UACC Midwest, Inc. v. Indiana Dept. of State Revenue, 49T10-9204-TA-00012

• Citation: 629 N.E.2d 1295
• Decision Date: 02 March 1994
• Docket Number: No. 49T10-9204-TA-00012,49T10-9204-TA-00012
• Parties: UACC MIDWEST, INC., successor by merger to Evansville Cable Television, Inc., Petitioner, v. The INDIANA DEPARTMENT OF STATE REVENUE, and Kenneth L. Miller, Commissioner of The Indiana Department of State Revenue, Respondents.
• Court: Tax Court of Indiana

Page 1295

629 N.E.2d 1295

UACC MIDWEST, INC., successor by merger to Evansville Cable

Television, Inc., Petitioner, v. The INDIANA DEPARTMENT OF STATE REVENUE, and Kenneth L.

Miller, Commissioner of The Indiana Department of

State Revenue, Respondents.

No. 49T10-9204-TA-00012.

Tax Court of Indiana.

March 2, 1994.

John W. Allen, Michele L. Halloran, Patrick R. Van Tiflin, Howard & Howard, Lansing, MI, for petitioner.

Pamela Carter, Atty. Gen., Marilyn S. Meighen, Thomas K. Caldwell, Deputy Attys. Gen., Indianapolis, for respondents.

FISHER, Judge.

UACC Midwest, Inc. (UACC), as successor by merger to Evansville Cable Television, Inc., appeals the final determination of the Indiana Department of State Revenue (the Department), denying UACC's claim for refund of Indiana gross income tax paid for the fiscal year ending August 31, 1987, the shortened calendar year 1987, and the calendar years 1988 and 1989 (the years in issue). The parties now bring cross-motions for summary judgment.

ISSUES

I. Whether the court has subject matter jurisdiction.

II. Whether the gross income tax structure is constitutionally valid.

III. Whether the Department can counterclaim for the refunds issued to UACC for 1986 and 1990.

FACTS

UACC, a Delaware corporation, is a cable operator with Indiana offices in Evansville and Anderson. UACC selects, produces, and delivers video and audio entertainment information programming services. For the tax years 1986 through 1990, UACC timely filed its Indiana gross income tax returns. It subsequently filed amended returns, with explanatory statements attached, seeking refunds. It did not file the Department's claim for refund form, Form 615.

The Department approved the refund for 1986 and 1990. For the years in issue, however, the Department either denied the refund or merely failed to respond within 180 days. UACC now appeals. Additional facts will be provided as necessary.

DISCUSSION AND DECISION

"[E]ach party to a summary judgment motion must designate to the court all parts of pleadings, depositions, answers to

interrogatories, admissions, matters of judicial notice, and any other matters on which it relies for purposes of the motion." Fort Wayne Nat'l Corp. v. Indiana Dep't of State Revenue (1993), Ind. Tax, 621 N.E.2d 668, 670 (quoting Rosi v. Business Furniture Corp. (1993), Ind., 615 N.E.2d 431, 434) (alteration in original); Ind. Trial Rule 56(C). If, after reviewing the designated evidentiary materials, the court determines that no genuine issue of material fact exists and a party is entitled to judgment as a matter of law, either the movant or the non-movant may be granted summary judgment. T.R. 56(C); Harlan Sprague Dawley, Inc. v. Indiana Dep't of State Revenue (1992), Ind. Tax, 605 N.E.2d 1222, 1224 (citing C & C Oil Co. v. Indiana Dep't of State Revenue (1991), Ind. Tax, 570 N.E.2d 1376, 1378).

I

The Department moves for summary judgment alleging the court lacks subject matter jurisdiction to hear the case at bar. Because the Department's motion attacks the court's subject matter jurisdiction, the court will treat the motion as an Ind. Trial Rule 12(B)(1) motion to dismiss. ¹ See Department of Revenue v. Mumma Bros. Drilling Co. (1977), 173 Ind.App. 487, 491-92, 364 N.E.2d 167, 170-71; 3 W. HARVEY, INDIANA PRACTICE Sec. 56.2 at 622 (1988). The Department bases its motion on UACC's failure to file the Department's claim for refund form, Form 615.

Compliance with the procedures prescribed in IND. CODE 6-8.1-9-1 is the exclusive remedy for relief from taxes paid. See Evansville Concrete Supply Co. v. Indiana Dep't of State Revenue (1991), Ind. Tax, 571 N.E.2d 1350, 1351-52. IC 6-8.1-9-1 provides:

(a) [i]f a person has paid more tax than the person determines is legally due for a particular taxable period, the person may file a claim for a refund with the department. In order to obtain the refund, the person must file the claim with the department within three (3) years after the latter of the following:

(1) The due date of the return; [or]

(2) The date of payment;

. . . . .

The claim must set forth the amount of the refund to which the person is entitled and the reasons that the person is entitled to the refund.

(emphasis added). 45 I.A.C. 15-9-2 provides that a claim for refund shall be filed on the form prescribed by the Department. The Department has prescribed Form 615, but use of the form is not mandatory. Neither IC 6-8.1-9-1 nor the Department's regulations require a specific form be filed to claim a refund. In fact, they specify merely the information required to process a claim for refund, which includes the reason for, and the amount of, the requested refund. See IC 6-8.1-9-1; 45 I.A.C. 15-9-2.

Specifically, the Department asserts UACC's amended returns do not qualify as claims for refund because UACC did not file Forms 615. UACC instead filed Forms IT-20X, amended returns. ² Because the amended returns for the 1987 fiscal year and the 1987 shortened tax year were filed more than three years after the due date of the respective gross income tax returns, UACC has failed to meet the time requirement of IC 6-8.1-9-1. ³ Accordingly, UACC is barred from UACC attached an explanatory statement to each of its amended returns. The amended return, Form IT-20X, contains three general parts providing for the computation of tax, the adjustment due to credits, and the remittance or refund due. See Form IT-20X. ⁴ UACC supplied the Department with additional information in its explanatory statements:

recovering a refund for the 1987 fiscal year and 1987 shortened tax year regardless of the form UACC filed. The amended returns for the 1988 and 1989 calendar years were, however, timely filed, and qualify as claims for refund.

This return is being amended to reclassify cable revenues for gross income tax purposes from receipts for services to retail receipts. Taxpayer's position is based on section I.C. 6-2.5-4-11(a) of the Indiana Gross Retail Tax Act which describes a cable operator as one who is making retail sales. The taxpayer believes that it should be treated consistently for both gross income tax and gross retail tax purposes.

Petitioner's Exhibits, 1, 5, 6, 7, and 9. The Form IT-20X, along with the explanatory statement, supplied the Department with the claim for refund information required by both statute and regulation. See IC 6-8.1-9-1; 45 I.A.C. 15-9-2. Because UACC provided the Department with the required information for a claim for refund within the three year time frame, its amended returns for calendar years 1988 and 1989 qualify as claims for refund.

For the reasons stated, the court GRANTS the Department's motion with respect to fiscal year 1987 and the shortened year 1987, and DENIES the Department's motion with respect to calendar years 1988 and 1989.

II

UACC challenges the constitutionality of the gross income tax statutes, I.C. 6-2.1-1, on three grounds: (1) it classifies taxpayers differently from the gross retail (sales) tax statutes; (2) it classifies taxpayers differently within its own two-tier structure; and (3) its application to UACC violates the First Amendment to the United State Constitution, the Due Process Clause of the Fourteenth Amendment to the United States Constitution, the Due Course of Law Clause, Art. 1, Sec. 12 of the Indiana Constitution, and the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. In construing statutes, the court's foremost goal is to adhere to the true intent of the legislature. Caylor-Nickel Clinic, P.C. v. Indiana Dep't of State Revenue (1991), Ind. Tax, 569 N.E.2d 765, 768 (citing Johnson County Farm Bureau Coop. Ass'n v. Indiana Dep't of State Revenue (1991), Ind. Tax, 568 N.E.2d 578, 580, aff'd (1992), Ind., 585 N.E.2d 1336), aff'd (1992), Ind., 587 N.E.2d 1311. All statutes are presumptively constitutional, and the court must resolve all reasonable doubts concerning the gross income tax statute in favor of constitutionality. See Northern Ind. Bank v. State Bd. of Finance (1983), Ind., 457 N.E.2d 527, 529; Short v. Texaco, Inc. (1980), 273 Ind. 518, 521, 406 N.E.2d 625, 627-28, aff'd (1982), 454 U.S. 516, 102 S.Ct. 781, 70 L.E.2d 738. The Indiana Supreme Court has upheld the constitutionality of the Indiana Gross Income Tax Law of 1933. Miles et. al. v. Department of Treasury (1935), 209 Ind. 172, 199 N.E. 372, appeal dismissed (1936), 298 U.S. 640, 56 S.Ct. 750, 80 L.Ed. 1372.

The classifications, as well as the purposes, of Indiana's gross income tax and its sales tax differ. "A person is a retail merchant making a retail transaction when he furnishes local cable television service or intrastate cable television service." IC 6-2.5-4-11(a). UACC furnishes cable television services and is therefore considered a retail merchant for sales tax purposes. For gross income tax purposes, receipts from services are taxed at 1.2 percent and retail receipts are taxed at 0.3 percent. IC 6-2.1-2-3; 6-2.1-2-4; 6-2.1-2-5. UACC argues that because it is classified as a retail merchant under IC 6-2.5-4-11, its receipts "The right to tax is the highest attribute of sovereignty." Bielski, 627 N.E.2d at 883 (citing M'Culloch v. Maryland (1819), 17 U.S. (4 Wheat.) 316, 339, 4 L.Ed. 579, 585). The power is fundamental to the very existence of our government and is limited only by constitutional requirements. Id.; State Bd. of Tax Comm'rs of Indiana v. Jackson (1931), 283 U.S. 527, 537, 51 S.Ct. 540, 545, 75 L.Ed. 1248, 1255-56; Miles, 209 Ind. at 177, 199 N.E. at 374. "[I]n taxation, even more than other fields, legislatures possess the greatest freedom in classification." Madden v. Kentucky (1940), 309 U.S. 83, 88, 60 S.Ct. 406, 408, 84 L.Ed. 590, 593. In fact, the Indiana Supreme Court has held that "Article 1, Section 23, of the Indiana Constitution and the Equal Protection and Due Process Clauses of the Fourteenth Amendment ... do not impose any specific limitation upon the...