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 Final Order Denying Refund.

Business was not the entity which incurred a tax liability and was therefore not the proper one to claim a refund. Therefore, refund of tax previously paid was properly denied.

I. Sales and Use Tax–Refund.

Authority: IC § 6-2.5-2-1; IC § 6-2.5-3-2; IC § 6-8.1-9-1; Dept. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579, 583 (Ind. 2014); 45 IAC 2.2-3-4.

Refund claimant protests the denial of a claimed refund of tax.

Refund claimant ("Claimant") protests the denial of a claim for refund of tax for the tax year 2018. Claimant is a business which provides the service of registering vehicles purchased in one state and registered in another. In 2018, Claimant registered a vehicle in Indiana for one of its customers ("Customer") which had been purchased in another state. Subsequently, Claimant filed a claim for refund with the Indiana Department of Revenue ("Department") on the grounds that the value of Customer's trade-in vehicle in the transaction in the other state had not been fully credited when registering the vehicle in Indiana. Claimant states that, since it paid Customer's Indiana tax at the time it registered Customer's vehicle and since Customer's trade-in value on the vehicle purchase had not been fully credited in Indiana, it should receive credit for the value of the trade-in which would reduce Indiana tax due and in turn would result in an overpayment of Indiana tax. The Department denied the claim for refund on the basis that Claimant was not the individual that created the taxable event and so was not the proper person to claim the refund. Claimant protested the denial and an administrative hearing was held. This Final Order Denying Refund results. Further facts will be supplied as required.

I. Sales and Use Tax–Refund.

Claimant protests the denial of its claim for refund of sales taxes for the tax year 2018. Claimant protests that it paid the sales tax on behalf of Customer and that the value of Customer's trade-in vehicle was not taken into account when calculating Indiana sales tax due when Claimant registered Customer's new vehicle in Indiana. The Department denied the claim for refund because it was Customer, not Claimant, who incurred sales tax when he purchased a vehicle. Since Claimant did not incur the tax, the Department determined, Claimant could not claim a refund of the tax.

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 preceding audit, shall be entitled to deference.

IC § 6-8.1-9-1(a) states:

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

Use tax is imposed by IC § 6-2.5-3-2(a), which states:

Therefore, when tangible personal property is used, stored, or consumed in Indiana, use tax is due unless sales tax was paid at the time of the transaction.

Claimant explains that it provided the service of registering Customer's vehicle in Indiana, including payment of tax at the time of registration. Claimant believes that, since it paid the tax at the time of registration and since it determined that Customer's trade-in value was not properly credited against the purchase price of Customer's new vehicle, it should receive a refund of tax based on the reduced purchase price. In support of its position, Claimant provided documentation showing the purchase price of Customer's new vehicle and the trade-in value of Customer's prior vehicle. Also, Claimant provided a "Limited Power of Attorney" form signed by Customer stating that Customer authorized Claimant to file a claim for and to receive any refund of taxes in this matter.

After review of the materials provided, the Department does not agree with Claimant's protest. As provided by IC § 6-2.5-2-1(b), the person who acquires property in a retail transaction is liable for the tax on the transaction. In this case, that person is Customer, not Claimant. Claimant does not refer to any Indiana statute, regulation, or court case which would allow the Department to issue a refund of tax to anyone other than the person who bore the liability for that tax. Therefore, Claimant has not established that it is entitled to receive a refund of the tax at issue.

Claimant's protest is denied.

October 31, 2019