Taxpayer is an out-of-state business which made deliveries
of its merchandise to its customers in Indiana. As the result of an audit
covering the tax years 2008, 2009, 2010, and 2011, the Indiana Department of
Revenue ("Department") determined that Taxpayer had not reported the
correct amount of sales tax for those years. The Department therefore issued
proposed assessments for sales tax and interest.
...
Taxpayer protests the imposition of sales tax for the tax
years 2008-11. Taxpayer believes that its delivery of merchandise did not
constitute taxable events in Indiana.
...
Since the nine items in question were transferred from
Taxpayer to Taxpayer's customers in Indiana, Taxpayer was the retail merchant
in Indiana transactions and should have collected the tax as agent for the
state. Therefore, the Department determined that Taxpayer had not collected and
remitted the proper amount of sales tax for these years.
At hearing, Taxpayer protested that it only delivered the
items to its customers in Indiana when the customer's location was on the route
to an event which Taxpayer was attending anyway. Taxpayer also states that its
customers must have paid tax when they licensed the vehicles in question in
Indiana. Taxpayer believes that its activities do not establish nexus with
Indiana for sales tax collection purposes.
...
Again, the tax here is being applied to an activity with
more than substantial nexus with Indiana. Taxpayer is a retail merchant by
trade and specifically agreed to deliver the merchandise to its customers in
Indiana in its own conveyance. As described above in Quill, such a vendor is
not free from state-imposed duties to collect sales taxes.
After review of the supplied documentation, the Department
is not convinced that this documentation establishes Taxpayer's argument. Of
the nine vehicles in question, Taxpayer was only able to supply brief notes
from three of the customers which stated that tax was paid on the vehicles. Of
those three statements, the Department notes that the statements merely say that
tax was paid. The statements are not receipts from the Indiana BMV which would
establish that tax was paid. One logical alternative to the customers
registering the vehicles with the Indiana BMV would be if the customer bought
the item and sold off parts. In that case, registration with and collection of
tax by the BMV would not be necessary, even though the customer acquired the
item in a retail transaction. This documentation does not prove the proposed
assessments wrong and therefore Taxpayer has not proven the proposed
assessments wrong as required by IC § 6-8.1-5-1(c).
