in-20250528-IR-045250257NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE FINAL ORDER DENYING REFUND: 04-20241381 Sales Tax For The Tax Year 2021 HOLDING Individual was not entitled to refund of Indiana sales tax on his vehicle purchase because Individual purchased a vehicle and took possession of that vehicle at the Indiana Dealership’s Indiana business location. The transaction was an Indiana sale subject to 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; IC 6-8.1-9-1; Sales Tax Information Bulletin 28S (July 2020); Sales Tax Information Bulletin 84 (July 2020); Missouri Sales Tax Credit for Sales Tax Paid in Another State, https://dor.mo.gov/forms/4298A.pdf. Taxpayer protests the refund denial of sales tax which was collected at the time Taxpayer bought a car from an Indiana dealer. STATEMENT OF FACTS Taxpayer is an individual residing in Missouri. In July 2020, Taxpayer purchased a vehicle from a dealership in Indiana (“Dealership”). Dealership collected Indiana sales tax and completed Form ST-108NR. The approximately $1,300 sales tax was calculated at six percent of the sale price of the vehicle; the sales tax rate for Missouri. Taxpayer took possession of the vehicle at the Dealership and returned home to Missouri. Taxpayer proceeded to title and register the vehicle in Missouri. According to Taxpayer, Missouri declined to allow a credit for Indiana sales tax against Missouri sales tax. Taxpayer was denied the credit because “I did not have a tax amount due, and I did not owe tax.” Taxpayer filed a refund claim (GA-110L) with the Indiana Department of Revenue (“Department”) seeking the return of the $1,300. On the refund form, Taxpayer explained as follows: The Department responded in a letter dated September 2023. Taxpayer disagreed with the Department’s decision and submitted a protest to that effect. This Final Order Denying Refund is based on the information provided by Taxpayer, information available to the Department, and the tax laws of this state.

I. Sales Tax – Refund.

DISCUSSION The issue is whether Taxpayer has established that – as a Missouri resident – he was not subject to Indiana’s sales tax when he purchased a car in this state. Taxpayer argued that he is entitled to a full refund because he “was not an Indiana resident and have never been. I owed no tax to the state of Indiana. The dealership collected this amount in error . . . . ” In concluding his written protest, Taxpayer instructed the Department as follows: IC 6-8.1-9-1(a) affords a taxpayer a statutory right to file a claim for refund. This statute provides, in part, 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); IC 6-8.1-9-1; IC 6-2.5-2-1; IC 6-2.5 13-1; IC 6-2.5-2-3; Sales Tax Information Bulletin 28S (July 2020); Sales Tax Information Bulletin 84 (July 2020). 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 documentation shows the transaction took place at the Indiana dealership. The transaction began and concluded in Indiana when Taxpayer (as the Buyer) took possession of the vehicle he purchased in Indiana. Thus, the sale of the vehicle was an Indiana sale subject to Indiana sales tax. IC 6-2.5-13-1(d)(1). The vehicle was not sold in interstate commerce because the Dealership did not deliver the vehicle outside of Indiana. Since Taxpayer was not entitled to any exemption under Indiana law, Dealership was required to collect Indiana sales tax at the time the vehicle was sold. In 2014, the Indiana General Assembly enacted legislation, codified at IC 6-2.5-2-3, which offers deferential treatment on certain qualified Indiana sales of motor vehicles. Specifically, a purchaser of a vehicle who purchases a vehicle in Indiana but intends to title and register the vehicle to be used in states other than Indiana (within 30 days after the sale) may pay the tax rate of the state for which the vehicle is ultimately titled, registered, and used. Id. The Department’s Sales Tax Information Bulletin 84 (July 2020) 20200826 Ind. Reg. 045200440NRA further explains the computation of the sales tax concerning the qualified Indiana sales. The applicable sales tax rate for Missouri is six percent. Therefore, Indiana Dealership collected the correct, reduced amount of sales tax. To be clear, that sales tax was remitted to Indiana, not to Missouri. Under IC 6-2.5-2-3, Indiana sales tax was collected at the Missouri rate on the Indiana transaction. Finally, Taxpayer asserts he should not have to pay tax twice on the same vehicle purchase. Taxpayer’s complaint with respect to Missouri’s policy of not allowing a Buyer a credit or exemption for sales tax paid for an out-of-state purchase rests with Missouri. Indiana has neither control nor authority to address that matter. It is up to the purchaser’s state of residence to determine whether that state will give a purchaser credit or an exemption for sales tax paid to Indiana when that person purchases a vehicle out of state. In summary, Taxpayer’s vehicle sale was an Indiana retail transaction subject to Indiana sales tax. His purchase qualified for deferential treatment under IC 6-2.5-2-3, and Indiana Dealership collected the remitted sales tax at the correct rate of six percent. Therefore, Taxpayer is not entitled to a refund. Taxpayer seems to suggest Indiana should refund the tax because Missouri does not provide a credit for tax paid Indiana. The Department has no special insight into Missouri tax, but an online review seems to confirm that Missouri, does provide a credit for sales tax paid in another state: FINDING Taxpayer’s protest is denied. March 14, 2025 Replaces Finding Document: New