Friday, September 13, 2013

Revenue Finds Taxpayer Acted Reasonably in Efforts to Comply with Indiana Filing Requirements

Taxpayer is a business with operations in Indiana. The Indiana Department of Revenue ("Department") determined that Taxpayer had not timely remitted its use tax for the tax years 2009, 2010, and 2011. The use tax arose from Taxpayer's delivery drivers purchasing fuel in Indiana tax exempt without Taxpayer's knowledge.

The Department issued proposed assessments for penalty on failure to timely remit use tax for 2009, 2010, and 2011. Taxpayer protests that it had a fully staffed Sales Tax Department with four full time employees to ensure compliance with the 31 states in which taxpayer operates. Taxpayer also states that it no longer operates a fleet of delivery trucks so that the non-taxable fuel will not be purchased in Indiana. Taxpayer protests the imposition of penalty and requests a waiver of that penalty.
The Department considered Taxpayer's failure to timely remit use tax constituted negligence and so imposed penalty under IC § 6-8.1-10-2.1(a). As a result of the protest process, Taxpayer has affirmatively established that it acted reasonably in its efforts to comply with Indiana's tax filing requirements, as required by 45 IAC 15-11-2(c). The penalty will be waived. However, the Department takes this opportunity to notify Taxpayer that it is now aware of its use tax obligations and that penalty may be imposed if this scenario occurs again.