in-20260729-IR-045260239NRA: FINAL ORDER DENYING REFUND: 04-20251213

DEPARTMENT OF STATE REVENUE FINAL ORDER DENYING REFUND: 04-20251213 Use Tax For the Year 2023 HOLDING Indiana Company was not entitled to refund of Indiana use tax on its vehicle purchase because the Company purchased and took possession of that vehicle at the Dealership’s Indiana business location, then titled the vehicle in Indiana. The transaction was an Indiana sale subject to Indiana use tax. ISSUE

I. Use Tax – Refund.

Authority: IC 6-2.5-1-2; IC 6-2.5-2-1; IC 6-2.5-2-3; 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 6-8.1-9-1; M.C.L.A. 205.94; Rhoade v. Indiana Dept. of State Revenue, 774 N.E.2d 1044 (Ind. Tax Ct. 2002); 45 IAC 2.2-1-1; 45 IAC 2.2-2-1; 45 IAC 15-9-1; 45 IAC 15-9-2; Sales Tax Information Bulletin 84 (April 2023). Taxpayer protested the Department’s refund denial of use tax collected at the time Taxpayer titled its vehicle in Indiana. STATEMENT OF FACTS Taxpayer is a company headquartered in Indiana, doing business in both Indiana and Michigan according to publicly available information. In December 2023, Taxpayer purchased a vehicle from a dealership in Indiana (“Dealership”). Dealership did not collect Indiana sales tax. Taxpayer then registered and titled the vehicle with the Indiana Bureau of Motor Vehicles (“BMV”) in January 2024, at which point Taxpayer paid use tax on the vehicle at the Indiana rate of 7 percent of its purchase price. In March 2024, Taxpayer titled and registered the vehicle in Michigan. According to Taxpayer, Michigan declined to allow a credit for Indiana use tax against Michigan use tax. Taxpayer submitted Form GA-110L Claim for Refund with the Indiana Department of Revenue (“Department”) seeking the return of the full 7 percent use tax. The Department denied the claim for refund in full. Taxpayer disagreed with the Department’s decision and submitted a protest to that effect. Taxpayer elected to pursue its protest without a hearing. 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. Additional facts will be provided as necessary.

I. Use Tax – Refund.

DISCUSSION The Department determined Taxpayer was not entitled to a refund when Taxpayer titled and registered a vehicle in Michigan after purchasing it in Indiana three months prior on December 15, 2023. Taxpayer had also titled and registered the vehicle in Indiana a little more than one month after purchasing the vehicle. Taxpayer stated its registration of the vehicle in Indiana was in error, and Taxpayer had meant to register the vehicle in Michigan. IC 6-8.1-9-1(a) affords a taxpayer the right to file a claim for refund if the taxpayer determines that he or she has paid more tax than the amount legally due for a particular taxable period. “A claim for refund can only be initiated pursuant to IC [§] 6-8.1-9-1” because the Department “has no legal method of generating a claim for refund.” 45 IAC 15-9-2(b). Crucially, the Department has no legal authority to automatically “refund or credit this overpayment to the taxpayer.” 45 IAC 15-9-2(b). Instead, the taxpayer must file a claim for refund as prescribed in IC 6-8.1-9-1 and 45 IAC 15-9-1.” Id. Such refund claim must include certain verifiable information, which may include 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. 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 person who acquires property in a retail transaction is liable for the sales tax on the transaction. IC 6-2.5-2-1(b). 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 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). 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). The “retail merchant [] shall collect the tax as agent for the state.” Id. Indiana also imposes a complementary excise tax called a “use tax” on “the storage, use, or consumption of tangible personal property in Indiana if the property was acquired in a retail transaction, regardless of the location of that transaction or of the retail merchant making that transaction.” IC 6-2.5-3-2(a). “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 a functional equivalent to the sales tax. See Rhoade v. Indiana Dept. of State Revenue, 774 N.E.2d 1044, 1047 (Ind. Tax Ct. 2002). 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.” 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 (April 2023), 20230503-IR-045230228NRA, further explains the computation of the sales tax concerning the qualified Indiana sales. The documentation provided by Taxpayer shows the transaction took place at an Indiana dealership. The transaction began and concluded in Indiana when Taxpayer bought and took possession of the vehicle it 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. Dealership was required to collect sales tax at the time of purchase. Due to Dealership’s failure to collect sales tax from Taxpayer at the time of purchase, Taxpayer was charged use tax at the Indiana rate of 7 percent when they titled and registered the vehicle 34 days later at the BMV. Taxpayer would not have qualified for the deferential treatment of paying the 6 percent Michigan rate since they did not title and register the vehicle in Michigan within 30 days of purchase. Taxpayer then applied to title and register the vehicle in Michigan on March 12, 2024, at which point Taxpayer stated they had to pay a 6 percent use tax to Michigan. Taxpayer asserts it should not have to pay tax twice on the same vehicle purchase. Michigan not allowing Taxpayer a credit or exemption for use tax paid for an out-of-state purchase and processing it as a new transaction is an issue that rests with Michigan. Indiana has neither control nor authority to address that matter. In summary, Taxpayer’s vehicle purchase was an Indiana retail transaction subject to Indiana sales tax. The purchase did not qualify for deferential treatment under IC 6-2.5-2-3 due to the vehicle not having been titled and registered in Michigan within 30 days of purchase. The BMV correctly collected use tax at the 7 percent Indiana rate upon Taxpayer’s titling of the vehicle in Indiana 34 days after purchase due to the dealership’s failure to collect sales tax at the time of purchase. Taxpayer then titled the vehicle in Michigan 88 days after the purchase, which plainly exceeds the 30-day window allowed under IC 6-2.5-2-3. Taxpayer’s timing of the purchase of the vehicle, titling it in Indiana, and subsequent titling in Michigan are entirely of its own doing. Taxpayer has not substantiated its claim for refund as prescribed under 45 IAC 15-9-2(d). FINDING Taxpayer’s protest is denied. May 18, 2026 Replaces Finding Document: New