in-20250625-IR-045250301NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE MEMORANDUM OF DECISON: 04-20251237 Use Tax For The Tax Year 2024 HOLDING Individual was entitled to a refund of use tax on the purchase of a motor vehicle because the vehicle was purchased in interstate commerce. ISSUE

I. Use Tax – Refund.

Authority: IC 6-2.5-1-2; IC 6-2.5-3-2; IC 6-2.5-3-7; IC 6-2.5-4-1; IC 6-8.1-9-1; 45 IAC 2.2-2-1; Sales Tax Information Bulletin 28S (August 2023). Taxpayer protests the denial of a claim for refund of use tax paid after the time of the sale. STATEMENT OF FACTS Taxpayer is a Florida resident. In 2023, Taxpayer purchased a custom recreational vehicle (“RV”) from a manufacturer located in Indiana. The manufacturer shipped the RV to Taxpayer in Florida, and the price and manner of shipping was stated separately on the invoice. The manufacturer did not charge Taxpayer sales tax. Taxpayer filed a 2024 ST-115 Consumer Use Tax Return (“ST-115”) because she believed that the dealership’s failure to charge her sales tax was an error. When Taxpayer titled her RV in Florida, the Florida authorities required her to pay Florida use tax. Because of this, Taxpayer filed a claim for refund of Indiana use tax with the Indiana Department of Revenue (“Department”). The Department denied Taxpayer’s refund request. Taxpayer then filed a protest, and this Memorandum of Decision results. Additional facts will be provided as necessary. Because Taxpayer waived her right to a hearing, this Memorandum of Decision relies on documents submitted by Taxpayer and the Department’s own records.

I. Use Tax – Refund.  

DISCUSSION The Department determined that Taxpayer was not entitled to a refund of Indiana use tax because “all sales of motor vehicles . . . purchased in Indiana are subject to Indiana sales and use tax.” 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 . . . [a] 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). For sales of motor vehicles, the use tax is also imposed on “isolated or occasional sale[s],” where the seller originally acquired the vehicle “for . . . use or consumption.” IC 6-2.5-3-2(b)(1); 45 IAC 2.2-1-1(d). In other words, the purchaser of a motor vehicle must pay use tax so long as they acquired it in a “sale.” A taxpayer who buys a motor vehicle from an Indiana merchant “is presumed to have acquired the property for storage, use, or consumption in Indiana . . . [but they] can produce evidence to rebut that presumption”. IC 6-2.5-3-7(a). Transactions of motor vehicles are not subject to Indiana sales tax when the transactions are “in interstate commerce.” Sales Tax Information Bulletin 28S (August 2023), 20230125 Ind. Reg. 045230016NRA. A transaction is made in interstate commerce when it is “physically delivered[] by the selling dealer to a delivery point outside Indiana.” Id. “Terms and the method of delivery must be indicated on the sales invoice,” and the seller must be the one to arrange the transport of the vehicle. Id. If a taxpayer believes that they have paid more tax than they owe, they may file for a refund with the Department. IC 6-8.1-9-1(a). Taxpayer has demonstrated that she did not acquire her RV for “storage, use, or consumption” in Indiana. Specifically, Taxpayer showed that she has never lived in Indiana and that she has no connection to Indiana apart from her purchase of the RV. The Department therefore finds that she did not owe use tax, as provided by IC 6-2.5-3-2(b)(1). Taxpayer also demonstrated that the manufacturer of her RV correctly did not charge her sales tax on her purchase of the RV. Taxpayer took delivery at her address in Florida, and the manufacturer arranged for the delivery, charged her a separate price for it, and stated its terms on the invoice the manufacturer sent her. In other words, the manufacturer correctly determined that Taxpayer bought her RV in interstate commerce and therefore did not owe sales tax, as explained by Sales Tax Information Bulletin 28S. Taxpayer paid use tax to the Department based on a mistaken belief that she should have been charged sales tax. But Taxpayer owed neither sales nor use tax to the Department, and she was able to carry her burden to prove that this was the case. The Department will therefore grant Taxpayer a full refund. FINDING Taxpayer’s protest is sustained. April 24, 2025 Replaces Finding Document: New