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Monday, July 18, 2016

Ind. Decisions - Tax Court posts one ruling today, filed Friday

In Fresenius USA Marketing, Inc. v. Indiana Department of State Revenue, a 9-page opinion filed July 15th, Judge Wentworth writes:

Fresenius USA Marketing, Inc. has appealed the Indiana Department of State Revenue’s denial of its claim for refund of gross retail (sales) tax remitted on its sales of durable medical equipment and supplies to Indiana clinics between January 1, 2004, and October 31, 2007 (the Period at Issue). The matter, currently before the Court on the parties’ cross-motions for summary judgment, presents one dispositive issue: whether the Department is bound by its published ruling interpreting the exemption provided by Indiana Code § 6-2.5-5-18(a). * * *

The Department argues first that it is bound by Indiana Code § 6-8.1-3-3(b) only when it interprets a statute by promulgating a regulation. (See Hr’g Tr. at 57-63.) Accordingly, the Department maintains that because the 1998 Ruling is not a regulation, it is not bound to follow it. The Court is not persuaded by the Department’s argument for two reasons. * * *

Next, the Department claims that Fresenius cannot rely on its interpretation of the Durable Medical Equipment Exemption in its 1998 Ruling because regulation 45 IAC 15-3-2(d)(3) states that “‘only the taxpayer to whom the ruling was issued is entitled to rely on it.’” (See Resp’t Reply Br. at 7 (citation omitted).) The Department’s argument fails, however, for three reasons. * * *

Finally, the Department claims that its own regulation indicates that the taxpayer to whom a ruling is issued is alone entitled to rely on it. (See Resp’t Reply Br. at 7 (citing 45 I.A.C. 15-3-2(d)(3)).) The Department’s claim, however, relies on only one isolated portion of its regulation, ignoring the remainder of the provision that expressly permits other taxpayers than the taxpayer to whom the ruling was issued to rely on its rulings * * *

Even though the 1998 Ruling was not issued to Fresenius, it was entitled to rely on it because it demonstrated factual similarity. Because it did not rebut Fresenius’s showing of similarity, the Department is bound by its interpretation in its 1998 Ruling. Consequently, while the Department is not entitled to summary judgment on this basis, Fresenius is.

Posted by Marcia Oddi on July 18, 2016 11:02 AM
Posted to Ind. Tax Ct. Decisions