in-20250625-IR-045250295NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE SUPPLEMENTAL MEMORANDUM OF DECISION: 04-20211001 Use Tax For the 2017 and 2018 Tax Years HOLDING Corporation 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 (June 6, 2022). 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 sales 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 04-20211001 (June 6, 2022), 20230412 Ind. Reg. 045230132 (“MOD”). The refund was partially reduced based on that verification process. 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. Individual Income Tax – Income Sourcing.

DISCUSSION The Department sustained part of Taxpayer’s claim pending proof of use tax paid. 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 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 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 all of the transactions at issue. Therefore, under IC 6-8.1-9-1, the Department agrees that Taxpayer is entitled to a full refund of the amount protested. FINDING Taxpayer’s protest is sustained. April 9, 2025 Replaces Finding Document: New