ATTORNEYS FOR PETITIONER: FRANCINA A. DLOUHY J. DANIEL OGREN
FAEGRE BAKER DANIELS LLP Indianapolis, IN
THEODORE R. BOTS SCOTT L. BRANDMAN JENNY A. AUSTIN BAKER
& McKENZIE LLP New York, NY
ATTORNEYS FOR RESPONDENT: GREGORY F. ZOELLER ATTORNEY GENERAL
OF INDIANA JESSICA R. GASTINEAU WINSTON LIN DEPUTY ATTORNEYS
GENERAL Indianapolis, IN
ORDER ON RESPONDENT'S VERIFIED MOTION FOR
Blood Wentworth Judge, Indiana Tax Court
University of Phoenix, Inc. ("UoPX") has appealed
the Indiana Department of State Revenue's assessment of
additional gross income tax and interest for the period
ending on August 31, 2009, through and including August 31,
2011 (the "period at issue"). The matter is
currently before the Court on the Department's Verified
Motion for Protective Order. The Court denies the
AND PROCEDURAL HISTORY
November 7, 2014, UoPX initiated an original tax appeal
alleging that the Department's assessment of additional
gross income tax and interest for the period at issue ran
afoul of the sourcing provisions for service revenue under
Indiana Code § 6-3-2-2. More specifically, UoPX claimed
that the Department erred in computing its alleged tax
liability by sourcing some of its online tuition service
revenue to Indiana based on a market or customer-based test
despite the fact that Indiana Code § 6-3-2-2 required
that the revenue be sourced based on the costs of performance
litigation continued, the parties cooperatively used a
variety of discovery tools to develop their respective
positions. By October 21, 2016, however, the parties'
cooperative efforts broke down and the Department filed a
discovery enforcement motion that asked the Court to either
bar or reschedule an October 28, 2016, subpoenaed deposition
of the former Commissioner of the Indiana Department of State
Revenue, Michael Alley. Although the Court quashed the
subpoena, it advised the parties that UoPX could depose Mr.
Alley at a later date.
November 1, 2016, UoPX sent a second subpoena to Mr. Alley,
requesting that he appear for a deposition on November 29,
2016. UoPX sought to depose Mr. Alley on the following topics
(which are referred to hereafter as the "deposition
1) the Tax Competitiveness and Simplification Report of
September 2014 (the "Report"), Mr. Alley's
September 29, 2014, presentation on the Report, and Section
14 of House Bill 1349;
2) the Department's "position and interpretation of
Indiana's 'costs-of-performance' sourcing regime
generally and how it should be applied to UoPX
3) "the Department's involvement in the studies and
reports, and specifically the Department's views,
comments and approval of the statements describing
Indiana's 'cost[s] of performance' sourcing
regime pursuant to [Indiana Code] § 6-3-2-2(f)[;]"
4) "the Department's involvement in the studies and
reports, and specifically the Department[']s views,
comments and approval of the statements regarding the
replacement of Indiana's 'cost[s] of performance'
sourcing with market or customer based sourcing."
(See Pet'r Resp. Resp't V. Mot. Protective
Order ("Pet'r Resp. Resp't V. Mot.")
¶¶ 3, 11 (referring to Pet'r Resp.
Resp't V. Mot. Protective Order or Alternative Quash Dep.
But Allow Extension Of Time To Take Deps. ("Pet'r
Resp.") ¶¶ 9-11).) On November 10, 2016, the
Department responded with its Verified Motion for Protective
Order, asserting that a protective order must be issued to
protect Mr. Alley from a "burdensome and
oppressive" deposition. (See Resp't V. Mot.
Protective Order ("Resp't V. Mot.")
¶¶ 10-11.) On November 18, 2016, UoPX filed its
response and on November 22, 2016, the ...