January 17, 1989
TO: TAX MEMBERS NO. 5-89
MONEY MARKET FUND CHIEF EXECUTIVE OFFICERS NO. 1-89
UNIT INVESTMENT TRUST MEMBERS NO. 6-89
RE: INDIANA INTANGIBLES TAX HELD UNCONSTITUTIONAL
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In the attached opinion, an Indiana superior court recently
ruled that Indiana's intangibles tax is unconstitutional. The
court concluded that the tax violates the U.S. Constitution's
Commerce Clause because the tax is assessed only on intangibles
(such as stock) of entities (such as funds) organized outside
Indiana and thus provides a commercial advantage to in-state
companies. In addition, the court held that the tax violates the
Indiana Constitution.
Under the court's order, all persons who paid the
intangibles tax since June 27, 1987 will be entitled to refunds
of amounts paid, plus interest, less certain costs.
We will keep you informed of developments.
Keith D. Lawson
Assistant General Counsel
Attachment