Taxpayer runs a fruit stand and farm. Taxpayer purchased a
skidsteer from an equipment store in Indiana. Taxpayer filled out a Sales Tax
Exemption Certificate (Form ST-105); Taxpayer did not pay sales tax on the
skidsteer. The Indiana Department of Revenue ("Department") later
issued a proposed assessment regarding the skidsteer.
...
At the hearing, Taxpayer's representative argued that
Taxpayer runs a fruit stand and farm. Taxpayer transports fruit (melons,
tomatoes, beans, sweet corn) from the field and farm to the stand using the
skidsteer. Further, Taxpayer's representative stated that Taxpayer takes seed,
soybeans, and field corn to the field, using the skidsteer to put the items on
a wagon and remove items from the wagon to planter.
A skidsteer is a type of loader (in Taxpayer's memorandum to
the Department Taxpayer calls it is a "skid loader (loader)"). 45 IAC
2.2-5-4, states in relevant part:
(c) The following is a partial list of items which are
considered subject to the sales tax.
TAXABLE TRANSACTIONS
Fences, posts, gates, and fencing materials.
Water supply systems for personal use.
Drains.
Any motor vehicle which is required by the motor vehicle law
to be licensed for highway use.
Ditchers and graders.
Paints and brushes.
Refrigerators, freezers, and other household appliances.
Garden and lawn equipment, parts, and supplies.
Electricity for lighting and other non-agricultural use.
Any materials used in the construction or repair of
non-exempt: buildings, silos, grain bins, corn cribs, barns, houses, and any
other permanent structures.
Items of personal apparel, including footwear, gloves, etc.,
furnished primarily for the convenience of the workers if the workers are able
to participate in the production process without it.
Pumps.
All saws.
All tools, including forks, shovels, hoes, welders, power
tools, and hand tools.
Building materials or building hardware such as lumber,
cement, nails, plywood, brick, paint.
Plumbing, electrical supplies, and accessories, pumps.
Horses, ponies, or donkeys not used as draft animals in the
production of agricultural products.
Food for non-exempt horses, ponies, etc.
Fertilizer, pesticides, herbicides, or seeds to be used for
gardens and lawns.
Field tile or culverts.
Graders, ditchers, front end loaders, or similar equipment
(except equipment designed to haul animal waste).
Any replacement parts or accessories for the above items.
(Emphasis added).
Thus under 45 IAC
2.2-5-4(c) the skidsteer would only be exempt if a farmer was using it to
haul animal waste. Taxpayer was not using the skidsteer for that purpose.
Taxpayer cites to the Department's most recent version of Sales Tax Information
Bulletin 9 (July 2012), 20120725 Ind. Reg. 045120427NRA, however that
Information Bulletin was not in effect at the time of the purchase in 2009. The
applicable Sales Tax Information Bulletin 9 (August 2008), 20080827 Ind. Reg.
045080655NRA, did not contain the language that Taxpayer relies upon. The
Department further notes that the current language that Taxpayer relies upon in
its argument is the following:
8. When used by entities occupationally engaged in
agricultural production, blending and loading equipment used for plant food and
crop protection products is exempt because this item consists of various
dedicated equipment that facilitates the moving of exempt items from temporary
storage locations to the location where they will be used. This would include
loaders, scales, conveyors, pumps, temporary tankage, and associated plumbing.
What is at issue is not "plant food and crop protection
products," and additionally Taxpayer's skidsteer is not a piece of
"dedicated equipment" to that end. Taxpayer's use of the skidsteer
includes post-production movement of the fruit to the fruit stand. Thus even if
Sales Tax Information Bulletin 9 (July 2012) would have been in effect at the
time of the purchase, Taxpayer's use of the equipment is not within the scope
of exempt use.
