in-20250827-IR-045250410NRA: DEPARTMENT OF STATE REVENUE 

DEPARTMENT OF STATE REVENUE  LETTER OF FINDINGS: 04-20241500 Gross Retail Tax   For the Years 2018 - 2021 HOLDING Taxpayer protested the Indiana Department of Revenue’s (“Department”) proposed assessments of sales tax on mobile food sales. Taxpayer’s protest was partially sustained—the Department is instructed to review the records provided and make adjustments to the proposed assessments, if warranted. ISSUE 

I. Gross Retail Tax – Mobile Food Sales.

Authority: IC 6-2.5-2-1; IC 6-2.5-9-3; IC 6-8.1-5-1; IC 6-8.1-5-4; Dep’t. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014); 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). Taxpayer protests the Department’s proposed assessments of sales tax for the years 2018 through 2021.  STATEMENT OF FACTS  Individual operates a business that sells food items from a trailer attached to a truck (hereinafter also referred to as “mobile food sales”). Individual’s business operates under a “doing business as” (“d/b/a”) name (hereinafter Individual and d/b/a are collectively referred to as “Taxpayer”).  Taxpayer sells food items at various locations in Indiana. The Department conducted a compliance review of Taxpayer and found that sales tax was not reported on the sales, resulting in proposed assessments for the years 2018 through 2021. Taxpayer disagreed with the proposed assessments and subsequently filed a protest with the Department. Taxpayer on his “Protest Submission Form” chose a “Final determination without a hearing,” meaning that Taxpayer was forgoing and waiving his right to an administrative hearing. Additional facts will be provided below. 

I. Gross Retail Tax – Mobile Food Sales.

DISCUSSION  The Department, according to the Explanation of Adjustments, “received information that the taxpayer was making sales subject to sales tax. No registration for sales tax was found and no sales tax returns were filed.” Taxpayer is listed by two county health departments as a mobile food service. The Department based its proposed assessment “upon the best information available which come from a survey of food truck sales.” Taxpayer’s protest is in essence that the Department’s proposed assessments for sales tax owed on mobile food sales is too high. As a threshold issue, it is Taxpayer’s responsibility to establish that the existing tax assessment is incorrect. As stated in IC 6-8.1-5-1(c), “[t]he notice of proposed assessment is prima facie evidence that the [D]epartment’s claim for the unpaid tax is valid. The burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made.” 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). Consequently, a taxpayer is required to provide documentation explaining and supporting his or her challenge that the Department’s position is wrong. Further, “[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). A retail merchant – such as Taxpayer – is required to “collect the tax as agent for the state.” IC 6-2.5-2-1(b). The retail merchant “holds those taxes in trust for the state and is personally liable for the payment of those taxes . . . . ” IC 6-2.5-9-3 Since Taxpayer conducts retail transactions, Taxpayer is required to maintain accurate financial records. “Every person subject to a listed tax must keep books and records so that the Department can determine the amount, if any, of the person’s liability for that tax by reviewing those books and records.” IC 6-8.1-5-4(a). “If the [D]epartment reasonably believes that a person has not reported the proper amount of tax due, the [D]epartment shall make a proposed assessment of the amount of the unpaid tax on the basis of the best information available to the [D]epartment.” IC 6-8.1-5-1(b). Turning to Taxpayer’s argument, Taxpayer states that “the reason for [Taxpayer’s] delinquent filings” was that his “business partner passed away in 2018.” Further, Taxpayer states: As noted, Taxpayer marked final determination without a hearing on the Protest Form, yet in his protest letter Taxpayer also speaks of “settlement” and a payment plan. This written ruling only addresses the protest and does not address possible settlement or payment plan. If Taxpayer disagrees with the outcome of this Letter of Findings and wants to make a settlement offer, an explanation regarding how to do so is available in the Department’s “Protest & Administrative Hearing Guide” (online at: https://www.in.gov/dor/files/dor-protest-guide.pdf). The Protest & Administrative Hearing Guide also discusses requesting a rehearing and filing in the Indiana Tax Court. The Department’s “Compliance Report Summary” states that the “net tax adjustment made in this report is $31,500.00.” In the Department’s “Explanation of Adjustments” the Department states: And: IC 6-8.1-5-1(b) provides that if the “department reasonably believes that a person has not reported the proper amount of tax due” that the “department shall make a proposed assessment . . . on the basis of the best information available to the department.” In the present case, as part of the protest Taxpayer has provided the Department with records for the years 2018 through 2022 (although the Department notes the years at issue in the protest are 2018-2021). Specifically, Taxpayer has provided copies of Schedule C for Form 1040 (Profit or Loss From Business). Therefore, the Department has more direct information regarding Taxpayer’s income and the sales that generated that income than was available at the initial review stage. The Department is instructed to review Taxpayer’s records and make any adjustments to the proposed assessments to the extent warranted by Taxpayer’s records. Taxpayer made no argument regarding penalties and interest, thus Taxpayer is denied on those issues. FINDING Taxpayer’s protest is partially sustained. Taxpayer’s protest was that the proposed assessments for the years 2018 through 2021 were too high; the Department is instructed to review records provided by Taxpayer and make the appropriate adjustments if warranted.   June 12, 2025 Replaces Finding Document: New