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.

Company is not entitled to a refund of collection fees.

I. Sales Tax - Collection Fees.

Authority: IC § 6-8.1-9-1; IC § 6-8.1-8-4; Dept. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014).

Taxpayer protests the denial of its refund claim.

Taxpayer was an Indiana business that closed in 2017. After Taxpayer went out of business, the Indiana Department of Revenue ("Department") determined that Taxpayer owed unremitted sales tax. The Department therefore issued a proposed assessment for sales tax, penalty, and interest. Taxpayer did not respond to the proposed assessment and the Department issued a demand notice for the unremitted sales tax, penalty, and interest. Taxpayer did not respond to the demand notice and the liability advanced to the warrant stage. At that point, the Department employed a collection agency to collect the unpaid liability. After the collection agency contacted Taxpayer's bank, Taxpayer attempted to pay the liability. That payment was rejected due to insufficient funds. The collection agency then levied Taxpayer's bank account for the unpaid liability plus collection fees. Taxpayer filed a claim for refund of the amount levied from its bank account. After review, the Department refunded the amount for sales tax, penalty, and interest, but did not refund the amount related to collection fees. Taxpayer protested the denial of the refund of collection fees. An administrative hearing was held and this Final Order Denying Refund results. Further facts will be supplied as required.

I. Sales Tax - Collection Fees.

Taxpayer closed its business in November 2017. After the collection agency employed by the Department levied Taxpayer's bank account, Taxpayer filed a claim for refund of the entire amount which had been levied. After review of Taxpayer's claim for refund, the Department refunded the amounts related to sales tax, penalty, and interest. The Department denied refund of collection fees. Taxpayer protests that collection fees should be refunded as well.

"[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 shall be entitled to deference.

The Indiana Code provides guidance on filing a refund claim. IC § 6-8.1-9-1(a) provides:

IC § 6-8.1-8-4 provides:

Taxpayer timely filed a claim for refund for tax, penalty, interest, and collection fees based on the amount levied from its bank account and on the fact that the Department agreed that it did not owe the sales tax which the Department originally believed was unpaid. Taxpayer did not timely respond the Department's assessment. Thus, under IC § 6-8.1-8-4, the Department is authorized to employ a collection agency to collect a debt arising from a tax warrant. After Taxpayer's account was levied, Taxpayer filed a claim for refund for the tax, penalty, interest, and collection fee. Taxpayer did not contact the Department in a timely manner to halt the collection agency. The collection agency carried out its duties and is entitled to its collection fees, as provided by IC § 6-8.1-8-4. Thus, Taxpayer will not receive a refund on collection fees.

Taxpayer is denied.

April 28, 2020