Supreme Court vacates Tax Court ruling in seized-dogs case

February 9, 2016

An Indiana Tax Court ruling that the state improperly denied a refund of the value of 240 dogs seized from an alleged puppy mill in southern Indiana was vacated Monday by the Indiana Supreme Court. The court determined after oral arguments that the matter was to be resolved in a pending civil trial tort claim.

The justices’ published order also dismissed in its entirety the long-running tax appeal in Virginia Garwood v. Indiana Department of Revenue, 82S10-1505-TA-330.

Garwood pleaded guilty to Class D felony charges of failing to pay sales tax on dogs she sold that were seized in a 2009 raid on her property in Harrison County. Tax warrants demanded she pay more than $142,000 in sales tax the state said was owed. The state sold the animals to the U.S. Humane Society for $300, but Garwood won a Tax Court judgment saying it could not conclude she was properly denied a refund claim on the value of the dogs and other seized property, which she claims was $122,684.50.

“During oral argument, the Department of Revenue’s counsel argued that Garwood’s tax appeal alleges tort claims seeking compensatory damages that should be decided in the civil action Garwood has filed in the Harrison Circuit Court,” Chief Justice Loretta Rush wrote for the Supreme Court. “Garwood’s counsel agreed the tort claims arising from the sale of the dogs should be decided in the Harrison Circuit Court case. Counsels’ statements bind their clients.

“Based on the parties’ representations, the Court vacates the Tax Court’s published order denying summary judgment … and dismisses in its entirety the tax appeal,” Rush wrote. “Garrison’s tort claims seeking compensatory damages shall proceed in the Harrison Circuit Court case.”


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