Background
Nestlé challenged six years of assessments on its approximately one-million-square-foot Anderson manufacturing facility. The property occupies about 183 acres and combines food-grade manufacturing, general manufacturing, warehouse, office, utility, dock, and refrigerated-storage space. For tax years 2018 through 2023, the assessments ranged from roughly $48.6 million to $54.2 million. Nestlé’s appraisal produced values between $31.5 million and $33.9 million, while the Madison County Assessor’s appraisal ranged from $48 million to $57 million.
The Indiana Board of Tax Review found the Assessor’s appraisal more persuasive. It credited that appraisal’s cost, sales-comparison, and income approaches, while identifying multiple weaknesses in Nestlé’s work: no independent land valuation, inadequately supported obsolescence adjustments, older and generally inferior comparable properties, substantial adjustments to leased comparables without a market-rent analysis, and no income approach. The Board nevertheless could not adopt the Assessor’s appraisal for every year because former Indiana Code section 6-1.1-15-17.2 imposed a special burden framework when assessments increased by more than five percent.
For 2019 through 2021, the Board concluded that the Assessor did not prove the challenged assessment with the exactness the former statute required and that Nestlé also failed to prove its proposed value by a preponderance. It therefore reverted those years to the assessment determined for the prior year. It adopted the Assessor’s evidence for 2018, 2022, and 2023. Nestlé appealed the evidentiary analysis, and the Assessor argued alternatively that a structural-improvement exception prevented burden shifting and that the procedure deprived it of a fair chance to respond.
The Court’s Holding
The Indiana Tax Court affirmed the Board in full. Judge McAdam held that former section 17.2 allocated burdens and prescribed reversion to the prior year when neither side met its burden, but did not require the Board to isolate each party’s evidence. An assessor’s appraisal may fail to prove that the precise assessment is correct yet remain probative of the property’s value. Because the statute did not displace the ordinary adjudicative rule that a factfinder considers all relevant evidence regardless of who introduced it, the Board could weigh the Assessor’s appraisal when deciding whether Nestlé carried its own burden.
The court also distinguished the burden of production from the burden of persuasion. A minimally credible appraisal may be enough to place valuation before the factfinder without persuading it that the proposed number is more likely than not the property’s true tax value. The Board’s detailed criticisms of Nestlé’s appraisal supported its finding that Nestlé met the former but not the latter. Because neither party met the statutory burden for 2019 through 2021, reverting to the prior-year value was correct.
The Assessor’s alternative arguments also failed. The Assessor waived the structural-improvement exception by not presenting it to the Board when the administrative law judge invited burden arguments. And the Assessor had a fair opportunity to submit evidence for every year; in a consolidated multi-year appeal, the final burden allocation can depend on the value determined for the preceding year. On valuation, substantial evidence supported the Board’s conclusion that the Assessor’s comparables reflected the property’s current use under Indiana’s market-value-in-use standard. One unsupported comment about Nestlé’s appraiser’s familiarity with Indiana law was harmless because the Board’s other appraisal criticisms independently supported the result.
Key Takeaways
- Under former section 17.2, burden shifting did not force the Board to evaluate each party’s appraisal in an evidentiary silo.
- An appraisal can satisfy the burden of production yet fail the burden of persuasion when its methodology and support do not establish the proposed value by a preponderance.
- Assessors must preserve statutory exceptions before the Board, and parties in multi-year appeals should anticipate that one year’s determination may change the next year’s burden allocation.
Why It Matters
The decision is an important guide to Indiana’s distinctive property-tax appellate process even though section 17.2 was repealed and replaced for later tax years. Older assessment disputes remain governed by the former statute, and the opinion clarifies that its burden rules change who must persuade the Board and what happens if neither side does; they do not alter the Board’s basic truth-seeking role. Parties cannot obtain a favorable valuation merely because the opposing appraisal misses the exact challenged assessment.
Practitioners should build appraisal records with the burden of persuasion in mind. Independent land values, supported obsolescence calculations, market-grounded lease adjustments, appropriate valuation approaches, and genuinely comparable properties all matter. The case also underscores the need to raise burden exceptions at the administrative hearing and to plan consolidated appeals year by year. A persuasive objection saved for the Tax Court will ordinarily be too late.