in-20251126-IR-045250667NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE LETTER OF FINDINGS: 04-20241911 Consumer Use Tax  For The Year 2022 HOLDING Taxpayer has not met his burden of proof that he did not owe additional use tax on the transfer of a motorcycle. ISSUE

I. Consumer Use Tax – Actual Selling Price/Average Selling Price.

Authority: IC 6-2.5-1-2; IC 6-2.5-1-27; 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 6-2.5-4-1; IC 6-2.5-5 et seq.; IC 6-8.1-5-1; 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); Leehaug v. State Bd. of Tax Comm’rs, 583 N.E.2d 211 (Ind. Tax Ct. 1991); 45 IAC 2.2-3-5. Taxpayer argues that he was not required to pay additional use tax on his acquisition of a motorcycle purchased in a casual sale. STATEMENT OF FACTS Taxpayer is an Indiana resident who acquired a motorcycle in a casual sale. Taxpayer registered the motorcycle with the Indiana Bureau of Motor Vehicles (“BMV”) and reported a certain purchase price. Due to errors on a title form, Taxpayer re-submitted a certificate of title with a different purchase price for the motorcycle. Both the BMV and the Indiana Department of Revenue’s (“Department”) audit personnel reviewed the documents transferring ownership from the seller to Taxpayer. After a review, the Department determined that the reported purchase price was significantly less than the fair market value of the motorcycle. As a result, the Department issued an assessment for additional consumer use tax based on the average selling price of the motorcycle. Taxpayer disagreed with the assessment and submitted a protest to that effect. Taxpayer waived his right to a hearing. This Letter of Findings is based on the documents provided at the time Taxpayer submitted his protest, on information available to the Department, and on information provided by the BMV. Additional facts will be provided as necessary.

I. Consumer Use Tax – Actual Selling Price/Average Selling Price.

DISCUSSION At issue is whether Taxpayer has provided sufficient documentation to rebut the Department’s assessment for use tax. In support of his protest, Taxpayer submitted a bill of sale, a certificate of title, an affidavit for certificate of title correction, and an application for certificate of title. In reviewing both the original use tax assessment and Taxpayer’s contentions, the Department notes that it is Taxpayer’s responsibility to establish the inaccuracy of a tax assessment. As stated in IC 6-8.1-5-1(c), “The notice of proposed assessment is prima facie evidence that the department's claim for the unpaid tax is valid, including during an action appealed to the tax court under this chapter. The burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made.” See also Indiana Dep’t of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463, 466 (Ind. 2012); Lafayette Square Amoco, Inc. v. Indiana Dep’t of State Revenue, 867 N.E.2d 289, 292 (Ind. Tax Ct. 2007). Consequently, a taxpayer is required to provide documentation explaining and supporting their argument that the Department’s position is incorrect. Pursuant to IC 6-2.5-2-1, a sales tax, known as the state gross retail tax, is imposed on retail transactions made in Indiana unless a valid exemption is applicable. IC 6-2.5-5 et seq. Retail transactions involve the transfer of tangible personal property. IC 6-2.5-1-2; IC 6-2.5-1-27; IC 6-2.5-4-1. Indiana’s use tax runs parallel to but separate from the state’s sales tax. Indiana use tax is imposed on a person’s 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 Department notes that the Department’s use tax assessment stems from the purchase price reported by Taxpayer at the time he registered the vehicle. In such instances, IC 6-2.5-3-6(e) provides: 45 IAC 2.2-3-5(d) explains: The regulation requires that vehicle purchasers – in the absence of an affidavit – pay use tax based on the “average selling price of the vehicle.” In this case, the Department concludes that use tax is based on the “average selling price” of Taxpayer’s motorcycle unless the purchaser provides a “affidavit signed under penalty of perjury by the seller that contains the actual selling price of the vehicle.” Taxpayer has had three opportunities to provide the actual selling price during this process - once on the initial title application, once on the affidavit of title correction, and once in his letter of protest to the Department. None of the sales prices provided by Taxpayer match one another, complicating any attempt to establish the “actual selling price” of the vehicle. By reporting multiple selling prices, each document contradicts the other and thus are insufficient to overcome the requirements of IC 6-2.5-3-6(e). The Department did what it is required to do under IC 6-8.1-5-1(b) when it determined the Taxpayer had “not reported the proper amount of tax due.” The BMV likewise fulfilled its statutory responsibility when it calculated an “average selling price” for the vehicle under IC 6-8.1-3-3(e). However, Taxpayer has not met his burden as outlined in IC 6-8.1-5-1(c) and has not established that the Department’s assessment was inaccurate. The documents provided by Taxpayer are not sufficient to rebut the “average selling price” determined by Department or additional assessed taxes. Taxpayer has not met his burden under IC 6-8.1-5-1(c) and IC 6-2.5-3-6(e) of establishing that the assessment was wrong, has not rebutted the presumption that the assessment was correct, and has not submitted sufficient documentation which represents the actual selling price of the vehicle. FINDING Taxpayer’s protest is denied. June 30, 2025 Replaces Finding Document: New