Reiterating the relationship between exclusion and consumption exemption, the Indiana Tax Court upheld its earlier ruling exempting Aztec Partners LLC from paying sales tax on the electricity it used.
In its June ruling, the Tax Court found the electricity that Aztec used to power certain electrical equipment was exempt from Indiana sales tax because it qualified for the consumption exemption under Indiana Code, 6-2.5-5-5.1. The case was Aztec Partners, LLC, v. Indiana Dep’t of State Revenue, 49T10-1210-SC-00067, 2015 WL 3875259, at *2-6 (Ind. Tax Ct. June 23, 2015).
The department petitioned for rehearing, arguing it had denied Aztec’s refund claims because either the records indicated the state had previously granted the business an exemption for a lower percentage or the non-exempt equipment had been removed from the utility study that Aztec sent with its refund claims.
The Tax Court was not convinced and stood by its original decision in its entirety.
Judge Martha Blood Wentworth wrote, “…to the extent the Department claims that Aztec’s refund claims were based on an exclusion along (i.e., the predominate use exclusion), the Department’s position completely disregards the relationship that this exclusion has to the consumption exemption: a taxpayer’s qualification for the former depends on its qualification for the latter.”
The case is Aztec Partners, LLC v. Indiana Department of State Revenue, 49T10-1210-SC-00067.