-IR- Database Guide
-IR- Database: Indiana Register


Letter of Findings Number: 04-20130218
Use Tax
For the Years 2010-2012

NOTICE: Under IC § 4-22-7-7, this document is required to be published in the Indiana Register and is effective on its date of publication. It shall remain in effect until the date it is superseded or deleted by the publication of a new document in the Indiana Register. The publication of this document will provide the general public with information about the Department's official position concerning a specific issue.
I. Use Tax–Imposition.
Authority: IC § 6-2.5-3-2; IC § 6-2.5-3-5; IC § 6-2.5-4-1; IC § 6-8.1-5-1.
Taxpayer protests the Department's assessment of use tax on purchases from an Illinois vendor.
Taxpayer is a company doing business in Indiana. The Indiana Department of Revenue ("Department") audited Taxpayer for sales and use tax and determined that Taxpayer owed additional tax. As a result, the Department assessed additional sales tax and interest. Taxpayer protested the assessment related to use tax imposed on purchases from one vendor. The Department conducted an administrative hearing and this Letter of Findings results. Additional facts will be supplied as necessary.
I. Use Tax–Imposition.
Taxpayer protests the assessment of use tax on purchases from an Illinois vendor.
IC § 6-8.1-5-1(c) states in relevant part:
The notice of proposed assessment is prima facie evidence that the department's claim for the unpaid tax is valid. The burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made.
IC § 6-2.5-3-2(a) states:
An excise tax, known as the use tax, is imposed 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.
In Taxpayer's case, Taxpayer purchased tangible personal property from an Illinois vendor and the ordinary course of that vendor's business. The transaction was a retail transaction under IC § 6-2.5-4-1(b). Taxpayer used the property in Indiana. The use of the tangible personal property subjects the property to Indiana use tax unless an exemption applies to that property. No exemption applies to the property in question.
On the transactions where no sales tax is paid at the point of purchase and no exemption applies, Taxpayer is required to self-assess use tax on the property brought into Indiana and remit the use tax to the Department. If another state imposes its sales or use tax at a lower rate than Indiana, Taxpayer is required to self-assess use tax on the property but with a credit for the other state's sales and use tax rate as provided under IC § 6-2.5-3-5. In this case, Taxpayer paid no sales tax to Illinois yet used tangible personal property in Indiana. Thus, Taxpayer should have self-assessed use tax at the time of purchase.
Taxpayer's protest is respectfully denied.

Posted: 08/28/2013 by Legislative Services Agency

DIN: 20130828-IR-045130392NRA
Composed: Apr 23,2018 11:17:46PM EDT
A PDF version of this document.