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ATTORNEY FOR PETITIONER: MARK J. RICHARDS ICE MILLER LLP Indianapolis, IN

ATTORNEYS FOR RESPONDENT: GREGORY F. ZOELLER ATTORNEY GENERAL OF INDIANA ANDREW W. SWAIN CHIEF COUNSEL, TAX SECTION JESSICA E. REAGAN NANCY M. HAUPTMAN DEPUTY ATTORNEYS GENERAL Indianapolis, IN

FILED
IN THE INDIANA TAX COURT
AWHR AMERICAS WATER HEATER RENTALS, LLC, Petitioner, v. INDIANA DEPARTMENT OF STATE REVENUE, Respondent. ) ) ) ) ) ) ) ) ) ) )
Jul 15 2010, 12:18 pm
of the supreme court, court of appeals and tax court

CLERK

Cause No. 49T10-0710-TA-50

ORDER ON PARTIES CROSS-MOTIONS FOR SUMMARY JUDGMENT FOR PUBLICATION July 15, 2010 FISHER, J. AWHR Americas Water Heater Rentals, LLC (AWHR) challenges the Department of State Revenues (Department) assessment of Indiana gross retail tax (sales tax) for the years ending December 31, 2003, December 31, 2004, and December 31, 2005 (the years at issue). The matter is currently before the Court on the parties cross-motions for summary judgment.

FACTS AND PROCEDURAL HISTORY The following facts are undisputed. AWHR advertises that it is in the business of providing "worry-free and economical hot water." (See Petr Desg Evid. Ex. 1A at 2.) More specifically, AWHR states that through its "Lifetime Water Heater Plan" (hereinafter, "Plan") it provides: quality equipment, plumbing professionals, and a service guarantee that supplies [the customer] with a lifetime of worry-free hot water for a low monthly fee. With [the P]lan[, the customer] eliminate[s] the costly upfront investment of purchasing a water heater, the ongoing expense for future repairs and replacement, and the uncertainty that comes from not knowing who will respond to [a] hot water emergency or when. (Petr Desg Evid. Ex. 1A at 3.) During the years at issue, customers in Indiana contracted with AWHR for its Plan. Pursuant to the terms of the written agreements, AWHR provided the customer a new or reconditioned water heater "at no charge."1 (See Petr Desg Evid. Ex. 1B at 1 (footnote added).) The agreements also provided that AWHR would bear the expense of installing the water heater in the customers home or business. (See Petr Desg Evid. Ex. 1B at 1.) Finally, AWHR agreed that it would make any repairs (including

AWHR acquired these water heaters in a 2003 bulk transaction with Indiana Michigan Power Company, American Electric Power Service Corporation, and some of their affiliates (collectively, "AEP"). More specifically, AWHR purchased AEPs interests in certain water heaters already installed in buildings in Indiana, AEPs rights and obligations under contracts with respect to those water heaters, and certain uninstalled water heaters that were stored in Indiana. (Petr Desg Evid. Ex. 1

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