in-20250917-IR-045250460NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE SUPPLEMENTAL MEMORANDUM OF DECISION: 04-20211002 Use Tax For the 2017 and 2018 Tax Years HOLDING LLC established that it was entitled to a refund of use tax paid to the Indiana Department of Revenue (“Department”). ISSUE

I. Use Tax – Burden of Proof.

Authority: IC 6-2.5-1-2; IC 6-2.5-3-2; IC 6-2.5-4-1; IC 6-8.1-5-4; IC 6-8.1-9-1; Dep’t of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014); Wendt LLP v. Indiana Dep't of State Revenue, 977 N.E.2d 480 (Ind. Tax Ct. 2012); Scopelite v. Indiana Dep't of Local Gov't Fin., 939 N.E.2d 1138 (Ind. Tax Ct. 2010); Memorandum of Decision 04-20211001 (May 3, 2023). Taxpayer protests a denial of refund based on use tax paid to the Department. STATEMENT OF FACTS Taxpayer is an Indiana company. Taxpayer submitted a refund claim for use tax paid to the Department on transactions involving pre-written computer software and use tax paid on information services and professional services. The Department denied the refund request, and Taxpayer timely protested. The Department held a hearing and issued a written decision sustaining Taxpayer’s refund request to the extent that the Department could verify that it paid use tax on the items in question. Memorandum of Decision 04-20211002 (May 3, 2023), 20230503-IR-045230311NRA (“MOD”). The Department stated that it would not issue refunds for the transactions until this verification process was completed. Taxpayer timely petitioned for rehearing, and its petition was accompanied by the additional pieces of the previously requested documentation. This Supplemental Memorandum of Decision results and incorporates statements of fact and applicable law mentioned in the MOD.

I. Use Tax – Burden of Proof.

DISCUSSION The Department sustained part of Taxpayer’s claim pending proof of use tax paid. Taxpayer requested a rehearing on the basis that it could provide additional verification of use tax paid on non-taxable transactions. As the MOD stated, where a taxpayer is challenging the Department’s final refund denial, the taxpayer is required to provide documentation explaining and supporting its challenge. Poorly developed and non-cogent arguments are subject to waiver. Scopelite v. Indiana Dep't of Local Gov't Fin., 939 N.E.2d 1138, 1145 (Ind. Tax Ct. 2010); Wendt LLP v. Indiana Dep't of State Revenue, 977 N.E.2d 480, 486 n.9 (Ind. Tax Ct. 2012). Additionally, “when [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.’” Indiana Dep’t of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579, 583 (Ind. 2014). Thus, all interpretations of Indiana tax law contained within this decision are entitled to deference. Additionally, IC 6-8.1-5-4(a) requires that “[e]very person subject to a listed tax must keep books and records so that the [D]epartment can determine the amount, if any, of the person’s liability for that tax by reviewing those books and records. The records [] include all source documents necessary to determine the tax, including invoices, register tapes, receipts, and canceled checks.” The person also “must allow inspection of the books and records and returns by the [D]epartment or its authorized agents at all reasonable times.” IC 6-8.1-5-4(c). Indiana imposes an excise tax called the “use tax” on “[the] storage, use, or consumption of tangible personal property in Indiana if the property was acquired in a retail transaction[.]” IC 6-2.5-3-2(a). A “retail transaction” occurs when a person or business makes a “sale at retail.” See IC 6-2.5-1-2. A “sale at retail” occurs when, “in the ordinary course of . . . regularly conducted trade or business,” a person or business buys property “for the purpose of resale” and transfers it to someone else “for consideration.” IC 6-2.5-4-1(b). IC 6-8.1-9-1 affords taxpayers a statutory right to request a refund from the Department. The initial MOD found that Taxpayer’s transactions were not subject to use tax. However, it stated that Taxpayer was entitled to a refund “only to the extent use tax was paid.” Here, Taxpayer provided documentation showing that it paid use tax on most of the transactions listed on the original refund claim. However, in the course of the rehearing process Taxpayer provided a written statement confirming that it would not seek a refund of use tax paid on three Microsoft transactions that it had previously included in its refund request. Without these three transactions included, Taxpayer’s remaining refund claim is $227,463.50. Taxpayer successfully showed that it paid use tax on the transactions underlying the remaining portion of the claim, and the Department has already agreed in the MOD that those transactions were exempt from the use tax. Therefore, under IC 6-8.1-9-1, the Department agrees that Taxpayer is entitled to a full refund of the amount protested less the amount of use tax paid on the three Microsoft transactions upon which Taxpayer has agreed not to seek refund of tax paid. FINDING Taxpayer’s protest is sustained to the extent described above. July 11, 2025 Replaces Finding Document: New