Taxpayer is a School in Indiana. A waste water treatment plant and a small gas station are on the Taxpayer's property. At the gas station was one underground storage tank (UST). Taxpayer contacted the Indiana Department of Environmental Management (IDEM) to discuss whether to replace or improve the water plant. IDEM suggested that Taxpayer build a new plant. Taxpayer inquired about how to remove the tank properly because building the new plant would require Taxpayer to move the fueling station. Taxpayer discovered in 2012 that it was required to have paid an annual UST registration fee for 1999-2011. Taxpayer protests the environmental penalties, the Department's statutorily mandated ten percent penalty, and interest.
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Taxpayer protests the imposition of UST fees for unpaid underground storage tank fees.
IC § 13-23-12-1 imposes a fee on underground storage tanks. Although the Indiana Department of Environmental Management (IDEM) regulates USTs for the State, IC § 13-23-12-4 mandates that the Indiana Department of Revenue collect and deposit the underground storage tank fees. IC § 6-8.1-1-1 defines "listed tax" to include "the underground storage tank fee (IC 13-23 )." The laws and regulations concerning the Department's collection of listed taxes apply to the Department's collection of the underground storage tank fees. All tax assessments are presumed to be accurate and the taxpayer bears the burden of proving that any assessment is incorrect. IC § 6-8.1-5-1(c).
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Pursuant to the imposition statute, the UST annual registration fee is imposed on all USTs open and available for use on July 1 of that year. The party who owns the property during the tax period is the person liable for payment of the UST fees.
IC § 13-11-2-150(a)(1)(A) describes an "owner" of a UST to mean "a person who owns the underground storage tank." IC § 13-23-12-1 states that "the owner of an underground storage tank that has not been closed before July 1... shall pay to the department of state revenue an annual registration fee." The UST-4 form states that "[i]f you were the legal owner as of July 1st of the current year, you are responsible for the yearly fees." Taxpayer does not dispute ownership.
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Pursuant to IC § 6-8.1-10-1(e), the Department does not have the authority to waive the interest.
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Taxpayer was not aware that they needed to register the UST. Taxpayer called IDEM to get assistance to remove the tank properly. Taxpayer has provided sufficient documentation demonstrating that the failure to pay tax was due to reasonable cause and not due to negligence. IDEM visited Taxpayer's water plant annually for inspection purposes. IDEM did not inspect the gas station and did not inform Taxpayer of the need to register any tanks.
