in-20250326-IR-045250142NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE FINAL ORDER DENYING REFUND: 04-20241275 Sales and Use Tax For The 2019 Tax Year HOLDING Out-of-State Business was not entitled to the refund of Indiana tax because Business failed to provide verifiable documents to substantiate that it overpaid the tax. ISSUE

I. Sales/Use Tax – Refund.

Authority: IC 6-2.5-1-2; IC 6-2.5-2-1; IC 6-2.5-3-1; IC 6-2.5-3-2; IC 6-2.5-4-1; IC 6-2.5-13-1; IC 6-8.1-5-4; IC 6-8.1-9-1; Indiana Dep’t of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014); Scopelite v. Indiana Dep’t of Local Gov’t Fin., 939 N.E.2d 1138 (Ind. Tax Ct. 2010); Rhoade v. Indiana Dep’t of State Revenue, 774 N.E.2d 1044 (Ind. Tax Ct. 2002); Monarch Beverage Co. v. Indiana Dep't of State Revenue, 589 N.E.2d 1209 (Ind. Tax Ct. 1992); 45 IAC 2.2-2-1; 45 IAC 15-9-2. Taxpayer protests the refund denial and argues that it was entitled to the refund of tax paid to the Indiana Bureau of Motor Vehicles on behalf of its customer, an Indiana resident. STATEMENT OF FACTS Taxpayer is a car dealership, which conducts business in Indiana and Ohio. In 2023, Taxpayer requested a $1,504.65 refund of sales tax it paid to Indiana Bureau of Motor Vehicles (“BMV”) in 2019. The Indiana Department of Revenue (“Department”) reviewed and denied Taxpayer’s refund claim. The Department, in a letter, explained that “[t]here is no evidence of Indiana tax being overpaid.” Taxpayer protested the refund denial. A hearing was held. Taxpayer asked for and was allowed additional time – but it failed – to provide verifiable documents to support its protest. This final determination results. Further facts will be provided as necessary.

I. Sales/Use Tax – Refund.

DISCUSSION Taxpayer argued that it was entitled to the refund of sales/use tax collected from a customer and then remitted to the Indiana BMV. Taxpayer argued that it was entitled to the refund of sales/use tax paid on a vehicle to the Indiana BMV. The Department denied the refund claim, stating that “[t]here is no evidence of Indiana tax being overpaid.” The issue thus is whether Taxpayer provided sufficiently verifiable documentation to substantiate its refund claim. IC 6-8.1-9-1(a) affords a taxpayer a statutory right to file a claim for refund if the taxpayer determines that he or she has paid more tax than the amount is legally due for a particular taxable period. The Department generally “has no legal method of generating a claim for refund. A claim for refund can only be initiated pursuant to IC [§] 6-8.1-9-1.” 45 IAC 15-9-2(b). To obtain a refund, the person must file the claim with the Department “within three (3) years after the later of . . . [t]he due date of the return [or the] date of payment.” IC 6-8.1-9-1(a). The claim must include certain verifiable information such as the amount of the refund to which the person is entitled, the reasons why the person is entitled to the refund, the tax period for which the overpayment is claimed, and the year and date of the overpayment. 45 IAC 15-9-2(d). The claim for refund is required to be filed on the form prescribed by the Department. Id. Further, 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 department can determine the amount, if any, of the person’s liability for that tax by reviewing those books and records . . . including invoices, register tapes, receipts, and canceled checks.” The taxpayer thus is required to provide documentation to explain and support his or her challenge to the Department’s denial. When an agency is charged with enforcing a statute, such as the Department here, the Indiana jurisprudence defers to the agency’s reasonable interpretation of that statute “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). 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). Indiana imposes an excise tax called “sales tax” on retail transactions made in Indiana. IC 6-2.5-2-1(a); 45 IAC 2.2-2-1. In addition, the Indiana use tax is imposed “on the storage, use, or consumption of a vehicle . . . if the vehicle . . . (1) is acquired in a transaction that is an isolated or occasional sale; and (2) is required to be titled, licensed, or registered by this state for use in Indiana.” IC 6-2.5-3-2(b). “Use” means the “exercise of any right or power of ownership over tangible personal property.” IC 6-2.5-3-1(a). The use tax is generally functionally equivalent to the sales tax. See Rhoade v. Indiana Dep’t of State Revenue, 774 N.E.2d 1044, 1047 (Ind. Tax Ct. 2002). A retail transaction is a transaction made by a retail merchant that constitutes “selling at retail.” IC 6-2.5-1-2(a). Selling at retail occurs when a person “(1) acquires tangible personal property for the purpose of resale; and (2) transfers that property to another person for consideration.” IC 6-2.5-4-1(b). A person who acquires tangible person property in a retail transaction (a “retail purchaser”) is liable for the sales tax on the transaction. IC 6-2.5-2-1(b). A retail sale is sourced to Indiana and thus is subject to Indiana sales tax when the transaction is a “retail sale . . . of a product” and “the product is received by the purchaser at a business location of the seller [in Indiana] . . . .” IC 6-2.5-13-1(d)(1). The purchaser in general “shall pay the tax to the retail merchant as a separate added amount to the consideration in the transaction.” IC 6-2.5-2-1(b). When a vehicle “(1) is acquired in a transaction that is an isolated or occasional sale; and (2) is required to be titled, licensed, or registered by this state for use in Indiana” under IC 6-2.5-3-2(b), the purchaser is responsible for the use tax. During the hearing, Taxpayer explained that the customer was an Indiana resident and purchased a vehicle at its dealership in Ohio. Taxpayer claimed that it was entitled to the refund of tax paid to the BMV on the same vehicle sold to the same customer because “Indiana is a sister state [and] sales tax was paid to Mahoning County clerk of courts in Ohio [ON January 3, 2019] . . . .” Taxpayer maintained that the Department erred in denying the refund because it had the “proof that Indiana cashed the tax check.” To support its protest, Taxpayer provided the following: Taxpayer seemingly argued that it paid $1,467.72 in property tax to Ohio correctly and mistakenly paid the tax the second time to the Indiana BMV because according to Taxpayer, the vehicle sale occurred and concluded in Ohio. Taxpayer offered its $1,504.65 payment record to show that this check was paid to and cashed by the Indiana BMV. Upon review, however, the “Buyer’s Order” and “Simple Interest Note and Security Agreement” were illegible. Thus, Taxpayer’s receipt and replacement of “Ohio Certificate of Title” could not be verified. That is, the Department was not able to review the “Buyer’s Order” and “Simple Interest Note and Security Agreement” to verify the information contained in Taxpayer’s receipt and replacement of “Ohio Certificate of Title,” which included the customer’s name, vehicle model and year, vehicle identification number, time and place of the vehicle sale, as well as the selling price and applicable taxes. As such, the Department was not able to discern if Taxpayer overpaid. Taxpayer’s reliance on its supporting documents is misplaced. Assuming that the vehicle sale could be verified and the vehicle can be identified, based on Taxpayer’s records submitted, it paid $1,467.72 to “Clerk of Courts” for Ohio property tax, and it paid $1,504.65 to the Indiana BMV for Indiana use tax. Ohio property tax and Indiana use tax are two distinct and different types of taxes. Assuming further that Ohio property tax and Indiana sales/use tax are imposed on the same vehicle, it should be noted that “[s]ales and use taxes are transactional taxes imposed on the gross income received from a retail transaction” and “sales or use tax can be collected more than once on the same item if the item is the subject of more than one non-exempt retail transaction . . . .” See Monarch Beverage Co. v. Indiana Dep't of State Revenue, 589 N.E.2d 1209, 1214 (Ind. Tax Ct. 1992). As mentioned, Indiana use tax is imposed on the use of a vehicle if the vehicle is required to be titled, licensed, or registered by this state for use in Indiana. To conclude, Taxpayer was asked to supplement verifiable records, but it failed to do so before the agreed due date. As such, given the totality of the circumstances, in the absence of other verifiable supporting documents, the Department is not able to agree that Taxpayer was entitled to the $1,504.65 refund. FINDING Taxpayer’s protest is respectfully denied. January 31, 2025 Replaces Finding Document at: New