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Taxpayer protests the assessment of use tax on purchases from an Illinois vendor.
IC § 6-8.1-5-1(c) states in relevant part:
The notice of proposed assessment is prima facie evidence that the department's claim for the unpaid tax is valid. The burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made.
IC § 6-2.5-3-2(a) states:
An excise tax, known as the use tax, is imposed on the storage, use, or consumption of tangible personal property in Indiana if the property was acquired in a retail transaction, regardless of the location of that transaction or of the retail merchant making that transaction.
In Taxpayer's case, Taxpayer purchased tangible personal property from an Illinois vendor and the ordinary course of that vendor's business. The transaction was a retail transaction under IC § 6-2.5-4-1(b). Taxpayer used the property in Indiana. The use of the tangible personal property subjects the property to Indiana use tax unless an exemption applies to that property. No exemption applies to the property in question.
On the transactions where no sales tax is paid at the point of purchase and no exemption applies, Taxpayer is required to self-assess use tax on the property brought into Indiana and remit the use tax to the Department. If another state imposes its sales or use tax at a lower rate than Indiana, Taxpayer is required to self-assess use tax on the property but with a credit for the other state's sales and use tax rate as provided under IC § 6-2.5-3-5. In this case, Taxpayer paid no sales tax to Illinois yet used tangible personal property in Indiana. Thus, Taxpayer should have self-assessed use tax at the time of purchase.
