in-20250528-IR-045250261NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE FINAL ORDER DENYING REFUND: 04-20241802 Sales Tax For The Tax Year 2021 HOLDING Individual was not entitled to a refund of sales tax on the purchase of a motor vehicle because he failed to substantiate that the sale was an interstate sale exempt from Indiana sales tax. ISSUE

I. Sales Tax – Refund.

Authority: IC 6-2.5-2-1; IC 6-2.5-2-3; IC 6-2.5-13-1; Dept. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014); 45 IAC 2.2-2-1; Sales Tax Information Bulletin 28S (February 2021). Taxpayer protests the refund denial of sales tax collected at the time of the sale. STATEMENT OF FACTS Taxpayer is an Arkansas resident. On October 22, 2021, Taxpayer purchased a vehicle from a dealership (“Dealership”) in Indiana. Dealership collected Indiana sales tax on the purchase at a rate of six and a half percent. Taxpayer then registered the vehicle in Arkansas. Taxpayer, believing he had paid more sales tax than was legally due to Indiana, filed a claim for refund for the sales tax paid in Indiana. The Indiana Department of Revenue (“Department”) denied the refund. Taxpayer protested, and an administrative hearing was held. This Final Order Denying Refund results. Additional facts will be provided as necessary.

I. Sales Tax – Refund.

DISCUSSION The Department determined that Taxpayer was not entitled to a refund because Dealership correctly charged Indiana sales tax at the Arkansas rate of six and a half percent. In support of his protest, Taxpayer provided a written explanation, the sales invoice for the vehicle, the Arkansas vehicle registration application, the certificate of origin for the vehicle, the bill of sale, and a receipt for Arkansas application for title. When examining 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); 45 IAC 2.2-2-1. A retail sale is sourced to Indiana and subject to Indiana sales tax when the transaction is a “retail sale” and the product is received by the purchaser at the business’ location in Indiana. IC 6-2.5-13-1(d)(1). A retail merchant that has a physical presence in Indiana shall collect the tax as an agent for the State. IC 6-2.5-2-1(b). The Department’s Sales Tax Information Bulletin 28S provides guidance on vehicle purchases that are Indiana transactions, where the vehicle will later be transported out-of-state. Sales Tax Information Bulletin 28S (February 2021), 20210331 Ind. Reg. 045210101NRA. The Bulletin explains, in part: IC 6-2.5-2-3(b) also states: Sales Tax Information Bulletin 28S also provides guidance for vehicles that are delivered outside Indiana. The Bulletin explains: Taxpayer argues that he is entitled to a sales tax refund from Indiana because the vehicle he purchased was delivered to him outside of Indiana. The Department agrees that vehicles which are physically delivered by the buyer to the purchaser outside Indiana are exempt from Indiana sales tax. However, as noted in Sales Tax Information Bulletin 28S, the terms and method of delivery must be indicated on the sales invoice. The Department requested Taxpayer provide additional information and documentation about the delivery of the vehicle, but no response was received. The documentation provided by Taxpayer reflects that the vehicle was purchased at an Indiana dealership. The invoice provides no information about delivery terms and/or method. Absent documentation regarding the delivery method and terms of the vehicle, the Department cannot agree that the sale constituted a sale in interstate commerce and is therefore exempt from Indiana sales tax. Taxpayer registered the vehicle in Arkansas after purchase. Dealership correctly charged Taxpayer the Arkansas sales tax rate on vehicles of six and a half percent at the time of purchase rather than Indiana’s sales tax rate of seven percent. Taxpayer did not pay more than was correctly owed to Indiana at the time of the sales transaction. Therefore, Taxpayer is not entitled to a refund, as provided by IC 6-2.5-2-3(b). FINDING Taxpayer’s protest is denied. March 12, 2025 Replaces Finding Document: New