In a 4-1 ruling written by Justice Mark Massa, the court held that the Tax Court clearly erred in determining that an example of how taxes are to be assessed had the force of law.
“The Tax Court determined that Example 7 was an administrative rule with the force of law and that it operated to exempt Miller from liability for Indiana tax on income from sales of goods delivered by common carrier to Indiana customers. We find that this determination was clearly erroneous and hold that Example 7 does not have the force of law,” Massa wrote.
Miller in its appeal said that an administrative rule contained an example that said “[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.”
“Miller contends that the term ‘in his own conveyance’ includes not only vehicles owned by the purchaser himself, but also vehicles owned by common carriers hired by either the purchaser or the seller to transport the goods to Indiana. … That interpretation is plainly inconsistent with the language of the example; the ordinary reader would understand ‘his own conveyance’ to mean a conveyance owned by the purchaser, not a conveyance owned by anyone else, such as a third-party common carrier,” Massa wrote.
Justice Robert Rucker dissented, agreeing with the Tax Court that Indiana Code 6-3-2-2(e)(1) is ambiguous.
“I am not convinced an error was made here. Applying our cautious deference standard of review I would affirm the judgment of the Tax Court,” Rucker wrote.