ATTORNEY FOR PETITIONER:                            ATTORNEYS FOR RESPONDENT:
BRETT J. MILLER                                     GREGORY F. ZOELLER
BINGHAM GREENEBAUM DOLL LLP                         ATTORNEY GENERAL OF INDIANA
Indianapolis, IN                                    EVAN W. BARTEL
                                                    JESSICA R. GASTINEAU
                                                    DEPUTY ATTORNEYS GENERAL
                                                    Indianapolis, IN

                                                                          FILED
                              IN THE                                  Apr 29 2016, 1:53 pm


                        INDIANA TAX COURT                                 CLERK
                                                                      Indiana Supreme Court
                                                                         Court of Appeals
                                                                           and Tax Court



HAMILTON SOUTHEASTERN                          )
UTILITIES, INC.,                               )
                                               )
      Petitioner,                              )
                                               )
             v.                                 )     Cause No. 49T10-1210-TA-00068
                                               )
INDIANA DEPARTMENT OF                          )
STATE REVENUE,                                 )
                                               )
      Respondent.                              )


    ORDER ON PETITIONER’S MOTION FOR PARTIAL SUMMARY JUDGMENT

                                 FOR PUBLICATION
                                   April 29, 2016
WENTWORTH, J.

      Hamilton Southeastern Utilities, Inc. challenges the Indiana Department of State

Revenue’s assessment of Indiana’s utility receipts tax (URT) on connection fees it

collected during the 2006, 2007, and 2008 tax years (the years at issue). This matter is

currently before the Court on Hamilton Southeastern’s motion for partial summary

judgment, which presents one issue: whether the amount of Hamilton Southeastern’s

nontaxable connection fees is subject to URT because it was not separated from its

taxable receipts on its returns.     The Court finds that the amount of Hamilton
Southeastern’s connection fees was separated from taxable receipts on its returns.

                          FACTS AND PROCEDURAL HISTORY1

       In October 2012, Hamilton Southeastern initiated an original tax appeal

challenging the Department’s proposed URT assessments on, among other things,

receipts from its connection fees. In that appeal, Hamilton Southeastern claimed that its

connection fees were not subject to the URT under either Indiana Code §§ 6-2.3-1-4 or

6-2.3-3-10.2    The Department argued that Hamilton Southeastern’s connection fees

were taxable gross receipts not only under those statutes, but also under Indiana Code

§ 6-2.3-3-2.

       In August of 2015, this Court issued an opinion regarding the parties’ cross-

motions for summary judgment in which it found that Hamilton Southeastern’s

connection fees were not gross receipts subject to the URT under either Indiana Code

§§ 6-2.3-1-4 or 6-2.3-3-10. See Hamilton Se. Utilities, Inc. v. Indiana Dep’t of State

Revenue, 40 N.E.3d 1284, 1287-89 (Ind. Tax Ct. 2015) (explaining that the connection

fees were not gross receipts under Indiana Code § 6-2.3-1-4 because they were not

received in consideration for the retail sale of utility services for consumption and were


1
  Portions of the parties’ designated evidence are confidential. Consequently, this order will
provide only the information necessary for the reader to understand its disposition of the issues
presented. See generally Ind. Administrative Rule 9.
2
   Indiana Code § 6-2.3-1-4 provides that “gross receipts” means “anything of value, including
cash or other tangible or intangible property, that a taxpayer receives in consideration for the
retail sale of utility services for consumption before deducting any costs incurred in providing the
utility services.” IND. CODE § 6-2.3-1-4 (2006). Indiana Code § 6-2.3-3-10 defines “gross
receipts” to include those received in exchange for the “installation, maintenance, repair,
equipment, or leasing services provided to a commercial or domestic consumer that are directly
related to the delivery of utility services to the commercial or domestic consumer or the removal
of equipment from a commercial or domestic consumer upon the termination of service.” IND.
CODE § 6-2.3-3-10 (2006).



                                                 2
not gross receipts under Indiana Code § 6-2.3-3-10 because they were not directly

related to the delivery of sewage utility services to the utility service consumer). With

respect to the taxability of the connection fees under Indiana Code § 6-2.3-3-2, the

Court explained that the designated evidence did not indicate that Hamilton

Southeastern separated the amount of its connection fees from its taxable receipts on

its records, but that there was a genuine issue of material fact whether the amount was

separated on its returns. Id. at 1289-90.

       Now, Hamilton Southeastern is before the Court, having filed a motion for partial

summary judgment, to resolve this remaining issue. The Department filed its response

in opposition to Hamilton Southeastern’s motion on November 20, 2015. The Court

held a hearing on Hamilton Southeastern’s motion on February 17, 2016. Additional

facts will be supplied if necessary.

                                STANDARD OF REVIEW

       Summary judgment is appropriate when there are no genuine issues of material

fact and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule

56(C). When reviewing a motion for summary judgment, the Court will construe all

properly asserted facts and reasonable inferences drawn therefrom in favor of the non-

moving party. See Scott Oil Co. v. Indiana Dep’t of State Revenue, 584 N.E.2d 1127,

1128-29 (Ind. Tax Ct. 1992).

                                       ANALYSIS

       Hamilton Southeastern argues that its connection fees are not taxable under

Indiana Code § 6-2.3-3-2 because they were separated from taxable receipts on its

URT returns (i.e., its Forms URT-1). (See, e.g., Hr’g Tr. at 7-8.) As support for its



                                            3
argument, Hamilton Southeastern designated, among other things, its Forms URT-1 for

the years at issue.3 (See Pet’r Des’g Evid., Aff. of A. Bradley Mares (“Mares Aff.”) at Ex.

A.)

       In reviewing these forms, the Court notes that Hamilton Southeastern was

required to provide its “taxable receipts” received from the “retail sale of utility services”

on line one of its Forms URT-1. (See Mares Aff., Ex. A at 1-3.) This necessarily

required Hamilton Southeastern to have separated the amount of its nontaxable

connection fees from its taxable receipts. Moreover, the designated evidence showed

that the amount of the connection fees was not reported as taxable receipts by Hamilton

Southeastern. (Compare Resp’t Des’g Evid., Ex. A at 35 with Mares Aff., Ex. A at 1-3.)

Thus, the Court finds that Hamilton Southeastern did separate the amount of its

connection fees from its taxable receipts reported on line one of its Forms URT-1.

       Nonetheless, the Department claims that Hamilton Southeastern did not satisfy

the requirements of Indiana Code § 6-2.3-3-2 because the statute requires taxpayers to

separately state both their taxable and nontaxable receipts on their returns. (See Hr’g

Tr. at 17-20, 31-32, 37-38.) Indiana Code § 6-2.3-3-2 states that receipts “that would

otherwise not be taxable under [the URT] are taxable . . . to the extent that the amount

of the nontaxable receipts are not separated from the taxable receipts on the records or

returns of the taxpayer.” IND. CODE § 6-2.3-3-2 (2006). This plain language does not


3
  Hamilton Southeastern also designated evidence to show that the amount of its connection
fees was separated from taxable receipts on its records. (See Pet’r Des’g Evid., Aff. of Robert
Butler at Exs. A, B-1, B-2.) The Court will not consider this evidence, however, because it
previously determined that Hamilton Southeastern failed to rebut the Department’s designated
evidence that showed that Hamilton Southeastern’s connection fees were not separated from
taxable receipts on its records. See Hamilton Se. Utilities, Inc. v. Indiana Dep’t of State
Revenue, 40 N.E.3d 1284, 1289-90 (Ind. Tax Ct. 2015).


                                              4
require a taxpayer to provide both the amount of nontaxable and taxable receipts on a

Form URT-1; instead, it merely requires the taxpayer to show on the return that the

amount of nontaxable receipts has been separated from the amount of taxable receipts.

See id. Accordingly, the Department asks the Court to read an additional element

(reporting both nontaxable and taxable receipts on the return) into the statute that the

Legislature did not require. See DeKalb Cnty. E. Cmty. Sch. Dist. v. Dep’t of Local

Gov’t Fin., 930 N.E.2d 1257, 1260 (Ind. Tax Ct. 2010) (explaining that when the

language of a statute is clear and unambiguous, the Court may not expand or contract

the meaning of a statute by reading language into it to correct any supposed omission

or defects). Moreover, because the Department did not provide a line on the return to

identify the amount of nontaxable receipts, the Department’s own Forms URT-1 agree

with the Court’s finding today.         See IND. CODE § 6-8.1-3-4 (2006) (granting the

Department “the sole authority to furnish forms used in the administration and collection

of the listed taxes”4) (amended 2009). (See also Mares Aff., Ex. A at 1-3 (indicating that

there is no line for a taxpayer to provide its nontaxable receipts).)

                                         CONCLUSION

         Hamilton Southeastern’s connection fees are not subject to the URT because it

has satisfied the requirements of Indiana Code § 6-2.3-3-2.              The Court therefore




4
    Indiana’s URT is a “listed tax.” See IND. CODE § 6-8.1-1-1 (2006) (amended 2007).


                                                5
GRANTS summary judgment in favor of Hamilton Southeastern and against the

Department.

      SO ORDERED this 29th day of April 2016.



                                             Martha Blood Wentworth
                                             Judge, Indiana Tax Court


DISTRIBUTION: Brett J. Miller, Evan W. Bartel, Jessica R. Gastineau




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