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Tax Court rules in brewery's favor

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Ruling on an issue that previously has come before the Indiana Tax Court, Senior Judge Thomas Fisher has upheld that sales to Indiana customers who hired common carriers to pick up alcohol at an Ohio facility shouldn’t have been included in the sales factor of Miller Brewing Co.’s adjusted gross income tax and supplemental net income tax.

Miller appealed the Indiana Department of State Revenue’s denial of its claims for a refund of Indiana adjusted gross income tax and supplemental net income tax paid for the 1997-1999 tax years. In 2005, the Tax Court ordered the department to refund the AGIT paid by Miller for the 1994-1996 tax years.

At issue is whether for purposes of calculating its AGIT liability, Miller’s sales to Indiana customers are allocated to Indiana if those customers hired common carriers (carrier-pickup sales) to get their merchandise at Miller’s Ohio facility.

Miller didn’t allocate the income it got from the carrier-pickup sales to Indiana when calculating its AGIT liabilities. It paid the proposed assessments after the state revenue department audited its returns and decided Miller should have paid tax on that sales income. Miller filed for a refund, which the department denied.

In Miller Brewing Company v. Indiana Dept. of State Revenue, No. 49T10-0607-TA-69, Judge Fisher looked to Indiana Code 6-3-2-2(e)(1), which says “[s]ales of tangible personal property are in this state if[ ] the property is delivered or shipped to a purchaser, other than the United States government, within this state, regardless of the f.o.b. point or other conditions of the sale[.]” The department argued that the plain language of the statute mandates the application of the “destination rule,” which says that the income from sales should be apportioned to the purchaser’s state regardless of where the sale actually happens.

Miller, on the other hand, said the statute could be construed in two different ways, and argued that the department’s own regulation interpreting how the Legislature intended the statute to apply – 45 I.A.C. 3.1-1-53(7) – should control. It says “[s]ales are not ‘in this state’ if the purchaser picks up the goods at an out-of-state location and brings them back into Indiana in his own conveyance.”

Judge Fisher found the department’s interpretation of I.C. 6-3-2-2(e)(1) to be more persuasive than Uniform Division of Income for Tax Purposes Act, Indiana’s membership in the Multistate Tax Commission in 2007 after a 30-year absence, or how other states construe their statutory language, arguments the revenue department had advanced.

“In determining its Indiana AGIT liability for the years at issue, Miller did nothing more than follow Indiana law: pursuant to Indiana Code § 6-3-2-2(e)(1) and 45 I.A.C. 3.1-1-53(7), its carrier-pickup sales were not Indiana sales and therefore not allocable to Indiana,” he wrote, granting summary judgment for Miller and against the revenue department.

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  1. Excellent initiative on the part of the AG. Thankfully someone takes action against predators taking advantage of people who have already been through the wringer. Well done!

  2. Conour will never turn these funds over to his defrauded clients. He tearfully told the court, and his daughters dutifully pledged in interviews, that his first priority is to repay every dime of the money he stole from his clients. Judge Young bought it, much to the chagrin of Conour’s victims. Why would Conour need the $2,262 anyway? Taxpayers are now supporting him, paying for his housing, utilities, food, healthcare, and clothing. If Conour puts the money anywhere but in the restitution fund, he’s proved, once again, what a con artist he continues to be and that he has never had any intention of repaying his clients. Judge Young will be proven wrong... again; Conour has no remorse and the Judge is one of the many conned.

  3. Pass Legislation to require guilty defendants to pay for the costs of lab work, etc as part of court costs...

  4. The fee increase would be livable except for the 11% increase in spending at the Disciplinary Commission. The Commission should be focused on true public harm rather than going on witch hunts against lawyers who dare to criticize judges.

  5. Marijuana is safer than alcohol. AT the time the 1937 Marijuana Tax Act was enacted all major pharmaceutical companies in the US sold marijuana products. 11 Presidents of the US have smoked marijuana. Smoking it does not increase the likelihood that you will get lung cancer. There are numerous reports of canabis oil killing many kinds of incurable cancer. (See Rick Simpson's Oil on the internet or facebook).

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