ATTORNEY FOR PETITIONER:                           ATTORNEYS FOR RESPONDENT:
CRAIG M. McKEE                                     GREGORY F. ZOELLER
WILKINSON, GOELLER, MODESITT,                      ATTORNEY GENERAL OF INDIANA
WILKINSON & DRUMMY, LLP                            JOHN P. LOWREY
Terre Haute, IN                                    DEPUTY ATTORNEY GENERAL
                                                   Indianapolis, IN



                               IN THE
                         INDIANA TAX COURT
                                                                     Feb 16 2015, 2:17 pm


ALLOY CUSTOM PRODUCTS, INC.,                   )
                                               )
      Petitioner,                              )
                                               )
                    v.                         )    Cause No. 49T10-1102-TA-00017
                                               )
INDIANA DEPARTMENT OF                          )
STATE REVENUE,                                 )
                                               )
      Respondent.                              )


       ORDER ON PARTIES’ CROSS-MOTIONS FOR SUMMARY JUDGMENT

                                 FOR PUBLICATION
                                  February 16, 2015

FISHER, Senior Judge

      Alloy Custom Products, Inc. has challenged the Indiana Department of State

Revenue’s (Department) final determination denying it a refund of the Indiana sales tax

it paid on utilities it consumed while “rehabilitating” cryogenic tanker trailers between

September 2006 and March 2010 (the period at issue). The matter is currently before

the Court on the parties’ cross-motions for summary judgment.
                                              FACTS

                                          Background

        Alloy is in the business of manufacturing new cryogenic tanker trailers as well as

what it calls “rehabilitating” used cryogenic tanker trailers. (Resp’t Des’g Evid. Supp.

Mot. Summ. J. (“Resp’t Des’g Evid.”), Ex. 1 ¶ 1, Ex. 4 at 1; Pet’r Resp. Opp’n Resp’t

Mot. Summ. J. & Supp. Cross-Mot. Summ. J. (“Pet’r Br.”) at 2.) A cryogenic tanker

trailer is used to transport atmospheric gases in a liquid state.1 (Pet’r Des’g Evid. Supp.

Mot. Summ. J. (hereinafter, “Boatman Aff.”) ¶¶ 3, 5.) A cryogenic tanker trailer

           consists of the bottle (the two layered cylinder storage tank for the
           gas) and several sub-assemblies which are pumping, air[,] and
           vacuum systems powered by a resident engine. These sub-
           assemblies are the means to provide the temperature protection by
           vacuum to the stored and transported gas in addition to efficient
           loading and unloading systems.

(Resp’t Des’g Evid., Ex. 4 at 1.)

        Alloy’s facility, located near Delphi, Indiana, consists of three separate buildings.

(Resp’t Des’g Evid., Ex. 1 ¶ 1, Ex. 3 at 1, 3, Ex. 7 at 8-10.) One building is used solely

for the manufacture of new tanker trailers. (Resp’t Des’g Evid., Ex. 1 ¶ 1, Ex. 7 at 8-10.)

The second building is used solely for the rehabilitation of used tanker trailers. (Resp’t

Des’g Evid., Ex. 1 ¶ 1, Ex. 7 at 8-10.) The third building is used for the sandblasting

and repainting of rehabilitated tanker trailers. (Resp’t Des’g Evid., Ex. 1 ¶ 1, Ex. 7 at 8-
1
    For example:

           Liquid nitrogen, a common type of cargo in these tanker-trailers, boils at
           -320 degrees F. If the temperature of the cargo rises above that
           temperature, product boils off and enters the atmosphere – the cargo
           essentially dissipates into thin air. The inner vessel of one of these trailers
           is insulated from the ambient temperature by special insulation and
           vacuum technology much like a Thermos bottle.

(Pet’r Des’g Evid. Supp. Mot. Summ. J. (hereinafter, “Boatman Aff.”) ¶ 3.)



                                                 2
10.) While each building has its own electric meter, all three buildings share a single

natural gas meter. (Resp’t Des’g Evid., Ex. 1 ¶ 2, Ex. 7 at 10-11.)

                              Alloy’s Rehabilitation Process

       The typical life span of a cryogenic tanker trailer is six to ten years. (See Resp’t

Des’g Evid., Ex. 4 at 1, Ex. 7 at 5.) “As [it] wear[s] out, an owner can take [it] out of

service or have [it] . . . rehabbed into ‘like new’ to extend [its] useful life.” (Boatman Aff.

¶ 5.) (See also Resp’t Des’g Evid., Ex. 4 at 3-4 (claiming that “[w]hen the rehab is

finished, it is the equivalent of a new tanker”).) A tanker trailer is “worn out” when the

bottle no longer holds a vacuum. (Boatman Aff. ¶ 5; Hr’g Tr. at 44.) Indeed,

          [w]hen the void space between the inner and outer vessel [of the
          bottle] is compromised by the introduction of atmosphere, the
          integrity and the benefit of the vacuum technology degrades and
          causes product loss. Rehabbing the outer vessel is essential to
          maintaining the vacuum and using the trailer for its intended purpose
          when manufactured. A trailer that cannot maintain the proper
          temperature or no longer maintains a reliable vacuum is essentially
          worthless for its intended purpose.

(Boatman Aff. ¶ 3.)

       Alloy states that through its rehabilitation process, it not only refurbishes the

bottle’s vacuum, but it also might upgrade the tanker trailer to current industry

standards.        (See Resp’t Des’g Evid., Ex. 1 ¶ 1, Ex. 4 at 1-2 (explaining that

rehabilitation “is an ideal time to upgrade the tanker to new and current improvements

and requirements such as air suspension, ABS braking systems, fire valves, improved

emissions, upgraded electrical and air systems”), Ex. 6 at 5 (stating “the rehab process

may include upgrades such as new standards and technologies for emissions,

suspensions, engines and valves that were not part of the original manufactured




                                              3
trailer”).) A rehabilitation can extend a trailer’s useful life by approximately four to six

years. (See Resp’t Des’g Evid., Ex. 7 at 5.)

       When a trailer is brought in for rehabilitation, Alloy first purges it with nitrogen

gas, ensuring that it contains no hazardous gases and that it poses no threat of

explosion. (See Resp’t Des’g Evid., Ex. 7 at 16.)            Alloy then inspects the trailer’s

various systems (e.g., vacuum, piping, engine drive, exterior chassis, and inner vessel).

(See Resp’t Des’g Evid., Ex. 7 at 16-18.)          Once it completes its inspection, Alloy

presents the owner with an estimate of the recommended work necessary (and cost) to

rehabilitate the trailer. (See Resp’t Des’g Evid., Ex. 7 at 19.) If the owner accepts the

estimate, Alloy orders the necessary parts and materials needed to complete the work

and schedules each rehabilitation task within its computer system.2 (See Resp’t Des’g

Evid., Ex. 7 at 20.)

       After stripping the trailer down to its bottle and removing all sub-assemblies and

several other components, Alloy sandblasts everything to remove paint, rust, and mill

scale.3 (See Resp’t Des’g Evid., Ex. 4 at 1-3, Ex. 7 at 22-23.) Next, Alloy repairs the

leaks within the bottle and the vacuum system and completes any replacement of, or

repair work on, the sub-assemblies. (See Resp’t Des’g Evid., Ex. 7 at 25-26.) All sub-




2
  Alloy keeps an inventory of parts that it uses in both its manufacture of new, as well as its
rehabilitation of used, trailers. (See Resp’t Des’g Evid. Supp. Mot. Summ. J. (“Resp’t Des’g
Evid.”), Ex. 6 at 6-7; Boatman Aff. ¶ 6.) Alloy also allows its customers to supply parts if they
can acquire them at a more favorable cost than Alloy. (See Resp’t Des’g Evid., Ex. 5, Ex. 6 at
7-8; Boatman Aff. ¶ 6.)
3
  At this point, Alloy might submit a revised estimate to the trailer’s owner. (See Resp’t Des’g
Evid., Ex. 7 at 24 (explaining that after sandblasting, a revised estimate might be provided to
include previously undiscovered but necessary rehabilitation work).)



                                               4
assemblies are pre-fit to the tank to ensure a proper fit. (See Resp’t Des’g Evid., Ex. 7

at 26.)

          Before reinstalling the sub-assemblies, Alloy primes and paints the trailer to the

owner’s specifications, using a polyurethane enamel paint. (See Resp’t Des’g Evid., Ex.

7 at 27-29.)       Once dry, Alloy reinstalls all other components and then conducts

warm/cold retention tests, engine run tests, piping leak tests, and air and brake system

checks. (See Resp’t Des’g Evid., Ex. 7 at 30.) The trailer is then ready for delivery

back to its owner. (See Resp’t Des’g Evid., Ex. 7 at 30.)

          A typical rehabilitation process takes approximately 750 man-hours over a six to

eight week period. (Boatman Aff. ¶ 7.) A cryogenic tanker trailer can be rehabilitated

three or four times. (See Resp’t Des’g Evid., Ex. 7 at 7.)

                                     Procedural History

          On October 8, 2009, Alloy filed four Forms ST-200 (“Utility Sales Tax Exemption

Application”) and a Form GA-110L (“Claim for Refund”) with the Department covering

the period between September 2006 and September 30, 2009.               (See Resp’t Des’g

Evid., Ex. 1 ¶¶ 2-3.) In those Forms, Alloy asserted that its metered purchases of

electric and gas should have been exempt from sales tax because it consumed those

utilities in its manufacturing and rehabilitation process. (See Resp’t Des’g Evid., Ex. 1

¶¶ 2-3.) On April 2, 2010, Alloy filed a second Form GA-110L seeking a refund of sales

tax it paid on its metered purchases of electric and gas between October 1, 2009 and

March 31, 2010. (See Resp’t Des’g Evid., Ex. 1 ¶ 3.)

          The Department subsequently conducted a review of Alloy’s business and

approved the exemption and refund for the electric metered purchases on the building




                                              5
used for the manufacture of new tanker trailers. The Department denied the exemption

and refund, however, for the other two electric meters (i.e., the meters on the two

buildings used for the rehabilitation of used tanker trailers). (See Resp’t Des’g Evid.,

Ex. 1 ¶ 4, Ex. 3 at 3-5.) With respect to the gas meter, the Department approved a

partial exemption and refund in the amount of 45% (i.e., the amount of gas it determined

was consumed in the building used to manufacture new trailers). (See Resp’t Des’g

Evid., Ex. 1 ¶ 4, Ex. 3 at 3-5.)

       Alloy subsequently protested the Department’s determination.        In a Letter of

Findings dated December 1, 2010, the Department denied Alloy’s protest.

       On February 25, 2011, Alloy filed an original tax appeal. Both Alloy and the

Department subsequently filed motions for summary judgment. The Court conducted a

hearing on their cross-motions on December 3, 2012. Additional facts will be provided

when necessary.

                                   STANDARD OF REVIEW

       Summary judgment is appropriate only when the designated evidence

demonstrates that no genuine issues of material fact exist and the moving party is

entitled to judgment as a matter of law.       Ind. Trial Rule 56(C).   Cross-motions for

summary judgment do not alter this standard. Horseshoe Hammond, LLC v. Indiana

Dep’t of State Revenue, 865 N.E.2d 725, 727 (Ind. Tax Ct. 2007), review denied.

                                          LAW

       Indiana imposes an excise tax, known as the state sales tax, on retail

transactions made within the state. IND. CODE § 6-2.5-2-1(a) (2006). “The person who




                                           6
acquires property in a retail transaction is liable for the tax on the transaction[.]” I.C. §

6-2.5-2-1(b).

       In an effort to encourage industrial growth and to limit the effect of tax

pyramiding, the Indiana legislature has enacted several statutes that exempt from sales

tax certain purchases of tangible personal property that are used or consumed in the

production of other tangible personal property. See, e.g., Harlan Sprague Dawley, Inc.

v. Indiana Dep’t of State Revenue, 605 N.E.2d 1222, 1225, 1228 (Ind. Tax Ct. 1992).

The exemption at issue in this case, found at Indiana Code § 6-2.5-4-5, provides that

retail sales of electricity and natural gas by a public utility to a purchaser that uses that

electricity and gas in its manufacturing process are not subject to sales tax. See IND.

CODE § 6-2.5-4-5(a)-(c) (2006) (amended 2012). The exemption only applies, however,

if the electricity and gas are consumed by the purchaser “as an essential and integral

part of an integrated process that produces tangible personal property and those sales

are separately metered . . . or[,] if those sales are not separately metered[, the electricity

and natural gas is] predominately used by the purchaser for [manufacturing].” I.C. § 6-




                                              7
2.5-4-5(c) (emphasis added).4

                                           ANALYSIS

       In this case, the parties do not dispute that Alloy’s consumption of electricity and

gas is integral to its rehabilitation process. (See, e.g., Resp’t Br. Supp. Mot. Summ. J.

(“Resp’t Br.”) at 6.)    Instead, their dispute centers on whether Alloy’s rehabilitation

4
   Indiana Code § 6-2.5-4-5 is not denominated as an “exemption” from tax, but rather as an
“exclusion” from tax. See IND. CODE § 6-2.5-4-5(a)-(c) (2006) (amended 2012). The difference
between the two is best explained as follows:

          A tax exemption is a provision which exempts from tax a transaction which
          would, in the absence of the exemption, otherwise be subject to tax. That
          is, there has been a statutory decision not to tax a certain transaction which
          is clearly within the ambit and authority of the taxing statutes to tax. On the
          other hand, an exclusion relates to a transaction which is not taxable
          because it falls outside the scope of the statute giving rise to a tax, ab
          initio. Transactions excluded from tax are those which by the language of
          the statutes are defined as beyond the reach of the tax. . . . [Moreover,]
          while exemptions from taxation are strictly construed against the taxpayer,
          statutes imposing the tax, of which exclusions are an integral part, are
          construed liberally in favor of the taxpayer[] and against the taxing
          authority.

Tarver v. World Ship Supply, Inc., 615 So.2d 423, 426 (La. Ct. App. 1993) (citation omitted), writ
denied by 616 So.2d 672 (La. 1993). Nonetheless, whether a taxing provision is an exemption
or an exclusion is not controlled by what it is called, but rather by its language and the effect of
that language. See Adelphia House P’ship v. Commonwealth of Pennsylvania, 709 A.2d 967,
970 (Pa. Cmmw. Ct. 1998), adhered to by 719 A.2d 833 (Pa. Cmmw. Ct. 1998).
        The Indiana Supreme Court and this Court have repeatedly interpreted the language
contained in Indiana Code § 6-2.5-4-5(c) as providing an exemption. See, e.g., Indiana Dep’t of
Revenue v. Interstate Warehousing, Inc., 783 N.E.2d 248, 253 (Ind. 2003); Mynsberge v.
Indiana Dep’t of State Revenue, 716 N.E.2d 629, 635-36 (Ind. Tax Ct. 1999) (explaining that the
exclusionary language contained in Indiana Code § 6-2.5-4-5(c) is superfluous given that
Indiana Code § 6-2.5-5-5.1 already provides an identical exemption); Harlan Sprague Dawley v.
Indiana Dep’t of State Revenue, 605 N.E.2d 1222, 1230 (Ind. Tax Ct. 1992); Chrome Deposit
Corp. v. Indiana Dep’t of State Revenue, 557 N.E.2d 1110, 1114, 1117 (Ind. Tax Ct. 1990), aff’d
by 578 N.E.2d. 643 (Ind. 1991). This interpretation is consistent with the notion that under
Indiana Code § 6-2.5-4-5(c), it would be more practical to require a taxpayer to prove that its
integrated process constitutes production rather than the Department to prove that the
taxpayer’s integrated process does not constitute production. See, e.g., Rotation Prods. Corp.
v. Indiana Dep’t of State Revenue, 690 N.E.2d 795, 798, 800-02 (Ind. Tax Ct. 1998) (explaining
that a taxpayer always bears the burden of demonstrating that it is eligible for an exemption
because “[a]fter all, it is the taxpayer who knows his business”). Consequently, the Court finds
that Alloy’s burden of demonstrating that it is entitled to the exemption precedes the
Department’s burden of demonstrating that Alloy is not entitled to the exemption. See
Babinchak v. Town of Chesterton, 598 N.E.2d 1099, 1101 (Ind. Ct. App. 1992).


                                                 8
process constitutes production (i.e., whether the process produces tangible personal

property). The Department’s position is that through its rehabilitation process, Alloy

merely repairs existing tanker trailers for the purpose of extending their useful lives and

as a result, no production of tangible personal property occurs. (See Resp’t Br. at 5-6.)

Alloy’s position, on the other hand, is that even when characterized as “repair,” its

rehabilitation process constitutes production. Specifically, it argues that when a tanker

trailer has reached the end of its useful life, it is “stripped to its skeletal state and

component parts are removed, replaced, or restored in some way[.]” (Pet’r Br. at 10.)

Once the process is complete, Alloy contends an entirely new product has been

produced: a “like-new” tanker trailer with four to seven years of life. (See Hr’g Tr. at

49.)

       Nearly twenty years ago, this Court recognized that because there are a number

of ways by which tangible personal property is produced, “repair” could, in certain

instances, constitute production. See Rotation Prods. Corp. v. Indiana Dep’t of State

Revenue, 690 N.E.2d 795, 798, 800-02 (Ind. Tax Ct. 1998). More specifically, the Court

explained that “transformative repair” culminated in production whereas “ordinary repair”

did not:

           [i]n general, repair activity is not [exempt] . . . because ordinary
           repair creates no new products and is properly characterized as a
           service.    Ordinary repair activity merely perpetuates existing
           products, and although ordinary repair activity may impact the
           number of scarce economic goods by increasing their longevity, it
           cannot be said that ordinary repair produces scarce economic
           goods. . . . However . . . at some point, the repair activity is so
           extensive in nature and so transforms the object such that it cannot
           be characterized as a mere service. Rather, the repair activity
           produces a new product and therefore constitutes exempt activity.




                                            9
Id. at 801-02 (internal citations omitted).       See also Indiana Dep’t of Revenue v.

Interstate Warehousing, Inc., 783 N.E.2d 248, 250-51 (Ind. 2003) (explaining that if a

taxpayer does not transform property into a “distinct marketable good” for customer

consumption, it is not engaged in production).        To assist it in determining whether

property has been transformed into a new product, the Court explained that the answers

to four specific questions can prove helpful. See Rotation Prods., 690 N.E.2d at 802-

03.   Both Alloy and the Department assert that the outcome of this case turns

exclusively on how its facts answer these four questions. (See, e.g., Pet’r Br. at 8, 10-

16; Resp’t Br. at 6-9; Hr’g Tr. at 37-38.)

              QUESTION 1: What is the substantiality and complexity of
              the work done on the existing article and what are the
              physical changes to the existing article, including the
              addition of new parts?

       This question is designed to reveal one of the “indicators” that tangible personal

property has been transformed into a new product:           there has been a substantial

change in the form of that property. See Rotation Prods., 690 N.E.2d at 801-03. The

Court has recognized that in order to create a product that is significantly different in

form from the material used to make it, a substantial amount of complex work is typically

required. See id. at 802-03.

       In addressing this question in its written brief, Alloy states that its rehabilitation

process is substantial because a typical trailer rehab takes approximately 750 man-

hours to complete over a six to eight week period. (See Pet’r Br. at 11-12.) It also

states that the rehabilitation process is complex because, when distilled on paper step-

by-step, the document is twelve pages long. (Pet’r Br. at 12 (citing Resp’t Des’g Evid.,




                                             10
Ex. 4 at 6-16).) Alloy therefore concludes that its rehabilitation process culminates in

the production of a new product. (See Pet’r Br. at 12-13.)

       While Alloy’s rehabilitation process may be time-consuming and comprised of

many steps,5 the Court is not convinced that through its rehabilitation process Alloy has

physically changed the form of the tanker trailer so as to constitute a new product. For

example, when the Court pressed Alloy during the summary judgment hearing to

explain how its rehabilitation process transformed tangible personal property into a

substantially different end product, Alloy simply responded that it takes a tanker trailer at

or near the end of its useful life and “transforms” it into one that can be used for another

five to seven years. (See Hr’g Tr. at 50-51.) This answer, however, is more indicative

of “ordinary repair.” See Rotation Prods., 690 N.E.2d at 801 (explaining that “ordinary

repair” does not produce goods but “merely perpetuates existing products . . . by

increasing their longevity”). Compare with Hoosier Roll Shop Servs., LLC v. Indiana

Dep’t of State Revenue, 10 N.E.3d 1051, 1055-56 (Ind. Tax Ct. 2014) (explaining that

after the taxpayer’s grinding process was accomplished the end product was still a giant

rolling pin, but the pin’s surface was so physically different that it transformed the pin

into a new tool that could only be used for an entirely different purpose), review denied.




5
  There is evidence before the Court that tends to augur against a finding of substantiality and
complexity. For instance, there is evidence indicating that the six to eight week period to
complete the rehabilitation process is often contingent not upon the nature of the project itself
but rather upon Alloy’s staffing schedule, how many other projects it has in its queue, and how
quickly Alloy can order and receive any necessary parts. (See Boatman Aff. ¶ 7.) Moreover,
there is evidence indicating that while it considers a typical rehabilitation to be comprised of 216
separate tasks, 28 of those tasks involved inspecting something, five involved painting
something, and another five involved mailing something, taking photos of something, or sticking
decals on something. (See Resp’t Des’g Evid., Ex. 4 at 6-16.)



                                                11
Consequently, the Court finds that answer to this question does not weigh in Alloy’s

favor.

             QUESTION 2: How does the article’s value before and after
             the work compare?

         This second inquiry seeks to identify yet another indicator that tangible personal

property has been transformed into a new product: a change in the property’s value.

See Rotation Prods., 690 N.E.2d at 802-03. Indeed, production often occurs when

property with little or no market value has been converted into a marketable product.

See id.

         Alloy contends that the answer to this question weighs in its favor, as a cryogenic

tanker trailer that no longer maintains its vacuum is, if not worthless, of limited value.

(Boatman Aff. ¶¶ 3, 5.) It asserts that after the rehabilitation process, however, a tanker

trailer’s ability to haul liquid gases has been restored, and thus so has its value. (See

Pet’r Br. at 14.)

         With respect to this second inquiry, the Court recognizes that the rehabilitation

process adds value to a tanker trailer that was not there when it first received it.

Nonetheless, the evidence submitted to the Court indicates that even before

rehabilitation, a tanker trailer often has other uses and therefore more than just “a little”

value. Indeed, as Alloy has explained,

           the value [of a tanker trailer] prior to a first rehab . . . [could] range
           . . . from minimal to $5,000 for scrap value, perhaps $5,000 to
           $10,000 for a trailer suitable for mere storage, and a higher value for
           a trailer that can be used on the road but inefficient for hauling liquid
           gases.

(Resp’t Des’g Evid., Ex. 6 at 4.) The answer to this question, therefore, does not favor

Alloy either. Compare with Hoosier Roll, 10 N.E.3d at 1053 n.6, 1056 (indicating that



                                              12
once a mill completed a job of converting slabs of raw product into sheets of finished

product, the work rolls it used to make that conversion could not be used for any other

purpose without being ground and calibrated with different specifications).

              QUESTION 3: How does the article’s performance before and
              after the work compare?

        This inquiry examines yet a third indicator that property has been transformed

into a new product: there has been a change in its performance. See Rotation Prods.,

690 N.E.2d at 802-03. In other words, production is likely occurring when tangible

personal property is transformed in such a way that it performs as good as or better

than when it was originally manufactured. Id. at 803.

        Here, Alloy argues that the performance of a rehabilitated trailer is as good, if not

better, than the performance of the original tanker trailer. (See Pet’r Br. at 15.) To

support its argument, Alloy first explains that a rehabilitated tanker trailer is

indistinguishable from a newly-manufactured one. (Pet’r Br. at 14-15 (explaining that

during the administrative process it gave two photographs to the Department – one of a

newly manufactured tanker trailer and the other of a rehabilitated one – and the

Department could not distinguish between them).) (See also Resp’t Des’g Evid., Ex. 7

at 36-38.) Next, Alloy explains that it “warrant[s] the work on [the] rehabilitated tanker-

trailers.”    (Pet’r Br. at 15.)   Finally, it explains that the rehabilitation process often

involves “upgrading the [tanker trailer] to new standards and technologies for emissions,

suspensions, engines and valves that did not exist at the time of initial manufacture.”

(Pet’r Br. at 15.) (See also Resp’t Des’g Evid., Ex. 4 at 3-4 (asserting that “in almost all

cases, [a rehabilitated] tanker has significantly enhanced capabilities than the original

trailer”).)



                                               13
       The Court is not persuaded by these explanations.          Indeed, the fact that a

rehabilitated tanker trailer looks like a newly-manufactured one does not speak to its

performance.    Moreover, Alloy’s warranty does not appear to cover performance.

Compare Rotation Prods., 690 N.E.2d at 803 (indicating that one way to demonstrate a

change in performance is through a performance guarantee) with (Boatman Aff. ¶ 8

(stating only that “Alloy warrants rehabbed trailers for a period of one year. All Alloy

rehabs and new trailers carry the same standard one-year warranty against defects in

workmanship and materials”)). Finally, the whole point of the rehabilitation process is to

restore the bottle’s capability to transport liquid gas. (See Boatman Aff. ¶¶ 3, 5; Hr’g Tr.

at 44.) See also Chrome Deposit Corp. v. Indiana Dep’t of State Revenue, 557 N.E.2d

1110, 1114, 1117 (Ind. Tax Ct. 1990) (indicating that taxpayer’s process was not

ordinary repair because it enhanced, not merely restored, the performance of

customer’s equipment), aff’d by 578 N.E.2d 643 (Ind. 1991). The various upgrades, if

any, to a tanker trailer’s air suspension, ABS braking systems, fire valves, emissions,

and electrical and air systems do not improve or enhance the bottle’s ability to transport

the liquid gas. (See Resp’t Des’g Evid., Ex. 6 at 5 (where Alloy acknowledges that the

only support it has that a rehabilitated tanker trailer performs as well as a newly

manufactured one is “the regular referral of trailers by customers for rehabilitation and

the use of those rehabilitated trailers in the market”).) As a result, the answer to this

question weighs against Alloy.




                                            14
            QUESTION 4: Was the work performed contemplated as a
            normal part of the life cycle of the existing article?

       This final question was designed as a “catch-all.”       See Rotation Prods., 690

N.E.2d at 803. It was formulated to recognize that routine maintenance, which merely

perpetuates existing products, does not qualify for an exemption. See id.

       In answering this question, Alloy cites solely to the fact that not all owners

choose to have their tanker trailers rehabilitated. (Pet’r Br. at 15.) In other words, Alloy

claims that because an owner may choose to take his tanker trailer out of service rather

than rehabilitate it, the rehabilitation process “is assuredly not a normal part of the

tanker-trailer’s life cycle.” (Pet’r Br. at 15.)

         The Court finds that Alloy’s rehabilitation process is contemplated as a normal

part of a cryogenic tanker trailer’s life cycle. Indeed, when an owner finds his bottle’s

vacuum no longer operational, he must decide to either have it rehabbed or taken out of

service. The fact that an owner may opt to take the tanker trailer out of service does not

mean, however, that the rehabilitation process is not “routine maintenance.”            See

Rotation Prods. Corp., 690 N.E.2d at 803 (explaining that a process that allows property

to function more efficiently may be “routine maintenance,” i.e., a normal part of its life

cycle). Another fact supporting the conclusion that the rehabilitation process is routine

maintenance is that a tanker trailer can be rehabilitated numerous times. (See Resp’t

Des’g Evid., Ex. 7 at 7.) In fact, many of Alloy’s customers rehabilitate their tanker

trailers on set “cycles.” (See, e.g., Resp’t Des’g Evid., Ex. 9 at 144-47 (indicating that at

least one of Alloy’s customers had its tanker trailers rehabbed every five years).) As

such, the answer to this question also fails to support Alloy’s position.




                                                   15
                                         CONCLUSION

       Based on the evidence and argument before it, the Court finds that Alloy’s

rehabilitation process does not produce other, or new, tangible personal property.

Accordingly, the Court GRANTS summary judgment in favor of the Department and

AGAINST Alloy. 6

       SO ORDERED this 16th day of February 2015.



                                                              __________________________
                                                              Thomas G. Fisher, Senior Judge
                                                              Indiana Tax Court


DISTRIBUTION:

Craig M. McKee, Gregory F. Zoeller, John P. Lowrey


6
   The Court notes that the Department designated as evidence the deposition of Ted Boatman,
Alloy’s president. While Alloy did not cite to this deposition in its written brief, it indicated
numerous times during the hearing in this matter that once the Court reviewed the deposition, “it
would be clear” that Alloy was entitled judgment as a matter of law. (See, e.g., Hr’g Tr. at 40,
42, 45-47, 51-53, 55, 58.)
         When a party seeks judgment as a matter of law under Indiana Trial Rule 56(C), it “shall
designate to the court all parts of pleadings, depositions, answers to interrogatories,
admissions, matters of judicial notice, and any other matters on which it relies for purposes of
the motion.” Ind. Trial Rule 56(C). Because the Rule compels a party to identify the “parts” of
any document upon which it relies, it may not designate various pleadings, discovery material,
and affidavits in their entirety. See Filip v. Block, 879 N.E.2d 1076, 1081 (Ind. 2008); O’Connor
v. Stewart, 668 N.E.2d 720, 722 (Ind. Ct. App. 1996). Rather, “regardless of how concise or
short the document is, in order to be properly designated, specific reference to the relevant
portion of the document [i.e., the specific portion of the document that contains the material fact
or facts upon which the moving party relies] must be made.” O’Connor, 668 N.E.2d at 722. A
proper designation should also include an explanation as to why those specifically designated
facts are material. Kissell v. Vanes, 629 N.E.2d 878, 880 (Ind. Ct. App. 1994). The purpose for
requiring this level of specificity is to decrease the amount of evidentiary material a court must
sift through when ruling on a summary judgment motion. See O’Connor, 668 N.E.2d at 721-22;
Kissell, 629 N.E.2d at 880 (explaining that it is not the court’s responsibility to search the record
and piece together a party’s summary judgment argument and relevant support for it).
         Mr. Boatman’s deposition is nearly 200 pages long. (See Resp’t Des’g Evid., Ex. 9.)
Because Alloy has simply relied on and referred the Court to the deposition in toto, the Court
did not review it to piece together support for Alloy’s position.



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