ATTORNEY FOR PETITIONER: ANDREW R. WOLF THE WOLF LAW OFFICE
Michigan City, IN.
ATTORNEYS FOR RESPONDENT: CURTIS T. HILL, JR. ATTORNEY
GENERAL OF INDIANA JESSICA R. GASTINEAU EVAN W. BARTEL
WINSTON LIN DEPUTY ATTORNEYS GENERAL Indianapolis,
ORDER ON PARTIES' CROSS-MOTIONS FOR SUMMARY
Blood Wentworth, Judge.
Industries, Inc. has challenged the Indiana Department of
State Revenue's final determination assessing it with
unpaid Indiana sales and use tax liabilities for the 2008,
2009, and 2010 tax years (the years at issue). The matter is
currently before the Court on the parties' cross-motions
for summary judgment and presents just one issue for the
Court to decide: whether the Department's assessments are
void as a matter of law because of the audit procedures it
employed. Upon review, the Court finds that they are not.
AND PROCEDURAL HISTORY
a manufacturer of heating equipment, is located in LaPorte
County, Indiana. (Resp't Des'g Evid. Supp. Partial
Mot. Summ. J. ("Resp't Des'g Evid."), Ex.
15 ¶¶ 1, 10.) In July of 2010, the Department
notified Thermo-Cycler that in August it would be conducting
a compliance audit for tax years 2007 through 2009 and
indicated that it would need access to, among other things,
Thermo-Cycler's federal income tax returns, sales reports
showing total and exempt sales, and withholding tax forms.
(Resp't Des'g Evid., Ex. A at Ex. 1.) At
Thermo-Cycler's request, however, the audit start date
was postponed several times. (See, e.g., Pet'r
Des'g Evid., Ex. A at Exs. 2-7.) In the meantime,
Thermo-Cycler did not provide the Department with access to
any of the requested records. (See Pet'r
Des'g Evid., Ex. A at Ex. 7.)
beginning of January 2011, the Department sent Thermo-Cycler
a letter stating that it was necessary for the audit to be
completed by the end of the month and warned that if the
requested records were not forthcoming, it would complete the
audit based on the "best information available."
(Pet'r Des'g Evid., Ex. A at Ex. 7.) There was no
further communication between Thermo-Cycler and the
Department until April of 2011 when the Department issued
both an audit summary and Proposed Assessments against
Thermo-Cycler imposing approximately $70, 000 in sales and
use tax liabilities for the 2008, 2009, and 2010 tax years.
(See Pet'r Des'g Evid., Ex. A at 71-72, Ex.
B at Exs. 2-3; Resp't Confd'l Des'g Evid., Ex. B
¶ 7, Ex. E ¶ 5, Ex. 11.) The Department's
Proposed Assessments were based on figures it extrapolated
from Thermo-Cycler's 2007-2009 federal tax returns.
(See Pet'r Des'g Evid., Ex. B at 17.)
subsequently protested the Proposed Assessments, claiming
that they were void as a matter of law because the Department
did not follow the statutorily-prescribed audit procedure.
(See, e.g., Pet'r Des'g Evid., Ex. A at Ex.
8.) In the alternative, Thermo-Cycler claimed that the amount
of the tax liabilities set forth in the Proposed Assessments
were improper because they were based on certain erroneous
mathematical calculations. (See, e.g., Pet'r
Des'g Evid., Ex. A at Ex. 8.) After conducting a hearing
on the protest, the Department issued a Letter of Findings in
which it denied Thermo-Cycler's void as a matter of law
argument, but granted that portion of Thermo-Cycler's
protest relating to the propriety of the mathematical
calculations subject to a supplemental audit. (See,
e.g., Pet'r Des'g Evid., Ex. A at Ex. 8.) After
the supplemental audit was completed, the Department issued
revised Proposed Assessments that reduced Thermo-Cycler's
total sales and use tax liabilities for the years at issue to
approximately $62, 000. (See Resp't Des'g
Evid., Ex. D ¶¶ 4-5; Resp't Confd'l
Des'g Evid., Exs. 10, 12.)
filed an original tax appeal on October 19, 2011. In 2013,
while the case was pending, the Department conducted a second
supplemental audit of Thermo-Cycler and reduced the Proposed
Assessments again, to approximately $16, 000. (See
Resp't Des'g Evid., Ex. C ¶¶ 4-5;
Resp't Confd'l Des'g Evid., Exs. 9, 13.) On July
19, 2016, Thermo-Cycler and the Department filed
cross-motions for summary judgment. Additional facts will be
supplied as necessary.
judgment is proper only when the designated evidence
demonstrates that no genuine issues of material fact exist
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). Cross-motions for summary
judgment do not alter this standard. Horseshoe Hammond,
LLC v. Indiana Dep't of State Revenue, 865 N.E.2d
725, 727 (Ind. Tax Ct. 2007), review denied.
Department is charged with the administration, collection,
and enforcement of Indiana's sales and use taxes.
See Ind. Code § 6-8.1-1-1 (2011) (amended
2013); Ind. Code § 6-8.1-3-1 (a) (2011). Accordingly,
the Department "may audit any returns filed in respect
to [those] taxes . . . and may investigate any matters
relating to [those] taxes." Ind. Code § 6-8.1
conducting an audit, the Department may "inspect any
books, records, or property of any taxpayer which is relevant
to the determination of the taxpayer's tax
liabilities!.]" Ind. Code § 6-8.1-4-2(a)(3) (2011).
To that end, every person subject to the sales or use taxes
"must keep books and records so the [D]epartment can
determine the amount, if any, of [his] liability for th[ose]
tax[es] by reviewing those books and records." Ind. Code
§ 6-8.1-5-4(a) (2011). The taxpayer must allow
inspection of his books, records, and returns by the
Department at all reasonable times. I.C. § 6-8.1-
5-4(c). When the taxpayer fails to maintain or provide the
Department with his records, the Department may determine the
taxpayer's tax liability based on the best ...