Source: http://www.in.gov/legislative/iac/20120829-IR-045120486NRA.xml.html
Timestamp: 2017-01-24 07:28:58
Document Index: 371287291

Matched Legal Cases: ['§ 13', '§ 13', '§ 6', '§ 6', '§ 13', '§ 13', '§ 13', '§ 13']

43-20120030.LOF
Letter of Findings Number: 43-20120030
Taxpayer purchased land in 2007 that contained three underground storage tanks (USTs). In September of 2011, the Department billed Taxpayer for unpaid UST registration fees for each year from 1990 to 1997. The Department also assessed a 10 percent negligence penalty and interest on each fee. Taxpayer protested the imposition of the fees, interest, and penalty. An administrative hearing was held, and this Letter of Finding results. Additional facts will be provided as necessary.
IC § 13-23-12-1 imposes a fee on underground storage tanks. Although the Indiana Department of Environmental Management ("IDEM") regulates underground storage tanks for the State, IC § 13-23-12-4 mandates that the Indiana Department of Revenue ("Department") collect and deposit the UST fees. IC § 6-8.1-1-1 defines "listed tax" to include "the underground storage tank fee (IC 13-23)." The laws and regulations concerning the Department's collection of listed taxes apply to the Department's collection of the UST fees. All tax assessments are presumed to be accurate and the taxpayer bears the burden of proving that any assessment is incorrect. IC § 6-8.1-5-1(c).
For the years at issue, the annual registration fee was two hundred ninety dollars ($290). (See IC §§ 13-7-20-32 and 13-7-20-41, as in effect through 1996, when it was repealed by P.L.1-1996, SEC.13; and IC § 13-23-12-1, as in effect through 1998, thereafter amended by P.L.212-1999, SEC.4).
Taxpayer maintains that it purchased the facility in October 2007, which means that it did not own the USTs prior to that time, and therefore it does not owe unpaid annual registration fees for the years 1990 through 1997. Taxpayer argues that it is not liable for the environmental penalties associated with the USTs owed during the period prior to its ownership.
IC § 13-11-2-150(a)(1)(A) describes an "owner" of a UST to mean "a person who owns the underground storage tank." In support of Taxpayer's contention that it was not the owner of the USTs prior to 2007, Taxpayer submitted a deed of sale and various other documents, showing that it purchased the property in October 2007.
Taxpayer has clearly demonstrated that it was not the owner of the USTs prior to October 2007. Thus, Taxpayer was not the owner of the USTs on July 1 during the tax period 1990-1997. Therefore, Taxpayer is not responsible for the payment of the UST fees due for the years 1990-1997.
However, Taxpayer is admonished that if the annual registration fees are not paid in full, Taxpayer or any future owner will not be eligible for full payments from the Excess Liability Trust Fund (ELTF) in the event that there is a gasoline spill or other environmental problem resulting from Taxpayer's USTs.
IC § 13-23-8 details the process for claiming monies from the ELTF. Further guidance is found in 328 IAC 1-3. With regards to whether an UST owner (or operator) may make a claim for reimbursement, 328 IAC 1-3-3(a) provides in pertinent part that:
A person listed in section 1 of this rule shall comply with the following for a claim for reimbursable costs or a third party liability claim to be considered for reimbursement from the fund by the administrator:
(6) Pay all:
(A) past and currently due fees under IC 13-23-12-1; and
(B) interest and penalties that are due under subsections (e) and (f).
Tank fees under IC 13-23-12-1(a) must be paid on any tanks that are not closed in accordance with 329 IAC 9-6-1 and are operable or in temporary closure.
(7) For a person who acquires ownership in accordance with subsection (d), make timely payment of all past due tank fees, interest, and penalties in accordance with subsection (f) to make a claim for reimbursable costs for any site characterization or corrective action related to a release that is first suspected, discovered, or confirmed after the payment of all past and currently due fees, interest, and penalties.
This is meant to include any fees or penalties, regardless of whether the current owner was the owner of the USTs during the time period that the fee or penalty was assessed. Therefore, if these registration fees are not paid, neither Taxpayer nor any future owner will be eligible for full payments from the ELTF.
Taxpayer's protest is sustained with regards to the annual registration fee. However, Taxpayer is admonished that if the annual registration fees are not paid in full, Taxpayer or any future owner will not be eligible for full payments from the Excess Liability Trust Fund (ELTF) in the event that there is a gasoline spill or other environmental problem resulting from Taxpayer's underground storage tanks.
Taxpayer's protest file will be held in the legal division for 60 days. Within this sixty day period, Taxpayer must notify the Department in writing stating that it will either pay the fees to have access to payments from the ELTF fund or that it will not pay the fees. Taxpayer's decision will be given to IDEM for future ELTF fund considerations.
Taxpayer has provided sufficient documentation demonstrating that the failure to pay tax was due to reasonable cause and not due to negligence.
For the reasons discussed above, Taxpayer's protest related to the unpaid UST annual registration fees is sustained. Taxpayer's protest of interest is respectfully denied. Taxpayer's protest of the imposition of the negligence penalty is sustained.
Composed: Jan 24,2017 2:28:58AM EST