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Tax Court: Company creates new tool, entitled to exemption

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The Indiana Tax Court has ruled in favor of a Hammond company in its attempt to exempt certain equipment from the state’s sales and use taxes.

Hoosier Roll Shop Services LLC challenged the denial of the Indiana Department of State Revenue’s final determination denying it an exemption for equipment used and materials consumed in grinding and calibrating its mill customers’ work rolls during the 2007 and 2008 tax years. These work rolls create the proper thickness, flatness, surface texture and luster of the sheet product as it passes through them. The surfaces of the rolls must be ground and calibrated to certain specifications.

The parties’ motions for summary judgment present just one issue for the Tax Court to decide: whether Hoosier Roll produces a new good, thereby entitling it to the exemptions previously mentioned, when it grinds and calibrates work rolls. Hoosier Roll claimed that it does: it takes a work roll, a tool ground and calibrated for a certain use, and, through its grinding and calibration process, creates an entirely new tool for a different use (i.e., a remanufactured work roll). The department argued, however, that Hoosier Roll does not produce a new good, but instead provides a repair service that is designed merely to perpetuate the usable life of the work roll.

Senior Judge Thomas Fisher relied on the four questions outlined in Rotation Products Corporation v. Department of State Revenue, 690 N.E.2d 795 (Ind. Tax Ct. 1998), to determine whether a “remanufacturing” or “repairing” process produces a new product. Those questions are: What is the substantiality and complexity of the work done on the existing article and what are the physical changes to the existing article, including the addition of new parts?; How does the article’s value before and after the work compare?; How favorably does the performance of the “remanufactured” article compare with the performance of newly manufactured articles of its kind?; and Was the work performed contemplated as a normal part of the life cycle of the existing article?

Fisher determined that the answer to each of those four questions favors Hoosier Roll. It produces other tangible personal property when it grinds and calibrates its customers’ work rolls. As such, Fisher granted the company’s motion for summary judgment and denied summary judgment in favor of the Department of State Revenue in Hoosier Roll Shop Services, LLC v. Indiana Department of State Revenue, 49T10-1104-TA-29.


 

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  1. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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