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ATTORNEY FOR PETITIONER: JEFFREY L. SANFORD ATTORNEY AT LAW South Bend, IN

ATTORNEYS FOR RESPONDENT: STEVE CARTER ATTORNEY GENERAL OF INDIANA DAVID A. ARTHUR DEPUTY ATTORNEY GENERAL Indianapolis, IN

IN THE INDIANA TAX COURT
ANTHONY PACE, Petitioner, v. INDIANA DEPARTMENT OF STATE REVENUE 1 , Respondent. ) ) ) ) ) ) ) ) ) )

Cause No. 71T10-0103-TA-26

ON APPEAL FROM A FINAL DETERMINATION OF THE INDIANA DEPARTMENT OF STATE REVENUE NOT FOR PUBLICATION July 13, 2005 FISHER, J. Anthony Pace (Pace) appeals the final determination of the Indiana Department of State Revenue (Department) assessing him with controlled substance excise tax

Along with the Department, Pace also initially named the Indiana Attorney General as a respondent. However, other than providing legal representation to the Department, the Attorney General has no role in administering the CSET. Accordingly, the Attorney General is now removed as a party to this appeal. (See Resp't Br. at 7; Oral Argument Tr. at 15-16.)

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(CSET). The issue for this Court to decide is whether Pace possessed the marijuana in question, thereby making him liable under the CSET statute. FACTS AND PROCEDURAL HISTORY The Department based its imposition of CSET upon the following facts 2 : In August of 1995, Tony Reeves, a friend of Pace's, went to Pace to purchase marijuana. During the course of their conversation, Pace asked Reeves if he could receive a package at Reeves' grandmother's house at 324 W. Mishawaka Avenue where Reeves was living at the time. Pace offered to give Reeves $50.00 in exchange for allowing this. That same month, police in McAllen, Texas intercepted a package of marijuana addressed to Ronnie Rowe, 324 W. Mishawaka Avenue, South Bend, IN 46545. The McAllen authorities forwarded the package to the South Bend Police Department. On August 24, 1995, Captain Terry Miller of the South Bend Police Department posed as a UPS delivery person and delivered the package to the house at 324 W. Mishawaka Avenue. Both Reeves and Pace were in the house at the time of the delivery. Reeves answered the door and accepted the package from Captain Miller. Before doing so, however, he first asked Pace if he had been expecting a package. Pace told Reeves to go ahead and sign for the box. Reeves signed for it and, together, he and Pace moved the box into the kitchen. There, they opened the box and removed its contents which were bundled and wrapped in duct tape. They did not open this interior packaging.

Many of the facts in this case are in dispute. The facts recited in this section reflect the facts as argued by the Department, and do not necessarily reflect Pace's version of the facts. Factual disputes will be addressed later in the opinion

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Approximately fifteen minutes after the package was delivered, a police entry team arrived at the house with a search warrant. Police discovered Pace in the kitchen with the opened box. After being advised of his rights, Pace was questioned by Captain Gary Horvath of the South Bend Police Department. During the course of this

questioning, Pace first denied that he had touched the box, then admitted that he had touched it. He also initially denied that he had looked at the address label on the box, then later admitted that he had looked at it. In addition, Pace first admitted that certain papers the police had located during the search were drug ledgers, then later stated that they were actually ledgers for drywall work he had done. 3 evidentiary value were found on the box. The Indiana State Police laboratory confirmed that the package contained 9156.5 grams of marijuana. Based on that amount, the Department assessed Pace with CSET (and penalties) in the amount of $732,520.00. Pace protested the assessment and the Department scheduled an administrative hearing on March 16, 2000. Pace did not appear for the hearing and the protest was therefore denied. Pace subsequently sought a rehearing, which was granted. On September 1, 2000, the Department issued a Supplemental Letter of Findings (LOF) again denying Pace's protest. Pace initiated an original tax appeal on February 28, 2001. The Court conducted a trial on November 9, 2001, and heard the parties' oral arguments on April 5, 2002. Additional facts will be provided as necessary. No fingerprints of

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Pace was employed at the time as a painter and plasterer. (See Trial Tr. at 14.)

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ANALYSIS AND OPINION Standard of Review This Court reviews final determinations of the Department de novo. IND. CODE ANN.

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