Indiana Administrative Code
Title 50 - DEPARTMENT OF LOCAL GOVERNMENT FINANCE
Article 27 - ANNUAL ADJUSTMENTS AND EQUALIZATION STANDARDS
Rule 5 - Annual Adjustment Process
Section 5-5 - Outlier ratios
Current through September 18, 2024
Authority: IC 6-1.1-4-4.5; IC 6-1.1-31-1; IC 6-1.1-31-12
Affected: IC 6-1.1-4-4.5
Sec. 5.
(a) Outlier ratios are very low or high ratios as compared with other ratios in the sample. One (1) extreme outlier can have a controlling influence over some statistical measures. Outlier ratios can result from an erroneous sale price, a nonmarket sale, unusual market variability, a mismatch between property sold and the property assessed, and other reasons listed in the IAAO Standard on Ratio Studies, Standard 5.2 (April 2013), as incorporated by reference in 50 IAC 27-1-4.
(b) The preferred method of handling an outlier ratio is to subject it to additional scrutiny to determine whether the sale is a nonmarket transaction or contains an error in fact. If the error can be corrected, for example, data entry error, the property should be kept in the sample. If the error cannot be corrected, if correction of the error would cause the identified outlier to no longer be representative of the population, or if inclusion of the identified outlier would reduce sample representativeness, the sale shall be excluded.
(c) For guidelines on outlier identification and trimming, the department requires that assessing officials follow the IAAO Standard on Ratio Studies, Appendix B (April 2013), as incorporated by reference in 50 IAC 27-1-4.
