Taxpayer is a company doing business in Indiana. Taxpayer was
audited by the Indiana Department of Revenue ("Department"). As a
result of the audit, the Department determined that Taxpayer owed additional
use tax and interest.
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Taxpayer argues that it already paid Indiana sales tax on
the items assessed or that the items represented nontaxable items such as
membership fees. Taxpayer maintains that its records were destroyed in a 2009
fire at its owner's home. Taxpayer has provided a copy of a statement from the
owner's insurance company documenting a check related to an April 5, 2009,
loss. However, the fire does not explain the issues related to the customer's
records after that date.
Under IC § 6-8.1-5-4(a),
Every person subject to a listed tax must keep books and
records so that the department can determine the amount, if any, of the
person's liability for that tax by reviewing those books and records. The
records referred to in this subsection include all source documents necessary
to determine the tax, including invoices, register tapes, receipts, and
canceled checks.
In this case, Taxpayer's records presented to the
Department's auditor did not demonstrate that sales tax had been paid or that
use tax had been accrued and remitted to the Department. After the assessment,
Taxpayer produced seven invoices for various items on which it claims sales tax
was paid and which in fact list sales tax as a separate item. According to
Taxpayer, these items were listed as having "American Express" as the
vendor. Taxpayer has provided sufficient information to conclude that these
items should be removed from the assessment. However, the removal of these
items is contingent on Taxpayer providing the Department billing statements
from American Express listing the purchases and providing information to
demonstrate that the payments listed represented payments of the invoice
amounts charged.
Taxpayer also protested various other items, notably
magazine subscriptions and items for which the vendor was listed as
"BBB". For the magazine subscriptions, Taxpayer has not presented
sufficient information to establish that Indiana sales tax was paid upon
purchase; therefore, Taxpayer's protest is denied. For the "BBB"
transactions, Taxpayer has provided sufficient information to conclude that the
charges do not represent the sale of tangible personal property or amounts paid
for any other taxable transaction. Therefore, Taxpayer's protest is sustained
with regard to the "BBB" transactions.
For the remaining items in the assessment, notwithstanding
the information provided with regard to the fire which destroyed a portion of
Taxpayer's records, Taxpayer has not provided sufficient legal or factual
grounds to demonstrate that the Department's assessment was incorrect.
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