ATTORNEY FOR PETITIONER: BRETT J. MILLER, BINGHAM GREENEBAUM
DOLL LLP, Indianapolis, IN.
FOR RESPONDENT: GREGORY F. ZOELLER, ATTORNEY GENERAL OF
INDIANA, EVAN W. BARTEL, JESSICA R. GASTINEAU, DEPUTY
ATTORNEYS GENERAL, Indianapolis, IN.
ON PETITIONER'S MOTION FOR PARTIAL SUMMARY
Blood Wentworth, Judge.
Southeastern Utilities, Inc. challenges the Indiana
Department of State Revenue's assessment of Indiana's
utility receipts tax (URT) on connection fees it collected
during the 2006, 2007, and 2008 tax years (the years at
issue). This matter is currently before the Court on Hamilton
Southeastern's motion for partial summary judgment, which
presents one issue: whether the amount of Hamilton
Southeastern's nontaxable connection fees is subject to
URT because it was not separated from its taxable receipts on
its returns. The Court finds that the amount of Hamilton
Southeastern's connection fees was separated from taxable
receipts on its returns.
AND PROCEDURAL HISTORY
October 2012, Hamilton Southeastern initiated an original tax
appeal challenging the Department's proposed URT
assessments on, among other things, receipts from its
connection fees. In that appeal, Hamilton Southeastern
claimed that its connection fees were not subject to the URT
under either Indiana Code § § 6-2.3-1-4 or
6-2.3-3-10. The Department argued that Hamilton
Southeastern's connection fees were taxable gross
receipts not only under those statutes, but also under
Indiana Code § 6-2.3-3-2.
August of 2015, this Court issued an opinion regarding the
parties' cross-motions for summary judgment in which it
found that Hamilton Southeastern's connection fees were
not gross receipts subject to the URT under either Indiana
Code § § 6-2.3-1-4 or 6-2.3-3-10. See Hamilton
Se. Utilities, Inc. v. Indiana Dep't of State
Revenue, 40 N.E.3d 1284, 1287-89 (Ind.Tax Ct. 2015)
(explaining that the connection fees were not gross receipts
under Indiana Code § 6-2.3-1-4 because they were not
received in consideration for the retail sale of utility
services for consumption and were not gross receipts under
Indiana Code § 6-2.3-3-10 because they were not directly
related to the delivery of sewage utility services to the
utility service consumer). With respect to the taxability of
the connection fees under Indiana Code § 6-2.3-3-2, the
Court explained that the designated evidence did not indicate
that Hamilton Southeastern separated the amount of its
connection fees from its taxable receipts on its records, but
that there was a genuine issue of material fact whether the
amount was separated on its returns. Id. at 1289-90.
Hamilton Southeastern is before the Court, having filed a
motion for partial summary judgment, to resolve this
remaining issue. The Department filed its response in
opposition to Hamilton Southeastern's motion on November
20, 2015. The Court held a hearing on Hamilton
Southeastern's motion on February 17, 2016. Additional
facts will be supplied if necessary.
Summary judgment is appropriate when there are no genuine
issues of material fact and the moving party is entitled to
judgment as a matter of law. Ind. Trial Rule 56(C). When
reviewing a motion for summary judgment, the Court will
construe all properly asserted facts and reasonable
inferences drawn therefrom in favor of the non-moving party.
See Scott Oil Co. v. Indiana Dep't of State
Revenue, 584 N.E.2d 1127, 1128-29 (Ind.Tax Ct. 1992).
Southeastern argues that its connection fees are not taxable
under Indiana Code § 6-2.3-3-2 because they were
separated from taxable receipts on its URT returns (i.e., its
Forms URT-1). (See, e.g., Hr'g Tr. at 7-8.) As support
for its argument, Hamilton Southeastern designated, among
other things, its Forms URT-1 for the years at
issue. (See Pet'r Des'g Evid., Aff.
of A. Bradley Mares (" Mares Aff." ) at Ex. A.)
reviewing these forms, the Court notes that Hamilton
Southeastern was required to provide its " taxable
receipts" received from the " retail sale of
utility services" on line one of its Forms URT-1. (See
Mares Aff., Ex. A at 1-3.) This necessarily required Hamilton
Southeastern to have separated the amount of its nontaxable
connection fees from its taxable receipts. Moreover, the
designated evidence showed that the amount of the connection
fees was not reported as taxable receipts by Hamilton
Southeastern. (Compare Resp't Des'g Evid., Ex. A at
35 with Mares Aff., Ex. A at 1-3.) Thus, the Court finds that
Hamilton Southeastern did separate the amount of its
connection fees from its taxable receipts reported on line
one of its Forms URT-1.
the Department claims that Hamilton Southeastern did not
satisfy the requirements of Indiana Code § 6-2.3-3-2
because the statute requires taxpayers to separately state
both their taxable and nontaxable receipts on their returns.
(See Hr'g Tr. at 17-20, 31-32, 37-38.) Indiana Code
§ 6-2.3-3-2 states that receipts " that would
otherwise not be taxable under [the URT] are taxable . . . to
the extent that the amount of the nontaxable receipts are not
separated from the taxable receipts on the records or returns
of the taxpayer." Ind. Code § 6-2.3-3-2 (2006).
This plain language does not require a taxpayer to provide
both the amount of nontaxable and taxable receipts on a Form
URT-1; instead, it merely requires the taxpayer to show on
the return that the amount of nontaxable receipts has been
separated from the amount of taxable receipts. See id.
Accordingly, the Department asks the Court to read an
additional element (reporting both nontaxable and taxable
receipts on the return) into the statute that the Legislature
did not require. See DeKalb Cnty. E. Cmty. Sch. Dist. v.
Dep't of Local Gov't Fin.,930 N.E.2d 1257, 1260
(Ind.Tax Ct. 2010) (explaining that when the language of a
statute is clear and unambiguous, the Court may not expand or
contract the meaning of a statute by reading language into it
to correct any supposed omission or defects). Moreover,
because the Department did not provide a line on the return
to identify the amount of nontaxable receipts, the