Source: http://www.in.gov/legislative/iac/20140528-IR-045140172NRA.xml.html
Timestamp: 2016-05-27 18:23:30
Document Index: 439241

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

04-20140023.LOF
Letter of Findings: 04-20140023
I. Gross Retail Tax – Exempt Diesel Fuel Sales.
Authority: IC § 6-2.5-2-1; IC § 6-2.5-2-1(b); IC § 6-2.5-7-3(b); IC § 6-2.5-8-8; IC § 6-2.5-8-8(a); IC § 6-2.5-8-8(e); IC § 6-8.1-5-1(c); IC § 6-2.5-9-3; Indiana Dep't of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463 (Ind. 2012); Lafayette Square Amoco, Inc. v. Indiana Dep't of State Revenue, 867 N.E.2d 289 (Ind. Tax Ct. 2007); 45 IAC 2.2-8-12; 45 IAC 2.2-8-12(d); 45 IAC 2.2-8-12(f).
Taxpayer argues that the Department of Revenue should accept the information it provided as sufficient to establish that otherwise undocumented sales of diesel fuel were exempt from sales tax.
The Indiana Department of Revenue ("Department") conducted an audit review of Taxpayer's tax returns and business records. The audit resulted in the assessment of additional sales tax. Taxpayer disagreed with the assessment and submitted a protest to that effect. An administrative hearing was conducted during which Taxpayer's representatives explained the basis for the protest. This Letter of Findings results.
Indiana imposes a gross retail (sales) tax on retail transactions and imposes on the vendor responsibility for collecting the tax. IC § 6-2.5-2-1 provides as follows:
(2) the relevant data to complete the exemption certificate; within ninety (90) days after the sale.
45 IAC 2.2-8-12 imposes on each vendor certain limitations on the use of the exemption certificate and imposes on those vendors responsibility for either collecting the tax or obtaining the certificate.
Therefore, as provided by IC § 6-2.5-8-8(a), a vendor such as Taxpayer accepting a valid exemption certificate has no duty to collect or remit the state gross retail or use tax on a purchase. However, as provided in 45 IAC 2.2-8-12(f), an exemption certificate issued by a purchaser is not valid unless it is executed in the prescribed and approved form and unless all information requested on the form is completed. In addition, the instructions on the ST-105 state, "Sales tax must be charged unless all information in each section is fully completed by the purchaser."
IC § 6-2.5-7-3(b) specifically requires retail merchants who sell special fuel from metered pumps to collect exemption certificates from their customers when they make exempt sales. In the absence of exemption certificates, the sales are deemed taxable. IC § 6-2.5-7-3 provides as follows:
(2) seven percent (7[percent]).
(2) seven (7[percent]).
The language of IC § 6-2.5-7-3(b) is unequivocal in its requirement that vendors collect exemption certificates for a vendor's exempt sale of diesel fuel.
A. Additional "Pink Slips."
B. Clerical Errors.
C. "Rolodex" Customer Information.
As explained in the Department's regulation, 45 IAC 2.2-8-12(d):
Unless the seller receives a properly completed exemption certificate the merchant must prove that sales tax was collected and remitted to the state or that the purchaser actually used the item for an exempt purpose. It is, therefore, very important to the seller to obtain an exemption certificate in order to avoid the necessity for such proof.
The Audit Division is requested to review both the additional "pink slips" and the purported clerical errors contained within the original audit report, and to make whatever adjustments are necessary; the Department does not agree that the Rolodex records are sufficient to verify that the otherwise undocumented diesel transactions are exempt; the Department does not agree that Taxpayer was denied sufficient time in which to prepare and submit additional documentation on the otherwise undocumented diesel transactions.
Composed: May 27,2016 2:23:29PM EDT