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Tax court adjusts sales, use taxes for contractor

May 20, 2016

The Indiana Tax Court reversed some issues and affirmed others related to Miller Pipeline's claim of refund of sales and use taxes remitted for the 2006 and 2007 tax years, ruling the contractor overpaid by tens of thousands of dollars.

Miller Pipeline is an underground utility contractor. In 2008 it filed several claims with the Indiana Department of Revenue seeking refunds of sales taxes it remitted on various purchases in 2005, 2006 and 2007. Those resulted in an audit of Miller in 2009.

The audit determined Miller was deficient in remitting sales/use taxes during those years and issued proposed assessments against Miller totaling $84,647.96, which Miller paid. In 2010, Miller filed another claim with the Department seeking refund in the amount of $104,318.39, which was denied. Miller appealed.

Miller’s appeal was divided into 11 issues being challenged. Six of those issues were reversed and remanded to the Department of Revenue.

In the first issue, Miller overpaid its use tax on two invoices by more than $5,500. Miller was also found to have overpaid on the second issue by $36,687. The Tax Court reversed and remanded both and ordered negative adjustments within the statistical sample to account for the overpayments.

On the third issue, Miller showed it was not required to remit use tax on a $21,250 transaction and the department’s adjustment was reversed to zero. On the fourth issue of transactions with Petro’s, Miller again showed it didn’t have to remit use tax on those and the issue was reversed to an adjustment of zero.

The tax court affirmed the Department of Revenue’s adjustments on issues five and six, the purchase of air compressor and an invoice from another business.

On the seventh issue, Miller argued the methodology used by the department in dealing with those transactions was erroneous, but the department argued if it used a different method, Miller would have been credited twice. The tax court said both arguments have merit and remanded the issue to the department to apply the appropriate negative adjustments and refigure the tax.

The eighth, ninth and tenth issues were all affirmed by the tax court, and on the last issue Miller proved it erroneously paid tax on a freight charge, and that issue was remanded to the department as well to make a negative adjustment.

The case is Miller Pipeline Corporation v. Indiana Department of Revenue, 49T10-1012-TA-00064.


 

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