ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
ANDREW C. MATERNOWSKI STEVE CARTER
Attorney at Law ATTORNEY GENERAL OF INDIANA
Indianapolis, IN Indianapolis, IN
DAVID A. ARTHUR
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
KEVIN AND MONICA CLIFFT, )
v. ) Cause No. 49T10-9308-TA-64
INDIANA DEPARTMENT OF REVENUE )
and KENNETH L. MILLER, COMMISSIONER, )
ON APPEAL FROM A FINAL DETERMINATION
OF THE INDIANA DEPARTMENT OF STATE REVENUE
May 1, 2001
The petitioner, Monica Clifft,
challenges the Indiana Department of
State Revenues (Department) finding that she owed a controlled substance excise tax (CSET)
in the amount of $77,871. Monica has raised several issues for this
The Court, however, finds that the only issue that remains
is whether Monica possessed the marijuana in question such that she is liable
for the CSET on it.
For the reasons stated below, the Court AFFIRMS the Departments assessment.
FACTS AND PROCEDURAL HISTORY
The Court has previously reviewed the facts of this case, which are set
forth in Clifft v. Indiana Department of State Revenue, 641 N.E.2d 682, 684-85
(Ind. Tax Ct. 1994) (Clifft I), affd in part and revd in part,
660 N.E.2d 310 (Ind. 1995) (Clifft II). Therefore, this Court will briefly
review the relevant factual and procedural history of this case in order to
provide insight as to the current posture of this case.
In October 1992, Monica Cliffts residence was a house located on West 30th
Street in Indianapolis, Indiana. (Trial Tr. at 13.) Monica, who had
lived in the house since 1985 and was buying the house on contract,
had lived in the house with her husband, Kevin Clifft. (Trial Tr.
at 13, 15-17.) On October 8, 1992, Indianapolis and Speedway police executed
a search warrant on Monicas house and discovered a total of 927 grams
and marijuana growing equipment. Clifft I, 641 N.E.2d at 684.
Kevin, but not Monica, was at the house when the police executed
the warrant. (Trial Tr. at 9-10, 14.)
After the police shared this information with the Department, the Department issued an
assessment for CSET in the amount of $77,871.
On January 14, 1993,
after pleading guilty, Monica was convicted of possession of marijuana as a class
See Ind. Code § 35-48-4-11. Monica protested the CSET
assessment, and her protest was denied by the Department on May 12, 1993.
(States Ex. H.)
Monica petitioned this Court for review of the assessment and claimed among other
things that the CSET violated her privilege against double jeopardy under the United
States Constitution. Clifft I, 641 N.E.2d at 684. This Court ordered
that CSET assessment against Monica be vacated because the CSET was a punishment
subject to the constraints of the Double Jeopardy Clause and that the imposition
of the CSET after the attachment by a conviction in the criminal case
violated the Double Jeopardy Clause. Id. at 692-93.
Upon appeal to the Indiana Supreme Court, the Court reinstated the CSET assessment
because it held the jeopardy in a CSET case attaches at the moment
of the assessment. Clifft v. Indiana Dept of State Revenue, 660 N.E.2d 310,
313, 318 (Ind. 1995) (Clifft II). The Court reasoned that the CSET
assessment in Monicas case did not violate the Double Jeopardy Clause because it
was assessed prior to her criminal action, which was a second jeopardy.
Id. at 313.
Monica then returned to this Court to challenge the CSET assessment. This
Court conducted a trial on the issue of Monicas liability under the CSET
statute. Additional facts will be supplied where necessary.
ANALYSIS AND OPINION
Standard of Review
This Court reviews final determinations of the Department de novo and is not
bound by either the evidence presented or issues raised at the administrative level.
I.C. § 6-8.1-5-1(h); see also Hall v. Indiana Dept of State
Revenue, 720 N.E.2d 1287, 1289 (Ind. Tax. Ct. 1999). Although statutes that
impose tax are to be strictly construed against the State, in Indiana, [t]he
burden of proving that the proposed assessment is wrong rests with the person
against whom the proposed assessment is made. I.C. § 6-8.1-5-1(b); see also
Horrall v. Indiana Dept of State Revenue, 687 N.E.2d 1219, 1221 (Ind. Tax.
Ct. 1997), review denied; Longmire v. Indiana Dept of State Revenue, 638 N.E.2d
894, 898 (Ind. Tax Ct. 1994).
Monica appears to claim that she is not liable for the CSET because
she was not at the house and not living in the house at
the time the police executed the search warrant and found the 972 grams
The Department maintains that Monica, who pled guilty to possession
of the marijuana, is liable for the CSET assessment. (Respt Trial Br.
A person may be liable for the tax under the CSET statute, Indiana
Code § 6-7-3-5, for controlled substances that are:
in Indiana in violation of IC 35-48-4 or 21 U.S.C. 841 through 21
I.C. § 6-7-3-5. CONCLUSION
In Hall, this Court addressed the issue of whether the taxpayers had possession
of marijuana such that they were liable for a CSET assessment. In
that case, Keith Hall and his wife, Mary, were assessed with the CSET
for marijuana found by police during a search of the Halls house.
Hall, 720 N.E.2d at 1291. The police found the marijuana in a
locked room in the basement. Id. at 1291. This Court found
that the evidence of possession in regard to Keith Hall -- specifically that
he admitted to possessing the marijuana
-- was sufficient to show that Keith
had possession of the marijuana for liability under the CSET statute. Id.
at 1291. On the other hand, this Court found that although there
was some evidence that Mary Hall constructively possessed the marijuana (she co-owned the
house where the marijuana was found, she washed laundry near the room where
the marijuana was found, and the odor of raw marijuana emanated throughout the
house), Mary did not have knowledge of the marijuana because it was kept
behind a closed door that was locked and to which she did not
have a key. Id. at 1291-92. Thus, this Court held that
Mary did not have the intent or the capability to maintain dominion and
control over the marijuana. Id. at 1292.
The evidence in this case shows that Monica Clifft possessed the marijuana such
that she was liable under the CSET statute. Just like taxpayer Keith
Hall in the Hall case, Monica Clifft admitted that she possessed the marijuana.
Specifically, Monica admitted that she possessed the marijuana when she pled guilty
to possession of marijuana in her criminal proceedings. (Trial Tr. at 15,
17; States Exhibit I.) Moreover, Monica admitted that she possessed the marijuana
during the trial in this case. Monica admitted that she knew the
marijuana plants were growing in her house, that she used the marijuana in
her house, and that some of the marijuana was found in her clothes.
(Trial Tr. at 14-16.) Because Monica admitted that she possessed the
marijuana, the Department properly assessed the CSET on her possession of that marijuana.
Even assuming arguendo that Monica had not pled guilty to possession of marijuana,
the facts and evidence in this case shows that she constructively possessed the
marijuana. Possession may be actual or constructive. Hurst v. Department of
State Revenue, 721 N.E.2d 370, 374 (Ind. Tax. Ct. 1999); Hall, 720 N.E.2d
at 1290. In a CSET case, when a taxpayer does not have
actual possession, there must be a determination of whether the taxpayer had constructive
possession of the controlled substance. Hall, 720 N.E.2d at 1290 (citing Ladd
v. State, 710 N.E.2d 188, 190 (Ind. Ct. App. 1999)). Constructive possession
is established when the taxpayer has shown both: (1) the requisite intent
to maintain dominion and control over the controlled substance and (2) the capability
to maintain dominion and control over the controlled substance. Id.
Proof of a possessory interest in the premises in which the illegal drugs
are found is adequate to show the capability to maintain dominion and control
over the drugs in question. Goliday v. State, 708 N.E.2d 4, 6
(Ind. 1999). To prove the intent element, it must be shown that
the petitioner had actual knowledge of the presence and the illegal character of
the substance. Id.; Hurst, 721 N.E.2d at 375 (citing Godar v. State,
643 N.E.2d 12, 14 (Ind. Ct. App. 1994), trans. denied). This knowledge
may be inferred by either exclusive control over the premises where the contraband
was found or, if the control is nonexclusive, evidence of additional circumstances tending
to buttress such an inference. Goliday, 708 N.E.2d at 6; Hall, 720
N.E.2d at 1290 (citing Lampkins v. State, 685 N.E.2d 698, 699 (Ind. 1997)).
These additional circumstances that would imply a petitioners knowledge of the nature
of the substance and its presence include: (1) incriminating statements by the petitioner;
(2) attempted flight or furtive gestures; (3) a drug manufacturing setting; (4) proximity
of the petitioner to the drugs; (5) drugs in plain view; and (6)
location of the drugs in close proximity to items owned by the petitioner.
Hurst, 721 N.E.2d at 375; Hall, 720 N.E.2d at 1290.
First, this Court must determine whether Monica had capability to maintain dominion and
control over the marijuana. Monica, who was buying the house where the
marijuana was found, lived in the house since 1985, had the utility and
phone bills in her name, kept her personal property in the house, and
received her mail at that house. (Trial Tr. at 13, 15, 17.)
Because Monica had a possessory interest in the house, it is adequate
to show that she had the capability to maintain dominion and control over
the marijuana. See Goliday, 708 N.E.2d at 6.
Next, this Court must determine whether Monica had the intent to maintain dominion
and control over the marijuana. Because Monicas husband, Kevin, also lived in
Monicas house, the control over the premises where the marijuana was found was
nonexclusive. Therefore, this Court must look to the additional factors that may
support an inference that Monica had knowledge of the nature and presence of
the marijuana. Goliday, 708 N.E.2d at 6; Hall 720 N.E.2d at 1290.
During the trial, Monica admitted that she knew that Kevin was growing
marijuana in the house. (Trial Tr. at 14-15.) She also admitted
that she used the marijuana while in the house and that some of
the marijuana was found in her clothes. (Trial Tr. at 16, 21.)
The police also discovered marijuana growing equipment in Monicas house. Clifft
I, 641 N.E.2d at 684. These additional circumstances -- Monicas incriminating statements
about her knowledge of and her use of marijuana in her house; a
drug manufacture setting for marijuana in Monicas house; and the location of the
marijuana in close proximity to items owned by Monica -- buttress the
inference that she knew that the marijuana was located in the house and
support the inference that Monica had the intent to maintain dominion and control
over the marijuana. See Hurst, 721 N.E.2d at 375; Hall, 720 N.E.2d
The evidence presented shows that Monica had the intent and capability to maintain
dominion and control over the marijuana. Thus, the evidence demonstrates that she
had constructive possession of the marijuana. Because Monica possessed the marijuana in
question, she is liable under the CSET statute for tax on the marijuana.
Because Monica Clifft possessed the marijuana found in her home, and indeed pled
guilty to possession of that marijuana, this Court AFFIRMS the Departments finding that
Monica is liable for the CSET assessment.
Originally, both Monica and Kevin Clifft were petitioners in this case.
However, at trial, this Court learned that Kevin Clifft had died and
had neither an estate opened nor a personal representative appointed. Thereafter, the
Court dismissed Kevins petition.
See Clifft v. Indiana Dept of State Revenue,
No. 49T10-9308-TA-64 (Indiana Tax Ct. Dec. 3, 1998) (unpublished order). Accordingly, this
opinion will only address Monica Cliffts liability.
Monica did not file a post-trial brief. However, on September
1, 1999, Monica
filed a Notice to the Court Regarding Proposed Findings of
Fact and Conclusions of Law and Adoption of Legal Arguments. In this
notice, Monica moved to vacate and dismiss the CSET assessment on grounds of
equitable double jeopardy, cruel and unusual punishment, and excessive fines. She moved
to dismiss and vacate by merely copying a motion to dismiss and vacate
filed in another CSET case, Hall v. Indiana Dept of State Revenue, Cause
No. 49T10-9306-TA-36, which was pending before the Court, and asking this Court to
incorporate the motion by reference. Just as these issues raised in Monicas
incorporated motion were denied in the Hall case, they are also denied in
this case and therefore will not be addressed in this opinion. See
Hall v. Indiana Dept of State Revenue, 720 N.E.2d 1287, 1289 (Ind. Tax
Ct. 1999) (citing Hall, No. 49T10-9306-TA-36 (Ind. Tax Ct. July 6, 1998) (unpublished
order denying Petitioners Motion to Vacate)). Furthermore, following the analysis in Hall,
the issue of excessive fines was not discussed at trial because, at that
time, the issue was premature in that the Court had not determined whether
Monica was liable for the CSET. See id. Given the fact
that this Court now finds that Monica is liable for the CSET, this
Court will allow Petitioners counsel to brief and argue the excessive fines issue
at a later date. See infra. See also Hall 720 N.E.2d
at 1289, n.6. Lastly, Monica also copied and attached another motion from
the Hall case to submit additional authority on previously determined issues to support
argument on her previously rejected due process argument. (Petr Notice Regarding Adoption
of Legal Arguments at 1) (citing Lynn v. West, 134 F.3d 582 (4th
Cir. 1998), cert. denied, 525 U.S. 813 (1998).) Because this Court and
the Indiana Supreme Court have already reviewed this issue and held that the
CSET assessment did not violate Monicas due process rights, this Court will not
again entertain the issue. See Clifft v. Indiana Dept of State Revenue,
641 N.E.2d 682, 691 (Ind. Tax Ct. 1994) (Clifft I), affd in part,
revd in part; Clifft v. Indiana Dept of State Revenue, 660 N.E.2d 310,
318 (Ind. 1995) (Clifft II).
The 927 grams of marijuana consisted of both loose marijuana and
marijuana plants. (Trial Tr. at 9-10; States Ex. C.)
also Clifft I, 641 N.E.2d at 684.
The $77,871 was assessed on both Monica and Kevin Clifft.
(States Exs. E, G.) This amount includes the $37,080 tax itself, a
100% nonpayment penalty of $37,080, a 10% collection fee of $3,708, and a
clerks fee of $3.00.
See I.C. §§ 6-7-3-6 (calculation of tax); 6-7-3-11
(authorizing 100% nonpayment fee); 6-8.1-8-2(b) (authorizing 10% collection fee). Interest began to
accrue immediately at the rate of $8.13 per day. Clifft I, 694
N.E.2d at 685.
The State dropped all charges against Kevin Clifft. Clifft I,
641 N.E.2d at 685.
Monica Clifft did not file a post-trial brief; therefore, her position
is gleaned from the trial transcript.
See n.2, supra. Although this
Court will not do the taxpayers work for her, here the Court found
it necessary to try to determine Monicas position in order to complete its
analysis. See CDI, Inc. v. State Bd. of Tax Comm'rs, 725 N.E.2d
1015, 1020 (Ind. Tax Ct. 2000).
Keith pled guilty to possession of marijuana and admitted to possessing
marijuana at trial before this Court.
Hall, 720 N.E.2d at 1291; Hall
v. Indiana Dept of State Revenue, 660 N.E.2d 319, 320 (Ind. 1995), cert.
denied, 517 U.S. 1210 (1996)).
This Court notes that pursuant to Indiana Code § 6-8.1-10-1(a) Monica
is liable for all interest that has accrued or will accrue.