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Tuesday, October 05, 2010

Ind. Decisions - Second decision today from the Supreme Court

In Indiana Department of State Revenue v. Belterra Resort Indiana, LLC, an 11-page, 3-2 opinion. Justice Rucker writes:

In this opinion we address the question of whether a contribution by a parent corporation to the capital of its subsidiary is automatically excluded from Indiana use tax. We conclude it is not. * * *

We reverse the decision of the Tax Court, and enter summary judgment in favor of the Department.

Shepard, C.J., and Sullivan, J., concur.

Boehm, J., dissents with separate opinion in which Dickson, J., joins.

I respectfully dissent. I believe the majority adopts a definition of contribution to capital that incorrectly assumes a contribution to capital is for no consideration, and then imports contract law notions of consideration to conclude that Belterra's transfer of this riverboat to its subsidiary was not a contribution to capital. * * *

Importing the step transaction doctrine into Indiana tax law should be done, if at all, on a more fully developed argument in the Tax Court. I would affirm on this record, where the argument was not “developed,” and we therefore do not have the Tax Court‟s analysis of it.

Posted by Marcia Oddi on October 5, 2010 02:04 PM
Posted to Ind. Sup.Ct. Decisions