Mumma Bros. Drilling Co. v. Department of Revenue

• Decision Date: 28 October 1980
• Docket Number: No. 1-480-A-88,1-480-A-88
• Citation: 411 N.E.2d 676
• Parties: MUMMA BROTHERS DRILLING CO., a Partnership and Mumma Drilling, Inc., an Indiana Corporation, Appellants (Plaintiffs Below), v. DEPARTMENT OF REVENUE, State of Indiana, Appellee (Defendant Below).
• Court: Indiana Appellate Court

Page 676

411 N.E.2d 676

MUMMA BROTHERS DRILLING CO., a Partnership and Mumma Drilling, Inc., an Indiana Corporation, Appellants (Plaintiffs Below), v. DEPARTMENT OF REVENUE, State of Indiana, Appellee (Defendant Below).

No. 1-480-A-88.

Court of Appeals of Indiana, First District.

Oct. 28, 1980.

Richard C. Rusk, Washington, for appellant.

Theodore L. Sendak, Atty. Gen., Ted J. Holaday, Deputy Atty. Gen., Indianapolis, for appellee.

ROBERTSON, Presiding Judge.

This is a tax case. It involves the application of sales and/or use taxes to purchases of drilling equipment by Mumma Brothers Drilling Co. (Taxpayer). The case has been before us already in the form of an appeal from summary judgment for the Taxpayer. Department of Revenue v. Mumma Brothers Drilling Co., (1977) Ind.App., 364 N.E.2d 167. The action began as a claim of a refund for taxes paid. We previously held part of the claim is barred by a statute of limitations and reaffirm that holding. We also reversed the other claims for taxes erroneously paid, in order that the trial court make a factual determination of whether the Taxpayer is exempted from paying the tax. The trial court, on remand, found the taxes properly paid and the Taxpayer appeals.

The Taxpayer is in the business of drilling water wells and installing pumps and plumbing for residences, farms and commercial entities in order to provide water for livestock and human consumption. The Taxpayer also repairs and replaces equipment which is used to extract water from the ground.

The provision of the sales tax code that makes Mumma subject to the sales or use tax is Ind. Code 6-2-1-38(k). The statute reads:

(k) Every person making sales of tangible personal property to be used by the purchaser, including builders and contractors, whether general, prime or subcontractors, for incorporation in or improvement of a facility or structure constituting or becoming part of the land on which such facility or structure is situated, and not for resale as tangible personal property, shall be deemed to be a retail merchant in respect to such sales, and every such transaction shall constitute selling at retail subject to either the state gross retail tax or the use tax. Every such builder or contractor who furnishes tangible personal property for the purposes aforesaid, in respect to which property when acquired by the builder or contractor or by any predecessor supplier thereof neither the state gross retail tax nor the use tax was imposed, shall be deemed to be a user for consumption in respect to such property and the furnishing of such property shall be subject to the use tax imposed by this act as in section 45 (6-2-1-45) provided. Notwithstanding any other provision of this act (6-2-1-1 6-2-1-53), the furnishing of such property either to or by the builder or contractor, whether general, prime or subcontractor, for incorporation in or as incorporated in such facility or structure shall be subject to but one (1) imposition of either of such taxes under the provisions of this subsection or any other provisions of this act and not to any repetitive or multiple imposition thereof: Provided, however, That no state gross retail or use tax shall be owing in respect to any of the foregoing transactions in which the ultimate purchaser or recipient of the tangible personal property to be incorporated in or used as an improvement to a real estate facility or structure would be entitled under the exemption provisions of this act to purchase such property from the supplier thereof without liability for the state gross retail tax or use tax.

We have no doubt that the...