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For Member A, Taxpayer directs the Department to the fact that the Member A's president was also Taxpayer's president. According to Taxpayer, the president visited Indiana's location twice a month on average and conducted various managerial duties while in Indiana. Taxpayer further notes that Member A received management fees from Taxpayer.
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In this case, Taxpayer has provided sufficient information
to conclude that its president performed certain services in Indiana. However,
in order for Member A to be comparable to the parent in Wabash, the president
of Member A would need to be performing services in Indiana on behalf of Member
A, just as the subsidiary's employee in Wabash was working in Indiana on behalf
of the parent corporation. Further, based on the Department's audit report,
Member A reported no Indiana payroll or other Indiana apportionment factors,
which compels the conclusion that Member A did not derive adjusted gross income
from Indiana sources. See Hunt, 709 N.E.2d at 781. Thus, absent some indication
that Member A was working as Member A's president (as opposed to Taxpayer's),
Taxpayer's protest is denied for Member A.
With regard to Member B, Taxpayer has stated that Member B's
employees attend quarterly training at Taxpayer's Indiana facility. Taxpayer
further asserts that all purchases by Member B from Taxpayer are approved in
Indiana. Finally, Taxpayer argues that Member B's executives and employees
travel to Indiana monthly to address production and product ordering issue. In
addition, Taxpayer indicates that its executives and employees engage in
quality review of products now located in Indiana.
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In this case, Taxpayer has indicated that Member B engaged
in certain activities in Indiana. However, the activities in question are
ancillary to the solicitation of orders. As such, P.L. 86-272 precludes Indiana
from subjecting Member B to its corporate income tax, and thus Member B is not
considered to be "doing business in Indiana" within the meaning of 45 IAC 3-1-1-38(7).
