ATTORNEYS FOR PETITIONER:    ATTORNEYS FOR RESPONDENT:
STEPHEN H. PAUL    STEVE CARTER
ROBERT K. STANLEY    ATTORNEY GENERAL OF INDIANA
DANIEL R. ROY    Indianapolis, IN
BAKER & DANIELS     
Indianapolis, IN     KAREN L. HSU    
    DEPUTY ATTORNEY GENERAL
WILLIAM D. PELTZ    Indianapolis, IN
SHELL OIL COMPANY
Houston, TX    
_____________________________________________________________________

    IN THE INDIANA TAX COURT _____________________________________________________________________ 

SHELL OIL COMPANY,                                                        )
                                                                               )
    Petitioner,                                                                )
                                                                               )
    v.                                                                         )   Cause No. 49T10-0004-TA-43
                                                                               )
INDIANA DEPARTMENT OF                                                          )
STATE REVENUE,                                                                 )
                                                                               )
    Respondent.                                                                )    
 _____________________________________________________________________

ON APPEAL FROM A FINAL DETERMINATION
OF THE INDIANA DEPARTMENT OF STATE REVENUE


NOT FOR PUBLICATION
October 15, 2001


FISHER, J.

    The Petitioner, Shell Oil Company (Shell), challenges the Indiana Department of State Revenue’s (Department) finding that, under a tax precollection agreement, Shell owed special fuel tax on import sales into Indiana. Shell raises several issues in its motion for partial summary judgment; however, the Court finds that the dispositive issue is whether the Department’s tax precollection agreement was ambiguous.
    For the reasons stated below, the Court DENIES Shell’s motion for partial summary judgment and GRANTS the Department’s cross motion for partial summary judgment.
FACTS AND PROCEDURAL HISTORY

    The facts of this case are undisputed. Shell holds an Indiana special fuel supplier’s license. Prior to July 1, 1994, Shell did not collect the special fuel tax See footnote from its customers on import sales into Indiana. In 1994, the Department sent Shell a Form SF-10A, which consisted of a “Tax Precollection Agreement Application” and a question and answer instructional document entitled “Tax Precollection Agreement on Imported Fuel Transactions.” See footnote Form SF-10A provided Shell with three options regarding the collection of the special fuel tax. Shell chose option one, which stated, “I choose option 1 and agree to treat all out-of-state terminal removals of undyed special fuel, for export into Indiana, as if they were received in Indiana, and will collect the Indiana special fuel tax from every purchaser.” See footnote (Pet’r Summary Judgment Ex. A at 16.) The Department received Shell’s Form SF-10A on September 22, 1994. Shell did not, however, collect the special fuel tax on any of its import sales into Indiana pursuant to its Form SF-10A.
    The Department later conducted an audit of Shell’s special fuel tax liability for the period from October 1, 1993 to December 31, 1994, and determined that Shell owed the special fuel tax for that period. After Shell protested the proposed tax liability, the Department conducted supplemental audits. The Department found that Shell was not liable for the special fuel tax on all unreported imports before September 22, 1994 (the day that the Department received Shell’s Form SF-10A). However, the Department found that Shell was liable for the special fuel tax on any import sales made on or after September 22, 1994.
    Shell filed this original tax appeal on April 19, 2000. Shell then filed a motion for partial summary judgment. See footnote The Department filed its response opposing the summary judgment motion and asked the Court to enter summary judgment in its favor. See footnote The Court heard oral arguments and took the matter under advisement. Additional facts will be supplied as needed.
ANALYSIS AND OPINION
Standard of Review

    Summary judgment is proper only when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. See Ind. Trial Rule 56(C). See also Salin Bancshares, Inc. v. Indiana Dep’t of State Revenue, 744 N.E.2d 588, 591 (Ind. Tax Ct. 2000). Cross motions for summary judgment do not alter this standard. Salin, 744 N.E.2d at 591. 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. Id.
Discussion

     The Department contends that Shell is liable for the special fuel tax because Shell agreed to collect the tax on all import sales to Indiana when it chose option one on Form SF-10A. While Shell does not dispute that it checked option one or that option obligated it to “collect the Indiana special fuel tax from every purchaser,” (Pet’r Summary Judgment Br. at 4-5; see also Pet’r Summary Judgment Ex. A at 16), it contends that it is not liable for the tax because Form SF-10A was ambiguous. Shell argues that any ambiguity should be resolved in its favor and against the Department. See footnote
    Whether the Form SF-10A agreement was ambiguous, like whether a contract or a statute is ambiguous, is a question of law for the Court. See Art Country Squire, L.L.C. v. Inland Mortgage Corp., 745 N.E.2d 885, 889 (Ind. Ct. App. 2001) (pertaining to a contract); Spears v. Brennan, 745 N.E.2d 862, 869 (Ind. Ct. App. 2001), reh’g denied (pertaining to a statute). A writing is not ambiguous merely because each party favors a different interpretation. Bernstein v. Glavin, 725 N.E.2d 455, 459 (Ind. Ct. App. 2000), trans. denied. Rather, a writing is ambiguous if it is susceptible to more than one reasonable interpretation. Bosecker v. Westfield Ins. Co., 724 N.E.2d 241, 244 (Ind. 2000); Rice v. Meridian Ins. Co., 751 N.E.2d 685, 688 (Ind. Ct. App. 2001).
    The meaning of an agreement is to be “determined from an examination of all of its provisions, not from a consideration of individual words, phrases, or even paragraphs read alone.” Art Country Squire, 745 N.E.2d at 889. Thus, the Court may consider a “writing[ ] executed at the same time and relating to the same transaction.” Id. This Court will, therefore, consider both Form SF-10A’s application and instruction pages in determining whether Form SF-10A was ambiguous.
    Shell argues that Form SF-10A was ambiguous because option one on the form’s application page instructed Shell to collect the tax while option one on the form’s instruction page instructed Shell to “continue to refrain from collecting the tax.” (Pet’r Summary Judgment Br. at 5 (internal quotation marks omitted).) More specifically, Shell argues because it did not collect the special fuel tax prior to July 1, 1994, it interpreted option one to mean that it should “continue to act in the ‘same manner’ that it had prior to July 1, 1994,” which meant “not [to] collect[] the tax.” (Pet’r Summary Judgment Br. at 2-3 (emphasis in original).) Shell’s interpretation is not reasonable.
    Shell’s interpretation ignores the plain language of the form’s instruction. The plain language of Form SF-10A required Shell to collect the Indiana special fuel tax. Indeed, Shell chose option one on the application page, which stated that Shell would “collect the Indiana special fuel tax from every purchaser.” (Pet’r Summary Judgment Ex. A at 16 (emphasis added).) Moreover, the requirement to collect the special fuel tax is buttressed by the explanation of option one in the instruction pages, which stated that Shell, as a supplier, would “continue to collect Indiana special fuel tax due on import sales into Indiana in the same manner which [it had] prior to July 1[, 1994].” (Pet’r Summary Judgment Ex. A(1) at 1 (emphasis added).) Form SF10-A did not say that Shell could continue to “act” in the same manner as before July 1. Form SF10-A must be read to mean what it plainly expresses and will not be enlarged. See McDonald’s Corp. v. Indiana State Bd. of Tax Comm’rs, 747 N.E.2d 654, 657 (Ind. Tax Ct. 2001); Ind. Code § 1-1-4-1 (explaining that “words and phrases shall be taken in their plain, or ordinary and usual, sense”). Thus, the Court will not hold Form SF-10A to be ambiguous merely because Shell favored a different interpretation. See Bernstein, 725 N.E.2d at 459.
    Moreover, after examining all of the provisions of Form SF-10A, including the other two options available to Shell, See footnote it is clear that Shell’s choice of option one unambiguously required it to collect the special fuel tax. Option one required a taxpayer to collect the special fuel tax from all of its customers on import sales into Indiana, option two required a taxpayer to collect the special fuel tax from only some it customers, and option three allowed a taxpayer not to collect the special fuel tax. (Pet’r Summary Judgment Ex. A at 16; Pet’r Summary Judgment Ex. A(1) at 1.) Shell’s interpretation was not reasonable given the plain meaning of the language. The language of option one can only be reasonably interpreted in one way – Shell was required to collect the special fuel tax. Thus, the form was unambiguous, and Shell was required to collect the special fuel tax because it opted to do so under Form SF-10A.
CONCLUSION

    For the aforementioned reasons, this Court holds that, as a matter of law, Form SF-10A, which Shell signed agreeing to collect the special fuel tax from all customers for import sales into Indiana, was not ambiguous. Therefore, this Court DENIES Shell’s motion for partial summary judgment and GRANTS the Department’s cross motion for partial summary judgment. See footnote This case will continue on the other issues raised in Shell’s original tax appeal petition.

Footnote: Indiana imposes a special fuel tax of sixteen cents per gallon on “all special fuel sold or used in producing or generating power for propelling motor vehicles[.]” Ind. Code § 6-6-2.5-28(a).
    
Footnote: Under Indiana Code § 6-6-2.5-35, the Department may enter into a tax precollection agreement with a supplier or permissive supplier for the collection of the special fuel tax. See Ind. Code § 6-6-2.5-35(j).

Footnote: Option two stated, “I choose option 2 and enter into a tax precollection agreement with the following importer(s). I have notified customers according to department guidelines.” Option three stated, “I choose option 3 and will not be collecting tax on any imports. I have notified customers according to department guidelines.” (Pet’r Summary Judgment Ex. A at 16.)
Footnote: Shell’s motion for partial summary judgment is based only on Count I of its original tax appeal petition. (Pet’r Summary Judgment Motion at 1; Pet’r Summary Judgment Br. at 3, 5.)

Footnote:      Pursuant to Indiana Trial Rule 56(B), t he Court treats the State Board’s request
as a cross-motion for summary judgment. Salin Bancshares, Inc. v. Indiana Dep’t of State Revenue, 744 N.E.2d 588, 591 n.6 (Ind. Tax Ct. 2000).

Footnote: Shell argues that it is not liable for the special fuel tax because: (1) Form SF-10A was an agreement drafted by the Department, and any ambiguity in it should be construed against the Department; (2) the Department is using Form SF-10A to impose a tax on Shell, and any ambiguity in it should be construed against the Department; and (3) Form SF-10A’s ambiguity should estop the Department from holding Shell liable for the tax. (Pet’r Summary Judgment Br. at 3-4.)
Footnote:      Form SF-10A’s instruction page stated, in pertinent part:
What are my options?
Effective July 1, 1994 each [supplier/permissive supplier] S/PS will be required to elect one of the following options:

     Option One: Elect the “blanket” option. Under this option, the S/PS will continue to collect Indiana special fuel tax due on import sales into Indiana in the same manner which they have prior to July 1. This alleviates administrative requirements, notice requirements, and reporting changes which are required under Option Two or Option Three.

     Option Two: Elect the “selective” option. Under this option, the S/PS elects to collect the Indiana special fuel tax only for those customers which it selects. Each S/PS electing this option must properly complete an SF-10A (see attached) for each customer from whom it will collect the tax on import sales into Indiana. Additionally, each S/PS must provide notice to each customer from whom it will not collect the tax on import sales into Indiana. This notice will be in the form of a notice drafted by the Department and which the S/PS will distribute to each of its customers. Each S/PS selecting this option will also be required to use a different reporting form to report import sales into Indiana on which Indiana tax was not collected.

     Option Three: Elect the “no collection” option. Under this option, the S/PS elects not to collect the Indiana special fuel tax due on any of its import sales into Indiana. Under this option, each supplier will be required to give notice to each customer as required under Option Two. Each S/PS must also report its import sales into Indiana in the same manner discussed under Option Two.

(Pet’r Summary Judgment Ex. A(1) at 1 (emphasis in original).)

Footnote: If any of Shell’s customers have already paid the special fuel tax on an import sale into Indiana, Shell would not be liable for the tax on those sales. ( See Trial Tr. at 32.) Thus, the Department should determine if any of these customers have already paid the special fuel tax and adjust Shell’s liability accordingly.