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Friday, December 18, 2015

Ind. Decisions - Tax Court decides one today, involving assessment of AGIT, finding IDOR's actions improper

In Columbia Sportswear USA Corporation v. Indiana Department of State Revenue, a 17-page opinion, Judge Wentworth writes:

Columbia Sportswear USA Corporation challenges the Indiana Department of State Revenue’s assessment of adjusted gross income tax (AGIT) for the 2005, 2006, and 2007 tax years (the “years at issue”). The matter is currently before the Court on the parties’ cross-motions for summary judgment. The dispositive issue is whether the Department’s adjustments to Columbia Sportswear’s net income for each of the years at issue were proper. The Court finds that they were not. * * *

The Department is an administrative agency and may exercise only those powers expressly or impliedly conferred by the General Assembly. See IND. CODE § 6-8.1-2-1 (2005); Auburn Foundry, Inc. v. State Bd. of Tax Comm’rs, 628 N.E.2d 1260, 1263 (Ind. Tax Ct. 1994). Any ambiguous grants of power, therefore, must generally be resolved against the Department. See Gary Cmty. Sch. Corp. v. Indiana Dep’t of Local Gov’t Fin., 15 N.E.3d 1141, 1146 (Ind. Tax Ct. 2014).

In this case, the Department’s reliance on Indiana Code § 6-3-2-2(l)(4) was improper because that statute permits the Department to use only methods that divide the tax base, not methods that recalculate the tax base.

The Department’s reliance on Indiana Code § 6-3-2-2(m) was also improper because the designated evidence simply does not show that the Standard Sourcing Rules failed to fairly represent Columbia Sportswear’s Indiana source income.

Finally, even if Columbia Sportswear’s Indiana source income was not fairly reflected under the Standard Sourcing Rules, the Department’s adjustments would still be improper because they were unreasonable. For all of these reasons, the Court therefore GRANTS summary judgment in favor of Columbia Sportswear and against the Department.

Posted by Marcia Oddi on December 18, 2015 04:27 PM
Posted to Ind. Tax Ct. Decisions