9 N.E.3d 263
Ind. T.C.2014Background
- Medco Health Solutions, Inc. appeals the Indiana Department of State Revenue's final determination of additional Indiana adjusted gross income tax for the periods ending August 19, 2003, December 27, 2003, December 25, 2004, and December 31, 2005.
- The Department audited Medco in 2007 and recalculated its Indiana sales factor, creating the asserted tax liability for the period in issue.
- Proposed Assessments were issued on June 8, 2009; Medco protested, a hearing occurred on March 30, 2010, and a Letter of Findings denying the protest was issued on March 7, 2011.
- Medco filed an original tax appeal on May 5, 2011; the Department moved to dismiss or for summary judgment, and a hearing was held on September 30, 2011.
- The Department's motion argued two claims should be dismissed under Trial Rule 12(B)(6): (1) Medco could not rely on two advisory letters binding on the Department, and (2) Medco could not obtain a refund because no refund claim had been filed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the two advisory letters binding on the Department as to Medco's receipts sourcing? | Medco argues the letters bind the Department on the transaction, per 45 I.A.C. 15-3-2(e). | Department contends the letters are binding only to the named taxpayer; here the letters were issued to an unnamed client via a representative. | Advisory letters not binding on Medco; letters issued to an unnamed client do not bind the Department. |
| Is Medco entitled to a refund claim that the Department denied during audit? | Medco sought a refund during the audit and asks the court to order payment. | Medco never filed a formal refund claim as required by statute and regulation. | No relief; Medco did not file a valid refund claim. |
Key Cases Cited
- Wireless Advocates, LLC v. Indiana Dep't of State Revenue, 973 N.E.2d 111 (Ind. Tax Ct.2012) (12(B)(6) standard; consider only petition on motion to dismiss)
- Town of Plainfield v. Town of Avon, 757 N.E.2d 705 (Ind.Ct.App.2001) (plainly states standard for dismissal under 12(B)(6))
- Mirant Sugar Creek, LLC v. Indiana Dep’t of State Revenue, 930 N.E.2d 697 (Ind.Tax Ct.2010) (binding vs non-binding letter interpretations)
- UACC Midwest, Inc. v. Indiana Dep’t of State Revenue, 629 N.E.2d 1295 (Ind.Tax Ct.1994) (amended returns and form requirements for refunds)
- Graves v. Kovacs, 990 N.E.2d 972 (Ind.Ct.App.2013) (treating attached instruments as part of petition)