in-20250827-IR-045250417NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE FINAL ORDER DENYING REFUND: 09-20251611; 10-20251612 Local Excise Tax For the 2024 Tax Year HOLDING Nonprofit Organization failed to establish that it did not owe Hendricks County food and beverage tax, Plainfield municipal food and beverage tax, nor Hendricks County innkeeper’s tax. ISSUE

II. Innkeeper’s Tax – Exempt Sales.

Authority: IC 6-2.5-5-25; IC 6-9-37-3; Sales Tax Information Bulletin 10 (June 2023); Sales Tax Information Bulletin 41 (March 2024). Taxpayer protests the imposition of innkeeper’s tax on its rental of hotel rooms. STATEMENT OF FACTS Taxpayer is a nonprofit organization organized under Indiana law. In April 2024, Taxpayer organized a conference in Plainfield, Indiana, “for the purpose of providing education to [its] members.” Plainfield is located in Hendricks County. In the process of organizing this conference, Taxpayer purchased food to be served at the conference and rented hotel rooms for certain members of the organization. Taxpayer was assessed Indiana sales tax, Hendricks County Food and Beverage Tax (“FAB”), Plainfield municipal FAB tax, and Hendricks County innkeeper’s tax on these transactions. Taxpayer filed two refund claims with the Indiana Department of Revenue (“Department”) requesting a refund on all sales tax, FAB tax, and innkeeper’s taxes paid on its food purchases and room rentals. The Department granted a partial refund of sales tax, but it denied in total the refunds of FAB tax and innkeeper’s tax. Taxpayer timely protested the FAB tax and innkeeper’s tax refund denials, and this Final Order Denying Refund results. Because Taxpayer waived its right to a hearing, this Final Order Denying Refund relies on documents that Taxpayer submitted and the Department’s own records.

I. Food and Beverage Tax – Exempt Sales.

DISCUSSION Taxpayer argues that its purchase of food should be exempt from FAB because it is a nonprofit exempt from federal income tax under I.R.C. § 501(c)(3). The Department based its partial denial on the grounds that purchases made by a nonprofit for the private benefit of any member of the organization, such as meals and lodgings, are not exempt from tax. Where a taxpayer is challenging the Department’s final determination, 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. Certain Indiana counties have imposed an excise tax called the “food and beverage tax” of one percent on all sales of ready-to-consume food and beverages. IC 6-9-35-1; IC 6-9-35-9. Additionally, certain towns and cities may elect to impose their own one percent FAB. IC 6-9-27-1. Both Hendricks County and Plainfield have imposed FAB taxes. However, transactions are exempt from FAB if they would also be exempt from sales tax. IC 6-9-35-10; IC 6-9-27-4(c). Indiana law provides certain qualified nonprofit organizations with limited exemptions from sales tax. Sales Tax Information Bulletin 10 (June 2023), 20230712 Ind. Reg. 045230537NRA; see also IC 6-2.5-5-25. The relevant regulation is 45 IAC 2.2-5-55(d), example (4), which provides: The Department’s treatment of such circumstances is further explained in Information Bulletin 10, which states as follows: (Emphasis in original.) Taxpayer stated in its protest that its conference was attended by “individuals, primarily members of [Taxpayer].” As 45 IAC 2.2-5-55(d), example (4) and Information Bulletin 10 state, purchases of meals for members of the organization are not exempt from sales tax. Because these purchases are not exempt from sales tax, neither are they exempt from FAB. The Department therefore cannot agree that Taxpayer is entitled to a refund of FAB assessed on its purchases of food for its conference. FINDING Taxpayer’s protest is denied.

II. Innkeeper’s Tax – Exempt Sales.

DISCUSSION Taxpayer argues that its rentals of hotel rooms should be exempt from Hendricks County innkeeper’s tax because it is a nonprofit exempt from federal income tax under I.R.C. § 501(c)(3). The Department based its denial on the grounds that purchases made by a nonprofit for the private benefit of any member of the organization, such as meals and lodgings, are not exempt from tax. Certain Indiana counties may impose an excise tax called the “innkeeper’s tax” on all rentals of lodgings for a period less than 30 days. IC 6-9-37-3. Hendricks County has imposed an innkeeper’s tax. However, transactions are exempt from the innkeeper’s tax if they would also be exempt from sales tax. IC 6-9-37-3(e). Indiana law provides certain qualified nonprofit organizations with limited exemptions from sales tax. As explained in Issue I above, 45 IAC 2.2-5-55(d) is the relevant regulation on this topic. 45 IAC 2.2-5-55(d) provides in relevant part: (Emphasis added). This is further explained by Sales Tax Information Bulletin 10, which states as follows: (Emphasis in original.) Further, Sales Tax Information Bulletin 41 (March 2024), 20240417 Ind. Reg. 045240132NRA states that “the rental of ordinary hotel/motel transient (i.e., sleeping) rooms for periods of less than 30 consecutive days to members of charitable or nonprofit organizations is subject to sales tax, even if the charitable or nonprofit organization pays for the room(s).” Taxpayer stated in its protest that its conference was attended by “individuals, primarily members of [Taxpayer].” As provided under 45 IAC 2.2-5-55(d) and explained by Sales Tax Information Bulletin 41, purchases of lodgings by a nonprofit organization are not exempt from sales tax. Because these purchases are not exempt from sales tax, neither are they exempt from the innkeeper’s tax. The Department therefore cannot agree that Taxpayer is entitled to a refund of innkeeper’s tax assessed on its room rentals for conference attendees. FINDING Taxpayer’s protest is denied. SUMMARY Taxpayer’s protest is denied on Issue I. Taxpayer’s protest is denied on Issue II. June 6, 2025 Replaces Finding Document: New