The Audit Report states, "Items purchased by the
taxpayer for which the taxpayer could not provide evidence of sales tax paid at
the point of purchase included... repair parts for garage doors...." As
part of its protest, Taxpayer provided the Department with documentation from
the door company that states that as of October 2004 the company would be using
the "lump sum" billing method.
…
If a construction contractor purchases construction
materials pursuant to a lump sum contract, the construction contractor pays
either: (1) sales tax at the time the construction materials are purchased, or
(2) use tax at the time the construction materials are incorporated into real
property if the contractor purchased or acquired the construction materials
exempt from sales tax and the owner of the real property could not have
purchased the materials exempt from sales tax.
Taxpayer's protest regarding this issue is sustained.
Next, Taxpayer argues that "sales tax was paid to [Company M] at the time of purchase...." Taxpayer provided invoices from Company M, which included invoices showing sales tax billed for months other than the five months assessed. For the five months that are at issue in the protest, those specific invoices show no sales tax billed (the audit report shows that the five months at issue were August 2009 through December 2009; those invoices show that no sales tax was billed). Taxpayer's protest fails to meet its burden of proof under IC § 6-8.1-5-1(c) for this issue.
Regarding the alarm system, Taxpayer states that it owns
"the equipment and pay [the alarm company] for monitoring." Taxpayer
provided the Department with an e-mail from the alarm company stating that
Taxpayer is "not leasing the equipment...." However an invoice from
the alarm company states in relevant part "LEASE/MONITOR." In light
of this contradictory evidence, Taxpayer would need to provide the Department
with a copy of the relevant contract with the alarm company in order to
establish the terms of the transaction. Taxpayer has failed to meet its burden
of proof under IC § 6-8.1-5-1(c).
The audit report notes that Taxpayer was "collecting
sales tax from their customers for materials which included items as parts
cleaners, hand cleaners, degreasers, shop towels, and other items. The taxpayer
has been notified that they are the end user of such items and should not be collecting
sales tax on these items." … Sales
Tax Information Bulletin 28S makes it clear that Taxpayer, not its customers,
is responsible for sales/use tax. Since Taxpayer did not pay sales tax at the
time of the purchases, use tax is properly imposed.
