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Taxpayer does not challenge the audit's conclusion that sales of hot tubs were taxable. However Taxpayer explains that it had "reasonable cause" for failing to charge its customers sales and use tax. Taxpayer states in part:
We did not realize the exemption was taken away, nor was any notice given to our store, corporate headquarters or any number of the medical community who continued to write prescriptions for hot tubs and told their clients they were tax exempt. We would have complied immediately had notice been sent when the law went into effect.
Thus, Taxpayer believes that it is entitled to abatement of the ten-percent negligence penalty.
We did not realize the exemption was taken away, nor was any notice given to our store, corporate headquarters or any number of the medical community who continued to write prescriptions for hot tubs and told their clients they were tax exempt. We would have complied immediately had notice been sent when the law went into effect.
Thus, Taxpayer believes that it is entitled to abatement of the ten-percent negligence penalty.
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In Taxpayer's case, the audit notes the following: Indiana exempts prescriptions of medical equipment via 45 IAC 2.2-5-27 ; however IC 6- 2.5-1-18 no longer considers hot tubs to be medical equipment. The citation states that durable medical equipment does not include equipment that "is generally not useful to a person in the absence of an illness or injury."
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Based upon the particular facts and circumstances of Taxpayer's case, the Department finds that Taxpayer has met the requirements of 45 IAC 15-11-2 . Thus the penalty should be waived.
