ATTORNEY FOR PETITIONER: BRETT J. MILLER, BINGHAM GREENEBAUM DOLL, LLP, Indianapolis, IN.
ATTORNEYS FOR RESPONDENT: GREGORY F. ZOELLER, ATTORNEY GENERAL OF INDIANA, JESSICA E. REAGAN, DEPUTY ATTORNEY GENERAL, Indianapolis, IN.
ORDER ON PARTIES' CROSS-MOTIONS FOR SUMMARY JUDGMENT
Martha Blood Wentworth, Judge.
Hamilton Southeastern Utilities, Inc. challenges the Indiana Department of State Revenue's assessment of Indiana's utility receipts tax (URT) on system development charges and connection fees it collected during the 2006, 2007, and 2008 tax years (the years at issue). This matter is currently before the Court on the parties' cross-motions for summary judgment, which present one issue: whether Hamilton Southeastern's system development charges and connection fees are gross receipts subject to the URT.
FACTS AND PROCEDURAL HISTORY
The following facts are not in dispute. Hamilton Southeastern is a domestic business corporation that provides sewage collection and disposal services to 17,000 customers in Hamilton County, Indiana. (See Pet'r Br. Supp. Cross-Mot. Summ. J. (" Pet'r Br." ) at 5.) (See also Pet'r Des'g Evid. Supp. Resp. Resp't Mot. Summ. J. (" Pet'r Des'g Evid." ) at 2 ¶ 6 (indicating that Hamilton Southeastern designated its Brief in Support of its Cross-Motion for Summary Judgment as evidence).) Hamilton Southeastern charges its customers a fixed, monthly rate in exchange for these services. (See Pet'r Original Tax Appeal Pet. (" Pet'r Pet." ) ¶ 10.) (See also Pet'r Des'g Evid. at 2-3 ¶ 7(G) (indicating that Hamilton Southeastern designated portions of its Petition as evidence).)
Hamilton Southeastern also charges two other one-time fees as new properties are developed and built. (See Pet'r Br. at 6-11.) The first is the system development charge that is " an amount which the [Indiana Utility Regulatory Commission] permits [Hamilton Southeastern] to collect, consistent with a tariff, to be used for future expansion of the sewer services provided by [Hamilton Southeastern]." (See Pet'r Des'g Evid., Ex. 1 ¶ 14.) More specifically, Hamilton Southeastern charges $2,400 per equivalent dwelling unit (EDU) each time a new customer is added to its sewage system. (See Pet'r Br. at 6-7.) This charge is generally paid by the property developer before he conveys the property to the buyer. (See Pet'r Pet. ¶ ¶ 18, 21.) Of the $2,400, Hamilton Southeastern remits $1,050 to the Town of Fishers, Indiana pursuant to a Wholesale Sewer Agreement in order to purchase additional sewage treatment capacity. (See Pet'r Pet. ¶ 15; Pet'r Br. at 6-7.) Hamilton Southeastern retains the remaining $1,350 for future capital improvements and projects including, among other things, installing new equipment and lift stations (thereby increasing capacity in its own sewage collection and disposal system). (See Pet'r Pet. ¶ 23.)
The second charge is the connection fee that is $305 per EDU. (See Pet'r Pet. P 31.) The connection fee is imposed during the construction of a home or other structure and is generally paid by the builder. (See Pet'r Pet. ¶ ¶ 31, 33.) In exchange for the connection fee, Hamilton Southeastern has
its agent inspect the sewer line to determine whether it can be connected to the sewer system. (See Pet'r Pet. ¶ 32.) After payment of the connection fee and the inspection, Hamilton Southeastern issues a permit. (See Pet'r Br. at 10.) The builder takes this permit to Fishers, and after confirming the builder has paid the connection fee, Fishers issues the builder a building permit. (See Pet'r Pet. ¶ 35.)
In August of 2010, the Department completed an audit of Hamilton Southeastern. (See Resp't Confd'l Des'g Evid., Ex. A at 26.) As a result, the Department issued proposed URT assessments, including interest and penalties on, among other things, Hamilton Southeastern's receipts from its system development charges and connection fees. (See Resp't Confd'l Des'g Evid., Ex. A at 2-13, 29-30, 35.)
Hamilton Southeastern protested the proposed assessments. (See Resp't Confd'l Des'g Evid., Ex. B at 2-10.) (See also Pet'r Des'g Evid. at 2 (stating that Hamilton Southeastern designated all evidence that was designated by the Department).) On August 31, 2012, after conducting an administrative hearing, the Department issued a Letter of Findings denying Hamilton Southeastern's protest. (See Resp't Confd'l Des'g Evid., Ex. A at 14-25.)
Hamilton Southeastern initiated this original tax appeal on October 29, 2012. Hamilton Southeastern and the Department filed cross-motions for summary judgment, and the Court held a hearing on the motions on September ...