Indiana Department of State Revenue v. Belterra Resort Indiana, LLC, 942 N.E.2d 796

Belterra seeks rehearing of the Indiana Supreme Court’s ruling that capital contributions are not categorically exempt from use tax; the use tax arose from Belterra’s riverboat purchase from Pinnacle Entertainment, Inc.
Tax Court granted Belterra summary judgment that no use tax applied; the Supreme Court reversed, applying the step transaction doctrine to the capital contribution.
The Court held Pinnacle’s capital contribution of the riverboat was a taxable retail transaction under Indiana use tax.
On rehearing Belterra argues misapplication of the step transaction doctrine, lack of genuine facts for summary judgment, and penalty issues are not addressed by the Tax Court.
The Court grants rehearing to address penalty issues and remands to the Tax Court to determine timeliness of Belterra’s argument and whether any penalty should be waived.
The Court maintains the original ruling on use tax, except for remanding the penalty question to the Tax Court.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Penalty for negligence applicable?	Belterra argues it was not negligent due to reasonable care.	Department contends negligence was properly determined; timing and evidence are contestable.	Remanded on penalty issue; not ripe for decision.
Waiver of penalty for reasonable cause?	Belterra asserts reasonable cause exists to waive penalties.	Department maintains penalties can be waived only upon proper showing of reasonable cause.	Remanded to Tax Court to decide waiver.
Timeliness of Belterra’s penalty argument?	Belterra contends timely filing of penalty challenge.	Department argues untimely unless administrative remedies exhausted.	Remanded to Tax Court to determine timeliness.

Grand Victoria Casino & Resort, LP v. Indiana Department of State Revenue, 789 N.E.2d 1041 (Ind. Tax Ct.2003) (capital contributions and use tax context discussed)
State Bd. of Tax Comm'rs v. Indianapolis Racquet Club, Inc., 743 N.E.2d 247 (Ind.2001) (special expertise and deference to Tax Court in tax cases)
Bethlehem Steel Corp., 639 N.E.2d 264 (Ind.1994) (summary judgment standard and Tax Court deference)