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ATTORNEYS FOR PETITIONER
Gregory F. Zoeller Attorney General of Indiana John D. Snethen Deputy Attorney General Matthew R. Nicholson Deputy Attorney General Timothy A. Schultz Deputy Attorney General Jennifer E. Gauger Deputy Attorney General Andrew W. Swain Deputy Attorney General Indianapolis, Indiana

ATTORNEYS FOR RESPONDENT
Stephen H. Paul Jon B. Laramore Brent A. Auberry Fenton D. Strickland Baker & Daniels LLP Indianapolis, Indiana

FILED
Oct 05 2010, 11:16 am
of the supreme court, court of appeals and tax court

CLERK

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Indiana Supreme Court
_________________________________ No. 49S10-1010-TA-519 INDIANA DEPARTMENT OF STATE REVENUE, Petitioner below, v. BELTERRA RESORT INDIANA, LLC, Respondent below. _________________________________ Petition for Review from the Indiana Tax Court, No. 49T10-0605-TA-49 The Honorable Thomas G. Fisher, Judge _________________________________ October 5, 2010 Rucker, Justice.

In the

In this opinion we address the question of whether a contribution by a parent corporation to the capital of its subsidiary is automatically excluded from Indiana use tax. We conclude it is not. Facts and Procedural History Belterra Resort Indiana, LLC ("Belterra") is a Nevada corporation that owns and operates a hotel and riverboat casino in Switzerland County. Pinnacle Entertainment Inc. ("Pinnacle"), a Delaware corporation, is Belterras parent company. Pinnacle contracted with Alabama

Shipyard, Inc. of Mobile, Alabama to purchase and construct the Miss Belterra riverboat in September 1999, at the cost of $34,689,719.00. See Supp. App. at 28, 32. Alabama Shipyard then conveyed title and possession of the completed riverboat to Pinnacle on July 24, 2000. Pinnacle paid no Alabama sales tax on this transaction. The following day, Pinnacle transferred title and possession of the riverboat to Belterra while in international waters off the Gulf of Mexico. Thereafter the riverboat headed to its ultimate destination in Indiana. Pinnacle owned a 97% interest in Belterra at the time of the transfer. Pinnacle subsequently acquired the remaining 3% interest in Belterra in August of 2001. The Indiana Department of Revenue ("Department") conducted a sales and use tax audit of Belterra in 2002 and issued a proposed use tax assessment against Belterra in the amount of $1,869,783.00 plus penalty and interest, due to its acquisition of the riverboat. Belterra protested the assessment and after a hearing on the matter the Department issued a Letter of Findings denying Belterras protest. Belterra filed a timely appeal of the denial with the Indiana Tax Court. The parties filed cross-motions for summary judgment. After a hearing the court granted Belterras motion for summary judgment and denied the Departments motion. Belterra Resort Ind., LLC v. Ind. Dept of State Revenue, 900 N.E.2d 513, 517 (Ind. Tax Ct. 2009). The court reasoned that Belterra was not subject to use tax on its acquisition of the riverboat because it was a contribution to capital and not the result of a retail transaction. Id. at 516. We granted review.

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Standard of Review

The Indiana Tax Court was established to develop and apply specialized expertise in the prompt, fair, and uniform resolution of state tax cases. State Bd. of Tax Commrs v. Indianapolis Racquet Club, Inc., 743 N.E.2d 247, 249 (Ind. 2001). This Court extends cautious deference to decisions within the special expertise of the Tax Court, and we do not reverse unless the ruling is clearly erroneous. Ind. Dept of State Revenue v. Safayan, 654 N.E.2d 270, 272 (Ind. 1995); see also Ind. Tax Court Rule 10. We extend the same presumption of validity to Tax Court rulings on summary judgments and apply the same standard of review. Ind. Dept of State Revenue v. Bethlehem Steel Corp., 639 N.E.2d 264, 266 (Ind. 1994). That is, when a summary judgment involves a question of law within the particular purview of the Tax Court, cautious deference is appropriate. Id.. We will set aside the Tax Courts determinations of tax law on summary judgment only if we are definitely and firmly convinced that an error was made. Id..

Discussion

Indiana imposes an excise tax, known as the state sales tax, on retail transactions made within the state. Ind. Code

Download Indiana Department of State Revenue v. Belterra Resort Indiana, LLC.pdf

Indiana Law