Complete bliss, it's almost everything that I like---gambling, taxes, and a judicial interpretation that is logical and rather simplistic. What more could you want out of life? How about putting Donald Trump into the equation?

All of this is in a rather short opinion of the Indiana Supreme Court. The case involves a dispute over liability for the Indiana sales and use tax, whose purpose is to tax items that are bought at retail out-of-state for use in Indiana, but would escape sales tax in Indiana, and elsewhere. It should be pointed out that real property is exempt from the use taxation by the express terms of the Indiana sales and use statute. However, the statute doesn't have definitions of "real property," "personal property," or "tangible personal property.''

The case involves Trump Indiana, Inc. and its casino riverboat at Buffington Harbor on Lake Michigan. The boat was purchased in 1996 from Atlantic Marine, Inc., which built it in Florida, and delivered it to Trump in Indiana. Trump didn't pay any Florida or Indiana sales or use tax in connection with the boat's acquisition. Since 1997, Trump has paid real property taxes on the boat of about $1.1 million annually. The Indiana Department of State Revenue audited Trump and assessed a sales and use tax against Trump in excess of $2.3 million, which included approximately $1.3 million attributable to a use tax on the boat. 

The Indiana Supreme Court agreed and held that the boat delivered to Indiana is taxable as "tangible personal property" for purposes of the Indiana sales and use tax, even though it is also subject to property tax as real property once it was placed in service as a casino riverboat. And what did it cite in support of upholding this $1.3 million assessment? A dictionary!

Here's exactly what the decision said in that regard. "Because the General Assembly did not define 'tangible personal property' for purposes of the sales and use tax, we apply the ordinary meaning of the phrase. Black's Law Dictionary defines personal property as 'any movable or intangible thing that is subject to ownership and not classified as real property.' Black's Law Dictionary 1254 (8th ed. 2004). By this rather ordinary definition, a casino riverboat, like any other boat, is 'tangible personal property.' As such, its purchase rendered it subject to use tax."

Not to suggest that Donald doesn't know what he is doing, but, maybe in the third year of "The Apprentice," he should be looking for an accountant that specializes in state and local tax planning.

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