In PENN Entertainment, Inc. v. Indiana Department of State Revenue, a unanimous Indiana Supreme Court reversed the tax court’s grant of summary judgment for the Indiana Department of Revenue requiring PENN Entertainment to add back approximately $2 billion in wagering excise taxes it paid to other states when calculating its Indiana adjusted gross income for tax years 2015–2017. The department had assessed additional taxes of approximately $8.75 million, contending that the wagering taxes were “based on or measured by income” and thus subject to the add-back requirement.
The Indiana Supreme Court held that the statute’s add-back requirement applies only to apportioned income taxes and excise taxes that are the functional equivalent of income taxes—not to unapportioned excise taxes on intrastate transactions like the wagering taxes at issue in this case. The Court reasoned that because the wagering taxes were never subject to an apportionment formula, adding them back would artificially inflate the Indiana tax base, noting that no other state with a corporate income tax required the adding back of unapportioned taxes.
PENN Entertainment, Inc. (f/k/a PENN National Gaming, Inc.) v. Indiana Department of State Revenue, No. 24S-TA-382, _ N.E.3d _ (Ind., Jun. 29, 2026).