NOTICE: IC § 4-22-7-7 permits the publication of this document in the Indiana Register. The publication of this document provides the general public with information about the Indiana Department of Revenue's official position concerning a specific set of facts and issues. The "Holding" section of this document is provided for the convenience of the reader and is not part of the analysis contained in this Memorandum of Decision.

Business provided sufficient documentation to establish that sales tax at issue in a refund claim was paid by the business and not an employee. Since the business purchased the tangible personal property for resale, the purchases at issue were not subject to sales tax and refund is appropriate.

I. Sales Tax–Refund.

Authority: IC § 6-2.5-2-1; IC § 6-2.5-5-8; IC § 6-8.1-9-1; Dept. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014).

Taxpayer protests the denial of a claim for refund.

Taxpayer is an Indiana business. In December of 2016, Taxpayer filed a claim for refund of sales tax paid on purchases of tangible personal property ("TPP") it made during the months of February and March of 2014. Taxpayer claimed the resale exemption on the purchase of the TPP. After review, the Indiana Department of Revenue ("Department") denied the claim on the basis that the invoices listed an employee as the purchaser rather than the business. Taxpayer protested the denial of the claim for refund. An administrative hearing was held and this Memorandum of Decision results. Further facts will be supplied as required.

I. Sales Tax–Refund.

Taxpayer protests the Department's denial of its claim for refund of sales tax for the months of February and March 2014. The Department denied the claim after review of the invoices supplied in the refund claim process. That review showed that the invoices listed an employee as the customer. The Department therefore considered the employee to be the purchaser and to be the person who would have standing to claim a refund. The determination on whether or not the employee would qualify for a refund would then be a separate question. Taxpayer protests that it was the purchaser and that the employee was only acting as an employee when the transactions occurred. Taxpayer also stated that it later learned that it could use its exemption certificate to make the purchases and has been doing so since the refund period.

As an initial point, the Department notes that, "[W]hen [courts] examine 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). Thus, all interpretations of Indiana tax law contained within this decision, as well as the initial refund determination, shall be entitled to deference.

Sales tax is imposed by IC § 6-2.5-2-1, which states:

Next, IC § 6-2.5-5-8(b) provides:

Finally, IC § 6-8.1-9-1(a) provides:

In this case, Taxpayer states that it purchased the TPP for resale. The employee, Taxpayer explains, was required to give a name to the vendor of the TPP and used his own name. The employee was acting in his employment capacity for Taxpayer in executing the transactions. Also, the employee paid for the TPP with a company credit card. In the course of the protest process, Taxpayer provided extensive documentation supporting these positions.

After review, the Department agrees with Taxpayer's protest. The documentation establishes that the credit card used to purchase the TPP was Taxpayer's and not the employee's. Also, Taxpayer has established that the TPP was purchased for resale. Therefore, under IC § 6-2.5-5-8(b) Taxpayer's purchase of the TPP qualified for the resale exemption and no sales tax should have been paid on those transactions. Since Taxpayer filed the claim for refund within three years of paying the taxes, it met the requirements of IC § 6-8.1-9-1(a). Taxpayer has established that it is entitled to the claimed refund.

Taxpayer's protest is sustained.