COA affirms on rehearing ruling against revenue department

The Indiana Court of Appeals affirmed on rehearing Monday its opinion reversing summary judgment in favor of the Department of Revenue in a dispute over whether an award from a state agency in Marion County could be levied against a judgment in Marshall County.

The panel in Gordon A. Etzler v. Indiana Department of Revenue, 50A04-1406-PL-285, affirmed its prior ruling against the department. In its original decision, the court ruled that because the department hadn’t taken steps to create a lien on a breeder’s award, it could not levy that property in Marion County to satisfy judgments from tax warrants in Marshall County.

The panel didn’t buy the department’s public policy arguments on rehearing or arguments it raised for the first time on rehearing.

“We have given careful consideration to the Department’s reading of Indiana Code section 6-8.1-8-8, both in our original opinion and on rehearing. That said, we believe that the Department’s proposed interpretation of the statute is neither apparent in its plain language nor consistent with other sections” of the chapter, Judge Margret Robb wrote for the panel.

“The Department also asserts that it should be granted statewide levying power as a matter of public policy, arguing that failing to do so will increase the cost of tax collection and make it easier for a delinquent taxpayer to avoid payment. There is no doubt that granting the Department unlimited statewide levying authority would make it easier for the Department to collect on unpaid tax debts. But the fact that such authority would make the Department’s job easier does not make it a correct interpretation of Indiana Code chapter 6-8.1-8,” Robb wrote.

The panel also rejected the state’s argument that the Uniform Commercial Code entitled the department to priority in breeder’s award proceeds from the Indiana Horse Racing Commission.