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Justices reverse Tax Court in UPS case

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The Indiana Supreme Court found that two reinsurance companies of the United Parcel Service are foreign companies that don’t do business within Indiana, so they aren’t exempt from Indiana adjusted gross income tax.

In Indiana Department of Revenue v. United Parcel Service, Inc., 49S10-1107-TA-417, UPS argued its two affiliated reinsurance companies – UPINSCO, formed under the laws of the U.S. Virgin Islands and UPS Re, formed under the laws of Bermuda – are subject to Indiana’s gross premium privilege tax statute, so they would be exempt from adjusted gross income tax here.

In Indiana, insurance companies are required to pay tax on earned premiums in lieu of state corporate income tax. The premium tax works like an excise tax allowing a foreign insurer to do business in Indiana, wrote Justice Robert Rucker.

UPS contracted with several companies to provide workers’ compensation insurance and liability insurance for damage to its packages, but UPINSCO and UPS Re ultimately insured UPS’s risks.

UPS sought to exclude in 2000 and 2001 from its federal taxable income the income of its affiliates UPINSCO and UPS Re. The Indiana Department of State Revenue disallowed the exclusion and claimed UPS underpaid taxes in 2001. The Indiana Tax Court granted summary judgment for UPS and denied the department’s motion. The Tax Court reasoned that because UPS was “subject to” the premium tax under Indiana Code 6-3-2-2.8(4), it was exempt from the adjusted gross income tax.

The justices concluded that the affiliates were not doing business in Indiana. The record shows – and the parties don’t dispute – that the reinsurance transactions took place between foreign companies as neither the primary insurers nor the affiliates are organized under the laws of Indiana, Rucker wrote.

“… even assuming UPINSCO and UPS Re reinsured Indiana risks, there is no evidence in the record before us that the reinsurance transactions took place in the State of Indiana,” he wrote. “Because this is a necessary condition in order to be ‘subject to’ the premium tax, UPS failed in its burden of establishing that it is entitled to summary judgment as a matter of law. Because we are definitely and firmly convinced the Tax Court’s determination to the contrary is in error, we reverse the grant of summary judgment in favor of UPS and remand this cause for further proceedings.”

 

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  1. Employers should not have racially discriminating mind set. It has huge impact on the society what the big players do or don't do in the industry. Background check is conducted just to verify whether information provided by the prospective employee is correct or not. It doesn't have any direct combination with the rejection of the employees. If there is rejection, there should be something effective and full-proof things on the table that may keep the company or the people associated with it in jeopardy.

  2. Unlike the federal judge who refused to protect me, the Virginia State Bar gave me a hearing. After the hearing, the Virginia State Bar refused to discipline me. VSB said that attacking me with the court ADA coordinator had, " all the grace and charm of a drive-by shooting." One does wonder why the VSB was able to have a hearing and come to that conclusion, but the federal judge in Indiana slammed the door of the courthouse in my face.

  3. I agree. My husband has almost the exact same situation. Age states and all.

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  5. Andrew, if what you report is true, then it certainly is newsworthy. If what you report is false, then it certainly is newsworthy. Any journalists reading along??? And that same Coordinator blew me up real good as well, even destroying evidence to get the ordered wetwork done. There is a story here, if any have the moxie to go for it. Search ADA here for just some of my experiences with the court's junk yard dog. https://www.scribd.com/document/299040062/Brown-ind-Bar-memo-Pet-cert Yep, drive by shootings. The lawyers of the Old Dominion got that right. Career executions lacking any real semblance of due process. It is the ISC way ... under the bad shepard's leadership ... and a compliant, silent, boot-licking fifth estate.

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