AP Reports Business Tax Cuts Bills Enter Negotiations

By the Associated Press in the Kokomo Tribune:

A package of business tax cuts is on its way to negotiations between Indiana House and state Senate lawmakers following a party-line vote in the Senate.

The Senate voted 33-15 Tuesday to advance the package, sending it to a conference committee of House and Senate members. House and Senate Republicans have agreed broadly on eliminating the state's business equipment tax for small businesses and creating local "super abatements" for some manufacturers.

A few key sticking points remain between the two sides. House Republicans would like to give county leaders the option of eliminating the equipment tax completely.

Gov. Mike Pence started the session seeking a complete elimination of the equipment tax. But he later scaled back his request amid concern from local leaders who stood to lose $1 billion.

http://www.kokomotribune.com/breakingnews/x1783701071/Business-tax-cuts-enter-House-Senate-negotiations

Revenue Finds Taxpayer was not Charging Postage as Part of Delivery Costs and Therefore not Required to Collect Sales Tax on Those Amounts

Excerpts of Revenue's Determination follow:

Taxpayer is an Indiana business and retail merchant. As the result of an audit, the Indiana Department of Revenue ("Department") determined that Taxpayer had not collected and remitted the proper amount of sales tax for the years 2009, 2010, and 2011. The Department therefore issued proposed assessments for sales tax, penalty, and interest.
...

Taxpayer protests the Department's imposition of sales tax on amounts paid to Taxpayer by its customers for postage. The Department considered the amounts to be part of the retail transactions conducted between Taxpayer and its clients. Taxpayer protests that the postage payments were not part of the retail transactions and were separate payments meant to reimburse Taxpayer for postage only. Taxpayer therefore believes that the amounts paid for postage are not subject to sales tax. The Department notes that the burden of proving a proposed assessment wrong rests with the person against whom the proposed assessment is made, as provided by IC § 6-8.1-5-1(c).

...
 

In this case, the Department reviewed Taxpayer's sales and determined that Taxpayer had not collected and remitted sales tax on the amounts it received from its customers regarding postage. The Department imposed sales tax on Taxpayer as a retail merchant. The first relevant statute is IC § 6-2.5-1-1, which states:
 

(a) Except as provided in subsection (b), "unitary transaction" includes all items of personal property and services which are furnished under a single order or agreement and for which a total combined charge or price is calculated.

(b) "Unitary transaction" as it applies to the furnishing of public utility commodities or services means the public utility commodities and services which are invoiced in a single bill or statement for payment by the consumer.

(Emphasis added).

Also of relevance is IC § 6-2.5-1-5(a), which, during the years at issue, provided:

Except as provided in subsection (b), "gross retail income" means the total amount of consideration, including cash, credit, property, and services, for which tangible personal property is sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for:

(1) the seller's cost of the property sold;

(2) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;

(3) charges by the seller for any services necessary to complete the sale, other than delivery and installation charges;

(4) delivery charges; or

(5) consideration received by the seller from a third party if:

(A) the seller actually receives consideration from a party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale;

(B) the seller has an obligation to pass the price reduction or discount through to the purchaser;

(C) the amount of the consideration attributable to the sale is fixed and determinable by the seller at the time of the sale of the item to the purchaser; and

(D) the price reduction or discount is identified as a third party price reduction or discount on the invoice received by the purchaser or on a coupon, certificate, or other documentation presented by the purchaser.

For purposes of subdivision (4), delivery charges are charges by the seller for preparation and delivery of the property to a location designated by the purchaser of property, including but not limited to transportation, shipping, postage, handling, crating, and packing.
 

(Emphasis added).
 

The Department reviewed Taxpayer's records and determined that Taxpayer was charging its customers postage as part of its delivery charges, but had not been charging sales tax on those amounts, as required by IC § 6-2.5-1-5(e). The Department therefore issued proposed assessments for sales tax which Taxpayer should have charged as a retail merchant under IC § 6-2.5-2-1(b).
 

In the course of the protest process, Taxpayer provided documentation and analysis in support of its position that it did not charge postage costs to its customers as part of its delivery charges. After review of this material, the Department agrees that Taxpayer was not charging postage to its customers as part of its delivery costs and therefore was not required to collect sales tax on those amounts. Taxpayer has met the burden imposed by IC § 6-8.1-5-1(c).

 

http://www.in.gov/legislative/iac/20140226-IR-045140039NRA.xml.html

Times Reports Outpatient Building May be Removed from Porter County Hospital Abatement

From the Northwest Indiana Times:

The debate over the starting date of the tax abatement at Porter Regional Hospital became even muddier Tuesday as a result of a smaller, medical office building at the site not owned by the hospital.

Porter County Councilman Jim Biggs, R-1st, held a news conference to share his research that found The Sanders Trust realty firm in Birmingham, Ala., was chosen over 20 companies for the right to develop the 60,000-square-foot building.

This development approach was not discussed when the 10 years of tax breaks were awarded by the County Council in 2009, Biggs said. There is nothing in the agreement indicating the hospital's intention to include more than its main building. The building permit for the medical office structure was issued in the name of the hospital, he said.

Biggs questioned whether the construction and jobs reported by the hospital to meet the obligations of the abatement included positions associated with this outpatient building.

"The degree of clandestineness on the part of the hospital regarding this matter is concerning to say the least," he said.

Biggs said he intends to ask the County Council not to extend the tax breaks to the outpatient building. Council President Dan Whitten, D-at large, agrees.

Whitten said the abatement's intention was to give the tax breaks to the hospital and not other developments attracted to the area.

Steve Hewett, senior vice president of The Sanders Trust, said his firm holds majority ownership of the outpatient building, with the balance owned by other investors, made up mostly of physicians doing business at the site.

The land is owned by the hospital, he said, which is a common arrangement for the firm in its other projects around the country.

Officials at Porter Regional Hospital declined comment Tuesday.
...

http://www.nwitimes.com/news/local/porter/outpatient-building-could-be-pulled-from-hospital-abatement/article_1c373515-d094-5d8f-bb72-5cd080cebec3.html

Board Finds Testimony of Tax Rep Lacking "Personal Knowledge" and Therefore Insufficient to Support a Reduction of Property's Value

Excerpts of the Board's Determination follow:

29. The Turpins rely on two things to support their claim: (1) what Ms. LeVeque describes as the price the Turpins bought the property for in August 2006, and (2) sale prices for various other properties containing manufactured homes.

30. A property’s sale price can be compelling evidence of its market value-in-use. But the Turpins bought their property more than 4½ years before the valuation date at issue in this appeal. And they failed to explain how their purchase price related to the market value-in-use as of the required valuation date.

31. Also, it is unclear what the Turpins actually paid for the property. It appears that they bought the land from their parents and then hired a contractor to place the manufactured home on a foundation. Neither of the Turpins actually testified. Their tax representative, Ms. LeVeque, asserted that they paid a total of $82,524 for the property. But she had no personal knowledge of that fact and offered little evidence to corroborate her assertions. At most, they offered a portion of a loan document and an e-mail from Ms. Turpin to Ms. LeVeque saying that the loan amount was for “the property and the manufactured home.” Pet’rs Ex. 2. But the contractor drew the entire loan balance, and nothing in the record indicates that the contractor was involved in buying the land.

32. In fact, the evidence about what the Turpins paid for the land was vague at best, consisting of Ms. LeVeque’s hearsay testimony that Ms. Turpin “believe[d]” the price was “around $10,000.” LeVeque testimony. And the Turpins bought the land from their parents. Under those circumstances, the Board will not simply assume that the sale was at arm’s length or that the price is a reliable indication of value.

33. The Board turns to the Turpins’ sales evidence for other properties containing manufactured homes. A property’s value may be estimated directly by comparing it similar properties that have sold in the market. Indeed, that is what the sales comparison approach—one of the three generally accepted appraisal approaches—does. But to use that approach in an assessment appeal, one must show that the sold properties are comparable to the property under appeal. Conclusory statements that a property is “similar” or “comparable” to another property do not suffice. Long v. Wayne Township Assessor, 821 N.E.2d 466, 470 (Ind. Tax Ct. 2005). Instead, one must identify the characteristics of the property under appeal and explain both how those characteristics compare to the characteristics of the purportedly comparable properties and how any differences affect the properties’ relative market values-in-use. See id. at 471.

34. The Turpins offered summary data for 16 properties containing manufactured homes with between 1,232 and 1,736 square feet that sold in Marshall County during the five years leading up to the Board’s hearing. They also offered MLS listing sheets for a subset of nine sales from that larger group and a property record card for a tenth sale.

35. The Board need spend little time discussing the summary for the larger group of sales. That summary shows little more than the sale price for each property and the fact that the property contained a manufactured home.

36. The MLS sheets and property record card contain more data, and Ms. LeVeque compared the properties described in those documents to the Turpins’ property in terms of at least some relevant characteristics. As the Assessor pointed out, however, Ms. LeVeque ignored one essential characteristic—location. See Poracky v. State Bd. of Tax Comm’rs, 635 N.E.2d 235, 237 (Ind. Tax Ct. 1994) (quoting JANATA PROPERTY TAXATION 234 (2d.ed. 1993) (“The location of [property] is of paramount importance with regard to its value.”). Ms. LeVeque brushed aside that concern by claiming that the value of a manufactured home does not differ based on where it is located. That might be true if one looks at the home by itself. But Ms. LeVeque’s sales included both land and improvements without anything to show the portion of the sale price that was attributable to each component.

37. And while Ms. LeVeque made broad claims about the relative inferiority or superiority of the sold properties to the Turpins’ property in terms of individual characteristics such as home size and age, lot size, and the presence of porches, garages or other improvements, she neither quantitatively adjusted the sale prices nor applied qualitative analysis techniques to account for those differences. She did not show that her analysis complied with generally accepted appraisal principles. Ultimately, Ms. LeVeque did not do much more than offer a good deal of raw data, which did not prove a value, or even a likely range of values, for the Turpins’ property.

38. The Turpins failed to establish that their evidence proves a more accurate market value-in-use for the subject property as of March 1, 2011.

http://www.in.gov/ibtr/files/Turpin_50-005-11-1-5-00033.pdf

Courier-Journal Reports Jeffersonville Approves Abatements for Menards and Amatrol

From the Louisville Courier-Journal:

The Jeffersonville City Council on Monday night approved tax abatements for the retention of an existing high-tech company that’s looking to expand in the North Port Business Centre and the location of a new home-improvement business off Veterans Parkway.

Amatrol, which was lauded by Gov. Mike Pence in his January State of the State address, is planning a $3.7 million project to accommodate its rapid growth. This includes $2.2 million to add 39,000 square feet to its existing 83,000 square-foot facility, $1.3 million in personal property investment and $210,000 in other investment by the end of this year.

“We’ve had significant growth in sales overseas and, more specifically, for green-energy products and mechatronics,” Paul Perkins, company president, said in a statement.

The company, which has 142 employees with an annual payroll of $7.8 million, plans to add about $1.4 million in annual payroll by hiring 30 new workers by the end of 2018, according to financial documents filed. The average starting wage of the new jobs is $22 an hour.

The city, in turn, gave the company a 10-year abatement on real estate improvements and a five-year abatement on personal property, as well as a pledge that it will match state economic development training money up to $2 million.

The development in Monday’s meeting is expected to be an $8 million project that has been in the works for the last several months.

Menards plans to build a home-improvement store in the Jeffersonville Town Center, off Veterans Parkway just east of Interstate 65 in Jeffersonville.

It has committed to hiring 100 new workers with annual salaries ranging between $10,000 and $100,000, according to economic development commitments signed by the company in August.
Construction is expected to start in July and take about a year to complete.

The city council approved a 10-year abatement for up to $9 million in qualifying real estate improvements made by Menards.

http://www.courier-journal.com/apps/pbcs.dll/article?AID=2014303040036

Here's a List of All the Tax Court Decisions from 2013

12/31/13	Vern R. Grabbe v. Carroll County Assessor, Neda K. Duff	N/A	49T10-1108-TA-51
12/31/13	Vern R. Grabbe v. Carroll County Assessor, Neda K. Duff	N/A	49T10-1206-TA-35
12/27/13	Joseph & Jeanne Hutcherson v. Robin L. Ward, Hamilton County Assessor	N/A	49T10-1302-TA-10
12/10/13	Roderick E. Kellam v. Fountain County Assessor	N/A	49T10-1211-TA-78
10/31/13	Virginia Garwood v. Indiana Dept. of State Revenue	N/A	82T10-1208-TA-46
10/16/13	Orbitz, LLC v. Indiana Department of State Revenue	N/A	49T10-0903-TA-10
10/08/13	Douglas G. Kildsig v. Warrick County Assessor	N/A	82T10-1101-TA-2
10/02/13	Orange County Assessor v. James E. Stout	N/A	49T10-1112-TA-94
09/23/13	Shelby County Assessor v. CVS Pharmacy, Inc. #6637-02	N/A	49T10-1112-TA-96
09/16/13	United Parcel Service, Inc. v. Indiana Department of State Revenue	N/A	49T10-0704-TA-24
08/09/13	Miller Pipeline Corporation v. Indiana Dept. of State Revenue	N/A	49T10-1012-TA-64
06/28/13	Geoffrey Odle, Personal Representative of the Estate of Floyd L. Odle, Deceased v. Indiana Dept. of State Revenue	29D01-0911-PL-1410	49T10-1210-TA-61
06/18/13	Vodafone Americas Inc. and Vodafone Holdings LLC v. Indiana Dept. of State Revenue	N/A	49T10-1002-TA-7
05/24/13	Dora Brown, Ben Kindle, and Sonjia Graf v. Department of Local Government Finance	N/A	49T10-0912-TA-83
05/17/13	Board of Commissioners of the County of Jasper, Indiana v. Micah G. Vincent, Commissioner, Indiana Department of Local Government Finance	N/A	49T10-1011-TA-59
05/03/13	Indiana MHC, LLC v. Scott County Assessor	N/A	39T10-1009-TA-52
05/03/13	Indianapolis Public Transportation Corporation v. Indiana Dept. of Local Government Finance	N/A	49T10-0910-TA-76
04/29/13	Kooshtard Property VIII, LLC v. Shelby County Assessor	N/A	49T10-1011-TA-58
04/12/13	Hamilton County Assessor v. Allisonville Road Development, LLC	N/A	49T10-1204-TA-30
04/05/13	Washington Township Assessor, Allen County Assessor, and Allen County Property Tax Assessment Board of Appeals v. Verizion Data Services, Inc. (NFP)	N/A	49T10-1102-TA-13
03/28/13	Caterpillar, Inc. v. Indiana Department of State Revenue	N/A	49T10-0812-TA-70

http://www.in.gov/judiciary/opinions/archtax.html

Riley: Important High for Indiana Business Personal Property Taxes

By Larry Riley in the Muncie Star-Press:

The proposal pushed by Gov. Mike Pence to eliminate or reduce business personal property taxes in Indiana appears off the table this legislative session and headed to a study committee.

The idea of making the state more competitive by taxing businesses less joins just about every other of his suggestions for this year’s General Assembly. For a guy who lots of people think wanted to show presidential timber, Pence has his hands full just trying to look like a gubernatorial leader.

Statewide, eliminating business personal property taxes would have taken something like $1 billion or so from local governments — not necessarily a bad move if those local governments would restructure, consolidate and streamline, but they won’t.

So they’d suffer immensely.

That’s not the total reason why legislators are lukewarm at best to the initiative, though howling from officials at local levels throughout the state didn’t hurt opposition at the statehouse.

(A more fundamental reason is legislative leaders don’t want to open the state’s two-year budget, approved last year. Thus the governor’s last minute willingness to replace some or all of the lost local revenues with state money didn’t move anybody, either.)

What exactly is business personal property, or BPP, and what exactly does this tax mean in Delaware County and Muncie?

BPP is anything tangible that businesses use to engage in commerce: furniture, computers, machinery (I guess computers are machines), anything not real estate (that is, land and buildings).

Not included, however, is inventory, and a number of news story headlines unfortunately conflate the two. Inventory, which eventually becomes the actual product sold, is not taxed and hasn’t been for a decade.
...

See the full article here:

http://www.thestarpress.com/apps/pbcs.dll/article?AID=2014303020010

AP Reports Same Sex Marriage Tax Benefits up for Indiana Vote

By the Associated Press in the Indianapolis Star:

Indiana would break from an Internal Revenue Service policy recognizing same-sex marriage for tax purposes if a late-session change becomes law.

The Senate on Monday approved adding the language to another tax bill. The measure is up for a final vote in the chamber Tuesday.

The IRS last year announced all same-sex marriages would be recognized in federal tax returns. The ruling applies regardless of whether the couple lives in an area where their marriage is recognized.

If passed into law, the Indiana bill would split from the IRS and not grant same-sex couples the same tax breaks other couples now receive.

Republican Sen. Brandt Hershman of Buck Creek says blocking the benefits would match Indiana tax policy with the state ban on same-sex marriage.

http://www.nwitimes.com/news/state-and-regional/indiana/same-sex-marriage-tax-benefits-up-for-indiana-vote/article_380486b9-48b6-5e86-9f29-432f518598d7.html

IBJ Reports Stonegate Mortgage Offered Incentives for Expansion in Carmel

From the Indianapolis Business Journal:

Indianapolis-based Stonegate Mortgage Corp. plans to double its local work force by adding up to 400 jobs by 2017, the company announced Tuesday morning.

It plans to invest $6.2 million in new office space in Carmel, at the North Haven office park to accomodate the expansion.

The additional 21,000-square-foot office will be just north of its 81,515-square-foot headquarters campus at The Precedent office park in Marion County.

Company officials said the new positions will be in administration, support and sales. About 300 of the new employees will work from the new office space with the other 100 stationed in the existing office.

Stonegate officials said salaries for new employees in non-sales jobs will average about $50,000 to $55,000 per year. It could not immediately say how many of the new jobs would be in sales.

The company will receive financial incentives from the state if it meets hiring expectations. The Indiana Economic Development Corp. offered Stonegate up to $4.8 million in conditional tax credits and up to $161,250 in training grants.
...

http://www.ibj.com/stonegate-plans-to-add-400-workers-in-expansion/PARAMS/article/46470

Journal-Gazette Reports Technology Solutions Offered Incentives for Expansion in Ashley

From the Fort Wayne Journal-Gazette:

Ashley-based Technology Solutions Inc. will invest nearly $2 million as it expands its operations with new equipment and renovations at the medical software and archery equipment business.

The plans were touted in a joint announcement Tuesday by the company and the Indiana Economic Development Corp., which offered Technology Solutions up to $125,000 in conditional tax credits and as much as $75,000 in training grants based on the company’s job creation plans.

Officials at the 20,280 square-foot facility expect to hire 26 people by 2016. Technology Solutions, which presently has 16 full-time workers, intends to begin hiring social marketers, graphic designers, animators, programmers, sales representatives and warehouse workers in the coming months.

http://www.journalgazette.net/article/20140304/BIZ/140309779/0/SEARCH

News-Sentinel Reports Sites Medical Offered Incentives for Expansion in Columbia City

From the Fort Wayne News-Sentinel:

Sites Medical, a medical device company serving the orthopedic industry, announced plans today to expand its Columbia City operations, creating up to 45 new jobs by 2017.

The company will invest $1.9 million to lease and equip a facility in Columbia City, expanding its total footprint in the community by approximately 8,000 square feet. Through its growth, which the company will begin this spring, Sites Medical plans to grow its in-house services to include specialty testing, prototyping, specialty manufacturing and quality and regulatory services, officials of the Indiana Economic Development Corp. The company anticipates beginning to hire engineers, technicians and inspectors later this year.

Founded in 2008, Sites Medical develops, evaluates and markets technologies and services within the medical marketplace. The company, which is ISO 13485 certified, distributes its products and technologies through orthopedic companies of all sizes around the world, currently specializing in serving companies in sports medicine, joint reconstruction, spine and orthopaedic oncology.

The IEDC offered Sites Medical up to $350,000 in conditional tax credits based on the company's job creation plans. These tax credits are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives. Whitley County approved additional incentives at the request of the Whitley County Economic Development Corporation.

http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20140304/BUSINESS/140309888/0/SEARCH

Journal & Courier Reports Subaru Tax Breaks Clear Final Hurdle in Lafayette

From the Lafayette Journal & Courier

Subaru of Indiana Automotive, Inc.’s request for tax abatements on a $422 million expansion won unanimous approval Monday from the Lafayette City Council.

Councilman Kevin Klinker abstained because he works as a contractor for SIA.

The tax abatements on $354 million in new manufacturing and technology equipment, and $68 million in real estate improvements are part of an incentive package to bring production of the Subaru Impreza to the plant at 5500 Indiana 38 East.

SIA already manufactures the Suburu Outback and Legacy there.

Tom Easterday, executive vice president, said SIA’s parent company, Fuji Heavy Industries, was looking at sites around the world when it decided to expand Impreza production for North America.

“Honda and Nissan eventually built plants in Mexico, so it meant a tremendous amount because to make us competitive was extremely important to be able to get this project here in Lafayette,” said Easterday.

The abatements allow the company’s property tax liabilities to increase from zero percent in the first year to 100 percent 10 years after the equipment and building improvements are assessed.

Construction will begin after the Indiana Department of Environmental Management approves SIA’s permit, likely in May, Easterday said.
...

http://www.jconline.com/apps/pbcs.dll/article?AID=2014303030038

Trib-Star Reports Senate Considers Bill to End Terre Haute TIF

From the Terre Haute Tribune Star:

An Indiana Senate bill that would sunset the city’s first tax increment finance district concerns Cliff Lambert, director of the Terre Haute Department of Redevelopment.

Lambert testified last week before the Indiana House Ways and Means Committee that Terre Haute’s original downtown tax district, established on Nov. 14, 1985, was to fund, through the payment of a general obligation bond, and construct the city’s first downtown parking garage.

In addition, the district was used to pay for a bond to construct the Center City building, which has 33 apartment units and commercial space on the first floor. Both of those structures are now under private ownership and are on the city’s tax rolls.

“The key heartburn to me is the death star [the proposed legislation] puts on our downtown TIF. It would cause it to go from an unlimited life to a sunset in the year 2025 or whenever bond indebtedness in the district is paid off,” Lambert said Monday about Senate Bill 118.

Lambert has been lobbying Wabash Valley legislators about the impact of the proposed bill on Terre Haute. The bill was up for its third reading Monday in the Indiana House. The bill included an amendment exempting a downtown TIF district in Indianapolis. Lambert contends Terre Haute should also receive such an exemption.
...

http://www.tribstar.com/local/x2118253876/Senate-considers-bill-to-end-TIF

Revenue Reports More then $1 Million in Tax Fraud Stopped

Department Stops More 
Than $1 Million in Tax Fraud

INDIANAPOLIS (March 4, 2014) — In just one month of processing more than 1 million individual tax returns, the Indiana Department of Revenue has already stopped $1,208,000 in attempted identity theft and tax fraud.

The fraudulent returns were stopped by the department’s increased security features in the 2014 tax filing process. The department’s Special Investigations Unit (SIU) has confirmed 619 returns as attempted fraud, which represents $1,208,000 that criminals attempted to steal from taxpayers and the State of Indiana.

“We have been highly successful in stopping identity theft and fraud so far this tax season, and we will continue this effort,” said Commissioner Mike Alley. “However, it’s not enough just to stop these criminals. We want to send a clear message that you’re going to be stopped and you’re going to be prosecuted in Indiana.”

SIU is investigating and building cases against the identity theft criminals behind the fraudulent returns. It will continue investigating these criminals throughout the tax season, and the department expects to be able to prosecute them within the year.

“If the department doesn’t prosecute the criminals, they will simply change their methodology and try to steal money and identities again next year,” said Gabrielle Owens, director of SIU.

With this year’s identity protection program, the identifying information in each return due a refund is cross-referenced through a sophisticated automated identity verification database. Of the returns checked for verification, 95 percent of taxpayers’ information was verified and the returns continued processing as usual.

As an additional level of protection, more than 28,800 taxpayers have been selected to confirm their identities. Those selected received a letter from the Indiana Department of Revenue with instructions of how to take the Identity Confirmation Quiz.

It is important that those required to take the quiz know they are not suspected of identity theft. This effort is designed to further protect taxpayers’ identities and tax refunds. After successful quiz completion, the taxpayer receives his or her refund on time—within 14 days if electronically filed and within 12 weeks if filed by paper.

Seventy-five percent of those required to take the Identity Confirmation Quiz have taken it online, and those who have taken the quiz on the phone have waited an average of only 12 seconds before being helped by a department representative.

These increased security features come at a time when identity theft has become an epidemic. In 2013, 13.1 million consumers were victims of identity theft, according to the Javelin Strategy and Research 2014 Identity Fraud Report.

Along with the increased security features in the identity protection program, the department continues to urge taxpayers to safeguard their personal information and protect their identities.

Visit the department’s Stop ID Theft website atwww.in.gov/dor/4794.htm for identity protection tips, a video and additional resources. Hoosiers can also sign up for the Attorney General’s ID Theft Protection Tool Kit atwww.in.gov/attorneygeneral/2853.htm.

Revenue Declines to Waive Penalty Findsing Returned Payment Within Taxpayer's Control

Excerpts of Revenue's Determination follow:

Taxpayer had a payment to the Indiana Department of Revenue ("Department") that was returned by Taxpayer's banking institution. Based upon this, the Department sent Taxpayer a letter notifying Taxpayer that the payment was due and that it would include a ten percent penalty and interest. The letter also notified Taxpayer in relevant part:

The penalty amount shall be increased to the face value of the payment or one hundred percent (100[percent]) of the unpaid tax, whichever is smaller, if not paid by April 11, 2013.

Taxpayer filed a protest. An administrative hearing was held, and this Letter of Findings results.
...
 

Taxpayer's protest letter states that per a discussion with a representative of the Department, Taxpayer's "payment was returned, and a 10[percent] returned payment penalty [was] assessed along with interest." Taxpayer's letter further states:
 

This payment, which is a first quarter 2013 estimated tax payment, was made by ACH Debit. The payment was made by ACH Debit to be compliant with the mandatory requirements that any corporation which has an AGI greater than $5,000 transmit funds by electronic funds transfer.
 

The statute at issue, IC § 6-8.1-10-5, states:
 

(a) If a person makes a tax payment with a check, credit card, debit card, or electronic funds transfer, and the department is unable to obtain payment on the check, credit card, debit card, or electronic funds transfer for its full face amount when the check, credit card, debit card, or electronic funds transfer is presented for payment through normal banking channels, a penalty of ten percent (10[percent]) of the unpaid tax or the value of the check, credit card, debit card, or electronic funds transfer, whichever is smaller, is imposed.

(b) When a penalty is imposed under subsection (a), the departmen t shall notify the person by mail that the check, credit card, debit card, or electronic funds transfer was not honored and that the person has ten (10) days after the date the notice is mailed to pay the tax and the penalty either in cash, by certified check, or other guaranteed payment. If the person fails to make the payment within the ten (10) day period, the penalty is increased to one hundred percent (100[percent]) multiplied by the value of the check, credit card, debit card, or electronic funds transfer, or the unpaid tax, whichever is smaller.

(c) If a person has been assessed a penalty under subsection (a) more than one (1) time, the department may require all future payments for all listed taxes to be remitted with guaranteed funds.

(d) If the person subject to the penalty under this section can show that there is reasonable cause for the check, credit card, debit card, or electronic funds transfer not being honored, the department may waive the penalty imposed under this section. (Emphasis added).
 

Furthermore, 45 IAC 15-11-5 addresses "reasonable cause," stating:
 

For purposes of IC 6-8.1-10-5, reasonable cause for waiving the penalty shall constitute circumstances which were totally beyond the control of the taxpayer. Determination of reasonable cause is at the discretion of the department. (Emphasis added).
 

Thus under 45 IAC 15-11-5 in order for a taxpayer to establish "reasonable cause" the taxpayer must show that the "circumstances which were totally beyond the control of the taxpayer." In the case at hand, Taxpayer states in pertinent part:
 

Since AGI has exceeded $5,000 for several prior years, it was assumed by [Company I's] tax department that [Taxpayer's] previous payments had been made to the Indiana Department of Revenue by the ACH Debit method. Due to these unknown circumstances, the Indiana originator ID was inadvertently not set up with processing bank, which resulted in the payment being returned.
 

Taxpayer also notes in a follow-up e-mail to the Department:
 

Upon notice of the returned payment, a certified check was cut on April 10^th, 2013 for the full amount of tax owed as well as interest and penalties . . . . This payment was received by the Indiana Department of Revenue on April 10^th, 10 days before the original due date for 1^st quarter estimated payments.
 

IC § 6-8.1-5-1(c) states in relevant part that, "The burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made." Under 45 IAC 15-11-5 Taxpayer must establish that the "circumstances which were totally beyond the control of the taxpayer." Taxpayer has not shown this; Taxpayer's explanation is that the company that acquired it "assumed" that the "previous payments had been made to the Indiana Department of Revenue by the ACH Debit method." Thus the circumstances were not totally beyond the control of Taxpayer.
 

Regarding the interest, the Department notes that under IC § 6-8.1-10-1(e) interest cannot be waived.

 

https://www.blogger.com/blogger.g?blogID=927161408558753715#editor/src=header

Two Hearings Scheduled for Tax Court in March

Larry G. Jones and Sharon F. Jones v. Jefferson Co. Assessor (View)

Thursday, March 06, 2014 11:00 AM - 12:00 PM

39T10-1308-TA-68 Taxpayers challenge whether the Indiana Board of Tax Review erred in denying their 2008/2009 real property assessment appeals. Location: Room 300, Jefferson County Courthouse 300 E. Main Street Madison, IN 47250

Fesenius USA Marketing, Inc. v. Indiana Dep't of State Revenue (View)

Thursday, March 20, 2014 10:00 AM - 11:00 AM

45T10-1008-TA-45 This is a hearing on the parties' motions for summary judgment.  For a description on the merits of the case see the Tax Summaries at http://www.in.gov/judiciary/opinions/taxsumm.html. Location: State House, Room 413 Indianapolis, IN 46204

http://www.in.gov/activecalendar/EventList.aspx?fromdate=3/1/2014&todate=3/31/2014&display=Month&view=DateTime

One Case Filed in Tax Court in February

INDIANA TAX COURT
Cases Transmitted
Week of 2/17/14


Name: NIBCO, Inc. v. Ind. Dep’t of State Revenue
Case No. 49T10-1402-TA-4
Date Filed: 2/21/14
Attorneys: Mark J. Richards, Matthew J. Ehinger
 ICE MILLER, LLC
 One American Square
 Suite 2900
 Indianapolis, IN 46282-0002
(317) 236-2100
Type of Tax: Sales/Use – taxpayer challenges whether its purchases of software maintenance agreements were subject to tax.

http://www.in.gov/judiciary/opinions/pdf/02261401sum.pdf

Hayden - Advertising Could Keep School Buses Running

By Maureen Hayden in the Kokomo Tribune:

ash hungry schools may start selling ads on the sides of buses to make up millions of dollars lost because of property tax caps.

Legislation moving through the General Assembly would create a pilot program allowing a few districts to peddle the rights to place ads on buses. It would be the first step in what supporters envision as a statewide program making Indiana the latest state to allow schools to transform their yellow buses into rolling billboards.

“We don’t know yet how much money it will generate, but with the boat we’re in now, every little bit helps,” said Mike Shafer, chief financial officer for Zionsville Community Schools, which lost more than $500,000 in transportation funds last year due to property tax caps.

Zionsville administrators lobbied for the measure, and their district would be one of three in the pilot program. Other districts may soon follow.

“If it’s something a local community wants, I think the state should provide the option to do it,” said Rep. Todd Huston, R-Fishers, author of a larger school transportation bill that contains the advertising provision. “It’s not deemed as something that solves the larger problem, but it can be used as a complementary revenue source.”

Some Howard County superintendents were more hesitant about the possibility of advertising on buses.

“It’s pretty clear when people see a big yellow bus coming down the road that it’s carrying children. I wouldn’t want to do anything to change that,” said Ryan Snoddy, superintendent of Northwestern School Corp. “Having that advertising on the side could distract from their safety. We may have revenue issues, but that’s not the route I’d want to go.”

Schools have been hit hard by the tax caps passed by voters in 2010. While the caps saved property owners $704 million on their tax bills last year, schools lost more than $245 million in funds they used to keep buses running and to pay for other big-ticket items.

...

http://www.kokomotribune.com/local/x1196468547/Advertising-could-keep-school-buses-running

Hayden: Legislators Looking to Help Close Bus Funding Gap

By Maureen Hayden in the Kokomo Tribune:

Legislators are closing in on a way to help some school districts that stand to lose millions of dollars in transportation funds.

A proposal in a school debt service bill essentially stalls for three years a law that requires schools to pay their debts before spending money on buses, building repairs or other big-ticket items.

The delay only helps districts that will lose at least 10 percent of their transportation funds due to the new “protected levy” law – or fewer than 100 of the state’s 294 districts. Schools losing less than that amount must absorb the cuts or dip into operating funds – which pay for salaries for teachers and administrators – for transportation or other needs.

The 10 percent benchmark is seen as a victory by some. An earlier version of the bill set the cutoff at 20 percent.

“We’ll be able to help a lot more schools,” said Sen. Randy Head, R-Logansport, who helped negotiate the new limit. Under the protected levy, Logansport Community Schools stand to lose more than 17 percent of the funds used to keep their buses running – almost $200,000.

Legislators and school officials have spent weeks trying to devise a plan to relieve school districts that have already lost millions from their transportation and capital funds due to property tax caps approved in 2010. Losses vary by district, but overall the caps have cost schools more than $642 million over the past three years.

Current law allows school corporations to spread such losses over several funds, including those for debt service, school pension debt, capital projects, transportation and bus replacement. But the protected levy law, which passed in 2012 and takes effect this July, removes that flexibility. It requires districts to apply property tax revenues to debt payments before other expenses.

...

http://www.kokomotribune.com/local/x1196468549/Legislators-looking-to-help-close-bus-funding-gap

Times Reports Tax Exempt Status of VU Bookstore and Ballroom Challenged by Porter County Assessor

From the Northwest Indiana Times:

Porter County Assessor Jon Snyder has expanded his challenge of tax exempt properties in the county to include portions of Valparaiso University.

The Porter County Property Tax Assessment Board of Appeals agreed this past week to a request by Snyder to determine whether the university should legally be able to maintain tax exempt status at the bookstore and banquet facility/ballroom at the Harre Student Union.

He is also researching to see if there are other income-producing areas of the campus to apply the key question of whether the predominant use is for education.

"If they're not paying their fair share, somebody else will," he said.

Valparaiso University did not respond to a request for comment on the issue.

The challenge to the university is similar to Snyder's opposition in November to an attempt by United Steelworkers Local 6787 in Portage to regain tax exempt status for its union hall and nearby building it referred to as a meeting facility.

The union argued the buildings are used for charitable and educational efforts, but the assessor's office said the meeting facility is actually a lucrative banquet center. An attorney for the assessor argued in the pending case that exemption law requires the facilities benefit the larger community and not primarily the group's membership.

Snyder also questioned the fairness of the union or university receiving these breaks while competing with private banquet facilities that are required to pay taxes.

Snyder had announced shortly after taking office in 2011 that he intended to take a close look at the 6,246 local parcels receiving property tax exemptions to see if each owner is qualified for the tax break. He said an estimated $17 million in unpaid revenue was at stake.

...

http://www.nwitimes.com/news/local/porter/tax-exempt-status-of-vu-bookstore-ballroom-questioned/article_46c62d82-0c1c-5791-9360-e52a2303466d.html