Taxpayer is an Indiana business and retail merchant. As the result of an audit, the Indiana Department of Revenue ("Department") determined that Taxpayer had not collected sales tax on sales which were subject to sales tax. The Department therefore issued proposed assessments for Indiana sales tax, ten percent negligence penalties, and interest for the tax years 2010 and 2011.
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The Department issued proposed assessment for penalties on failure to remit sales tax for the tax years 2010-11. Taxpayer protests the imposition of penalties and requests a waiver of that penalty. Taxpayer states that this was its first audit and that it now understands its duties regarding sales tax. Taxpayer has also implemented procedures to ensure that it will meet its sales tax duties in the future.
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In this case, Taxpayer failed to collect and remit Indiana sales tax on some sales which were properly subject to Indiana sales tax. The Department considered this to constitute negligence and so imposed penalties 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 sales tax requirements, as required by 45 IAC 15-11-2 (c). The negligence penalties will be waived. However, the Department takes this opportunity to inform Taxpayer that it is now on notice of its sales tax duties and any failure to meet those obligations in the future may result in penalties for subsequent years.
