Use tax on out-of-state vehicle purchases upheld

June 30, 2015

A tree service properly paid Indiana use tax on its commercial vehicle purchases made outside the state, and imposition of those taxes did not violate the Commerce Clause, the Indiana Tax Court ruled Tuesday.

The court granted partial summary judgment in favor of the state in Asplundh Tree Expert Co. v. Indiana Department of State Revenue, 49T10-1110-TA-63. Asplundh purchased more than 500 custom commercial vehicles between 2007 and 2009, and though most were never used in Indiana, they were registered, licensed and titled in the state.  Asplundh paid the Bureau of Motor vehicles about $2.6 million in use tax, but later sought a full refund.

Tax Court Judge Martha Blood Wentworth wrote, “Asplundh properly paid use tax on its out-of-state vehicle purchases because it exercised its rights as an owner over those vehicles when it chose to register, license, and title them in Indiana.

“Contrary to Asplundh’s contention … the imposition of the use tax does not necessarily depend on whether the subject property is physically present in the taxing state,” Wentworth wrote.




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