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ATTORNEYS FOR APPELLANT Stephen H. Paul Brent A. Auberry Indianapolis, Indiana ATTORNEY FOR AMICUS CURIAE MULTISTATE TAX COMMISSION Roxanne Bland Shirley Sicilian Washington, D.C.

ATTORNEYS FOR APPELLEE Gregory F. Zoeller Attorney General of Indiana Andrew W. Swain John D. Snethen Jessica Reagan Deputy Attorneys General Indianapolis, Indiana

______________________________________________________________________________

FILED
of the supreme court, court of appeals and tax court

Indiana Supreme Court
_________________________________ No. 49S00-0711-TA-553 MILLER BREWING CO.,

In the

Mar 13 2009, 3:13 pm

CLERK

Appellant (Petitioner below), v. INDIANA DEPARTMENT OF STATE REVENUE, Appellee (Respondent below). _________________________________ Appeal from the Indiana Tax Court, No. 49T10-0607-TA-69 The Honorable Thomas G. Fisher, Judge _________________________________ On Petition for Review of Interlocutory Order _________________________________ March 13, 2009 Shepard, Chief Justice. The Tax Court ruled in an earlier case addressing the share of Miller Brewing Companys income that is taxable by Indiana. In this case the Tax Court held that its previous ruling did not bar the Department of Revenue from raising new contentions in support of a different method of allocation of income to the state. We affirm.

Facts and Procedural History

Miller Brewing Company produces malt beverage products that are sold to customers located in Indiana. Miller is headquartered in Milwaukee, Wisconsin, and its Trenton, Ohio, brewery produces most of the products sold to Indiana customers. This case concerns the percentage of Millers nationwide income that is subject to Indiana income tax in 1997, 1998, and 1999. Indiana taxes a portion of the income of corporations doing business in this state, measured by the percentage of sales allocated to Indiana.1 Specifically, the issue is whether sales to Indiana customers are allocated to Indiana if the customer arranged for a common carrier to pick up the product at Millers facility in another state. Miller Brewing Co. v. Ind. Dept of State Revenue (Miller I), 831 N.E.2d 859 (Ind. Tax Ct. 2005), addressed this issue as to 1994-1996. Miller contends that the ruling of the Tax Court in Miller I resolved this issue in Millers favor and binds the Department under the doctrine of issue preclusion. In its 1994, 1995, and 1996 Indiana tax returns, Miller reported all sales to Indiana customers as Indiana sales irrespective of the means of delivery to the customer. Miller

requested a refund for income based on sales in which the customer picked up the product outside Indiana and also if the customer arranged for a carrier. The Indiana Department of Revenue granted the refund as to customer-pickup sales but denied it as to carrier-pickup sales. Miller appealed, and the Tax Court held that sales to customers who arranged transportation to Indiana by common carrier did not constitute Indiana sales for the purpose of allocation of income to this state. Miller was therefore entitled to a refund of the taxes paid as a result of treating these sales as allocable to Indiana. Id. at 863. Review by this Court was denied. 855 N.E.2d 998 (Ind. 2006) (table). In 2001, the Department completed an audit of Millers 1997, 1998, and 1999 returns and issued proposed assessments for all three years based on including in the sales factor all sales shipped by common carrier to customers in Indiana. Miller filed a protest, and after a hearing
Indiana imposes an adjusted gross income tax and a supplemental net income tax on income "derived from" this state by corporations doing business in Indiana and elsewhere. At all times relevant to this case, income was allocated to Indiana on the basis of a three-factor formula, giving equal weight to the percentage of the corporations payroll, property, and sales attributed to this state. Ind. Code

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Indiana Law