Case Title: IND. DEPT. OF STATE REVENUE v. Brown Boveri

Citation: 439 N.E.2d 561

Docket Number: 882S323

State: indiana

Court: Indiana Supreme Court

Date: 1982-08-31T00:00:00Z

Document:
439 N.E.2d 561 (1982)
INDIANA DEPARTMENT OF STATE REVENUE, Appellant (Defendant below),
v.
BROWN BOVERI Corporation, Appellee (Plaintiff below).
No. 882S323.

Supreme Court of Indiana.
August 31, 1982.
*562 Linley E. Pearson, Atty. Gen., Ted J. Holaday, Deputy Atty. Gen., Indianapolis, for appellant.
William M. Pope, Garelick, Cohen, Frank & Fishman, Indianapolis, for appellee.
HUNTER, Justice.
This case is before this Court upon the petition to transfer of defendant-appellee, the Indiana Department of State Revenue (Department). The Court of Appeals, First District, affirmed the judgment of the lower court in favor of Brown Boveri Corporation (Brown Boveri) holding that certain transactions of the company were protected as interstate commerce and were therefore exempt from any Indiana Gross Income Tax according to Ind. Code § 6-2-1-7(a) (Burns 1978). Indiana Department of State Revenue v. Brown Boveri Corporation, (1981) Ind. App., 429 N.E.2d 285.
While we agree with the Court of Appeals' decision affirming the classification of the company's transactions as interstate commerce, we do not agree with the court's decision as to the amount of interest which the state must pay on the refund. Transfer is now granted in order to consider the issue of the amount of interest which the state must pay. Accordingly, the decision and opinion of the Court of Appeals are hereby vacated, and appellee's petition to transfer is granted.
We adopt that portion of the opinion of the Court of Appeals as written by Judge Robertson which affirms the trial court's decision that a refund is due Brown Boveri for certain payments of Indiana Gross Income Tax:
Since Brown Boveri is due a refund for their payments of Indiana Gross Income Tax, we must consider what rate of interest is applicable in this case. The trial court entered its order on October 28, 1980, and ordered the state to pay interest at the rate of eight percent (8%) per annum according to the statute then in effect. Ind. Code § 6-2-1-16(b) (Burns 1978). However, the refunds involved covered tax payments made in the years of 1970, 1971, 1972, and 1973, and the interest was awarded from specific dates in 1975. As the state points out, the 1977 amendment which changed the interest rate from six percent to eight *565 percent became effective on January 1, 1978. Ind. Code § 6-2-1-16(b), supra. The change in interest rates passed by the legislature was obviously an attempt to keep the rates current and was not a penalty to be assessed for money held during years when the general interest rates were not as high. We have previously held that an award of eight percent interest prior to the effective date of the statute is error. Indiana Department of Revenue, Indiana Gross Income Tax Division v. Glendale-Glenbrook Associates, (1981) Ind., 429 N.E.2d 217. Therefore, the trial court's award of eight percent interest prior to January 1, 1978, in this case was error.
For all of the foregoing reasons, transfer is granted and the opinion of the Court of Appeals is vacated. The cause is remanded to the trial court with instructions to correct the amount of interest awarded. The judgment of the trial court in all other things is affirmed.
GIVAN, C.J., and DeBRULER, PRENTICE and PIVARNIK, JJ., concur.