Tuesday, October 21, 2008
Ind. Courts - Tax Court issues one yesterday
The tax Court issued one decision late yesterday.
In MBNA American Bank v. Ind. Dept. Revenue, a 9-page opinion, Judge Fisher writes:
The Court restates the issue as whether the Commerce Clause requires MBNA to have a physical presence in Indiana in order to be subject to the FIT. * * *
[T]his Court finds that the Supreme Court has not extended the physical presence requirement
beyond the realm of sales and use taxes. Thus, Bellas Hess and Quill do not control the outcome of this case. Accordingly, the Supreme Court has left the door open for this Court to determine, as a matter of first impression, whether an economic presence can also satisfy the substantial nexus requirement for purposes of the FIT. * * *
The stipulated facts in this case indicate that, during the years at issue, MBNA had an economic presence in Indiana. MBNA regularly solicited business from Indiana customers. (Stip. Facts ¶¶ 7-10.) MBNA’s Indiana customers exceeded a “de minimis” number. (Stip. Facts ¶ 17.) Furthermore, MBNA regularly received interest and fees from those customers. (Stip. Facts ¶ 19 (footnote added).) Finally, the Court notes that MBNA’s confidential FIT returns reported significant gross receipts attributable to its Indiana customers. Thus, during the years at issue, MBNA had a substantial nexus with Indiana for purposes of the FIT.
CONCLUSION. The Commerce Clause does not require MBNA to have a physical presence in Indiana to be subject to the FIT – its economic presence is enough. The Department’s motion for summary judgment is therefore GRANTED.
Posted by Marcia Oddi on October 21, 2008 12:51 PM
Posted to Ind. Tax Ct. Decisions