is being disputed. Go to the State of Indiana's website to download forms and learn how to appeal an assessment.)
Indiana code also covers the confidentially of tax audits in IC 6-1.1-35-9. In summary, the code states that all information related to earnings, income, profits, losses and expenditures given to an assessing official, or an employee of that official, must be kept confidential.
In Delaware, Jay and Randolph counties, members raised concerns over how recent tax auditing sessions were conducted. Those counties introduced language to the resolutions committee calling for strictly confidential tax audits. The resolution was accepted during the 2017 INFB delegate session.
Aaron Chalfant, INFB district young farmer representative from Randolph County, experienced one of these less-than-confidential audits first hand. Chalfant said he was sitting at a desk going over the numbers for his operation with an auditor. He said about 10 feet away there was another farmer going over his financials with an auditor at another desk.
“I could hear some of the numbers being tossed around,” said Chalfant. “I was trying to not pay attention because I’m sure he wouldn’t want anybody other than himself and his wife to know the numbers. Just the fact that I could hear some of that stuff made me a little uncomfortable.”
Chalfant said that to his knowledge the situation in Randolph County has been corrected. However, it is still important to emphasize the need for confidential tax audits.
“The information about a farmer’s business is nobody else’s business,” said Hall. “Those details should remain private, as provided for by Indiana law.”