Source: http://www.in.gov/legislative/iac/20130828-IR-045130384NRA.xml.html
Timestamp: 2017-03-30 18:41:38
Document Index: 525308185

Matched Legal Cases: ['§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 6']

04-20130026.LOF
Letter of Findings Number: 04-20130026
Authority: IC § 6-2.5-3-7; IC § 6-2.5-8-8; IC § 6-8.1-5-1; Sales Tax Information Bulletin 55 (May 1989).
Taxpayer protests the Department's assessment of sales tax on sales to three customers.
Taxpayer is a municipally-owned utility. The Indiana Department of Revenue ("Department") audited Taxpayer and determined that it sold various utility services to customers without receiving proper exemption certificates from the customers. As a result, the Department assessed additional sales tax and interest. Taxpayer protested the assessment related to three customers. The Department conducted an administrative hearing and this Letter of Findings results. Additional facts will be supplied as necessary.
Taxpayer protests the assessment of additional sales tax on utilities sold to three customers.
IC § 6-2.5-8-8(a) provides:
For utility purchases by an end customer such as an individual or business, a Form ST-109 ("ST-109") must be issued by the entity claiming tax exemption. During the audit, Taxpayer did not provide copies of ST-109s related to various customers. However, subsequent to the hearing, Taxpayer provided multiple ST-109s for one customer. Taxpayer has provided information to conclude that the meter may have a different number than the one listed on the ST-109s due to replacement of the physical meter associated with the originally-issued ST-109s. Taxpayer's protest is sustained with regard to sales to that customer and which are attributable to the meters–including replacement meters–covered by the ST-109s.
Taxpayer also provided Form ST-105s for two customers; however, the customers provided the forms to Taxpayer in 1963 and 1971. While the Department generally acknowledges that taxpayers are entitled to rely on exemption certificates under IC § 6-2.5-8-8(a), the Department's current procedures for granting exemption certificates on utility purchases have been published since 1989. See Sales Tax Information Bulletin 55 (May 1989), 12 Ind. Reg. 2431. Since 1989, the Department's published guidance has provided that an ST-109 is necessary to purchase utilities without paying sales tax; alternative forms are not sufficient, even if the forms had been sufficient previously. Thus, Taxpayer's reliance on the 1963 and 1971 exemption certificates in this case is not persuasive.
Absent a proper exemption certificate, IC § 6-2.5-3-7 requires Taxpayer to produce evidence of nontaxability. Taxpayer has not provided sufficient factual ground to demonstrate that Taxpayer's utility sales were not subject to sales and use tax.
In the alternative, Taxpayer asserts that it could issue an exemption certificate to its customer and be relieved of the duty to collect sales tax.
However, IC § 6-2.5-8-8 provides in relevant part:
The language of subsection (a) provides that certain purchasers may issue exemption certificates to sellers. An exemption certificate cannot be properly issued by a seller–Taxpayer–to a purchaser–a customer. Thus, Taxpayer's alternative contention is unavailing.
Taxpayer's protest is sustained with regard to the meters and customer for whom Taxpayer provided an ST-109. Taxpayer's protest is otherwise denied.
Composed: Mar 30,2017 2:41:37PM EDT