Articles Posted in Tax Law

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Two landowners (Landowners) each owned property served by a regional sewer district (District). Because the Landowners’ property had outstanding fees owed to the District, the District perfected liens against the properties, and the county treasurer and auditor ordered that the properties be sold at a tax sale. The Landowners petitioned the trial court requesting that the court find that their respective properties cannot be sold at a tax sale pursuant to Ind. Code 13-26-14-4. The district court ordered that both properties be removed from the tax sale because the District maintained the only lien and therefore was precluded from foreclosing on the parcels pursuant to the lien foreclosure prohibition clause in Ind. Code 13-26-14-4, which governs the collection of regional sewer district sewer liens. The Supreme Court reversed, holding (1) the lien foreclosure prohibition of section 13-26-14-4 does not apply to collection by tax sale; and (2) because the District employed the tax sale method and did not seek collection of the Landowners’ unpaid sewer bills and penalties through the lien foreclosure method, the lien foreclosure prohibition clause did not apply. View "Twin Lakes Reg’l Sewer Dist. v. Ray" on Justia Law

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Two landowners owned property served by a regional sewer district. The district had perfected liens against the properties due to the landowners’ failure to pay fees and penalties. The trial court listed the properties to be sold at a tax sale to satisfy obligations for the unpaid sewer bills. The landowners subsequently petitioned the circuit court to remove their properties from the tax sale list. The circuit court granted the petitions, concluding that because the district maintained the only lien, the district was precluded from foreclosing on the parcels pursuant to Ind. Code 13-26-14-4. The Supreme Court reversed, holding (1) the foreclosure prohibition of Ind. Code 13-26-14-4, which governs the collection of regional sewer district sewer liens, does not apply to collection by tax sale; and (2) because the district did not seek collection of the landowners’ unpaid fees and penalties through the lien foreclosure method, but rather employed the tax sale method, the lien foreclosure prohibition clause did not apply. Remanded. View "In re Carroll County 2013 Tax Sale" on Justia Law

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At issue in this case was whether Indiana’s tax statutes allow Caterpillar, Inc. to increase its Indiana net operating losses (NOLs) by deducting foreign source dividend income. Caterpillar commenced an original tax appeal in the Indiana Tax Court challenging the Indiana Department of State Revenue’s longstanding application of the Indiana tax statutes. The Tax Court entered summary judgment for Caterpillar, concluding that the Indiana NOL statute does not reference or incorporate the foreign source dividend deduction. The Supreme Court reversed, holding that Caterpillar may not deduct foreign source dividends when calculating Indiana NOLs, and Caterpillar did not meet its burden to show that disallowing the deduction discriminates against foreign commerce under the Foreign Commerce Clause. View "Ind. Dep’t of State Revenue v. Caterpillar, Inc." on Justia Law

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At issue in this case was Ind. Code 6-1.1-24-3(b), which provides that a mortgagee annually request by certified mail a copy of notice that a parcel of real property is eligible for sale under the tax sale statutes. Here a bank, which held a mortgage on certain property, failed to submit a form affirmatively requesting from the county auditor to mail notice of a pending sale of the real property. Therefore, the bank was not notified that its mortgaged property was tax delinquent until after the property had been sold and the buyer requested a tax deed. The buyer filed a petition to direct the county auditor to issue a tax deed for the property, and the bank filed a response challenging the tax sale notice statutes as unconstitutional under the Fourteenth Amendment. The trial court issued an order holding that the statute was unconstitutional and denying the buyer's petition. The court of appeals affirmed. The Supreme Court reversed, holding that section 6-1.1-24-3(b) was constitutional under the due process clause of the Fourteenth Amendment. Remanded.View "M & M Inv. Group, LLC v. Ahlemeyer Farms, Inc." on Justia Law

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This appeal was the latest iteration of a decade-long dispute between the Miller Brewing Company and the Indiana Department of Revenue over Miller's Indiana adjusted gross income tax liability. The Department here appealed the tax court's determination that Miller owes no tax on certain sales to Indiana customers. The Supreme Court reversed, holding (1) the relevant statute was unambiguous; and (2) an example in the statute used by Miller in its argument was specifically designated as an example and not a rule and did not have the force of law, and therefore, the tax court erred in determining that the example operated to exempt Miler from liability for Indiana tax on income from sales of good delivered by common carrier to Indiana customers. View "Ind. Dep't of Revenue v. Miller Brewing Co." on Justia Law

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In this case the Supreme Court examined whether income received by a corporation's affiliated foreign reinsurance companies falls within the ambit of Indiana's gross premium privilege tax statute and is on that basis exempt from Indiana adjusted gross income tax. The corporation in this case was UPS, which protested the Indiana Department of Revenue's audit, which disallowed the exclusion from Indiana adjusted gross income the income of UPS's affiliates. The Indiana tax court granted UPS's motion for summary judgment, reasoning that because UPS was "subject to" the premium tax, it was exempt from the adjusted gross income tax. The Supreme Court reversed, holding that because the record did not establish that during the years in question UPS's affiliates were doing business within the state of Indiana, which was a necessary condition in order to be "subject to" the premium tax, UPS failed in its burden of establishing that it was entitled to summary judgment as a matter of law. Remanded. View "Ind. Dep't of Revenue v. UPS" on Justia Law

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After Sawmill Creek's taxes became delinquent on its property, the Marion County Auditor set the property for tax sale. A tax deed was issued to McCord Investments upon the petition of the Auditor following the one-year redemption period after a tax sale. The trial court ultimately set aside the tax deed on grounds that the Auditor's effort to notify Sawmill of the tax sale was constitutionally deficient for failing to meet the requirements of due process. The Supreme Court reversed, holding that the notices of the tax sale and of Sawmill's right to redeem did not violate due process because, under the Mullane v. Cent. Hanover Bank & Trust Co. standard, the Auditor's actions were reasonably calculated to provide notice to Sawmill. View "Marion County Auditor v. Sawmill Creek, LLC" on Justia Law

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Under a complex series of arrangements with companies like paper suppliers, printers, and packagers, AOL procured promotional mailers it sent to Indiana residents. AOL filed with the Indiana Department of State Revenue claims for refund of use taxes it paid between 2003 and 2007. The Department denied the claims. The tax court reversed, holding that AOL did not purchase any tangible personal property in a retail transaction with either the assembly houses or letter shops but merely purchased assembly, printing, and mailing services. At issue on appeal was the use tax, which applies to storing, using, or consuming in Indiana tangible personal property acquired in a retail transaction regardless of where that transaction occurred or where the retail merchant was located. The Supreme Court reversed the tax court, holding that because the assembly houses and letter shops were selling at retail, the transactions between AOL and its assembly houses and letter shops constituted retail transactions that triggered Indiana's use tax once AOL used the property in Indiana. View "Ind. Dep't of State Revenue v. AOL, LLC" on Justia Law

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The Indiana Department of State Revenue conducted an audit of a taxpayer corporation, concluded that the corporation's 2003 tax return did not fairly represent its income from Indiana sources, and proposed an assessment of additional tax liability. On the corporation's appeal of the Department's final determination, the Indiana tax court granted the corporation's motion for summary judgment. The Supreme Court reversed, holding that the tax court incorrectly applied a combined scheme of tax statutes and trial rule requirements to the case before it. The Court concluded that the tax court required additional designated evidence, beyond the proposed assessment, in order for the Department to make a prima facie showing as to the absence of any issues of material fact under Ind. Trial R. 56(C). Remanded. View "Ind. Dep't of State Revenue v. Rent-A-Center East, Inc." on Justia Law

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The Indiana Attorney General (AG) sought to recover a tax refund issued to Aisin USA Manufacturing, Inc. (Aisin) at the Superior Court. The AG appealed the courtâs decision in favor of Aisin, arguing that because it was a tax matter, the Superior Court did not have jurisdiction to hear matters that âarose underâ the state tax laws. Upon review, the Supreme Court held that the case could proceed in the Superior Court. The Court found that despite the AGâs characterization of the case, the refund was a result of accounting and clerical errors within the Department of Revenue that were wholly unrelated to any interpretation or application of tax law. The Court remanded the case for further proceedings in Superior Court.