From the Lafayette Journal Courier:
"Requests for tax abatements sprouted like spring flowers Thursday at the Lafayette Redevelopment Commission, indicating that development is thriving here.
Four projects received the commission's nod for tax abatements, which still require approval from the Lafayette City Council.
Three of the abatements are related to investments that will create an estimated 144 new jobs at Wabash National, Rea Magnet and Alcoa. The fourth will provide added incentive to Heartland Automotive, a parts manufacturer, to build and later expand a permanent facility in Tippecanoe County.
Heartland Automotive plans to build a 126,000 square-foot manufacturing facility at Park 350, the industrial park at Veterans Memorial Parkway and U.S. 52. Heartland Automotive would then move out of its leased 71,000 square-foot plant at 1520 Kepner Drive.
...
The other abatements receiving preliminary approval:
• Wabash National plans to begin production on a vacuum tank trailer later this year. The new line will require a $750,000 investment in equipment and will produce 60 or more new jobs, said Eric Demerly, Wabash National's senior tax manager.
...
• Rea Magnet Wire received the commission's approval for a seven-year tax abatement on $7.5 million worth of new equipment to replace its aging machines. The abatement includes equipment for a new process for copper refining, adding nine jobs
• The commission approved Alcoa's request for 10-year property tax abatements on real estate and new equipment. The requests are part of Alcoa's $93 million investment to construct an aluminum lithium casting plant on its property along Teal Road near Sagamore Parkway. Alcoa's new line will create 75 new jobs."
http://www.jconline.com/apps/pbcs.dll/article?AID=2012203230311
Friday, March 23, 2012
Town of Fishers Plans Three Year Abatement for Debt Collection Company Expansion
From the Indianapolis Star:
"A Fishers debt-collection company is moving into a larger building and adding 140 employees.
DECA Financial Services said Wednesday that the hiring will take place over the next three years.
DECA will buy a vacant 50,000-square-foot building on Visionary Way in Fishers and spend $2.4 million on its expansion, according to the town of Fishers.
DECA specializes in persuading consumers and taxpayers to pay up on debts owed to companies and government. It was founded in 2010.
The town plans to offer the company a three-year abatement on its property taxes if it follows through on the expansion.
DECA said in November that it hoped to expand its 54-person company to meet a growing demand for debt collection."
http://www.indystar.com/apps/pbcs.dll/article?AID=2012203220348
"A Fishers debt-collection company is moving into a larger building and adding 140 employees.
DECA Financial Services said Wednesday that the hiring will take place over the next three years.
DECA will buy a vacant 50,000-square-foot building on Visionary Way in Fishers and spend $2.4 million on its expansion, according to the town of Fishers.
DECA specializes in persuading consumers and taxpayers to pay up on debts owed to companies and government. It was founded in 2010.
The town plans to offer the company a three-year abatement on its property taxes if it follows through on the expansion.
DECA said in November that it hoped to expand its 54-person company to meet a growing demand for debt collection."
http://www.indystar.com/apps/pbcs.dll/article?AID=2012203220348
Thursday, March 22, 2012
Revenue Finds Taxpayer's Utility Study Unpersuasive Where Taxpayer Revised its Study Multiple Times During Appeal
Taxpayer is an Indiana company which manufactures asphalt to be used in the construction of roads, parking lots, and driveways… Pursuant to an audit, the Department determined that Taxpayer did not pay sales tax on certain purchases of tangible personal property, including electricity…
Taxpayer protested the assessment on its purchases of electricity only.
…
Throughout the protest process, Taxpayer revised its utility studies on multiple occasions, asserting changes of the factors in calculating its "predominant use" of the electricity. Taxpayer may, and rightly so, assert that its machinery was operated on an average of 9 hours, 12 hours, 15 hours, or even 16.6 hours; however, deciding which average hours per week for the utility study did not fall into the purview of a legal protest. The administrative hearing is not the proper forum to decide which version of Taxpayer's utility studies is more accurate and therefore more acceptable. Given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayer met its burden of proof demonstrating that it used its machinery more than 9 hours per week for its production.
In short, Taxpayer provided the actual exempt usage of the two conveyors, so the Department will allow 59.15 percent and 58.67 percent exemption for its use of the electricity for the two conveyors in a supplemental audit accordingly. However, the Department is not able to agree that Taxpayer met its burden of proof demonstrating that it used its machinery more than 9 hours per week for its production.
…
If a person fails to file a return for any of the listed taxes, fails to pay the full amount of tax shown on the person's return by the due date for the return or the payment, or incurs a deficiency upon a determination by the department, the person is subject to interest on the nonpayment. Pursuant to IC § 6-8.1-10-1(e), the Department does not have the authority to waive the interest. Therefore, Taxpayer's protest is denied.
…
Taxpayer has demonstrated that the imposition of the negligence penalty is not appropriate.
…
Taxpayer's protest of the negligence penalty is sustained. Since Taxpayer paid the assessment prior to the protest, the Department will refund Taxpayer's overpayment accordingly.
Bill Raises 911 Surcharge on Cellphones
From the News and Tribune:
"A new law, signed by Gov. Mitch Daniels on Monday, aims to stop the financial bleeding and stabilize the funding for the 911 emergency system throughout the state.
Among other things, the law equalizes the 911 surcharge placed on landlines and cellphones and creates a statewide pool of 911 money. It eliminates a fractured system that lets counties set their own surcharge rate on landlines, and it raises the 911 surcharge on cellphones from 50 cents a month to 90 cents a month.
State Rep. Randy Frye, R-Greensburg, a retired firefighter who co-sponsored the bill, said the new law is critical to saving the 911 system in Indiana.
“The system was going broke,” Frye said. “The lion’s share of the funding has resided on landlines. We’ve seen a massive technology shift.”
Frye said counties in Indiana were seeing up to 10 percent drops each year in revenues collected through the 911 surcharge placed on phone lines.
That drop started around 2006, when there was a surge in the number of people who cut their landlines but kept their cellphones."
http://newsandtribune.com/statenews/x223905317/New-law-seeks-to-shore-up-draining-revenues-from-unplugged-landlines
"A new law, signed by Gov. Mitch Daniels on Monday, aims to stop the financial bleeding and stabilize the funding for the 911 emergency system throughout the state.
Among other things, the law equalizes the 911 surcharge placed on landlines and cellphones and creates a statewide pool of 911 money. It eliminates a fractured system that lets counties set their own surcharge rate on landlines, and it raises the 911 surcharge on cellphones from 50 cents a month to 90 cents a month.
State Rep. Randy Frye, R-Greensburg, a retired firefighter who co-sponsored the bill, said the new law is critical to saving the 911 system in Indiana.
“The system was going broke,” Frye said. “The lion’s share of the funding has resided on landlines. We’ve seen a massive technology shift.”
Frye said counties in Indiana were seeing up to 10 percent drops each year in revenues collected through the 911 surcharge placed on phone lines.
That drop started around 2006, when there was a surge in the number of people who cut their landlines but kept their cellphones."
http://newsandtribune.com/statenews/x223905317/New-law-seeks-to-shore-up-draining-revenues-from-unplugged-landlines
Wednesday, March 21, 2012
Revenue Imposes "Environmental Penalty" for Company's Failure to Pay Annual UST Fees
Taxpayer operates a gas station and convenience store in Indiana.
Taxpayer purchased four underground storage tanks ("UST"), which were
installed at Taxpayer's gas station in 2008. In 2011, the Indiana Department of
Revenue ("Department") issued proposed assessments for annual UST
fees, penalties, and interest for the years 2009 and 2010. Taxpayer paid the
required fees, the Department's statutorily mandated 10 percent penalty, and interest.
However, in a separate billing, the Department also assessed a total of $16,000
in "environmental penalties" in the amounts of $8,000 for 2009 and
$8,000 for 2010. Taxpayer protests the assessment of these environmental
penalties.
…
http://www.in.gov/legislative/iac/20120229-IR-045120089NRA.xml.pdf
…
IC § 13-23-12-7(a) states:
Except as provided in subsection (e), an owner of an underground
storage tank who: (1) is required to pay the fee under section 1 of this chapter;
and (2) fails to pay the fee when due as established under section 2
of this chapter; shall be assessed a penalty of not more than two thousand dollars
($2,000) per underground storage tank for each year that passes after the fee
becomes due and before the fee is paid.
…
Taxpayer provided documentation establishing that it notified the
Indiana Department of Environmental Management ("IDEM") of the
installation of the four USTs in 2008. Taxpayer also notified IDEM in 2011 when
it underwent a name change. Taxpayer also provided affidavits from two
employees with knowledge of Taxpayer's operations stating that the Department
never sent notices of UST fees due for either 2009 or 2010. Taxpayer believes
that the lack of Departmental notice required under IC § 13-23-12-6 should
relieve it of the penalties imposed under IC § 13-23-12-7.
The environmental penalties at issue here were not assessed for
failing to notify IDEM that Taxpayer had brought into use or service four new
USTs. The environmental penalties in question were assessed because Taxpayer
failed to pay two consecutive annual $90 registration fees for its four USTs,
all of which went unpaid until 2011. The annual registration fee is an
obligation of the owner per IC § 13-23-12-1. There is no provision for nullification
of the penalty imposed under IC § 13-23-12-7(a) based on the Department's
noncompliance with the notification requirement under IC § 13-23-12-6.
Taxpayer also maintains that a timely payment of the fees was made
once Taxpayer was notified that registration fees were owed, and makes other
arguments relating to equity in support of its position that the fees should be
waived. However, the penalties at issue were properly assessed pursuant to IC §
13-23-12-7 and will not be abated.
FINDING
Taxpayer's protest is denied.
http://www.in.gov/legislative/iac/20120229-IR-045120089NRA.xml.pdf
Columbus City Council Approves Two Tax Abatements
From the Columbus Republic:
"Two companies, Analytical Engineering and Nagakura Engineering Works, will receive breaks on their property taxes as incentives to expand in Columbus.
The Columbus City Council on Tuesday agreed to phase in taxes over 10 years. Aaron Hankins was the only council member to oppose the abatements."
http://www.therepublic.com/view/local_story/Tax_breaks_offered_to_two_firm_1332345369/
"Two companies, Analytical Engineering and Nagakura Engineering Works, will receive breaks on their property taxes as incentives to expand in Columbus.
The Columbus City Council on Tuesday agreed to phase in taxes over 10 years. Aaron Hankins was the only council member to oppose the abatements."
http://www.therepublic.com/view/local_story/Tax_breaks_offered_to_two_firm_1332345369/
Richmond Common Council Approves Tax Abatement for Silgan White Cap Corp
From the Richmond Palladium Item:
"The Richmond Common Council unanimously approved a tax abatement request Monday from Silgan White Cap Corp. for 10 years on equipment for a project that is valued at $913,640.
Silgan, which bought the former ALCOA building on Williamsburg Pike in 1997, makes mostly plastic and some metal lids for the soft drink and beer industry, said Bruce Wissel, president of the council's tax abatement committee.
The project will not create any new jobs but will retain 109, according to the company's request."
http://www.pal-item.com/apps/pbcs.dll/article?AID=2012203210318
"The Richmond Common Council unanimously approved a tax abatement request Monday from Silgan White Cap Corp. for 10 years on equipment for a project that is valued at $913,640.
Silgan, which bought the former ALCOA building on Williamsburg Pike in 1997, makes mostly plastic and some metal lids for the soft drink and beer industry, said Bruce Wissel, president of the council's tax abatement committee.
The project will not create any new jobs but will retain 109, according to the company's request."
http://www.pal-item.com/apps/pbcs.dll/article?AID=2012203210318
Tuesday, March 20, 2012
Board Finds Web Data Insufficient to Show Amount of Decline in Property Value
Mr. Hughes primarily focused on
adjusting the $235,000 that he paid for the subject property in February 2008
to a value as of March 1, 2010. To do so, he relied on indexes that he
downloaded from the FHFA’s website. According to Mr. Hughes those indexes show
a decline of almost 11% in the Fort Wayne housing market between the first
quarter of 2008 and the first quarter of 2010 and much larger declines in
regional and national markets. Mr. Hughes arrived at his conclusions by simply
adding the index numbers for each quarter to get a cumulative level of
depreciation. But it is not clear that the indexes were designed to be read
that way. In fact, Mr. Hughes offered no evidence about how the indexes are
meant to be read or about the data on which the indexes are based. Also, most
of the indexes that Mr. Hughes offered measure market depreciation in broad
geographical areas. They say little about the real estate market at issue in
this appeal. The index for Fort Wayne is more targeted, but it is still
imprecise.
...
...
Mr. Hughes asks the Board to
decide that his property depreciated by roughly 11% instead of by 4.3%,
representing a total of less than $15,000. Without more information about how
to read the FHFA’s indexes or about the data on which those indexes are based,
Mr. Hughes’s evidence does not allow the Board to draw a distinction that fine.
…
Because Mr. Hughes did not
offer any probative evidence to dispute the subject property’s assessment, he
failed to make a prima facie case.
North Spencer School Corp Considers Property Tax Referendum
From the Evansville Courier-Press:
"The North Spencer School Corp. could close one of its four elementary schools as early as the 2013-14 academic year.
Superintendent Dan Scherry said the school board decided Monday to begin establishing criteria to determine which school would close, if projections of continued declining enrollment and state funding prove true.
The public school district of 1,936 students has been studying cost-cutting and revenue-increasing options. Enrollment is expected to fall to about 1,700 over the next 10 years. That's the key metric in determining state funding levels.
Scherry said North Spencer has made cuts in different areas, but more significant actions soon will be needed. In addition to the possibility of closing a school, Scherry said North Spencer also will consider a referendum to increase property taxes for the general fund.
The school district is selling $1.7 million in general obligation bonds to fund a series of needed projects, such as heat and air system upgrades and roof work. Doing that will free up some funding for other needs, Scherry said.
A 25-member task force spent several months developing a series of alternatives for North Spencer schools. Scherry said the panel will be reconvened in early April as the school district evaluates the future of its four elementary buildings — Chrisney, David Turnham, Lincoln Trail and Nancy Hanks."
http://www.courierpress.com/news/2012/mar/20/no-headline---ev_northspencer/
"The North Spencer School Corp. could close one of its four elementary schools as early as the 2013-14 academic year.
Superintendent Dan Scherry said the school board decided Monday to begin establishing criteria to determine which school would close, if projections of continued declining enrollment and state funding prove true.
The public school district of 1,936 students has been studying cost-cutting and revenue-increasing options. Enrollment is expected to fall to about 1,700 over the next 10 years. That's the key metric in determining state funding levels.
Scherry said North Spencer has made cuts in different areas, but more significant actions soon will be needed. In addition to the possibility of closing a school, Scherry said North Spencer also will consider a referendum to increase property taxes for the general fund.
The school district is selling $1.7 million in general obligation bonds to fund a series of needed projects, such as heat and air system upgrades and roof work. Doing that will free up some funding for other needs, Scherry said.
A 25-member task force spent several months developing a series of alternatives for North Spencer schools. Scherry said the panel will be reconvened in early April as the school district evaluates the future of its four elementary buildings — Chrisney, David Turnham, Lincoln Trail and Nancy Hanks."
http://www.courierpress.com/news/2012/mar/20/no-headline---ev_northspencer/
Union County Council Considers Tax Hike
From the Palladium-Item:
"The Union County Council might raise one tax and lower another.
Auditor Gene Sanford on Thursday said the council should think about raising the tax rate on the Cumulative Capital Development Fund. Some items now paid from the general fund could be paid from the cumulative fund, which is not at its maximum tax levy, he said.
Raising the CCDF rate by 1.5 cents per $100 of assessed property value would generate nearly $48,000 for the county while having a small impact on taxpayers, Sanford said. A police cruiser will be purchased from the cumulative fund this year, saving general fund revenues, a fund that's at the maximum tax levy, he said.
Councilman Burke Thomas asked the council to consider reducing wheel tax rates for small trailers, a fee some owners have protested, he said. The council will research the possible impact on revenues from a reduction in the tax and also whether a public hearing is required to lower a tax rate."
http://www.pal-item.com/apps/pbcs.dll/article?AID=2012203160324
"The Union County Council might raise one tax and lower another.
Auditor Gene Sanford on Thursday said the council should think about raising the tax rate on the Cumulative Capital Development Fund. Some items now paid from the general fund could be paid from the cumulative fund, which is not at its maximum tax levy, he said.
Raising the CCDF rate by 1.5 cents per $100 of assessed property value would generate nearly $48,000 for the county while having a small impact on taxpayers, Sanford said. A police cruiser will be purchased from the cumulative fund this year, saving general fund revenues, a fund that's at the maximum tax levy, he said.
Councilman Burke Thomas asked the council to consider reducing wheel tax rates for small trailers, a fee some owners have protested, he said. The council will research the possible impact on revenues from a reduction in the tax and also whether a public hearing is required to lower a tax rate."
http://www.pal-item.com/apps/pbcs.dll/article?AID=2012203160324
Delaware County Withdraws Property Tax Support for Brevini Wind
From the Muncie Star Press:
"Delaware County officials on Monday approved an agreement that they said would address, in some ways, both Brevini and VAT.
Under the terms of the agreement, officials of Brevini -- who said recently they employ "close to 70" people at their Park One/332 facilities near I-69 and hope to add 30-50 more workers in the coming months -- will receive $1.69 million in tax increment financing (TIF) revenue but agreed to forego a claim to $5 million more.
In return for giving up on its claim to the $5 million in TIF revenue, Brevini also gets an extension on its deadline for job creation. The company -- which a year ago said it would employ up to 200 people in 2012 -- now has until the end of 2013 to employ 250.
And officials will allow Viehweider to sell the remaining 13 uninstalled streetlights -- that number was released Monday by Delaware County Commissioner Larry Bledsoe -- in an effort to recover $250,000 the county gave Viehweider for a vertical wind vane that would have been erected along the interstate to brand Delaware County as a green manufacturing hub.
...
Besides the $1.69 million in TIF revenue that Brevini will receive, the county gave the company $625,000 in incentives for its early local investment and an additional $800,000 as the company added millions of dollars in equipment to its two buildings in Park One.
The commissioners and officials of the Muncie-Delaware County Economic Development Alliance issued a statement Monday that Brevini now promised to create 410 jobs with an annual payroll of $18.8 million. Donati said that job-creation deadline is now the end of 2014."
http://www.thestarpress.com/article/20120320/NEWS01/203200343/-hard-lesson-economic-development?odyssey=tab|topnews|text|Frontpage%20DontMiss
"Delaware County officials on Monday approved an agreement that they said would address, in some ways, both Brevini and VAT.
Under the terms of the agreement, officials of Brevini -- who said recently they employ "close to 70" people at their Park One/332 facilities near I-69 and hope to add 30-50 more workers in the coming months -- will receive $1.69 million in tax increment financing (TIF) revenue but agreed to forego a claim to $5 million more.
In return for giving up on its claim to the $5 million in TIF revenue, Brevini also gets an extension on its deadline for job creation. The company -- which a year ago said it would employ up to 200 people in 2012 -- now has until the end of 2013 to employ 250.
And officials will allow Viehweider to sell the remaining 13 uninstalled streetlights -- that number was released Monday by Delaware County Commissioner Larry Bledsoe -- in an effort to recover $250,000 the county gave Viehweider for a vertical wind vane that would have been erected along the interstate to brand Delaware County as a green manufacturing hub.
...
Besides the $1.69 million in TIF revenue that Brevini will receive, the county gave the company $625,000 in incentives for its early local investment and an additional $800,000 as the company added millions of dollars in equipment to its two buildings in Park One.
The commissioners and officials of the Muncie-Delaware County Economic Development Alliance issued a statement Monday that Brevini now promised to create 410 jobs with an annual payroll of $18.8 million. Donati said that job-creation deadline is now the end of 2014."
http://www.thestarpress.com/article/20120320/NEWS01/203200343/-hard-lesson-economic-development?odyssey=tab|topnews|text|Frontpage%20DontMiss
Governor Signs Bills Phasing Out Inheritance Tax and Increasing Reserves Before Automatic Tax Refund
From the Indianapolis Business Journal:
"Gov. Mitch Daniels has signed bills to phase out Indiana's inheritance tax and paying for full-day kindergarten.
The measures signed by the governor Tuesday include about $80 million to pay for the additional kindergarten costs and prohibit districts from charging special kindergarten fees. Legislators approved a separate measure this month that will decrease the inheritance tax in stages beginning next year until it is eliminated after 2021.
Daniels also approved a requirement that the state hold more money in reserves before an automatic tax refund kicks in. The measures also include more money for the victims of last summer's deadly state fair stage collapse.
The governor said Tuesday he is still unsure whether he will approve a measure allowing residents to use force when resisting police in some cases."
http://www.ibj.com/daniels-signs-inheritance-tax--kindergarten-funding-bills/PARAMS/article/33339
"Gov. Mitch Daniels has signed bills to phase out Indiana's inheritance tax and paying for full-day kindergarten.
The measures signed by the governor Tuesday include about $80 million to pay for the additional kindergarten costs and prohibit districts from charging special kindergarten fees. Legislators approved a separate measure this month that will decrease the inheritance tax in stages beginning next year until it is eliminated after 2021.
Daniels also approved a requirement that the state hold more money in reserves before an automatic tax refund kicks in. The measures also include more money for the victims of last summer's deadly state fair stage collapse.
The governor said Tuesday he is still unsure whether he will approve a measure allowing residents to use force when resisting police in some cases."
http://www.ibj.com/daniels-signs-inheritance-tax--kindergarten-funding-bills/PARAMS/article/33339
Monday, March 19, 2012
Indiana Supreme Court Grants Transfer in the Virginia Garwood Case
Here's the Transfer List:
http://www.in.gov/judiciary/cofc/files/transfer-2012-0316.pdf
And here's the original Tax Court decision holding:
"It cannot reasonably be inferred that the jeopardy assessment procedure was used in this case to protect the State’s fiscal interests. For example, the day after the Garwoods’ 240 dogs were seized, the Department sold them all to the Humane Society for a total of $300.00, yet logic dictates that the dogs had a value far greater than just over $1.00 each. The Department’s sale of the dogs for this nominal price is in stark contrast to the Department’s previous purchase of two dogs from the Garwoods for a total of $550.00 as well as its estimate that each dog’s value was $300.00 in calculating the BIA assessments. Moreover, a media circus roiled on the very day the Department and the OAG served the jeopardy assessments, jeopardy tax warrants, and seized the Garwoods’ assets. Within hours of the raid, individuals from the OAG were interviewed on television and by newspapers about shutting down a “puppy mill.” The unusual occurrence of this media hype in conjunction with the Department’s sale of the Garwoods’ property for a nominal sum demonstrate that the Department wielded the power of jeopardy assessments as a sword to eliminate a socially undesirable activity and close down a suspected “puppy mill," not to fill the State’s coffers with the tax liabilities the Garwoods purportedly owed.
http://www.in.gov/judiciary/cofc/files/transfer-2012-0316.pdf
And here's the original Tax Court decision holding:
"It cannot reasonably be inferred that the jeopardy assessment procedure was used in this case to protect the State’s fiscal interests. For example, the day after the Garwoods’ 240 dogs were seized, the Department sold them all to the Humane Society for a total of $300.00, yet logic dictates that the dogs had a value far greater than just over $1.00 each. The Department’s sale of the dogs for this nominal price is in stark contrast to the Department’s previous purchase of two dogs from the Garwoods for a total of $550.00 as well as its estimate that each dog’s value was $300.00 in calculating the BIA assessments. Moreover, a media circus roiled on the very day the Department and the OAG served the jeopardy assessments, jeopardy tax warrants, and seized the Garwoods’ assets. Within hours of the raid, individuals from the OAG were interviewed on television and by newspapers about shutting down a “puppy mill.” The unusual occurrence of this media hype in conjunction with the Department’s sale of the Garwoods’ property for a nominal sum demonstrate that the Department wielded the power of jeopardy assessments as a sword to eliminate a socially undesirable activity and close down a suspected “puppy mill," not to fill the State’s coffers with the tax liabilities the Garwoods purportedly owed.
Jeopardy assessments are a
powerful collection tool that, when properly used, further the important state
interest of collecting state tax revenue needed to pay for critical governmental
services and conducting the business of the state. The designated evidence
shows that the Garwoods did not remit the proper amount of tax due to the state
on their sales, a fact the Garwoods have repeatedly acknowledged. Nonetheless,
the Department overstepped its authority in this case by issuing jeopardy
assessments without having shown the exigent circumstances required by Indiana
Code § 6-8.1-5-3 and 45 IAC 15-5-8. Consequently, the Court holds that the
sixteen jeopardy assessments issued to the Garwoods for all or part of the 2007
though 2009 tax years are void as a matter of law."
Revenue Finds RV Purchased in Florida by a Montana LLC whose Sole Member is an Indiana Farming Business Subject to Use Tax
Taxpayer purchased a recreational vehicle from a Florida
dealership. No sales tax was paid to Florida at the time of the transaction.
Taxpayer arranged for a Montana attorney to establish an LLC to hold title to
the vehicle. The only member of the LLC
is Taxpayer's Indiana farming business. Taxpayer is the president of the
Indiana farming business.
…
…
The Department does not deny that the LLC may have been formed for
a purpose other than avoiding the tax. However, in determining that Taxpayer
was entitled to rely on the representations of the Montana attorney to the
extent that Taxpayer did not knowingly commit fraud, the Department also
reasonably notes the attorney's own representations that the purpose of
establishing a Montana LLC is to "save a great deal of money on taxes and
licensing fees...."
Unfortunately, the Department is unable to accept the proposition
that Indiana residents may avoid paying sales and use tax on tangible personal
property simply by titling that property outside the state. In this particular case,
the Department is unable to agree that either the law, the facts presented by
Taxpayer, or simple common sense compel the conclusion that Taxpayer should not
be responsible for paying use tax on this vehicle.
Department has consistently determined as much. See Letter of
Findings 04-20100111 (March 29, 2010) 20100526 Ind. Reg. 045100324NRA; Letter of Findings 04-20100299
(July 28, 2010) 20100929 Ind. Reg. 045100591NRA; Letter of Findings 04-20100175 (August 23, 2010)
20101027 Ind. Reg. 045100650NRA.
Along with challenging the underlying assessment of sales/use tax
on the purchase of a vehicle, Taxpayer also challenges the assessment of the
fraud penalty which had the effect of doubling the underlying assessment.
…
However unlikely the legal contortions may have been, Taxpayer
apparently consulted the Montana attorney in good faith, paid that attorney to
establish a Montana LLC, and believed the attorney's explanation that
establishing the LLC would allow Taxpayer to avoid paying Indiana sales or use
tax. As such, it is not possible to establish – by "clear and convincing
evidence" – that Taxpayer possessed the requisite "degree of
knowledge" or scienter sufficient to sustain the imposition of the 100
percent penalty.
SUMMARY
The assessment of the fraud penalty is not justified and should be
abated. Taxpayer has not demonstrated that the purchase of the recreational
vehicle is not subject to Indiana use tax.
County Option Income Tax Checks Distributed Late in Tippecanoe County
From the Lafayette Journal Courier:
"The Tippecanoe County auditor's office last week paid out the 2010 county option income tax settlements, along with the 2011 COIT settlements.
The late settlement for 2010 was due to an oversight by the auditor's office.
Each month, the auditor office receives tax revenue distributions from the state, Tippecanoe County Auditor Jennifer Weston said. For the COIT revenue, the auditor's office figures out the specific amount for each government entity, then distributes 95 percent of the funds to them. At the end of the year, the auditor's office issues a settlement of the withheld 5 percent, Weston said.
In early 2011, the county received a late 2010 distribution from the state. This delayed the work on the 2010 settlement, while at the same time, the staff was bogged down in tax billing and timely completion of the 2010 settlement got lost in the shuffle.
"We missed last year at the end of the year, so we did two years this year," Weston said.
The 2010 and 2011 COIT settlements were sent out last Friday, Weston said.
Lafayette received $427,516.29. Breaking that down, it received a COIT settlement of $237,010.34 for 2010 and $190,505.95 for 2011.
West Lafayette received $74,501.55 for its 2010 COIT settlement and $57,935.96 for its 2011 settlement, for a total of $132,437.51.
Tippecanoe County received a 2010 COIT settlement of $327,617.97 and a 2011 settlement of $258,751.42, putting $586,369.39 into county coffers."
http://www.jconline.com/apps/pbcs.dll/article?AID=2012203160322
"The Tippecanoe County auditor's office last week paid out the 2010 county option income tax settlements, along with the 2011 COIT settlements.
The late settlement for 2010 was due to an oversight by the auditor's office.
Each month, the auditor office receives tax revenue distributions from the state, Tippecanoe County Auditor Jennifer Weston said. For the COIT revenue, the auditor's office figures out the specific amount for each government entity, then distributes 95 percent of the funds to them. At the end of the year, the auditor's office issues a settlement of the withheld 5 percent, Weston said.
In early 2011, the county received a late 2010 distribution from the state. This delayed the work on the 2010 settlement, while at the same time, the staff was bogged down in tax billing and timely completion of the 2010 settlement got lost in the shuffle.
"We missed last year at the end of the year, so we did two years this year," Weston said.
The 2010 and 2011 COIT settlements were sent out last Friday, Weston said.
Lafayette received $427,516.29. Breaking that down, it received a COIT settlement of $237,010.34 for 2010 and $190,505.95 for 2011.
West Lafayette received $74,501.55 for its 2010 COIT settlement and $57,935.96 for its 2011 settlement, for a total of $132,437.51.
Tippecanoe County received a 2010 COIT settlement of $327,617.97 and a 2011 settlement of $258,751.42, putting $586,369.39 into county coffers."
http://www.jconline.com/apps/pbcs.dll/article?AID=2012203160322
Sunday, March 18, 2012
Miami County Proposes Budget Cuts
From the Kokomo Tribune:
The Miami County Council is proposing to cut $1.1 million from the county budget for 2012, including reducing staff in at least four departments, to meet state mandated cuts to the county general fund.
Council members met Thursday to discuss the new budget, which tentatively could be approved on Tuesday.
Although the state Department of Local Government Finance required the county to cut $800,000 from budget, Ralph Duckwall, 2nd district councilman, proposed the increased reduction anticipating an additional $300,000 loss in revenue due to state tax caps.
If the budget is passed, it will bring down the adopted budget of $9.2 million to just under $8.1 million.
...
But even with the reductions, Duckwall said the proposed 2012 budget is only “putting bandages on the wound.”
Although it would meet the state mandate, he said revenue in the county is expected to decline or stay the same in coming years. Last year, he said $7.7 million came into county coffers, requiring council to dip into reserve funds – like the rainy-day fund – just to get by.
If revenue doesn’t improve, he said council will continue to have to cut spending, which could include eliminating more positions.
Duckwall said the county is looking into hiring an independent budget consultant to help develop a long-term plan to keep the budget solvent."
http://kokomotribune.com/local/x1511611884/Miami-County-set-to-pass-budget-cuts
The Miami County Council is proposing to cut $1.1 million from the county budget for 2012, including reducing staff in at least four departments, to meet state mandated cuts to the county general fund.
Council members met Thursday to discuss the new budget, which tentatively could be approved on Tuesday.
Although the state Department of Local Government Finance required the county to cut $800,000 from budget, Ralph Duckwall, 2nd district councilman, proposed the increased reduction anticipating an additional $300,000 loss in revenue due to state tax caps.
If the budget is passed, it will bring down the adopted budget of $9.2 million to just under $8.1 million.
...
But even with the reductions, Duckwall said the proposed 2012 budget is only “putting bandages on the wound.”
Although it would meet the state mandate, he said revenue in the county is expected to decline or stay the same in coming years. Last year, he said $7.7 million came into county coffers, requiring council to dip into reserve funds – like the rainy-day fund – just to get by.
If revenue doesn’t improve, he said council will continue to have to cut spending, which could include eliminating more positions.
Duckwall said the county is looking into hiring an independent budget consultant to help develop a long-term plan to keep the budget solvent."
http://kokomotribune.com/local/x1511611884/Miami-County-set-to-pass-budget-cuts
Vigo County Approves Personal Property Tax Abatement for Advics Manufacturing
From the Tribune Star:
"Advics Manufacturing Indiana LLC on Tuesday received a unanimous vote of the Vigo County Council for final approval of a 10-year personal property tax abatement as the company plans to add $15.26 million of new equipment.
The new equipment, used to produce parking brakes and brake booster and master cylinders, will add a new assembly line and is to create 35 new jobs with an annual payroll of $1,050,000, said Louis Britton, attorney representing the company.
The new equipment does not include nearly $1 million of equipment moved from another facility in Indiana, Britton said. Advics was formerly called Aisin Brake and Chassis, but was acquired by Advics in July 2010. The company reported having 384 workers as of Dec. 31, 2010."
http://tribstar.com/local/x426439697/T-H-City-Council-approves-Advics-abatement
"Advics Manufacturing Indiana LLC on Tuesday received a unanimous vote of the Vigo County Council for final approval of a 10-year personal property tax abatement as the company plans to add $15.26 million of new equipment.
The new equipment, used to produce parking brakes and brake booster and master cylinders, will add a new assembly line and is to create 35 new jobs with an annual payroll of $1,050,000, said Louis Britton, attorney representing the company.
The new equipment does not include nearly $1 million of equipment moved from another facility in Indiana, Britton said. Advics was formerly called Aisin Brake and Chassis, but was acquired by Advics in July 2010. The company reported having 384 workers as of Dec. 31, 2010."
http://tribstar.com/local/x426439697/T-H-City-Council-approves-Advics-abatement
Indianapolis to Vote on Property Tax Abatement for Cosmetic Manufacturers
From the Indianapolis Star:
"Two affiliated cosmetics manufacturers will add 144 jobs by renovating their factory and offices on the Eastside.
Mansfield-King LLC and William Roam LLC plan to buy new equipment and renovate their 180,000-square-foot facility near 6455 E. Washington St. The $3 million project will create 144 jobs by 2016, said the companies, which employ 45 people at the site.
The Department of Metropolitan Development will vote next week on giving a 10-year property tax abatement on the expansion. The abatement would save the companies $152,579."
http://www.indystar.com/apps/pbcs.dll/article?AID=2012303170012
"Two affiliated cosmetics manufacturers will add 144 jobs by renovating their factory and offices on the Eastside.
Mansfield-King LLC and William Roam LLC plan to buy new equipment and renovate their 180,000-square-foot facility near 6455 E. Washington St. The $3 million project will create 144 jobs by 2016, said the companies, which employ 45 people at the site.
The Department of Metropolitan Development will vote next week on giving a 10-year property tax abatement on the expansion. The abatement would save the companies $152,579."
http://www.indystar.com/apps/pbcs.dll/article?AID=2012303170012
Governor Signs Little Cal Levee Fee into Law
From the Northwest Indiana Times:
"Gov. Mitch Daniels signed into law Friday a measure establishing a permanent funding source to finish construction and maintain levees along the Little Calumet River in Lake County.
Starting next spring, property owners in the Little Calumet River and Burns Waterway watersheds will pay an additional per-parcel fee along with their first property tax bill.
The annual fee varies based on how a property is used. Owners of residential parcels will pay $45 a year; agricultural, $90; commercial, $180; and industrial or utility, $360.
...
The nonpartisan Legislative Services Agency estimates the fee will generate $7.3 million a year. The money will pay to complete and fund ongoing maintenance of the levees built over the past 25 years at a cost of $275 million in federal and state funds.
...
Property owners in the following Lake County cities and towns are set to be charged the annual levee fee: Munster, Highland, Griffith, Dyer, Schererville, Lake Station, New Chicago, Hobart and Merrillville; most of Winfield and Crown Point; southern portions of Hammond and Gary; and part of St. John."
Read more: http://www.nwitimes.com/news/local/govt-and-politics/governor-approves-little-cal-levee-fee/article_f4c29ea2-70b8-50b7-abed-2691cade3ddc.html#ixzz1pU445IU3
"Gov. Mitch Daniels signed into law Friday a measure establishing a permanent funding source to finish construction and maintain levees along the Little Calumet River in Lake County.
Starting next spring, property owners in the Little Calumet River and Burns Waterway watersheds will pay an additional per-parcel fee along with their first property tax bill.
The annual fee varies based on how a property is used. Owners of residential parcels will pay $45 a year; agricultural, $90; commercial, $180; and industrial or utility, $360.
...
The nonpartisan Legislative Services Agency estimates the fee will generate $7.3 million a year. The money will pay to complete and fund ongoing maintenance of the levees built over the past 25 years at a cost of $275 million in federal and state funds.
...
Property owners in the following Lake County cities and towns are set to be charged the annual levee fee: Munster, Highland, Griffith, Dyer, Schererville, Lake Station, New Chicago, Hobart and Merrillville; most of Winfield and Crown Point; southern portions of Hammond and Gary; and part of St. John."
Read more: http://www.nwitimes.com/news/local/govt-and-politics/governor-approves-little-cal-levee-fee/article_f4c29ea2-70b8-50b7-abed-2691cade3ddc.html#ixzz1pU445IU3
Saturday, March 17, 2012
Department of Revenue Issues Informational Bulletin Moving Two Grocery Items from the Taxable List to the Nontaxable list
"A number of items sold by grocery stores, supermarkets, and similar type businesses are classified in this bulletin under the headings "Non-taxable Food Items" and "Taxable Grocery Items." These examples are for illustrative purposes and are not intended to be all-inclusive."
http://www.in.gov/legislative/iac/20120229-IR-045120091NRA.xml.pdf
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