STATEMENT OF FACTS
This protest involves consideration of the activities of two
related companies: (1) a limited liability company that was assessed Indiana
adjusted gross income tax ("Entity"), and (2) a related corporation
that engaged in retail transactions in Indiana but was not assessed Indiana
adjusted gross income tax ("Retail Merchant").
…Retail Merchant was founded in the 1990s and is a leader in the Sci-Fi "Gaming Industry" ("Games"). Retail Merchant mostly sells Games to distributors and retailers. These Games were also available for purchase in Indiana at a convention during the years at issue. Furthermore, Retail Merchant sent most of its employees to a "retailer summit" hosted in Indiana for several days each of the years at issue. Neither Entity nor Retail Merchant filed any Indiana income tax returns for any years up through the periods at issue. Retail Merchant has since registered for an Indiana retail merchant certificate.
…
The clear fact is that Retail Merchant's activities in Indiana go beyond "mere solicitation" and activities closely tied to "mere solicitation." As a leader in its industry, Retail Merchant has a large presence at the convention that took place in Indiana annually during the periods at issue and made significant sales in Indiana at that time. These activities exceed "mere solicitation" and also exceed the "de minimis" activities Entity argues are trivial non-solicitation activities. If the Department had assessed Retail Merchant, Indiana adjusted gross income tax would have been properly due. For purposes of this protest, though, Entity has met its burden under IC § 6-8.1-5-1(c).
...
Entity protests the imposition of the negligence penalty assessed on the income tax the Department found Entity owed pursuant to the investigation conducted by the Department.
Since Entity was incorrectly assessed the adjusted gross income tax, the question of penalty is moot.
SUMMARY
Entity is sustained on both its protest of the imposition of adjusted gross income tax and penalty.
http://www.in.gov/legislative/iac/20120229-IR-045120075NRA.xml.pdf
