Taxpayer purchased land in 2007 that contained three underground storage tanks (USTs). In September of 2011, the Department billed Taxpayer for unpaid UST registration fees for each year from 1990 to 1997. The Department also assessed a 10 percent negligence penalty and interest on each fee. Taxpayer protested the imposition of the fees, interest, and penalty.
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The fee on USTs is imposed at IC § 13-23-12-1 as follows:
(a) Each year the owner of an underground storage tank that has not been closed before July 1 of any year under:
(1) rules adopted under IC 13-23-1-2; or
(2) a requirement imposed by the commissioner before the adoption of rules under IC 13-23-1-2;
shall pay to the department of state revenue an annual registration fee.
For the years at issue, the annual registration fee was two hundred ninety dollars ($290). (See IC §§ 13-7-20-32 and 13-7-20-41, as in effect through 1996, when it was repealed by P.L.1-1996, SEC.13; and IC § 13-23-12-1, as in effect through 1998, thereafter amended by P.L.212-1999, SEC.4).
Pursuant to the imposition statute, the UST annual registration fee is imposed on all USTs open and available for use on July 1 of that year. The party who owns the property during the tax period is the person liable for payment of the UST fees.
Taxpayer maintains that it purchased the facility in October 2007, which means that it did not own the USTs prior to that time, and therefore it does not owe unpaid annual registration fees for the years 1990 through 1997. Taxpayer argues that it is not liable for the environmental penalties associated with the USTs owed during the period prior to its ownership.
IC § 13-11-2-150(a)(1)(A) describes an "owner" of a UST to mean "a person who owns the underground storage tank." In support of Taxpayer's contention that it was not the owner of the USTs prior to 2007, Taxpayer submitted a deed of sale and various other documents, showing that it purchased the property in October 2007.
Taxpayer has clearly demonstrated that it was not the owner of the USTs prior to October 2007. Thus, Taxpayer was not the owner of the USTs on July 1 during the tax period 1990-1997. Therefore, Taxpayer is not responsible for the payment of the UST fees due for the years 1990-1997.
However, Taxpayer is admonished that if the annual registration fees are not paid in full, Taxpayer or any future owner will not be eligible for full payments from the Excess Liability Trust Fund (ELTF) in the event that there is a gasoline spill or other environmental problem resulting from Taxpayer's USTs.
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Taxpayer's protest file will be held in the legal division for 60 days. Within this sixty day period, Taxpayer must notify the Department in writing stating that it will either pay the fees to have access to payments from the ELTF fund or that it will not pay the fees. Taxpayer's decision will be given to IDEM for future ELTF fund considerations.
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