The taxpayer has [two] semi tractors that are being used to transport raw materials to a local foundry using the foundry's trailers. The taxpayer provides the semi tractors and the drivers and charges a mileage rate to the customer.
... the Indiana Tax Court issued a public transportation opinion– Carnahan Grain, Inc. v. Indiana Dept. of Revenue, 828 N.E.2d 465 (Ind. Tax Ct. 2005). In Carnahan the Indiana Tax Court held that: "Accordingly, because Carnahan predominantly used the property at issue for transporting agricultural commodities owned by third parties, it is entitled to the public transportation exemption." Id. at 469. The Indiana Tax Court, in a footnote, also stated: "the Court holds that the relevant inquiry is the use of the property at issue rather than the nature of the taxpayer's business...." Id. at 469 n.6.
In its protest letter, Taxpayer states "[t]he trucks were used 100[percent] for public transportation through the lease arrangement. The Trucks were not used in the demolition and excavation business." Further, Taxpayer states: "[Taxpayer] did not use the Trucks for any of its other work. It kept them separate for public transportation use. It kept accurate records of the fuel and parts used for the Trucks. Therefore, any fuel and repair items related to the Trucks are exempt from sales tax."
Taxpayer provided a copy of two operating contracts. The
contracts state in part that, "During the term of this Agreement,
Contractor [i.e. Taxpayer] shall provide Carrier transportation related
services and the use of the Equipment..." and further in the agreement it
states that "Contractor [i.e., Taxpayer] shall operate the equipment
covered by the terms of this Agreement himself or shall furnish sufficient
employees to operate said equipment."
Based upon Taxpayer's arguments and documentation provided,
Taxpayer has met its burden of proof as it relates to public transportation, as
required by IC § 6-8.1-5-1(c).
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http://www.in.gov/legislative/iac/20120425-IR-045120170NRA.xml.html
