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Taxpayer protests the Department's calculations of sales tax which should have been collected during the audit period of 2009, 2010, and 2011. Taxpayer states that the percentage of sales which the Department considered as exempt sales was too low and that a higher percentage of exempt sales should be used in calculating the amount of sales tax due for the years at issue. The Department reviewed available sales documentation to determine Taxpayer's sales tax compliance rates. Taxpayer kept copies of invoices for service repairs for warranty items, but did not keep records of other sales. Via a sample review of the available invoices for 2009 and 2011, the Department determined that Taxpayer had correctly charged sales tax on repair items on those invoices. The Department allowed the exempt sales which could be verified and also allowed an additional 15 percent of total sales as exempt. The Department then calculated the amount of sales tax which should have been collected on the remaining sales. Finally, the Department gave credit for sales tax previously remitted. Taxpayer believes that the Department should allow a higher additional percentage of total sales as exempt sales. The Department notes that the burden of proving a proposed assessment wrong rests with the person against whom the proposed assessment is made, as provided by IC § 6-8.1-5-1(c).
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In this case, Taxpayer states that the Department determined in its audit report that Taxpayer had correctly collected sales tax on the sales for which it was able to provide invoices. Taxpayer believes that the Department should apply the percentages it verified via those invoices to total sales. Taxpayer states that it primarily provides repair services and that it does not typically sell parts. Therefore, a significant portion of all sales are actually labor charges, which Taxpayer states would not be subject to sales tax. After the administrative hearing, Taxpayer provided several documents in support of its position.
The documentation consists entirely of sheets with two columns listed on them. One column is labeled "Cash Received" and the other is labeled "Exempt." No other data is listed on the documents. No invoices, contracts, or other detailed documentation were provided. Taxpayer believes that a contemporaneously kept log is good evidence that its numbers regarding exempt and taxable sales are more accurate than the Department's calculations.
After review of the documentation provided in support of the protest, the Department is unable to agree with Taxpayer's argument. Taxpayer provided no documentation to support the bare numbers it listed in the two columns. Therefore, there is no way to tie the numbers in Taxpayer's columns to any other data. This is not sufficient to prove the proposed assessments wrong, as required by IC § 6-8.1-5-1(c).
