Saturday, March 10, 2012

Revenue Finds that Taxpayer Failed to Support Argument that it Qualifies for Public Transportation Exemption

Taxpayer protests a portion of the use tax assessments based on its position that it qualifies for the public transportation exemption on some of its trucks. At hearing, Taxpayer explained why it believed that certain trucks qualified for the exemption. The Hearing Officer requested that the explanation be provided in written form along with supporting documentation.


The public transportation exemption is found at IC § 6-2.5-5-27, which states:  Transactions involving tangible personal property and services are exempt from the state gross retail tax, if the person acquiring the property or service directly uses or consumes it in providing public transportation for persons or property.
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Also, the Indiana Tax Court has addressed the application of the public transportation exemption. In  Carnahan Grain, Inc. v. Indiana Dep't of State Revenue, 828 N.E.2d 465, 468 (Ind. Tax Ct. 2005), the court provided:  [I]f the property is not predominately used for third-party transportation (i.e., it is predominantly used to transport the taxpayer's own property), then the taxpayer is not entitled to the exemption.

Therefore, the property in question must be used predominantly for transporting the property of another for consideration in order to qualify for the public transportation exemption.

In the instant case, Taxpayer has not provided any documentation in support of its position that it qualifies for the exemption provided under IC § 6-2.5-5-27. Neither has Taxpayer provided a detailed written explanation of its position. Taxpayer has not met its burden of proving the proposed assessments wrong, as required by IC §6-8.1-5-1(c).

FINDING

Taxpayer's protest is denied.