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Brian and Sarah Shapiro own a one-story residence situated on an acre of land in Hamilton County, Indiana.  Mrs. Shapiro also owns a residence in Leelanau County, Michigan.  During the 2017 through 2020 tax years, the Shapiros’ Indiana property received a homestead deduction.  In addition, Mrs. Shapiro’s Michigan property received the Michigan Principal Residence Exemption (the “PRE”).

In November 2020, the Hamilton County Auditor notified the Shapiros that she was conducting an audit to ensure their Indiana property was eligible for the homestead deduction during the 2017 through 2019 tax years.  In December of 2020, the Auditor determined that the Shapiros’ Indiana property was ineligible for the homestead deduction because it was not their principal place of residence.  Accordingly, the Auditor assessed the Shapiros with an additional property tax liability and a 10% civil penalty for each of those tax years.  The Auditor also revoked the Shapiros’ homestead deduction for the 2020 tax year.

The Shapiros subsequently sought review first with the Hamilton County Property Tax Assessment Board of Appeals and then with the Indiana Board of Tax Review.  During the Indiana Board proceeding, the parties disputed whether the revocations of the Shapiros’ homestead deductions were proper because the Indiana homestead deduction and the Michigan PRE were “equivalent” for purposes of Indiana Code § 6-1.1-12-37(f).  On February 2, 2022, the Indiana Board issued its final determinations that concluded the revocations of the Shapiros’ 2017 through 2020 homestead deductions were proper because the Indiana homestead deduction and the Michigan PRE were “substantially similar.” 

On appeal, the Shapiros claim that the Indiana Board’s final determinations must be reversed because the Indiana Board misconstrued the term “equivalent,” as used in Indiana Code § 6-1.1-12-37(f), by equating it to the phrase “substantially similar” under Indiana Code § 6-1.1-12-37(n).  The Shapiros further contend that because the Indiana homestead deduction and the Michigan PRE are not equivalent, the revocations of their 2017 through 2020 homestead deductions were improper.

Oral argument will be held remotely via videoconference.

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