in-20260826-IR-045260294NRA: LETTER OF FINDINGS: 04-20242051

DEPARTMENT OF STATE REVENUE LETTER OF FINDINGS: 04-20242051 Use Tax For The Year 2021 HOLDING Individual established the Department’s valuation of the vehicle was incorrect. ISSUE

I. Use Tax – Imposition.

Authority: IC 6-2.5-2-1; IC 6-2.5-3-1; IC 6-2.5-3-2; IC 6-2.5-3-6; IC 6-8.1-5-1; Dept. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014); Indiana Dept. of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463 (Ind. 2012); Lafayette Square Amoco, Inc. v. Indiana Dept. of State Revenue, 867 N.E.2d 289 (Ind. Tax Ct. 2007); Rhoade v. Indiana Dept. of State Revenue, 774 N.E.2d 1044 (Ind. Tax Ct. 2002); 45 IAC 2.2-2-1; 45 IAC 2.2-3-4. Taxpayer protests the assessment of additional consumer use tax on a vehicle purchase. STATEMENT OF FACTS Taxpayer in 2021 purchased a 2001 vehicle in Indiana. At the time of purchase, Taxpayer listed the purchase price as $500. The Indiana Department of Revenue (“Department”) received information from the Indiana Bureau of Motor Vehicles (“BMV”) that the stated purchase price was below the market value of the vehicle. The Department conducted a Compliance Review, which resulted in the Department issuing on March 21, 2024, a Notice of Proposed Assessment (“NOPA”) for additional use tax. Taxpayer, in turn, protested the NOPA and requested that the Department issue a written ruling without an administrative hearing. This Letter of Findings is based on the information provided by Taxpayer and a review of the Department’s records. Additional facts will be provided as necessary.

I. Use Tax – Imposition.

DISCUSSION The Department determined Taxpayer’s vehicle purchase was subject to use tax after a review of information received from the BMV. Taxpayer protested the assessment, stating that the value of the vehicle was overestimated by the Department. As a threshold issue, it is the Taxpayer’s responsibility to establish that the existing tax assessment is incorrect. A proposed assessment is prima facie evidence that the Department’s claim for the unpaid tax is valid. IC 6-8.1-5-1(c). The burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made. Id.; See e.g., Indiana Dept. of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463, 466 (Ind. 2012); Lafayette Square Amoco, Inc. v. Indiana Dept. of State Revenue, 867 N.E.2d 289, 292 (Ind. Tax Ct. 2007). An assessment is presumed valid. A taxpayer must provide documentation explaining and supporting that the Department’s position is wrong. Additionally, “[W]hen [courts] examine a statute that an agency is ‘charged with enforcing . . . [courts] defer to the agency’s reasonable interpretation of [the] statute even over an equally reasonable interpretation by another party.’” Dept. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579, 583 (Ind. 2014). Indiana imposes an excise tax called “the state gross retail tax” or “sales tax” on retail transactions made in Indiana. IC 6-2.5-2-1(a); 45 IAC 2.2-2-1. A person who acquires property in a retail transaction is liable for the sales tax on the transaction. IC 6-2.5-2-1(b). Indiana also imposes a complementary excise tax called a “use tax” on “the storage, use, or consumption of tangible personal property in Indiana if the property was acquired in a retail transaction, regardless of the location of that transaction or of the retail merchant making that transaction.” IC 6-2.5-3-2(a). “Use” means the “exercise of any right or power of ownership over tangible personal property.” IC 6-2.5-3-1(a). The use tax is a functional equivalent to the sales tax. See Rhoade v. Indiana Dept. of State Revenue, 774 N.E.2d 1044, 1047 (Ind. Tax Ct. 2002). Tangible personal property purchased in Indiana and stored, used, or otherwise consumed in Indiana is subject to Indiana use tax for such property unless the Indiana sales tax has been collected at the point of purchase. 45 IAC 2.2-3-4. IC 6-2.5-3-6 provides further guidance on the collection of use tax on the use, storage, or consumption of tangible personal property acquired in a retail transaction. The person liable for the use tax shall pay the use tax to the Department or, in the case of a vehicle, to the titling agency when the person applies for a title for the vehicle. IC 6-2.5-3-6(c) and (d)(1). Further, IC 6-2.5-3-6(e) states: As part of the Compliance Review, the Department provided an “Explanation of Adjustments,” which stated in pertinent part: After noting that the information was received from the BMV, the Explanation further stated: Taxpayer argued in relevant part that the selling price of $500 was based on the vehicle’s advanced age and need for repairs. These problems included a damaged truck bed, fuel leaks, and a missing tailgate. Taxpayer’s claim was supported by a document from their employer which verified the price and rationale for the low selling price. In the case at hand, Taxpayer has established that he paid $500 for the vehicle. The letter from Taxpayer’s employer provided is sufficient to rebut the Department’s valuation. FINDING Taxpayer’s protest is sustained. June 24, 2026 Replaces Finding Document: New