Taxpayer is an out-of-state corporation. Taxpayer was
assessed Indiana corporate income tax by the Indiana Department of Revenue
("Department"). Taxpayer protested the assessment.
…
Taxpayer references to Public Law 86-272 (15 U.S.C. § 381)
in its protest letter; that law prohibits the states from imposing a net income
tax on a foreign taxpayer if the foreign taxpayer's only business activity
within that state is the solicitation of sales.
…
Taxpayer also states in its protest letter that its
"activities within the State of Indiana" were limited to sales
solicited by a few resident salespeople, with the orders being "sent
outside of the state for approval and were filled by shipment of delivery from
a point outside of the state." Taxpayer then states, "This activity
results in both the payroll and receipt factors." Regarding the property
factor, Taxpayer states that the "resident salespeople were provided with
company vehicles which were leased from a third party vendor." Further,
Taxpayer states that it "maintained no business location within the State
of Indiana." Taxpayer concludes, "It is our belief that the above
activities do fall within the scope of Public Law 86-272 and that it was
correct to show a 0.000[percent] apportionment percentage for tax year
2010."
Taxpayer's receipts and payroll factor for the apportionment
schedule were from a few salespeople soliciting orders in Indiana; Taxpayer's
property factor was from the leased vehicles for those salespeople; and
finally, Taxpayer has no Indiana business location. The Department finds that
based upon these facts Taxpayer's Indiana activities did not exceed
solicitation. Given that Taxpayer's protest is being sustained, Taxpayer is
also by extension sustained regarding the penalty and interest that it was
assessed.
