Overloading the 1% “Circuit Breaker”: The Indiana Tax Court Constitutionally Expands Curtilage

In its 2024 decision, Sawlani v. Lake County Assessor, the Indiana Tax Court reviewed the constitutionality of the Indiana General Assembly’s statutory limit of the constitutionally prescribed 1% tax cap to only one acre of land—curtilage—surrounding the taxpayer’s principal place of residence. The Tax Court held the legislature’s limitation unconstitutional, finding no verbiage in the relevant constitutional provision that justified limiting the tax cap to just one acre. This Article critically examines the Court’s decision in Sawlani, arguing that the ruling represents a significant departure from established judicial principles and legislative intent, undermining the legislature’s authority and introducing uncertainty into Indiana’s property tax system. In rejecting the General Assembly’s clear and explicit definition of curtilage, the Court favored an ad hoc, case-by-case approach that conflicts with foundational principles of uniformity, predictability, and fairness in tax law. This Article also explores how this approach disregards the careful balance that must be struck between protecting homeowners from excessive taxation and ensuring the government can collect sufficient revenue to fund essential public services. Additionally, it delves into the Tax Court’s historical tendency to disregard legislative statutes and administrative regulations, substituting them with the court’s subjective views on how Indiana’s tax scheme should function. This pattern of judicial overreach is critically analyzed, emphasizing the risks it poses to the separation of powers and the integrity of Indiana’s tax system. Furthermore, this Article discusses how the Tax Court’s decision in Sawlani inadvertently nullifies the 1% tax cap entirely until the legislature enacts new operationalizing legislation, the nullification further encroaching on the legislature’s exclusive role in policymaking.