Excerpts of the Tax Court Decision follow:
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The Department contends that the Court does not have subject matter jurisdiction over Garwood’s case because it does not satisfy the “arising under” requirement of Indiana Code § 33-26-3-1. More specifically, the Department contends that Garwood’s case does not arise under Indiana’s tax laws for two reasons. First, it claims that Garwood’s case is not a “valid” refund claim under Indiana Code § 6-8.1-9-1. (See Confd’l Mem. Supp. Resp’t Mot. Dismiss (hereinafter, “Resp’t Br.”) at 6-8.) The Department explains that Garwood’s case, unlike a case involving a “valid” refund claim, is not based on what she actually paid toward her tax liability by using a method described in Indiana Code § 6-8.1-8-1 (i.e., $175.48), but is instead based on a purported tax payment derived from the appraised value of her animal inventory (i.e.,
$122,650). (See Resp’t Br. at 7-8; Resp’t Confd’l Reply Supp. Resp’t Mot. Dismiss (hereinafter “Resp’t Reply Br.”) at 2-3, 5 (footnote added).) Second, the Department maintains that Garwood’s case does not arise under Indiana’s tax laws because it does not involve the collection of a tax or defenses to that collection pursuant to the Indiana Supreme Court’s decision in Aisin, but rather seeks to recover monies that allegedly were not paid or credited to her by mistake. (See Resp’t Br. at 8-9 (citing Aisin, 946 N.E.2d at 1155); Resp’t Reply Br. at 4-5.) As such, the Department maintains that Garwood’s case involves a claim for compensatory damages, not a refund of sales tax. The Court, however, is not persuaded by either of these arguments.
Indiana Code § 6-8.1-9-1 provides, in relevant part, “[i]f a person has paid more tax than the person determines is legally due for a particular taxable period, the person may file a claim for a refund with the department.” IND. CODE § 6-8.1-9-1(a) (2012). The claim must be filed within three years of the date of payment and “must set forth the amount of the refund to which the person is entitled and the reasons that the person is entitled to the refund.” I.C. § 6-8.1-9-1(a). Here, the facts show that just over a week after the Court issued Garwood II, Garwood filed with the Department a completed Form GA-110L, its prescribed form for claims for refund. (See Pet’r Pet. ¶ 3, Ex. A at 3.) The document provided that Garwood made a tax payment on June 2, 2009, stated the amount of refund requested, and explained why she believed she was entitled to a refund:
Jeopardy assessments were issued against me for sales taxes purportedly owed. On June 2, 2009 my personal property (dogs and puppies) were seized from my home and farm. We followed the appeals process and the Indiana Tax Court has held that the jeopardy assessments are void and ordered the Indiana Dept. of Revenue to take all actions necessary to effect the order. I am attaching an appraisal of the value of my property as well as the decision of the Indiana Tax Court. My dogs were appraised at $122,650.00. I calculate my actual sales tax due as $1217.00 for 2008 and $1333.50 for 2009. In addition to taking the dogs the Department took $1260 in cash and uncashed checks totaling $1325. Subtracting what I owed from what was seized I am owed a refund of $122,684.50.
(Pet’r Pet., Ex. A at 3.) Thus, Garwood’s filing of the Form GA-110L complied with the requirements of Indiana Code § 6-8.1-9-1.
Furthermore, and as acknowledged by the Department, Garwood did everything the Department indicated that she needed to do. Indeed, the facts reveal that during Garwood’s first appeal, the Department repeatedly argued that she was required to file a refund claim under Indiana Code § 6-8.1-9-1 to obtain any relief whatsoever. For example, during the hearing on the Garwood I motion to dismiss, the Department asserted that because Indiana is a “pay-to-play” state, Garwood needed to pay the jeopardy assessments in their entirety and then file a refund claim to satisfy the exhaustion of administrative remedies requirement. (See Pet’r Resp. Br. Ex. G at 14-19.) Then, in moving for summary judgment in Garwood II, the Department stated: “The Petitioners can avail themselves of Ind. Code § 6-8.1-9-1 and file a claim for refund of amounts either seized by or paid to the Department.” (See Pet’r Resp. Br. Ex. F at 24 (emphasis added).) Moreover, in petitioning the Indiana Supreme Court to review Garwood II, the Department acknowledged that Garwood had already filed a refund claim:
Indiana’s refund remedy provides meaningful backward-looking relief to rectify any erroneous, unlawful, or unconstitutional tax collection. It does so by providing a fair opportunity to challenge the accuracy and legal validity of a tax obligation, both administratively and judicially. It provides the clear and certain remedy of a refund with interest if the taxes are found to have been collected erroneously, unlawfully, or unconstitutionally. This remedy has been available to the Garwoods since the day their inventory was levied. They have, until the past month, intentionally avoided this remedy.
(See Pet’r Resp. Br. Ex. H at 36 (emphasis added).) (See also Pet’r Pet. at 2, Ex. B at 1; Resp’t Des’g Evid., Vol. 2, Ex. 5 at 1 (demonstrating that the Department issued a check to Garwood in June 2012 and, on two separate occasions, indicated the “refund” was for her overpayment of sales tax for the 2007 tax period).) Based on the totality of these jurisdictional facts, the Court finds that Garwood’s case “arises under Indiana’s tax laws”: she filed a refund claim with the Department on August 29, 2011, pursuant to Indiana Code § 6-8.1-9-1 and now seeks to have the validity of her claim resolved by this Court.
Second, the General Assembly created this Court “to channel tax disputes into a single specialized tribunal, thereby ensuring the uniform interpretation and application of the tax laws.” Aisin, 946 N.E.2d at 1152 (citation omitted). To that end, the Indiana Supreme Court has explained that the “arising under Indiana’s tax law” requirement is to be broadly construed. See id. at 1153; Sproles, 672 N.E.2d at 1357. Indeed, “any case challenging the collection of a tax or assessment arises under the tax laws, whether the challenge is premised on constitutional, statutory, or other grounds.” Aisin, 946 N.E.2d at 1153 (citations omitted). Moreover, the challenge need not directly involve the collection of a tax - challenges to earlier steps in the taxation or assessment process also arise under the tax laws. Id.
Here, the parties do not dispute that the Department employed the jeopardy assessment procedure under Indiana Code § 6-8.1-5-3 in seizing and selling Garwood’s animal inventory. Thus, Garwood’s case concerns the sale of seized property pursuant to jeopardy tax warrants, a tax matter. Moreover, the resolution of Garwood’s appeal will require the Court to determine whether other tax statutes apply to the jeopardy tax collection process. (Compare Pet’r Resp. Br. at 3-4 (where Garwood argues that the procedures in Indiana Code § 6-8.1-8-8 apply to sales conducted pursuant to jeopardy tax warrants) with Resp’t Br. at 4-5 (where the Department argues that Indiana Code § 6-8.1-8-1 provides the exclusive method by which a tax payment can be made).) See also supra note 3; 45 IND. ADMIN. CODE 15-5-8 (2013) (see 10 http://www.in.gov/legislative/iac/) (the jeopardy tax statute and regulation do not shed
any light on either position). Consequently, the Court finds that these factors also indicate that Garwood’s case satisfies the “arising under Indiana tax law” requirement of Indiana Code § 33-26-3-1.
II. The Final Determination Requirement
With respect to the final determination requirement in Indiana Code § 33-26-3-1, Indiana Code § 6-8.1-9-1 accounts for the possibility that the Department may not rule on a claim for refund within 180 days of its filing by deeming such claims denied. See I.C. § 6-8.1-9-1(c)(2) (barring the Court from hearing a refund appeal suit if it “is filed both before the [department’s] decision is issued and before the one hundred eight-first day after the date the person files the claim for refund with the department”); Ziegler v. Indiana Dep’t of State Revenue, 797 N.E.2d 881 n.2 (Ind. Tax Ct. 2003). Here, there is no dispute that Garwood filed her second appeal with this Court more than 180 days after she filed her refund claim with the Department. (See Resp’t Reply Br. at 2 (“It is certainly true that the Department did not rule on Garwood’s request for more than 181 days after it was filed”).) As a result, Garwood has also satisfied the final determination or exhaustion of administrative remedies requirement of Indiana Code § 33-26-3-1.
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http://www.in.gov/judiciary/opinions/pdf/10311301tgf.pdf
