Indiana Dept. of State Revenue Gross Income Tax Division v. Lyall Elec., Inc., No. 3-876-A-193

Docket NºNo. 3-876-A-193
Citation411 N.E.2d 685, 181 Ind.App. 262
Case DateOctober 28, 1980
CourtCourt of Appeals of Indiana

Page 685

411 N.E.2d 685
181 Ind.App. 262
INDIANA DEPARTMENT OF STATE REVENUE, GROSS INCOME TAX
DIVISION, Defendant-Appellant,
v.
LYALL ELECTRIC, INC., Plaintiff-Appellee.
No. 3-876-A-193.
Court of Appeals of Indiana, Third District.
Oct. 28, 1980.

Page 686

Theodore L. Sendak, Atty. Gen. of Indiana, Alembert W. Brayton, Deputy Atty. Gen., Indianapolis, for appellant.

Miles C. Gerberding, James M. Prickett, Fort Wayne, for appellee.

GARRARD, Presiding Judge.

The Gross Income Tax Division of the State Department of Revenue appeals from the decision of the trial court that Lyall Electric, Inc. was entitled to a refund for tax it paid on receipts which should not have been included as income in its return.

Lyall is the successor to a parent corporation of a group of affiliated corporations. Its predecessor filed a consolidated return in 1969 which is the subject of this appeal. Lyall urges that it may, under IC 6-2-1-14, eliminate from its computation of gross income any income which it received from the sale of services to its affiliates. The state argues that income derived from sales of property, rentals, interest and dividends may be eliminated, but that the statute does not authorize elimination of income from sales of services.

After this suit was instituted, IC 6-2-1-14 was amended in one significant respect. It now provides that a consolidated

[181 Ind.App. 263] "... return shall include only the gross income of such members of the affiliated group as are incorporated in the state of Indiana or duly authorized to do business therein. The affiliated group will be allowed only one (1) exemption (deduction) upon a consolidated return as provided in IC 1971, 6-2-1-6. In such consolidated return there may be eliminated from the gross income only that portion which is received from transactions between such members as are incorporated in the state of Indiana or duly authorized to do business therein, and also interest, rentals and dividends paid by one (1) such corporate member to another ; Provided, however, That no such sales made, or other income earned, outside the state of Indiana may be eliminated under this section: Provided, further, That gross receipts of any member of the affiliated group which are received in distribution in connection with the dissolution of any other member of the group shall not be permitted to be eliminated under this section." (Emphasis added)

The word "transactions" has been substituted for "sales of...

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1 practice notes
  • Associated Ins. Companies, Inc. v. Indiana Dept. of State Revenue, No. 49T10-9405-TA-00152
    • United States
    • Indiana Tax Court of Indiana
    • September 29, 1995
    ...filing statute is to treat an affiliated group as a single taxpayer. Indiana Dep't of State Revenue v. Lyall Elec., Inc. (1980), 181 Ind.App. 262, 411 N.E.2d 685. In Lyall, the court considered whether intragroup transfers of services were deductible from gross income. At the time the case ......
1 cases
  • Associated Ins. Companies, Inc. v. Indiana Dept. of State Revenue, No. 49T10-9405-TA-00152
    • United States
    • Indiana Tax Court of Indiana
    • September 29, 1995
    ...filing statute is to treat an affiliated group as a single taxpayer. Indiana Dep't of State Revenue v. Lyall Elec., Inc. (1980), 181 Ind.App. 262, 411 N.E.2d 685. In Lyall, the court considered whether intragroup transfers of services were deductible from gross income. At the time the case ......

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