Kellam v. Fountain County Assessor
2013 WL 6455915, 999 N.E.2d 120, 2013 Ind. Tax LEXIS 30 (2013)
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Rule of Law:
An unmarried co-owner's eligibility for a homestead deduction is determined individually and is not automatically negated by the ineligibility of the other co-owner. A property qualifies as a 'principal place of residence' based on the owner's intent to return, not on their continuous physical presence.
Facts:
- In July 2009, Roderick E. Kellam and Carol Myers, who are not married, jointly purchased a house in Fountain County.
- On July 16, 2009, they visited the Fountain County Auditor's office to apply for tax deductions.
- An employee instructed Kellam and Myers to only sign the homestead deduction application, stating the office would complete the rest; as a result, they did not disclose their other properties on that form.
- In contrast, they were instructed to fully complete the mortgage deduction application, on which they did list their respective properties in Wells County (Kellam) and Grant County (Myers).
- Kellam had a homestead deduction on his Wells County property for the 2010 tax year, and Myers had one on her Grant County property for the same year.
- The Fountain County house was undergoing major renovations, during which time Kellam stayed next door with Myers' parents.
- After being notified of the issue, Kellam successfully had the 2010 homestead deduction removed from his Wells County property and paid the resulting additional tax.
- Despite Kellam removing his other deduction, the Fountain County Auditor ultimately denied the deduction for the Fountain County property because his co-owner, Myers, still had a homestead deduction on her Grant County residence.
Procedural Posture:
- The Fountain County Treasurer sent Kellam a 'Correction of Error' notice and a new tax statement removing the homestead deduction for the 2010 tax year.
- Kellam filed a Petition for Correction of an Error with the Fountain County Property Tax Assessment Board of Appeals.
- The Fountain County Board denied Kellam's petition.
- Kellam, as appellant, appealed the denial to the Indiana Board of Tax Review.
- The Indiana Board conducted a hearing and issued a final determination denying the deduction.
- Kellam, as appellant, filed an original tax appeal in the Indiana Tax Court, seeking review of the final determination of the Indiana Board, the appellee.
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Issue:
Does an unmarried individual who co-owns property become ineligible for a homestead standard deduction on that property simply because their co-owner is ineligible due to having a homestead deduction on another property?
Opinions:
Majority - Wentworth, J.
No. An unmarried co-owner's eligibility for a homestead deduction must be assessed individually, and one co-owner's ineligibility does not automatically disqualify the other. The Indiana Board's denial of Kellam's deduction was unsupported by evidence and contrary to law. First, the law allows an 'individual' to obtain a homestead deduction, and while Kellam and Myers could not claim one together as an unmarried couple, Kellam's individual eligibility remained. Second, the Board's finding that Kellam received a deduction on his Wells County property in 2010 was unsupported by substantial evidence, as Kellam proved he had the deduction removed and paid the back taxes, with no contradictory evidence from the Assessor. Finally, the Board's conclusion that the property was not Kellam's 'principal place of residence' was contrary to law because the legal standard is the 'intention of returning after an absence,' not continuous physical presence. Kellam demonstrated his intent through his mailing address, voter registration, and driver's license, and his absence was explained by the renovations.
Analysis:
This decision clarifies the application of Indiana's homestead deduction for unmarried co-owners, establishing that each owner's eligibility is to be evaluated independently. It prevents tax authorities from imputing the ineligibility of one co-owner to another. The case also reinforces the legal definition of 'principal place of residence,' emphasizing that intent, proven through objective factors, is the key element rather than uninterrupted physical occupancy. This provides protection for homeowners who may be temporarily absent for legitimate reasons such as renovations, work, or military service.
