…
The first category which Taxpayer protests is not subject to
use tax concerns purchases made through expense accounts which Taxpayer states
were for services. … A review of the six accounts at issue shows that these are
for services and not for the purchase of tangible personal property. The six
accounts are for: pest control, floor cleaning, window washing, common area
maintenance, internal/external painting, and rent. These six accounts will be
reclassified as non-taxable in the A/P Expenses-Statistical Sample and the
taxable percentage will be recalculated.
The second category which Taxpayer protests is not subject
to use tax concerns six invoices which Taxpayer states are not subject to use
tax since they are for services provided by a painting service. The LOF initially
denied the protest on these invoices even though they qualified for the
exemption provided under 45 IAC
2.2-4-2, based on the determination that the invoices provided were not
those listed in the sample in the audit report. At the rehearing, Taxpayer was
able to establish that the invoices were those listed in the audit report.
Therefore, since the invoices are listed in the audit report and since the
services qualify for the exemption found at 45 IAC
2.2-4-2, these six invoices will be reclassified as non-taxable in the
sample population and Taxpayer's use tax compliance percentage will be
recalculated.
In conclusion, the six expense accounts will be reclassified
as non-taxable services in the A/P Expenses-Statistical Sample. The six
invoices for the painting service will be reclassified as non-taxable in the
sample population and Taxpayer's use tax compliance percentage will be
recalculated. Otherwise, all findings in LOF 04-20110274 remain the same.
