Indiana Law Review Developments in Indiana Taxation Lawrence A. Jegen, III* Edward L. Harris, III** Introduction The 1 1 lth Indiana General Assembly, the Governor of Indiana, the Indiana Supreme Court, and the Indiana Tax Court each contributed changes and clarifications to the Indiana tax laws in 2000. ' This Article highlights the more interesting developments for the period of October 1, 1999 through September 30, 2000. 2 I. General Assembly Legislation Numerous legislative changes in 2000 impacted Indiana taxation. While many ofthe changes were made to fine-tune existing laws, some policy changes occurred in each ofthe following Indiana tax areas: property tax, income tax, tax credits, food and beverage tax, inheritance tax, financial institutions tax, and tax administration. A. Indiana Property Taxes The General Assemblyenacted several laws affecting Indiana property taxes. For example, the General Assembly amended the law concerning the deduction for rehabilitation or redevelopment of real property in economic revitalization areas (ERA) from the assessed value of property.3 This new law extends the * Thomas F. Sheehan Professor of Tax Law and Policy, Indiana University School of Law—Indianapolis; B.A., Beloit College; M.B.A., J.D., University ofMichigan; LL.M., New York University. ** J.D. Candidate, 2002, Indiana University School of Law—Indianapolis; B.S., Indiana University. 1 . Hereinafter, at times, the following abbreviations are used in this Article: the Indiana General Assembly is referred to as General Assembly; the Governor of Indiana is referred to as Governor; the Indiana State Board of Tax Commissioners is referred to as ISBTC; the Indiana Department of State Revenue is referred to as IDSR; the Indiana Supreme Court is referred to as supreme court; the Indiana Tax Court is referred to as tax court; and, the terms petitioner, petitioners, taxpayer, and taxpayers are used interchangeably. 2. For comprehensive information concerning the Indiana Tax Court, the Indiana Department ofState Revenue, the Indiana State Board ofTax Commissioners, and a variety ofother tax items related to Indiana tax laws, visit the Indiana Web Site, available at http://www.ai.org. 3. See IND. Code § 6-1.1-12.1-1(1) (2000). An economic revitalization area (ERA) is defined as: [A]n area which is within the corporate limits of a city, town, or county which has become undesirable for, or impossible of, normal development and occupancy because of a lack of development, cessation of growth, deterioration of improvements or character ofoccupancy, age, obsolescence, substandard buildings, or other factors which have impaired values or prevent a normal development of property or use of property. 1 004 INDIANA LAW REVIEW [Vol. 34: 1 003 tangible property tax deduction to eligible "[n]ew research and development equipment," which refers to "tangible personal property that: (A) is installed after June 30, 2000, and before January 1, 2006, in an [ERA] in which a deduction for tangible personal property is allowed." 4 The tangible personal property consists of laboratory equipment, research and development equipment, computers and computer software, telecommunications equipment, ortesting equipment that "is used in research and development activities devoted directly and exclusively to experimental or laboratory research and development for new products, new uses of existing products, or improving or testing existing products" and that "is acquired by the property owner" for the above stated purposes and which research and development equipment "was never before used by the owner for any purpose in Indiana." 5 New research and development equipment excludes "equipment installed in facilities used for or in connection with efficiency surveys, management studies, consumer surveys, economic surveys, advertising or promotion, or research in connection with literacy, history, or similar projects." 6 In the same bill, the General Assembly revised the statute concerning the deduction for rehabilitation or redevelopment ofreal property in ERAs from the assessed value ofproperty with respect to the periods for which the property tax deduction may be granted by the designating body.7 For real property located in an area designated as an ERA, other than a residentiary distressed area, the real property deduction may be allowed for a period from one to ten years.8 In the case of real property located in an ERA which is a residentiary distressed area, the period is from one to five years. 9 In the case of tangible personal property which is located in an ERA, the deduction for the tangible personal property may be allowed for a period from one to ten years. 10 These provisions were effective on July 1,2000." The General Assembly also made three important amendments to the property tax statute. First, the General Assembly amended the statute concerning the real property deduction for rehabilitation or redevelopment of real property in ERAs from the assessed value of property. 12 The amended statute provides [An ERA] also includes: (A) any area where a facility or a group of facilities that are technologically, economically, or energy obsolete are located and where the obsolescence may lead to a decline in employment and tax revenues; and (B) a residentially distressed area .... Id. 4. A*§6-1.1-12.1-1(12XA). 5. /564 the "tax situs. The tax court found that the term sources, as used in section 6-2. l-2-2(a)(2), was intentionally retained by the legislature in the recodified gross income tax imposition statute and its meaning had been refined by the tax court. 565 The tax court concluded that the IDSR's interpretation of section 6-2.1-1- 2(c)(6) would result in dissimilar applications ofthe same concept (the sources of gross receipts) in two related gross income tax statutes. 566 Because the tax court endeavors to construe statutes to prevent absurd results it found that section 6-2. l-l-2(c)(6) ofthe Indiana Code excludes the gross receipts generated by the taxpayer's Indiana destination sales from the definition of gross income. 567 In sum, the tax court held that the IDSR erroneously subjected the taxpayer's gross receipts from its Indiana destination sales to Indiana's gross income tax. 568 Therefore, the tax court reversed the final determination of the IDSR. 569 2. Policy Management Systems Corp. v. Department ofState Revenue570—In Policy Management Systems Corp., a corporate taxpayer challenged the final determination ofthe IDSR finding that the taxpayer owed Indiana gross income tax. 571 In this case, Policy Management Systems Corp. (taxpayer) requested that the tax court determine whether the money the taxpayer receives from customers, as reimbursements for advances the taxpayer makes on behalf of its customers to various state agencies in order to obtain motor vehicle reports (MVRs), 572 is subject to Indiana's gross income tax. 573 In sum, the tax court held that this form of taxpayer income, reimbursements for advances to third parties on behalf of customers, is not subject to Indiana's gross income tax. 574 The tax court remanded the case to the IDSR with instructions to sustain the taxpayer's protest on this issue. 575 The tax court indicated that "although the taxpayer was incorporated under the laws of South Carolina and maintained its principle [sic] offices in South Carolina," the taxpayer also maintained a service bureau in Indiana during the 564. Uniden Am. Corp., 718 N.E.2d at 828 (quoting Indiana-Kentucky Elec. Corp., 598 N.E.2d at 663). 565. See id. at 828. 566. See id. 567. See id. 568. See id. at 828-29. 569. See id. at 829. 570. 720 N.E.2d 20 (Ind. Tax Ct. 1999). 571. See id. at 21. 572. An MVR is "a confidential history of accidents, operating violations and other information maintained by a state government agency for each individual licensed as a motor vehicle operator by that agency." Id. at 21-22. 573 . See id. ; see also Ind. Code 6-2. 1 -2-2 (200 1 ) (defining gross income tax). 574. See Policy Management, 720 N.E.2d at 27. 575. See id. 1 054 INDIANA LAW REVIEW [Vol. 34: 1 003 relevant tax years. 576 One of the taxpayer's services included retrieving MVRs and transmitting them to its customers. The tax court noted that the taxpayer's customers pay a fixed fee for each MVR obtained by the taxpayer. The taxpayer's customers also agree to reimburse the taxpayer the cost ofassessments by government agencies incurred while retrieving the information. 577 With respect to the imposition ofIndiana's gross income tax, "the taxpayer's beneficial interest in income is central to the receipt of gross income."578 The taxpayer asserted that it was the agent for its customers, the purported principals, in processing MVRs.579 The tax court noted that, "[reimbursements to an agent for amounts advanced or paid to third parties substantively represent 'pass throughs' of income and therefore are not taxable to the agent." 580 The tax court then contrasted the agency concept with its observation that reimbursements of a taxpayer's own expenses are receipts of gross income to the taxpayer.581 The tax court also found that the IDSR's regulations recognize the non-taxability of an agent's receipts. 582 Because the taxpayer had the burden to prove that the reimbursements were not subject to Indiana's gross income tax, the tax court determined that in order to prevail, the taxpayer must first demonstrate that it acted as an agent for its customers in processing MVRs and then show that it received the reimbursements as payment for advances to third parties on behalf of customers. 583 The tax court determined that "a party claiming the existence of an agency relationship must prove the following three elements: '(1) a manifestation of consent by the principal to the agent, (2) an acceptance of the authority by the agent, and (3) control exerted by the principal over the agent.'" 584 In this case, the tax court concluded that the first two elements ofthe above test were met because the signatures of representatives from both the taxpayer and its customers on the processing agreements represented both the consent of individual customers to the taxpayer's agency status and the taxpayer's acceptance of the agency relationship. 585 However, the tax court found that whether the customer-principal exerted sufficient control over the taxpayer-agent to create an agency relationship was in dispute. 586 The tax court found that while the principal's control need not be complete, "the principal's control cannot 576. Mat 21. 577. See id. 578. Id. at 23 (citation omitted). See also Ind. CODE § 6-2.1-2-2 (2001). 579. See Policy Management, 720 N.E.2d at 23. 580. Id. (citation omitted). 581. See id. 582. See id. ; see also Ind. Admin. Code tit. 45, r. 1-1-54 (2001 ). 583. See Policy Management, 720 N.E.2d at 23. 584. Id. (citation omitted). 585. See id. at 24. 586. See id. 2001] TAXATION 1055 simply consist of the right to dictate the accomplishment of a desired result." 587 The tax court reviewed the contract terms in this case and determined that the taxpayer's customers had the right to dictate several aspects the retrieval process. 588 In addition, the taxpayer lacked any flexibility to control the disposition of the MVRs once retrieved.589 The tax court also noted that the taxpayer could only retrieve the requested information with its own system, unless customers agreed to an alternate method. 590 The tax court focused on the fact that the taxpayer's customers retained the power to exercise these rights.591 The tax court also found that it would be inefficient for the taxpayer to require its customers to pay state agencies directly for MVR requests because of the high volume of requests. 592 The tax court opined that while the Indiana "gross income tax is applicable regardless of any profit being involved ... the lack of a profit, when considered together with the efficiency" promoted by the taxpayer's fee arrangement with customers and its billing methods, supported the taxpayer's claim that it was acting as an agent when retrieving requested MVRs for customers. 593 The tax court first determined that the taxpayer acted as the agent for its customers, with respect to the processing of the MVR requests, and next considered whether the reimbursements were truly advances by the taxpayer to third parties on behalfofthe taxpayer's customers. 594 The tax court reviewed the relevant contract terms, as well as the conduct ofthe taxpayer and its customers, and concluded that the plain language of the contracts indicated that the reimbursements represented "pass throughs" of income. 595 The tax court reasoned that the payments were reimbursements for the taxpayer's advances to various government agencies and not for the taxpayer's own operating expenses. 596 Moreover, the tax court found that the taxpayer lacked a beneficial interest in the reimbursements. 597 Therefore, the tax court concluded that the taxpayer met its burden to show that its income from agency reimbursements was not subject to the Indiana gross income tax. 598 587. Id. 588. See id. at 25. 589. See id. 590. See id. 591. See id. 592. See id. at 26. 593. Id. (citation omitted) 594. See id. 595. See id. at 26-27. 596. See id. at 27. 597. See id. 598. See id. 1 056 INDIANA LAW REVIEW [Vol. 34: 1 003 D. Indiana Adjusted Gross Income Tax I. Wabash, Inc. v. Department of State Revenue.599—Wabash, Inc. (taxpayer), a manufacturing corporation, appealed from a final determination of the IDSR finding that it erroneously included the taxpayer's parent company, Kearney-National Inc. (KN), on the taxpayer's consolidated tax return. 600 Additionally, the IDSR raised the issue of whether the apportionment method used by the taxpayer to calculate its taxes was correct.601 The tax court found in favor ofthe taxpayer on both issues. 602 The tax court found that the taxpayer is a wholly-owned subsidiary of Kearney-National Holdings II (KNH II), a Delaware corporation doing business in Indiana. 603 KNH II is likewise a wholly-owned subsidiary of Kearney- National Holdings (KNH), a Delaware holding company of KN that lacked Indiana connections. Both companies were housed underthe corporate umbrella of KN, which was headquartered in New York. KN considered the acquisition of the Coto Corporation (Goto), and after completing an acquisition study to examine the benefits that Coto could bring to KN, KN acquired Coto. After the merger, all ofthe taxpayer's operations moved to Coto's plant located in Rhode Island. Thereafter, the taxpayer filed its Indiana adjusted gross income and its supplemental net income tax returns as a consolidated return, listing the taxpayer, KNH II, KNH and KN as corporations. The IDSR determined that KN was erroneously included in the taxpayer's tax return. 604 The tax court commenced its discussion of this case by addressing the inclusion ofKN on the taxpayer's return. Because the tax court found that KN's activities rose above mere solicitation, 605 KN did business in Indiana,606 KN generated two million dollars worth of sales attributable to Indiana, and KN had Indiana-sourced income, 607 the tax court concluded that KN was properly included in the taxpayer's return under section 6-3-4-14 ofthe Indiana Code. 608 Next, the tax court considered whether the apportionment formula used by the taxpayer to calculate its taxes was correct. The tax court found that because the IDSR raised this issue, it had the burden of proving that the taxpayer's Indiana income did not fairly reflect Indiana-sourced income. 609 As background, the tax court explained that in section 6-3-2-2(b) of the Indiana Code, the standard apportionment formula multiplies a company's business income by the 599. 729 N.E.2d 620 (Ind. Tax Ct. 2000). 600. See id. at 621. 601. See id. 602. See id. 603. See id. 604. See id. at 621-22. 605. See 15 U.S.C. §§ 381-384 (2000). 606. See Ind. Admin. Code tit. 45, r. 3.1-1-38(7) (2001). 607. See IND. CODE § 6-3-2-2 (200 1 ). 608. See Wabash, Inc., 729 N.E.2d at 624; see also IND. CODE § 6-3-4-14 (2000). 609. See Wabash, Inc. , 729 N.E.2d at 624. 2001] TAXATION 1057 total of its property, payroll and sales factors divided by three to determine the tax (standard formula). 610 The tax court found that if the stated method fails to fairly represent Indiana-sourced income, the regulations also authorize the IDSR or a taxpayer (upon obtaining a ruling from the IDSR) to use another method that produces a more equitable allocation and apportionment of a taxpayer's income. 611 The tax court observed that previous rulings of the United States Supreme Court, the IDSR and the tax court have recognized that the standard method is the method often used by related corporations to compute their state income taxes.612 For example, in Container Corp. ofAmerica v. Franchise Tax Board, 612 the United States Supreme Court "not only affirmed the standard formula but also stated that it has become a benchmark against which other apportionment formulas are judged." 614 The Supreme Court further found that "the standard formula gained wide approval because the property, payroll and sales factors reflect a large share ofthe activities by which value is generated." 615 Therefore, the tax court concluded that the standard formula could be used unless the IDSR proved that the income attributed to Indiana from using that formula was out of proportion to the amount of business transacted in Indiana. 616 The tax court observed that the IDSR has acknowledged that the standard formula is the most accepted and recognized method ofcomputing a company's taxes. 617 The tax court reasoned that it should give great weight to the IDSR's longstanding interpretation of its own regulation unless that interpretation would be inconsistent with the regulation itself. 618 The tax court found that the IDSR has also reiterated its preference for the standard method in a series of revenue rulings where the taxpayer sought to use the stacked method. 619 6 1 0. See id. at 625; see also IND. CODE § 6-3-2-2(b) (200 1 ); Ind. ADMIN. Code, tit. 45, r. 3 . 1 - 1-39(1988). 611. See Wabash, Inc. , 729 N.E.2d at 625. 612. See id. 613. 463 U.S. 159(1983). 614. Wabash, Inc., 729 N.E.2d at 625. 615. Id. See also Container Corp. ofAm., 463 U.S. at 183. 616. See Wabash, Inc., 729 N.E.2d at 626. 617. See id. at 625; see also Ind. Admin. Code, tit. 45, r. 3.1-1-37,-45 (2001) (stating that the IDSR will depart from the standard formula only if the use of such formula works a hardship or injustice upon the taxpayer, results in an arbitrary division of income, or in other respects does not fairly attribute income to Indiana). 6 1 8. See Wabash, Inc. , 729 N.E.2d at 626. 619. See id; see also Rul. 81-4381 GIT (May 29, 1981) ("The Indiana Department of Revenue has consistently required that a consolidated return use a combined three-factor apportionment formula as the fairest method of reflecting the income derived from Indiana sources."); Rul. 84-6943 ITC (October 3, 1 986) ("The basic premise behind a consolidated income tax return is that the group is treated as a single corporation .... [A] combined three-factor formula is employed to fairly reflect the income derived from Indiana sources."); Rul. 90-01 14 ITC (November 13, 1990) ("The Indiana Department of Revenue forms [ ] do not provide for the 1058 INDIANA LAW REVIEW [Vol. 34:1003 In this case, the tax court held that the IDSR failed to show how the standard formula employed by the taxpayer unfairly reflected the taxpayer's Indiana- sourced income and that it was appropriate for the taxpayer to use the standard formula. 620 2. Rockland R. Snyder v. Department of State Revenue.621—In Snyder, an individual taxpayer appealed the IDSR's denial of his protest challenging the constitutionality of Indiana's adjusted gross income tax on his wages. 622 In this case, the tax court addressed whether wages are income for the purpose of calculating Indiana's adjusted gross income tax. 623 Rockland R. Synder (taxpayer), an Indiana resident, filed Indiana individual income tax returns, in which he acknowledged having received wages, but declared that his wages did not constitute income. In addition, the taxpayer claimed refunds for all state income taxes withheld by his employer during the relevant tax years. The IDSR subsequently assessed the taxpayer for each year's unpaid adjusted gross income taxes. 624 In evaluating Snyder, the tax court reviewed Rickey v. Department ofState Revenue, 625 in which the tax court held that "[t]he constitutional legitimacy ofthe general assembly's decision to tax income is beyond dispute. The right to tax is a crucial attribute ofsovereignty." 626 The tax court also observed that article IX, section 8 ofthe Indiana Constitution provides: "The general assembly may levy and collect a tax upon income, from whatever source derived, at such rates, in such manner, and with such exemptions as may be prescribed by law."627 The tax court held that pursuant to the Adjusted Gross Income Tax Act of 1963 (Act), 628 the General Assembly has imposed an adjusted gross income tax. 629 The tax court found that the Act adopts the definition of"adjusted gross income" as the term applies to all individuals, from section 62 of the Internal Revenue Code, 630 with certain modifications, 63 'and the Act adopts the definition of"gross income" from section 61(a) of the Internal Revenue Code. 632 calculation of income as described by the taxpayer. . . . There are no provisions for separate calculations with a single consolidation to determine Indiana taxable income."). 620. See Wabash, Inc. , 729 N.E.2d at 626. 621 . 723 N.E.2d 487 (Ind. Tax Ct. 2000) 622. See id. 623. See id. 624. See id. 625. 634 N.E.2d 1375, 1376 (Ind. Tax Ct. 1994). 626. Snyder, 723 N.E.2d at 488 (quoting Rickey, 634 N.E.2d at 1 376 (citing McCulloch v. Maryland, 17 U.S. (4 Wheat) 316 (1819))). 627. Snyder, 723 N.E.2d at 488 (citing IND. CONST, art. IX, § 8). 628. See IND. CODE § 6-3- 1 - 1 . 629. See Snyder, 723 N.E,2d at 488; see also IND. CODE § 6-3-2-1 (2000). 630. See 26 U.S.C. § 62 (2001). 63 1 . See Snyder, 723 N.E.2d at 488; see also Ind. CODE § 6-3-1 -3.5(a) (2001). 632. See Snyder, 723 N.E.2d at 489; see also 26 U.S.C. § 6 1 (a) (2000); IND. CODE § 6-3- 1 -8 (2001). 2001] TAXATION 1059 Given the Internal Revenue Code's definitions for both adjusted gross income and gross income; the common definition ofthe terms; an overwhelming body of case law by the United States Supreme Court and the federal circuit courts; and, the tax court's opinions and decisions, the tax court concluded that wages are income for the purpose ofcomputing Indiana's adjusted gross income tax. 633 Consequently, the tax court found that, as a matter of law, the taxpayer's wages were subject to Indiana's adjusted gross income tax and affirmed the final determination of the IDSR. 634 E. Indiana Gross Retail and Use Taxes In Carroll County Rural Electric Membership Corp. v. State Board of Tax Commissioners, 635 an Indiana rural electric membership corporation challenged the IDSR's final determination granting the taxpayer's protest for certain prior tax years but finding that the taxpayer's publication would be subject to the Indiana gross retail (sales) and use taxes prospectively. 636 In this case, the IDSR asked the tax court to determine whether the tax court had jurisdiction to hear a taxpayer's appeal from a final determination where the IDSR sustained the taxpayer's protest but determined that the taxpayer's future purchases would not be exempt from the Indiana sales and use taxes. 637 Each month, Carroll County Rural Electric Membership Corporation (taxpayer) purchased a publication and distributed the publication to all of its members. The IDSR determined that the subject publication failed to meet all of the regulatory requirements to be considered a newspaper and that consequently, future purchases and use of the publication would no longer be exempt from the sales tax. 638 The tax court reviewed fundamental principles ofsubject matterjurisdiction and found that every action has threejurisdictional elements: jurisdiction ofthe subject matter; jurisdiction of the person; and, jurisdiction of the particular case. 639 The tax court found that the general scope of authority conferred upon the tax court is governed by section 33-3-5-2(a)(l) ofthe Indiana Code. 640 The tax court noted that this statutory provision provides that the tax court is a court of limited jurisdiction, having "exclusive jurisdiction over any case that arises under the tax laws of [Indiana] and that is an initial appeal of a final determination" made by the IDSR.641 The tax court concluded that because the taxpayer challenged the IDSR's assessment and collection ofIndiana's sales and 633. See Snyder, 723 N.E.2d at 491 . 634. See id. 635. 733 N.E.2d 44 (Ind. Tax Ct. 2000). 636. See id. at 46. 637. See id. 638. See id. ; see also IND. CODE § 6-2.5-5- 1 7 (2000) (newspaper exemption). 639. See Carroll County, 733 N.E.2d at 47. 640. See id. ; see also IND. CODE § 33-3-5-2(a)( 1 ) (200 1 ). 641 . Carroll County, 733 N.E.2d at 47 (quoting IND. CODE § 33-3-5-2(a)(l ) (2001)). 1060 INDIANA LAW REVIEW [Vol. 34: 1003 use taxes and because the taxpayer appealed from a final determination issued by the IDSR, the taxpayer's appeal fell within the jurisdiction ofthe tax court.642 Next, the tax court addressed the ripeness issue raised by the IDSR. The tax court observed that when ruling upon a ripeness challenge, it must consider both the fitness of the issues for judicial decision and any hardship imposed on the parties by withholding court consideration. 643 In this case, the tax court found a sufficient factual basis for the taxpayer' s challenge: whether or not the taxpayer' s publication qualified as a newspaper. 644 Consequently, the tax court concluded that the substantive issue in the case was fit for judicial decision.645 Next, the tax court considered the IDSR's allegation that the taxpayer failed to state a claim upon which relief could be granted. 646 The tax court noted that "jurisdiction over the particular case refers to the right, authority, and power to hear and determine a specific case within the class of cases over which a court has subject matter jurisdiction." 647 The tax court determined that the taxpayer had completed the statutory requirements to bring this appeal. 648 In summary, the tax court found that the IDSR failed to demonstrate that the tax court lacked jurisdiction over this particular case and denied the IDSR's motion to dismiss.649 F. Indiana Inheritance Taxes In Department of State Revenue, Inheritance Tax Division v. Estate of Riggs, 650 the Inheritance Tax Division of the IDSR appealed a probate court's order denying the IDSR's petition to redetermine the inheritance taxes owed by the transferees of real and personal property owned by Robert E. Riggs (decedent). 651 The sole issue presented for the tax court's consideration in this case was whether the transferees of a decedent who died prior to the effective date ofan amendment increasing an exemption to the state's inheritance tax were entitled to the increased exemption. 652 The tax court reversed the probate court's decision and remanded the case with instructions to grant the IDSR's request for a redetermination ofthe inheritance taxes owed by the transferees.653 The decedent died testate while residing in Henry County, Indiana. The decedent's last will and testament bequeathed or devised his entire estate to his 642. See id. 643. See id. at 48. 644. See id. at 49. 645. See id 646. See id at 49-50; see also IND. TR. 12(B)(6) (2001). 647. Carroll County, 733 N.E.2d at 50 (quoting Adler v. Adler, 713 N.E.2d 348, 352 (Ind. Ct. App. 1999) (citation omitted)). 648. See id; see also Ind. CODE § 33-3-5-1 1(a) (2001). 649. See Carroll County, 733 N.E.2d at 50. 650. 735 N.E.2d 340 (Ind. Tax Ct. 2000). 651. See id at 341-42. 652. See id. at 342. 653. See id. at 347. 2001] TAXATION 1061 three children (transferees). After opening the decedent's estate (estate), the estate petitioned the probate court seeking a determination as to whether the transferees were entitled to the one hundred thousand dollar exemption provided for by section 6-4.1-3-10 of the Indiana Code. 654 The probate court entered an order allowing the requested exemption. 655 The IDSR then filed a petition, pursuant to section 6-4.1-7-1 of the Indiana Code, requesting that the probate court grant a rehearing for the purpose of redetermining the amount of inheritance tax due. 656 The probate court conducted a rehearing and later entered an order denying the IDSR's petition. 657 The tax court explained that at the time of the decedent's death, Indiana's inheritance tax statutes imposed a tax on the privilege of succeeding to certain property rights ofdeceased persons. 658 The tax court noted that the inheritance tax is imposed on the transfer ofownership ofthe property as opposed to being imposed on the property itself. 659 In addition, the tax court observed that the inheritance tax is a lien on the property transferred by the decedent, whereby generally, the tax accrues and the lien attaches at the time of the decedent's death. 660 The tax court found that the Indiana inheritance tax statutes are based upon the ownership theory, which has two requirements for imposition ofthe tax: (1) a transfer from a decedent, (2) of an interest in property that the decedent owned at death.661 The tax court explained that the General Assembly has provided for various exemptions to the inheritance tax, including the one at issue in this case. 662 The tax court noted that the amended exemption provided that the "first one hundred thousand dollars ($100,000) of property interests transferred to a Class A transferee under a taxable transfer or transfers is exempt from the inheritance tax." 663 However, at the time ofthe decedent's death, adult children were entitled to a five thousand dollar exemption. 664 The tax court observed that while the General Assembly subsequently enacted legislation increasing the exemption, the legislation was silent with respect to whether the amended exemption was effective for transfers of decedents dying before its effective date. 665 However, 654. See id. ; see also IND. CODE §6-4.1-3-10 (2000). 655. See Riggs, 735 N.E.2d at 342. 656. See id. ; see also Ind. CODE § 6-4. 1 -7- 1 (2000). 657. See Riggs, 735 N.E.2d at 342. 658. See id; see also IND. CODE §§ 6-4.1-2-1 to -4.1-2-7 (2000). 659. See Riggs, 735 N.E.2d at 342. 660. See id ; see also IND. CODE § 6-4. 1 -8- 1 (2000). 66 1 . See Riggs, 735 N.E.2d at 343. 662. See id; see also IND. CODE §§ 6-4.1-3-1 to -4.1-3-12 (2000). 663. Riggs, 735 N.E.2d at 343 (quoting IND. CODE § 6-4. 1-3-10 (2000)). 664. See id. The Indiana Code provided that the "first five thousand dollars ($5,000) of property interests which a transferor transfers to each ofhis children, who is at least twenty-one (21) years ofage at the time ofthe transferor's death, under a taxable transfer or transfers is exempt from the inheritance tax." Ind.Code § 6-4.1-3-9.5 (2000) repealed by P.L. 254-1997(ss), § 37. 665. See Riggs, 735 N.E.2d at 343; see also P.L. 254-1997(ss), § 9. 1 062 INDIANA LAW REVIEW [Vol. 34: 1 003 the tax court concluded that there was no need to interpret the exemption, because it was neither unclear nor ambiguous.666 The tax court observed that in both its current and pre-amendment forms, the exemption clearly was applicable at the time property interests were "transferred . . . under a taxable transfer or transfers." 667 Therefore, the tax court determined that for purposes of applying the exemption, the pivotal finding for the probate court was the time oftransfer ofthe decedent's assets. 668 The tax court held that ifthe transfer ofproperty took place before the effective date of the amended exemption, then only the pre- amendment amount was available to the transferees.669 The tax court explained that in Indiana, a decedent's death marks the point when his property transfers to his beneficiaries.670 The tax court found that section 29-1-7-23 of the Indiana Code provides that "[w]hen a person dies, his real and personal property[ ] passes to persons to whom it is devised by his last will . . . ; but it shall be subject to the possession of the personal representative." 671 Therefore, because the decedent's assets were transferred under the pre-amendment exemption amount, that amount is all that the beneficiaries could claim. 672 The tax court rejected the estate's argument that the General Assembly intended to apply the amended exemption retroactively. 673 The tax court noted that Indianajurisprudence does not favor retroactive application of statutes and amendments. 674 However, the tax court noted that exceptions to the general rule exist and that retroactive application may be permitted where the new legislation only changes a mode of procedure or where a statute is remedial.675 The court found that to decide whether a statute is remedial, the tax court will examine, among other things, the alleged defect or mischief that a statute or amendment seeks to cure. 676 The tax court reviewed the amended exemption and determined that it should only be applied prospectively, as it was neither procedural nor remedial in nature. 677 Moreover, the tax court found no evidence suggesting that the General Assembly intended to make the exemption's amendment retroactive. 678 The tax court also refused the estate's argument that the General Assembly's silence was an expression of its intention to apply the amendment to 666. See Riggs, 735 N.E.2d at 343. 667. Id See also IND. CODE § 6-4.1-3-10 (2000). 668. See Riggs, 735 N.E.2d at 343. 669. See id. 670. See id 671 . Id at 343-44. See also IND. CODE § 29-1-7-23 (2000). 672. See Riggs, 735 N.E.2d at 344. 673. See id 674. See id 675. See id 676. See id. 677. See id at 345. 678. See id. 2001] TAXATION 1063 the exemption retroactively. 679 The tax court found that the estate failed to demonstrate a strong and compelling reason to apply the amendment retroactively. 680 Therefore, the tax court declined to apply the amended exemption retroactively. 681 In sum, the tax court ruled that because the decedent died approximately seven months before the effective date of the amendment increasing the exemption's value, the increased exemption amount was not available to the transferees in determining their inheritance taxes. 682 The tax court also found that the probate court erred in denying the IDSR's request for a redetermination ofthe inheritance taxes. 683 As a result, the tax court reversed the decision of the probate court and remanded the case to the probate court with instructions to redetermine the inheritance taxes owed by the transferees.684 G. Indiana Controlled Substance Excise Tax J. Hurst v. Department of State Revenue 685—In Hurst, an individual taxpayer challenged the IDSR's finding that the taxpayer owed controlled substance excise tax (CSET). 686 In this case, Gary G. Hurst (taxpayer) raised two issues for the tax court's review. 687 First, the taxpayer asked the tax court to determine whether or not he possessed or received delivery of a substance alleged to be marijuana so as to place him within the purview of the CSET statute. 688 Second, he requested a finding ofwhether the substance was actually marijuana. 689 In this case, the tax court reversed the CSET assessment against the taxpayer. 690 In Hurst, the taxpayer was charged with the crime of conspiracy to deal marijuana in an amount greater than ten pounds. 691 The IDSR subsequently filed a jeopardy finding and a jeopardy assessment notice and demand against the 679. See id at 346. 680. See id 681. See id 682. See id at 346-47. 683. See id at 347. 684. See id. 685. 721 N.E.2d 370 (Ind. Tax Ct. 1999). 686. See id. at 371. 687. See id 688. See id. ; see also IND. CODE § 6-7-3-5 (2000). 689. See Hurst, 72 1 N.E.2d at 371 . 690. See id at 376. 691. See id. at 372; see also Ind. CODE § 35-48-4-10 (a)(1)(D) (2000). This charge was ultimately dismissed by the state. The taxpayer eventually pled guilty to the charge of possession ofmarijuana (under 30 grams), a class A misdemeanor, which was based on the discovery ofa small amount of marijuana inside the taxpayer's home after the State Police performed a search. The subject CSET assessment did not include the marijuana that was found in the taxpayer's home. See Hurst, 721 N.E.2d at 372; see also Ind. CODE § 35-48-4-1 1(1) (2000). 1 064 INDIANA LAW REVIEW [Vol. 34: 1 003 taxpayer alleging that the taxpayer owed CSET and penalties. After the IDSR issued its findings denying the taxpayer's written protest challenging the CSET assessment, the taxpayer initiated this original tax appeal with the tax court. 692 First, the tax court considered whether the taxpayer possessed or received delivery of the substance alleged to be marijuana, thereby making him liable under the CSET statute.693 The tax court reviewed the CSET statute along with related statutes and determined that in order to be liable under the CSET statute, a taxpayer was required to manufacture, possess, or serve as an actor in the actual or constructive transfer ofa controlled substance. 694 The tax court reviewed the evidence in the case and found no evidence implicating the taxpayer in the manufacture of a controlled substance. 695 The tax court focused its analysis on whether the taxpayer either possessed, received, or delivered or organized delivery of the subject substance. 696 The tax court disagreed with the IDSR's assertion that the evidence allowed for the reasonable inference that the taxpayer either received delivery of the marijuana or organized the delivery of the marijuana. 697 The tax court also concluded that the evidence presented in the case failed to demonstrate the taxpayer's participation in the delivery of the marijuana. Next, the tax court analyzed the issue ofpossession ofa controlled substance and opined that possession may be actual or constructive.699 The tax court found that the majority of the alleged marijuana was confiscated by law enforcement personnel and stored at an Indiana State Police post prior to the taxpayer's alleged possession. 700 In addition, the tax court determined that there was no evidence that would prove that the taxpayer had the intent or the ability to exercise control over the marijuana. 701 The tax court also found no evidence that the taxpayer leased the delivery vehicle; that the taxpayer drove the delivery vehicle; or, that the taxpayer knew what was stored inside the delivery vehicle prior to his arrest and communication with the Indiana State Police. 702 The tax court emphasized that although it did not believe that the taxpayer encountered the driver of the vehicle carrying the marijuana by mere coincidence, the taxpayer's liability for the CSET was not established partly because the Indiana State Police arrested the taxpayerquickly, thereby hampering his activity with respect to the marijuana. 703 The tax court indicated that it was 692. See Hurst, 721 N.E.2d at 372. 693. See id. at 373. 694. See id; see also IND. CODE § 6-7-3-5 (2000). 695. See Hurst, 721 N.E.2d at 373. 696. See id. 697. See id 698. See id. at 374. 699. See id. 700. See id. at 375. 701. See id. at 376. 702. See id. 703. See id. 2001] TAXATION 1065 "not persuaded by a preponderance of the evidence that [the taxpayer] either orchestrated or received' delivery of the marijuana or that [the taxpayer] possessed the requisite intent or ability to maintain dominion and control over the marijuana in question." 704 The tax court concluded that as a result of its reversal of the CSET assessment, it was not necessary to discuss the identity of the substance because the issue was moot. 705 2. Hall v. Department of State Revenue. 706—In Hall, individual taxpayers challenged the IDSR's finding that the taxpayers owed CSET.707 In this case, the tax court considered whether or not the Halls (taxpayers) possessed the marijuana in question, making them liable under the CSET statute.708 Both ofthe taxpayers were arrested and were issued CSET assessments for unpaid taxes. 709 Keith Hall was convicted of Class D felony marijuana possession, while all charges against Mary Hall were dropped. 710 The tax court determined that the CSET was a punishment subject to the constraints of the Double Jeopardy Clause 711 and that the imposition ofthe CSET after a criminal conviction violated the Double Jeopardy Clause. 712 Therefore the tax court ordered the CSET assessment against Keith Hall vacated.713 Conversely, the tax court held that because Mary Hall suffered no previous criminal prosecution or punishment, the Double Jeopardy argument did not apply to her and that her CSET assessment would not be vacated.714 On appeal, the supreme court ruled that the CSET assessment against the taxpayers did not violate the Double Jeopardy Clause, the taxpayers' rights to procedural due process, or their privileges against self-incrimination. 715 The supreme court reasoned that the CSET assessment in Keith Hall's case did not violate the Double Jeopardy clause because it was assessed prior to the criminal action, which was the second jeopardy. 716 The taxpayers next filed a motion to vacate and dismiss the CSET assessment with the tax court on equitable double jeopardy, cruel and unusual punishment, and disproportionality grounds. 717 The 704. Id. 705. See id. 706. 720 N.E.2d 1287 (Ind. Tax Ct. 1999). 707. See id at 1288. 708. See id. 709. See id ; see also IND. CODE 6-7-3-5 (2000). 710. See IND. CODE § 35-48-4-1 1 (2000); Hall, 720 N.E.2d at 1288; see also Hall v. Dep't of State Revenue, 641 N.E.2d694 (Ind. Tax Ct. 1994) ajfd in part and rev 'din part, 660N.E.2d 319 (Ind. 1995) [hereinafter Hall /]. 711. See U.S. CONST, amend. V. 712. See id; see also Hall 7,641 N.E.2dat695. 713. See Hall, 720 N.E.2d at 1289. 714. See id 715. See id; see also Hall v. Dep't of State Revenue, 660 N.E.2d 319, 321-22 (Ind. 1995) [hereinafter Hall II). 716. See Hall, 720 N.E.2d at 1289; see also Hall II, 660 N.E.2d at 321 . 717. See Hall, 720 N.E.2d at 1289. 1 066 INDIANA LAW REVIEW [Vol. 34: 1 003 tax court overruled and denied the taxpayers' motion. 718 It found that the issue ofexcessive fines was premature and possibly irrelevant because, at that time, the tax court did not determine whether or not the taxpayers were liable for the CSETtax.719 The tax court observed that in this case, there was no question ofpossession with respect to Keith Hall as he had admitted to possessing the marijuana. 720 The tax court then addressed whether or not Mary Hall possessed the marijuana involved in this case under the CSET statute.721 Based on the facts of the case, the tax court determined that the pivotal inquiry was whether or not the application of the common law doctrine of constructive possession to the facts in this case demonstrated that Mary Hall constructively possessed the possessed the marijuana. 722 The tax court analyzed the factors and concluded that the facts and evidence presented failed to show that Mary Hall had the ability or the intent to exercise dominion and control over the marijuana and that the evidence confirmed that she lacked constructive possession. 723 The tax court noted that it was "in no way expressing that it has full confidence in Mary Halls' purported innocence."724 However, the tax court reiterated that the facts and evidence and any inferences drawn from them did not establish the intent as well as the ability to exercise dominion and control over the marijuana. 725 Consequently, the tax court affirmed the IDSR's finding that Keith Hall was liable for the CSET assessment.726 However, the tax court reversed the CSET assessment with respect to Mary Hall.727 3. Adams v. Department of State Revenue.728—In Adams, an individual taxpayer challenged the IDSR's finding that the taxpayer owed CSET.729 In this case, the tax court considered whether the exclusionary rule ofevidence applied rendering the CSET assessment invalid.730 The CSETassessment against Adams (taxpayer) was based upon cocaine possessed by the taxpayer discovered in a safe deposit box. Prior to the CSET assessment, the taxpayer was charged with dealing in cocaine, a class A felony,731 and for possession of cocaine, a class C 718. See id; see also Hall v. Dep't of State Revenue, No. 49T10-9306-TA-00036 (Ind. Tax Ct. July 6, 1998) (unpublished order denying motion to vacate) [hereinafter Hall III]. 719. See Hall, 720 N.E.2d at 1289. 720. See id. at 1291. 721. See id. 722. See id 723. See id at 1292. 724. Id 725. See id 726. See id. 727. See id. 728. 730 N.E.2d 840 (Ind. Tax Ct. 2000), trans, granted, vacated by No. 49T1 0-001 1 -TA- 628, 2000 Ind. LEXIS 1098 (Ind. Nov. 3, 2000). 729. See id at 84 1 ; see also Ind. Code § 6-7-3- 1 3 (2000). 730. See Adams, 730 N.E.2d at 841. 73 1 . See Ind. Code § 35-48-4-l(b). 2001] TAXATION 1067 felony. 732 In its review of the criminal case, the tax court found that the trial court ruled that Indiana "violated the [taxpayer's] rights under both the state and federal constitutions when it seized the cocaine."733 The tax court indicated that one day after the CSET assessment was prepared, the trial court granted Indiana's motion to dismiss the criminal charges against the taxpayer as a result of a ruling to suppress the evidence. 734 In its analysis, the tax court discussed the application ofthe exclusionary rule to CSET cases.735 The court ofappeals previously dealt with the same taxpayer, the same search and the same cocaine in Adams v. State.136 The tax court noted that in that case, the taxpayer, as a criminal defendant, was charged with possession of and dealing in cocaine. 737 The tax court explained that discovery ofthe subject cocaine in the taxpayer's house resulted from a search warrant that was based on evidence that was later suppressed. 738 The court of appeals held that "[f]ourth Amendment protections, specifically, the exclusionary rule apply to the CSET when a search warrant has been based on judicially determined illegally seized evidence" 139 Further, the tax court observed that the court of appeals disqualified the seizure of the cocaine found in the taxpayer's house based on the fruit ofthe poisonous tree doctrine. 740 The tax court agreed with the court ofappeals' decision that extended the exclusionary rule to Indiana's CSET when the assessment is clearly based on judicially determined illegally seized evidence. 741 As a result, the tax court reversed the IDSR's assessment determination that the taxpayer owed CSET.742 Moreover, the tax court ordered the IDSR to immediately refund to the taxpayer any amounts previously collected and applied to the subject CSET assessment.743 K Indiana Gaming Card Excise Tax In Muncie Novelty Co. v. Department ofState Revenue 144 Muncie Novelty Co. (taxpayer) challenged the IDSR's finding thatthe taxpayerowed gaming card excise tax (GCET). 745 In addition, the taxpayer appealed a civil penalty levied 732. See Adams, 730 N.E.2d at 841; see also IND. CODE § 35-48-4-1 (b)(1). 733. Adams, 730 N.E.2d at 842. 734. See id. 735. See id. 736. 726 N.E.2d 390 (Ind. Ct. App. 2000). 737. See Adams, 730 N.E.2d at 843. 738. See id. 739. Id. (quoting Adams, 726 N.E.2d at 395). 740. See id. 741. See id. 742. See id at 843-44. 743. See id. at 844. 744. 720 N.E.2d 779 (Ind. Tax Ct. 1 999). 745. See id. 1 068 INDIANA LAW REVIEW [Vol. 34: 1 003 against it by the IDSR for failure to keep adequate records ofthe taxpayer's sales ofgaming items.746 The tax court found in favor ofthe IDSR with respect to both ofthe above issues and affirmed the final determination ofthe IDSR. 747 The tax court remanded the case to the IDSR for a calculation of the amount of the tax, penalty and interest due. 748 The tax court explained that "the General Assembly enacted the Charity Gaming Act (Act) to allow charitable and other non-profit organizations to conduct games ofchance in order to raise funds for those organizations."749 The tax court also found that the legislature subsequently amended the Act to shift enforcement powers under it from the Indiana Secretary of State to the IDSR. 750 The taxpayer in this case manufactured and distributed gambling devices that were shipped across the United States and sold to both qualified and not qualified organizations. 751 In order to conduct a charity gaming event, a qualified organization is required to obtain a license from the IDSR. 752 And, all qualified organizations are required to purchase their gambling devices from a licensed supplier such as the taxpayer. 753 When a qualified organization purchases gambling devices from the taxpayer, the taxpayer was required to charge the qualified organization the ten percentGCET.754 Alternatively, the tax court noted that if a not-qualified organization purchased gambling devices from the taxpayer, a five percent sales tax was imposed on the transaction. 755 The tax court determined that when a customer purchased an item from the taxpayer, the taxpayer's employees inquired as to whether the customer was purchasing on behalf of a qualified organization. 756 If so, the taxpayer charged the GCET; but ifnot, the taxpayer charged the sales tax.757 However, some ofthe taxpayer's customers often preferred to pay the taxpayer with cash and some customers suggested to the taxpayer that no invoices be created for the 746. See id. at 780. 747. See id. 748. See id. at 783. 749. Id. at 780. See afro Act ofMar. 16, 1990, Pub. L. No. 32, § 13-15, 1990 Ind. Acts 1122, 1129-33. 750. See Muncie Novelty Co., 720 N.E.2d at 780; see also Act ofFeb. 26, 1 992, Pub. L. No. 24, §§45-58, 1992 Ind. Acts 1960, 1 992-201 7; IND. CODE §4-32- 15-1 (2000) (imposing an excise tax often percent on sales of pull-tabs, punchboards and tip boards (gambling devices)). 75 1 . See Muncie Novelty Co., 720 N.E.2d at 780; see also IND. CODE § 4-32-6-20 (2000) (defining a qualified organization). 752. See Muncie Novelty Co., 720 N.E.2d at 780; see also IND. ADMIN. CODE, tit. 45, r. 1 8-2- 1 (2001) (explaining the application process for a qualified organization). 753. See Muncie Novelty Co., 720 N.E.2d at 780; see also IND. Admin. CODE, tit. 45, r. 1 8-3- 2 (2001) (defining an allowable event). 754. See Muncie Novelty Co. , 720 N.E.2d at 780; see also IND. ADMIN. CODE, tit. 45, r. 1 8-5- 2 (2001) (explaining requirements for imposing excise tax). 755. See Muncie Novelty Co., 720 N.E.2d at 780. 756. See id. 757. See id. 2001] TAXATION 1069 transactions. 738 The tax court found that in such situations, the taxpayer charged the customers sales tax instead ofGCET.759 In order to determine what amount oftax to charge, it is necessary to know who the taxpayer's Indiana customers are because otherwise, neither the taxpayer or IDSR could conduct an audit to determine the correct amount of tax.760 The tax court found that in the absence of this information, the IDSR presumes that the taxpayer's cash sales are to qualified customers. 761 Next, the tax court considered whether it was reasonable to assess the ten percent GCET when the taxpayer did not provide any information identifying its cash-paying customers as required by the regulations. 762 The tax court rejected the taxpayer's assertion that it identified cash paying customers from past sales and that it honored customer requests to remain anonymous. 763 The tax court also rejected the taxpayer's contention that it had no tools available to determine the status ofits Indiana customers. 764 Consequently, the tax court concluded that the taxpayer knew the identity of its "unidentified customers," and that the taxpayer had the opportunity and the ability to easily ascertain whether such customers were qualified. 765 As a result, the tax court concluded that it was reasonable for the IDSR to presume that all of the unidentified customers were qualified and owed the ten percent GCET, thereby making the taxpayer liable for the GCET on all sales to its unidentified customers. 766 Next, the tax court addressed the assessment of a civil penalty against the taxpayer for failure to comply with the reporting requirements discussed above. 767 Sections 4-32-12-2 and -3 ofthe Indiana Code authorize the IDSR to impose civil penalties upon either a qualified organization or an individual. 768 The IDSR fined the taxpayer less than the maximum amount.769 The tax court held that while it did not find that the taxpayer's violation of the reporting requirements found in section 4-32-12-3 ofthe Indiana Code constituted a fraud on the IDSR, the taxpayer's conduct undermined the public confidence in the 758. See id. 759. See id 760. See id at 781. 761. See id. 762. See id. 763. See id. at 781-82. 764. See id. The tax court noted that the IDSR maintained a list of qualified Indiana organizations which was readily available to the taxpayer. The tax court also noted that the taxpayer could also have communicated directly with the IDSR concerning the status ofa particular customer. See id. 765. Id. at 782. 766. See id. ; see also IND. ADMIN. CODE, tit. 45, r. 1 8-4-2 (2001 ) (mandating that licensed manufacturer must keep detailed records). 767. See Muncie Novelty Co. , 720 N.E.2d at 782. 768. See id; see also IND. CODE §§ 4-32-12-2, -3 (2000). 769. See Muncie Novelty Co. , 720 N.E.2d at 782. 1070 INDIANA LAW REVIEW [Vol. 34:1003 IDSR. 770 The tax court concluded that the fine imposed was not excessive and was, therefore, reasonable. 771 /. Indiana Motor Vehicle Excise Tax In Bruns v. Department of State Revnue™ spouses challenged the final determination ofthe IDSR assessing the motor vehicle excise tax (MVET).773 In this case, the tax court considered whether or not Dr. and Mrs. Bruns (taxpayer) were liable for payment of the MVET assessed against the taxpayer by the IDSR.774 Dr. Bruns was a physician employed in Indiana who maintained a permanent residence in Illinois. His driver's license and license plates were issued in Illinois, he voted in Illinois, and paid income taxes as an Illinois resident. Due to his employment, Dr. Bruns drove to Indiana on Monday mornings to begin his work week and during the week, he would sometimes stay overnight in a rooming house located in Indiana. The taxpayer returned to his domicile in Illinois on Friday nights. 775 First, the tax court addressed liability under the MVET statute and indicated that the determining factor to trigger liability was whether a person lived in Indiana. 776 The tax court explained that excise taxes such as the MVET are levies on an activity or event. 777 The tax court also explained that an excise tax includes taxes sometimes designated by statute or referred to as privilege taxes. 778 Indiana imposes an annual license excise tax on vehicles required to be registered in Indiana under the motor vehicle laws ofthe state. 779 The statute requires that "[w]ithin sixty (60) days ofbecoming an Indiana resident, a person must register all motor vehicles owned by the person" that will be operated on Indiana roads.780 The tax court also referred to another statute that in part defines an Indiana resident as: "a person who has been living in Indiana for at least one hundred eighty-three (183) days during a calendar year and who has a legal residence in another state." 781 The tax court observed that in Croop v. Walton™2 the Indiana Supreme Court 770. See id. ; see also IND. CODE § 4-32- 1 2-3 (2000). 771 . See Muncie Novelty Co., 720 N.E.2d at 783. 772. 725 N.E.2d 1 023 (Ind. Tax Ct. 2000). 773. See id. at 1025; see also IND. CODE §§ 6-6-5-1 to -16 (2000) (describing the motor vehicle excise tax). 774. See Bruns, 725 N.E.2d at 1 025. 775. See id. 116. See /