CLAIMANT APPEARING PRO SE: ATTORNEYS FOR RESPONDENT:
LELAND H. STUMP STEVE CARTER
Fort Wayne, IN ATTORNEY GENERAL OF INDIANA
ROBERT B. WENTE
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
LELAND H. STUMP, )
v. ) Cause Nos. 49T10-0012-TA-130
INDIANA DEPARTMENT OF STATE )
ORDER ON PARTIES CROSS MOTIONS FOR SUMMARY JUDGMENT
October 22, 2002
The Claimant, Leland H. Stump, appeals two final determinations of the Indiana Department
of State Revenue (Department), denying him a sales tax exemption for tax years
1999 and 2000. The matter is currently before the Court on the
parties cross-motions for summary judgment. The Court finds the following issue dispositive:
whether Mr. Stumps purchases of two vans, which were modified for handicap-use,
were exempt from sales tax under Indiana Code § 6-2.5-5-18?
FACTS AND PROCEDURAL HISTORY
The material facts as they relate to these cross motions for summary judgment
are undisputed. Mr. Stump, who resides in Fort Wayne, was injured in
1986 in a work-related accident. As a result of the accident, Mr.
Stump had the lower part of both his legs amputated.
In 1999, after securing a prescription from his physician, Mr. Stump purchased a
van and had it modified for handicap access and operation.
did not pay sales tax on the purchase of the handicap equipment installed
in the van, he did pay $1,015 in sales tax on the purchase
of the van itself. Mr. Stump subsequently filed a claim for refund
with the Department, arguing that the purchase of the van was exempt from
sales tax pursuant to Indiana Code § 6-2.5-5-18. On September 25, 2000,
the Department denied Mr. Stumps claim. On December 27, 2000, Mr. Stump
filed an original appeal with this Court.
On October 2, 2000, Mr. Stump purchased another handicap-modified van, again with a
prescription from his physician. Mr. Stump did not pay any sales tax
on the transaction. The Department subsequently issued a proposed notice of assessment
to Mr. Stump, assessing him sales tax, penalties, and interest on the purchase
of the van in the amount of $1,613.42. Mr. Stump protested the
proposed assessment, again claiming the purchase of the van was exempt from sales
tax under Indiana Code § 6-2.5-5-18. On January 12, 2001, the Department
denied Mr. Stumps claim. Mr. Stump filed another appeal with this Court
on July 5, 2001.
In May 2002, Mr. Stump filed a unified motion for summary judgment in
On July 8, 2002, the Department filed its motion for
summary judgment. This Court held a hearing on the parties cross motions
on August 2, 2002. Additional facts will be supplied as necessary.
ANALYSIS & OPINION
Standard of Review
This Court reviews final determinations of the Department de novo. Ind. Code
§§ 6-8.1-5-1(h), 6-8.1-9-1(d); Salin Bancshares v. Indiana Dept of State Revenue, 744
N.E.2d 588, 591 (Ind. Tax Ct. 2000). Accordingly, it is bound by neither
the evidence nor the issues presented at the administrative level. Ind. Code
§ 6-8.1-9-1(d); Salin Bancshares, 744 N.E.2d at 591.
A motion for summary judgment will be granted only when there is no
genuine issue of material fact, and a party is entitled to judgment as
a matter of law. Ind. Trial Rule 56(C); Uniden Am. Corp. v.
Indiana Dept of State Revenue, 718 N.E.2d 821, 824 (Ind. Tax Ct. 1999).
Cross motions for summary judgment do not alter this standard. Salin
Bancshares, 744 N.E.2d at 591.
The sole issue in this case is whether Mr. Stumps purchases of two
handicap-modified vans are exempt from sales tax under Indianas medical equipment exemption, as
set forth in Indiana Code § 6-2.5-5-18. Mr. Stump claims that the
exemption applies not only to the special handicap equipment installed in the vans,
but the vans as well.
The Department claims, on the other hand,
that only the special handicap equipment falls within the ambit of the exemption.
Indiana Code § 6-2.5-5-18 provides, in relevant part:
Sales of artificial limbs, orthopedic devices, dental prosthetic devices, eyeglasses, contact lenses, and
other medical equipment, supplies, and devices are exempt from the state gross retail
tax, if the sales are prescribed by a person licensed to issue the
Ind. Code § 6-2.5-5-18(a). Thus, the first question this Court must answer
is what constitutes medical equipment, supplies, and devices under Indiana Code § 6-2.5-5-18(a).
While Indianas published case law is silent on the question, the Departments regulations
provide that [t]he term medical equipment, supplies, and devices [as used in Indiana
Code § 6-2.5-5-18(a)] are those items, the use of which is directly required
to correct or alleviate injury to[,] malfunction of, or removal of a portion
of the purchasers body. Ind. Admin. Code tit. 45, r. 2.2-5-28(h).
Because the Departments interpretation of the statutes it is charged with
administering is entitled to judicial deference,
Johnson County Farm Bureau Coop. Assn v.
Indiana Dept of State Revenue, 568 N.E.2d 578, 586 (Ind. Tax Ct. 1991),
the Court then arrives at its next question: was the purchase of
Mr. Stumps vans directly required to correct or alleviate the removal of his
When interpreting the Departments regulations, this Court applies the same rules of construction
that apply to statutes. Harlan Sprague Dawley, Inc. v. Indiana Dept
of State Revenue, 605 N.E.2d 1222, 1229 (Ind. Tax Ct. 1992) (quotation omitted).
Perhaps the most important, and elementary, of these rules of construction is
the one that provides that words are to be given their plain, ordinary,
and usual meaning. See Uniden, 718 N.E.2d at 824. The plain,
ordinary, and usual meaning of a word can be found in the dictionary.
See Johnson County, 568 N.E.2d at 581. The word directly, as
it is used in Indiana Administrative Code title 45, rule 2.2-5-28(h), is defined
as: without any intervening agency or instrumentality or determining influence: without
any intermediate step. Websters Third New International Dictionary 641 (1981). Mr.
Stumps van does not fit within this definition in the context of the
There is nothing inherently healing or remedial about a van that would make
it appropriate only for handicapped people; indeed, vans are driven everyday by handicapped
and non-handicapped people alike. Thus, the van itself does not have any
direct alleviating effect on Mr. Stumps condition. Rather, it is the special
handicap equipment, installed in the vans, which directly alleviates Mr. Stumps condition; without
that equipment, Mr. Stump could not drive, let alone get in and out
of the vans. It is that special handicap equipment which enables Mr.
Stump to continue to drive, despite his disability. Accordingly, it is the
special handicap equipment installed in Mr. Stumps vans that is exempt from sales
tax under Indiana Code § 6-2.5-5-18(a), not the van itself.
Nevertheless, Mr. Stump asks this Court to take into consideration the fact that,
in years past, his insurance carrier, who had been responsible for purchasing the
vans for him, was never assessed sales tax on either the van or
the special equipment. Furthermore, Mr. Stump states that before he purchased the
second van at issue in this appeal, he contacted both the Indiana Attorney
Generals Office and the local BMV and received assurances from each that the
transaction would be exempt from sales tax under Indiana Code § 6-2.5-5-18(a).
(Petr Motion for Summ. J. at 4-5.)
First, with respect to the claim that his insurance carrier never paid sales
tax on previous purchases of handicap-modified vans, the Court notes that Indiana businesses
often obtain sales tax exemption certificates under Indiana Code § 6-2.5-8-8 and then
later pay a self-assessed use tax equal to, and in lieu of, the
applicable sales tax.
See Ind. Admin. Code tit. 45, r. 2.2-3-15.
Because exemption statutes are strictly construed against taxpayers, Mr. Stump
bore the burden of proving that the insurance carrier never paid any tax,
sales or use, on the transaction. See Harlan Sprague Dawley, 605 N.E.2d
at 1225. Mr. Stump, however, did not offer any proof to support
Second, Mr. Stumps claim that he should receive the exemption because both the
BMV and the Attorney Generals office had each assured him that his purchase
of the second van was exempt is without merit, as neither one of
these entities had that authority. Rather, the authority to grant a sales
tax exemption rests with the Department, which has the responsibility for the administration,
collection, and enforcement of Indianas sales tax.
Ind. Code § 6-8.1-3-1(a).
Thus, Mr. Stumps reliance with the BMV and the Attorney Generals office is
For the foregoing reasons, this Court hereby DENIES Mr. Stumps motion for summary
judgment, and GRANTS the Departments motion for summary judgment. The parties shall
bear their own costs.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that judgment be and is entered
in favor of the Department and against Leland H. Stump.
SO ORDERED this 22nd day of October, 2002.
Thomas G. Fisher, Judge
Leland H. Stump
4238 Westlane Road
Fort Wayne, IN 46815
Attorney General of Indiana
By: Robert B. Wente
Deputy Attorney General
Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, IN 46204-2770
Mr. Stump purchased the van from a Ford dealer in
northern Indiana. He then hired a company to install the customized equipment
in it that would enable him to get in and out of the
vehicle and to drive it without assistance from others.
Footnote: Both cases involve the same issue.
Footnote: Mr. Stump argues that to allow the exemption on the special handicap
equipment, and not the van, would be the same as having a wheelchair
with no wheels. (Summ. J. Tr. at 42.)
Footnote: Regulations that represent an incorrect statement of law, however, are entitled
to no weight.
Harlan Sprague Dawley, Inc. v. Indiana Dept of
State Revenue, 605 N.E.2d 1222, 1231 n. 8 (Ind. Tax Ct. 1992) (quotation
omitted). That, however, is not the case with Indiana Administrative Code title
45, rule 2.2-5-28(h).
Mr. Stump even states that he received a tax exempt transaction
form from the BMV. Mr. Stump then presented the form to the
dealer from whom he purchased the van, and the dealer processed the sale
as tax exempt.
Footnote: Even if Mr. Stump did present that evidence, the Department posits
that it could have made an error, administrative or otherwise, in granting that
one exemption, and that one error does not necessarily rise to the level
of discrimination. (Summ. J. Tr. at 39.)