ILNews

Justices: Tax Court erred in prima facie showing requirement

Back to TopCommentsE-mailPrintBookmark and Share

The Indiana Supreme Court has found that the Indiana Tax Court erred in requiring the state revenue department to produce more evidence of a proposed assessment of additional tax liability for a corporation. The justices reversed and remanded Indiana Department of State Revenue v. Rent-A-Center East, Inc., No. 49S10-1112-TA-683.

The Tax Court in May denied the revenue department’s motion for summary judgment and granted one in favor of Rent-A-Center East. The department failed to designate any facts to show it complied with Indiana Code 6-3-2-2(p), so it had not made a prima facie case that it is entitled to judgment as a matter of law regarding whether the department should consider alternatives to assessing tax based on a combined return.

But the justices determined the Tax Court incorrectly applied the combined scheme of state statute and trial rule requirements to the case.

Judge Martha Wentworth construed the tax statutes to require the revenue department to make its Trial Rule 56(C) prima facie showing by designating facts material to RAC East’s separate return from 2003 on income sources and the use of combined income tax return being reasonable and equitable. Then, the court denied the department’s motion after finding it didn’t comply with Indiana Code 6-3-2-2(p).

“We conclude that Section 6-3-2-2(p) and Trial Rule 56 must function together in a different way,” Chief Justice Randall Shepard wrote.

The justices found that the department may make a proposed assessment only if it reasonably believes that a person has not reported the proper amount of tax due, and it makes its assessment on the basis of the best information available. The General Assembly has provided that the notice of proposed assessment is prima facie evidence that the department’s claim for the unpaid tax is valid, Shepard wrote, so the burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made.

“Nothing in the text of Section 6-3-2-2(p) indicates that the General Assembly intended it to trump the presumption of validity given to the proposed assessment, nor do we think it proper for a taxpayer resisting such an assessment simply to cite subsection (p) as a means of vitiating the Department’s prima facie showing.” Shepard wrote. “Rather, Section 6-3-2-2(p) reflects the Legislature’s codification of a rule of decision with respect to when a combined income tax return may permissibly be required. It serves as the evidentiary bar that must be evaluated at the end of the summary judgment analysis (or trial process), not a threshold over which the Department must pass at the beginning.”

The case is remanded to Wentworth to consider summary judgment motions on their merits in light of all the designated evidence the parties may tender.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Major social engineering imposed by judicial order well in advance of democratic change, has been the story of the whole post ww2 period. Contraception, desegregation, abortion, gay marriage: all rammed down the throats of Americans who didn't vote to change existing laws on any such thing, by the unelected lifetime tenure Supreme court heirarchs. Maybe people came to accept those things once imposed upon them, but, that's accommodation not acceptance; and surely not democracy. So let's quit lying to the kids telling them this is a democracy. Some sort of oligarchy, but no democracy that's for sure, and it never was. A bourgeois republic from day one.

  2. JD Massur, yes, brings to mind a similar stand at a Texas Mission in 1836. Or Vladivostok in 1918. As you seemingly gloat, to the victors go the spoils ... let the looting begin, right?

  3. I always wondered why high fence deer hunting was frowned upon? I guess you need to keep the population steady. If you don't, no one can enjoy hunting! Thanks for the post! Fence

  4. Whether you support "gay marriage" or not is not the issue. The issue is whether the SCOTUS can extract from an unmentionable somewhere the notion that the Constitution forbids government "interference" in the "right" to marry. Just imagine time-traveling to Philadelphia in 1787. Ask James Madison if the document he and his fellows just wrote allowed him- or forbade government to "interfere" with- his "right" to marry George Washington? He would have immediately- and justly- summoned the Sergeant-at-Arms to throw your sorry self out into the street. Far from being a day of liberation, this is a day of capitulation by the Rule of Law to the Rule of What's Happening Now.

  5. With today's ruling, AG Zoeller's arguments in the cases of Obamacare and Same-sex Marriage can be relegated to the ash heap of history. 0-fer

ADVERTISEMENT