ATTORNEYS FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
LARRY J. STROBLE STEVE CARTER
JENNIFER DUNFEE ATTORNEY GENERAL OF INDIANA
BARNES & THORNBURG Indianapolis, IN
DEPUTY ATTORNEY GENERAL
IN THE INDIANA TAX COURT _____________________________________________________________________
ALLISON ENGINE CO., INC., ) ) Petitioner, ) ) v. ) Cause No. 49T10-9910-TA-199 ) INDIANA DEPARTMENT OF ) STATE REVENUE, ) ) Respondent. ) _____________________________________________________________________
March 2, 2001
(1)The due date of the return.
(2) The date of payment.
. . . The claim must set forth the amount of the
refund to which the person is entitled and the reasons that the person
is entitled to the refund.
(b) When the department receives a claim for refund, the department shall consider
the claim for refund and may hold a hearing on the claim for
refund to obtain and consider additional evidence. After considering the claim and
all evidence relevant to the claim, the department shall issue a decision on
the claim, stating the part, if any, of the refund allowed and containing
a statement of the reasons for any part of the refund that is
denied. The department shall mail a copy of the decision to the
person who filed the claim. If the department allows the full amount
of the refund claim, a warrant for the payment of the claim is
sufficient notice of the decision.
(c) If the person disagrees with any part of the department's decision, he
may appeal the decision, regardless of whether or not he protested the tax
payment or whether or not the person has accepted a refund. The
person must file the appeal with the tax court. The tax court
does not have jurisdiction to hear a refund appeal suit, if:
(1) the appeal is filed more than three (3) years after the date
the claim for refund was filed with the department;
(2) the appeal is filed more than ninety (90) days after the date
the department mails the decision of denial to the person; or
(3) the appeal is filed both before the decision is issued and before
the one hundred eighty-first day after the date the person files the claim
for refund with the department.
The Department argues that this Court does not have jurisdiction because Allison did
not meet the statutory prerequisites to bring this action. More specifically, the
Department argues that Allison had ninety days to file an appeal from Claim
One, failed to do so, and cannot file a second claim involving the
same amount and same tax and appeal that claim to this Court.
The Department asserts that Allison has impermissibly tried to resurrect Claim One by
filing Claim Two. The Department bases this argument on its assertion that
Claim One and Claim Two are duplicate claims.
The Indiana statutes do not address whether more than one claim for refund can be filed for the same tax. This is an issue of first impression in Indiana. However, federal courts have addressed this issue. In Charlson Realty Co. v. United States, the taxpayer filed a claim for refund based upon the allegation that the taxpayer had not realized any gain on its sale of certain property (First Claim). Charlson Realty Co. v. United States, 384 N.E.2d 434, 437 (Ct. Cl. 1967). While the First Claim was pending, the taxpayer filed an amended claim for refund that contained various specific grounds that were not contained in the First Claim (Second Claim). Id. at 437-38. The Internal Revenue Service (IRS) denied both claims. Id. at 438.
The taxpayer then filed suit with regard to the Second Claim in the United States Court of Claims. Id. The IRS asserted that the Court of Claims did not have jurisdiction to hear the case because the taxpayer did not file its suit within two years from the date its First Claim for refund was denied as required by federal law. See footnote Id. The IRS contended that the First Claim and the Second Claim were identical and that the Second Claim was simply a repetition of the First Claim. Id. Therefore, the IRS asserted that the Second Claim did not extend the period of limitations in which the taxpayer was required to file suit. Id. The Court of Claims stated that on that theory, the taxpayers suit would be barred. Id. However, the taxpayer argued that the Second Claim was an entirely new and different claim from the First Claim and that it filed its suit within two years after the IRS denied its Second Claim. Id. The Court of Claims stated that it would have jurisdiction if the claims were different. Id.
The Court of Claims next analyzed whether the Second Claim was a separate claim containing different facts, grounds, and theories for recovery than did the First Claim. Id. at 439. Both claims contained the same amount of tax and interest. Id. Both Claims also had the same grounds as were set forth in the First Claim, but the Second Claim added various other and different grounds and theories for recovery. Id. After reviewing both claims, the Court of Claims found that the two claims were separate and distinct and that the Second Claim alleged and asserted facts, grounds, and theories for recovery that were different from those set forth in the First Claim. Id. at 440. The Court of Claims went on to state:
The second claim was not a mere repetition of the first claim, but is based upon new grounds, and, therefore, constitutes a separate claim which is entitled to independent treatment with reference to the statute of limitations. Accordingly, the limitation period commenced to run from the date the second claim was disallowed . . . .
In Huettl v. United States, the taxpayers filed a claim with the IRS for a refund of tax (First Claim). Huettl v. United States, 675 F.2d 239, 240 (9th Cir. 1982). The IRS denied the First Claim because the three year statute of limitations barred the taxpayers claim. Id. at 240-41. Subsequently, the Ninth Circuit decided a case that implied that the proper statute of limitations period was ten years, not three years for claims such as the one the taxpayers had made in Claim One with the IRS. Id. at 241. Thereafter, the taxpayers filed a second claim with the IRS that, with the exception to citing the Ninth Circuit decision regarding the ten year statute of limitations, was identical to the First Claim (Second Claim). Id. The IRS denied the Second Claim. Id.
Next, the taxpayers filed suit in the United States District Court for the Northern District of California within two years of the IRSs denial of the taxpayers Second Claim. Id. at 239, 241. The District Court held that the taxpayers Second Claim with the IRS was identical to their First Claim and therefore the Second Claim could not extend the two year limitations period. Id. at 241. Thus, the district court held that the limitations period to file suit began running when the IRS denied the First Claim. Id.
The taxpayers then appealed to the United States Court of Appeals for the Ninth Circuit. Id. The Ninth Circuit stated that generally a taxpayer may file more than one administrative refund claim within the statutory period applicable to the filing of claims with the IRS. Id. However, the Ninth Circuit noted that a second claim for refund on identical grounds does not extend the limitations period in which the taxpayer must file suit in the district court. Id. So, as in Charlson Realty Co, the issue boiled down to whether the taxpayers Second Claim was identical to the First Claim. Id. at 242. The Ninth Circuit found that an intervening change in the law between the IRSs denial of the First Claim and the bringing of a suit on the Second Claim was not a sufficient basis upon which to distinguish the claims. Id. As such, the Ninth Circuit affirmed the district courts determination stating that the taxpayers did not introduce different facts, statutory grounds, or theoretical bases for recovery, and their claims were therefore identical. Id. at 242. Consequently, the Ninth Circuit held that the limitations period began to run on the date that the IRS denied the First Claim. Id. As a result, the taxpayers case was barred. Id.
This Court finds the analysis and conclusion of each of the federal courts on this issue to be both persuasive and sound. Therefore, this Court adopts a similar analysis in this opinion. Therefore, the Court looks to whether Allisons Claim One and Claim Two were identical. To do so, this Court will consider the facts, grounds, and theories in each claim.
Allisons Claim One was filed for the tax years 1993 through 1996 and requested a refund of $1,415,855. (Respt Ex. 1 at 4.) Claim One was based upon the theory that pursuant to Ind. Admin. Code tit. 45, r. 1-1-100 Allison qualified as a contractor. (Respt Ex. 1 at 4.) Therefore, Allison claimed that it qualified for a lower rate of gross income tax for the portion of the contract prices it received that was an expense for materials used in Saleable Engineering. See footnote (Respt Ex. 1 at 4.)
Allisons Claim Two was filed for the tax years 1994 through 1996 and requested a refund of $1,352,219. (Respt Ex. 3 at 2.) Claim Two was based upon the theory that because Allisons contracts with the government required that title to materials and other tangible property pass to the government, Allison was selling at retail as defined in Ind. Code Ann. § 6-2.1-2-1(b). See footnote Therefore, Allison asserted in Claim Two that it should be taxed at a lower rate.See footnote
It is clear from reviewing the theories and facts in both Claim One and Claim Two that while there is some overlap, the claims are not identical. They can be meaningfully distinguished. Claim One is based upon the theory and facts which support Allisons contention that it is a contractor while Claim Two is based upon the theory and facts which support its assertion that it is selling at retail because of the title passage clauses in its government contracts. Because Claim Two is based upon different grounds and facts and constitutes a separate claim upon which the Department did not make a decision, I.C. § 6-8.1-9-1(c)(2) is not applicable.
Allison filed Claim Two with the Department on October 13, 1998. The Department did not make a decision on the merits of Claim Two. Instead, on July 12, 1999, the Department sent Allison a letter that stated that it would not address Claim Two because it had been previously addressed in the Departments response to Claim One, which denied Allison a refund. (Respt Ex. 4 at 2.) On October 6, 1999, Allison filed its appeal with this Court. As such, this Court has jurisdiction to hear Allisons appeal because it was filed less than three years but more than 180 days after Allison filed Claim Two with the Department and the Department had not made a decision on Claim Two. See I.C. § 6-8.1-9-1(c)(1)&(3); See also City Secs. Corp. v. Department of State Revenue, 704 N.E.2d 1122,1125 (Ind. Tax Ct. 1998) (stating that I.C. § 6-8.1-9-1(c) confers jurisdiction on this Court to hear an appeal when the taxpayer has waited at least 181 days (and less than three years) but has received no determination from the Department regarding his claim for refund). Consequently, the Court DENIES the Departments motion for summary judgment.