American United Life Insurance Company v. Indiana Department of State Revenue
84 N.E.3d 1244
| Ind. T.C. | 2017Background
- AUL, an Indiana insurer, bought computer software from out-of-state vendors; the software was first loaded on servers in Texas.
- AUL paid Texas use tax of 8.25% (6.25% state + 2% local) to the Texas Comptroller and also paid Indiana use tax of 7% because it used the software in Indiana.
- AUL sought a refund/credit from Indiana under Indiana Code § 6-2.5-3-5 for taxes paid to another state; the Department initially denied, then partially granted credit only for the 6.25% state portion, not the 2% local portion.
- The parties filed cross-motions for summary judgment; the Department late-filed an affidavit from a Texas official which the court denied as untimely.
- Central legal question: whether Indiana’s credit statute permits credit for local-level taxes collected by another state (here, the Texas municipal tax collected by the Texas Comptroller).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether "sales tax, purchase tax, or use tax" in I.C. § 6-2.5-3-5 is limited to state-level taxes | Credit applies to any of the listed tax types, including local taxes; statute language does not limit by "state" | "State" in statute should be read to limit creditable taxes to state-level taxes only | Court: The statute’s placement of "state" does not modify the listed tax types; creditable taxes include those listed regardless of being local or state-level |
| Whether tax paid to a state official who collects and remits local municipal tax qualifies as "paid to another state" | Payment to the Texas Comptroller counts as payment to "another state," so full tax paid to Texas is creditable | The 2% local portion was paid to a municipality (not a state); the Comptroller was merely a conduit, so that portion is not payment to "another state" | Court: The Credit Statute focuses on the payee; payment to the Texas Comptroller satisfies "paid to another state," so the full amount is creditable |
| Admissibility of late-filed affidavit from Texas official | Objected as untimely and prejudicial; should be struck under Trial Rule 56 | Sought to clarify Texas tax administration by designating the affidavit one day before hearing | Court: Denied the Department’s motion to designate; affidavit excluded as untimely |
| Whether constitutional (Commerce Clause) claim needed resolution | Argued denial of credit for local tax would raise dormant Commerce Clause issues | Department raised but court found statutory grounds dispositive | Court: Did not address Commerce Clause because statute interpretation resolved case in plaintiff’s favor |
Key Cases Cited
- Horseshoe Hammond, LLC v. Indiana Dep’t of State Revenue, 865 N.E.2d 725 (Ind. Tax Ct. 2007) (cross-motions summary judgment standard)
- Miller Pipeline Corp. v. Indiana Dep’t of State Revenue, 995 N.E.2d 733 (Ind. Tax Ct. 2013) (court considers only properly designated admissible evidence on summary judgment)
- HomEq Servicing Corp. v. Baker, 883 N.E.2d 95 (Ind. 2008) (deadline for summary judgment filings under Trial Rule 56)
- Day v. State, 57 N.E.3d 809 (Ind. 2016) (apply plain statutory language; courts cannot rewrite clear statutes)
- DeKalb Cnty. E. Cmty. Sch. Dist. v. Dep’t of Local Gov’t Fin., 930 N.E.2d 1257 (Ind. Tax Ct. 2010) (may not add language to correct alleged statutory omissions)
- Ind. Alcohol & Tobacco Comm’n v. Spirited Sales, LLC, 79 N.E.3d 371 (Ind. 2017) (may not add words to a statute beyond legislative text)
- C & C Oil Co. v. Indiana Dep’t of State Revenue, 570 N.E.2d 1376 (Ind. Tax Ct. 1991) (suppositions/hypotheticals insufficient to create material fact dispute)
- Comptroller of the Treasury of Maryland v. Wynne, 135 S. Ct. 1787 (U.S. 2015) (dormant Commerce Clause decision referenced by plaintiff)