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ATTORNEYS FOR PETITIONER: LARRY J. STROBLE RANDAL J. KALTENMARK ZIAADDIN MOLLABASHY BARNES & THORNBURG LLP Indianapolis, IN

ATTORNEYS FOR RESPONDENT: GREGORY F. ZOELLER ATTORNEY GENERAL OF INDIANA JESSICA E. REAGAN JENNIFER E. GAUGER DEPUTY ATTORNEYS GENERAL Indianapolis, IN

IN THE INDIANA TAX COURT
ENHANCED TELECOMMUNICATIONS CORP., Petitioner, v. INDIANA DEPARTMENT OF STATE REVENUE, Respondent. ) ) ) ) ) ) ) ) ) ) )

FILED
Nov 05 2009, 2:51 pm
of the supreme court, court of appeals and tax court

CLERK

Cause No. 49T10-0801-TA-1

ON APPEAL FROM A FINAL DETERMINATION OF THE INDIANA DEPARTMENT OF STATE REVENUE FOR PUBLICATION November 5, 2009 FISHER, J. Enhanced Telecommunications Corp. (ETC) challenges the Department of State Revenues (Department) imposition of Indianas utility receipts tax (URT) on certain monies it received during the years ending December 31, 2003, December 31, 2004, and December 31, 2005 (the years at issue). The issues for the Court to decide are:

I.

Whether money ETC collected from its customers in "subscriber line charges" and "federal universal service contribution recoveries" is subject to the URT; and Whether distributions ETC received through various federal and state subsidy programs are subject to the URT. FACTS

II.

ETC is a small telecommunications company headquartered in Sunman, Indiana.1 ETC provides telephone equipment and services, cellular phone equipment, cable services, and internet services to its Indiana customers. ETC is known within the telecommunications industry as a local exchange carrier ("LEC"): it provides its customers ("subscribers") with local telephone service only.

Nevertheless, as an LEC, ETC also facilitates long distance calls made by, and to, its subscribers by providing "access service" to long distance carriers. In other words, ETC allows the long distance carriers to "transport" long distance calls over its lines and through its switches.2,3

1

ETC served fewer than 5,000 customers during the years at issue.

A "switch" refers to the electronic equipment that processes and routes telephone calls to their proper destination; it is located at an LECs central, or "end," office.
2

Thus, "[a] long distance call is routed from [an] LECs end office to [a ]connection point with [the long distance carrier] for transport on its long distance network. The call is then handed off . . . to the LEC that provides service to the recipient of the call, which then routes it through its switch and over [its lines] to the recipients location." (Petr Br. at 7 (footnote omitted).)
3

2

As a small, rural LEC, ETCs costs to provide its services are significant.4 Consequently, to ensure that ETC

Download Enhanced Telecommunications Corp. v. Indiana Dept. of State Revenue.pdf

Indiana Law