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Economic presence meets taxing requirement

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In a matter of first impression, the Indiana Tax Court has ruled that a bank didn't need to have a physical presence in the state to be subject to Indiana's Financial Institutions Tax.

In MBNA America Bank, N.A. & Affiliates v. Indiana Department of State Revenue, No. 49T10-0506-TA-53, MBNA America Bank appealed the Department of State Revenue's denial of its claims for a refund of the Indiana Financial Institutions Tax (FIT) it paid during the 1992-98 tax years. MBNA argued because its principal place of business is in Delaware and it doesn't have a place of business here nor did any of its employees come here on business, it wasn't subject to the FIT.

The bank believed under the Commerce Clause, which prohibits states from charging taxes on an out-of-state business unless it has a "substantial nexus" with the taxing state, a company has to have a physical presence in Indiana in order to be charged the FIT. The department moved for summary judgment on the issue.

Indiana Tax Judge Thomas Fisher determined the U.S. Supreme Court holdings in National Bellas Hess v. Department of Revenue of Illinois, 386 U.S. 753 (1967), and Quill Corp. v. North Dakota, 504 U.S. 298 (1992), don't control in the instant case because the U.S. Supreme Court didn't extend the physical presence requirement beyond sales and use taxes.

Because those cases don't control, it becomes a matter of first impression for the tax court to determine whether an economic presence can satisfy the "substantial nexus" requirement for purposes of the FIT. Judge Fisher relied on a Supreme Court of West Virginia case on the issue, adopted its reasoning in Tax Commissioner of West Virginia v. MBNA American Bank, 640 S.E.2d 226 (W. Va. 2006), and held an economic presence is sufficient to meet the substantial nexus requirement.

Based on the facts in the instant case, MBNA had an economic presence in Indiana and thus had a substantial nexus with Indiana for purposes of the FIT. Judge Fisher granted the department's motion for summary judgment.

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  1. First comment on this thread is a fitting final comment on this thread, as that the MCBA never answered Duncan's fine question, and now even Eric Holder agrees that the MCBA was in material error as to the facts: "I don't get it" from Duncan December 1, 2014 5:10 PM "The Grand Jury met for 25 days and heard 70 hours of testimony according to this article and they made a decision that no crime occurred. On what basis does the MCBA conclude that their decision was "unjust"? What special knowledge or evidence does the MCBA have that the Grand Jury hearing this matter was unaware of? The system that we as lawyers are sworn to uphold made a decision that there was insufficient proof that officer committed a crime. How can any of us say we know better what was right than the jury that actually heard all of the the evidence in this case."

  2. wow is this a bunch of bs! i know the facts!

  3. MCBA .... time for a new release about your entire membership (or is it just the alter ego) being "saddened and disappointed" in the failure to lynch a police officer protecting himself in the line of duty. But this time against Eric Holder and the Federal Bureau of Investigation: "WASHINGTON — Justice Department lawyers will recommend that no civil rights charges be brought against the police officer who fatally shot an unarmed teenager in Ferguson, Mo., after an F.B.I. investigation found no evidence to support charges, law enforcement officials said Wednesday." http://www.nytimes.com/2015/01/22/us/justice-department-ferguson-civil-rights-darren-wilson.html?ref=us&_r=0

  4. Dr wail asfour lives 3 hours from the hospital,where if he gets an emergency at least he needs three hours,while even if he is on call he should be in a location where it gives him max 10 minutes to be beside the patient,they get paid double on their on call days ,where look how they handle it,so if the death of the patient occurs on weekend and these doctors still repeat same pattern such issue should be raised,they should be closer to the patient.on other hand if all the death occured on the absence of the Dr and the nurses handle it,the nurses should get trained how to function appearntly they not that good,if the Dr lives 3 hours far from the hospital on his call days he should sleep in the hospital

  5. It's a capital offense...one for you Latin scholars..

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