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ATTORNEYS FOR PETITIONER: BARTON T. SPRUNGER MARK J. RICHARDS ICE MILLER Indianapolis, IN

ATTORNEYS FOR RESPONDENT: STEVE CARTER ATTORNEY GENERAL OF INDIANA ANDREW W. SWAIN SPECIAL COUNSEL, TAX SECTION JENNIFER E. GAUGER DEPUTY ATTORNEY GENERAL Indianapolis, IN _____________________________________________________________________

IN THE INDIANA TAX COURT
_____________________________________________________________________ HORSESHOE HAMMOND, LLC, f/k/a HORSESHOE HAMMOND, INC., ) ) ) Petitioner, ) ) v. ) Cause No. 49T10-0411-TA-53 ) INDIANA DEPARTMENT OF ) STATE REVENUE, ) ) Respondent. ) _____________________________________________________________________ ORDER ON PARTIES' CROSS-MOTIONS FOR SUMMARY JUDGMENT FOR PUBLICATION May 1, 2007 FISHER, J. Horseshoe Hammond, LLC (Horseshoe) challenges the final determination of the Indiana Department of State Revenue (Department) denying its claim for refund of use taxes paid during the year ending December 31, 2001 (the year at issue). The matter is currently before the Court on the parties' cross-motions for summary judgment. The sole issue for the Court to decide is whether Horseshoe's provision of complimentary

merchandise and meals to some of its casino patrons during the year at issue was subject to Indiana's sales or use tax. FACTS AND PROCEDURAL HISTORY Horseshoe is an Indiana corporation with its principal place of business in Hammond, Indiana. During the year at issue, Horseshoe, a licensed riverboat operator, operated an excursion gaming boat from its dock on Lake Michigan. In conjunction with its gaming operations, Horseshoe also operated a gift shop, as well as several restaurants and bars, from its dock. During the year at issue, Horseshoe periodically provided complimentary merchandise and/or meals to certain casino patrons who were members of its "Player's Club." 1 Horseshoe's reason for offering the complimentary merchandise and meals

was "to cultivate customer relations so that customers w[ould] stay on the property, come to

Any casino patron who was at least 21 years of age and who presented valid identification was eligible to join Horseshoe's Player's Club. Membership in the Club was free. Upon joining the Club, patrons were issued a Player's Club card that, when gambling, the member could either insert into a slot machine or present to a gaming table attendant. A Player's Club card essentially served two main functions. First, it allowed a member to accumulate and track points earned as a result of the amount of "coin-in" a slot machine. Members could eventually exchange these points for cash, meals or merchandise. Second, it allowed Horseshoe to "monitor" a patron's overall gambling activity, (i.e., how much did the patron spend at slot machines, how much did the patron spend on table gaming, what was the patron's average wager, how long did the patron play, how much did the patron win or lose). Through the application of a formula which utilized some of this information, Horseshoe determined to whom it would offer complimentary merchandise and meals (i.e., its "good" customers). (See Oral Argument Tr. at 39-40.) (See also Pet'r Second Aff. of Joseph Branchik,

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