Marketing and Sales Company Unable To Claim Public Transportation Exemption

Monday, September 9th, 2013


In a recent Letter of Findings, the Indiana Department of Revenue held that a marketing company's purchases did not qualify for the public transportation exemption.

The marketing company made purchases for a related trucking company. The marketing company marketed and sold the trucking company's services to customers. The marketing company purchased goods and supplies for the trucking company and passed along its costs to the trucking company. The trucking company consumed the goods and supplies in providing public transportation services. Although they were separate entities, the companies filed consolidated Indiana corporate tax returns together.

Indiana exempts sales of tangible personal property and services to a person who directly uses or consumes them in providing public transportation. The marketing company argued that its purchases were exempt because the marketing and trucking companies were collectively in the business of providing public transportation.

The Department held that the marketing company did not qualify for the exemption. The exemption applies only when the purchaser itself provides public transportation services. Because the two companies were separate entities and the marketing company itself did not provide public transportation services, it could not claim the exemption. The trucking company could not "pass through" its exemption to the marketing company. The marketing company's purchases were therefore subject to tax.

About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at or call 866.578.8193.

Texas Releases Detailed Guidance on Exempt Organizations

Thursday, October 18th, 2018 -The Texas Comptroller has released a publication that provides detailed information on how sales and use tax a...

Telephone Answering Services Taxable in Arkansas

Tuesday, October 16th, 2018 -The Arkansas Department of Finance and Administration recently ruled that the service of answering calls on be...

Washington Provides Guidance on Lodging Tax for Online...

Friday, October 12th, 2018 -The Washington Department of Revenue released updated guidance that provides tax reporting information for bed...

Economic Nexus in West Virginia

Wednesday, October 10th, 2018 -The West Virginia State Tax Department announced that it will require remote sellers to begin collecting sales...

Idaho Provides Guidance on the Exemption for Medical...

Monday, October 8th, 2018 -The Idaho State Tax Commission recently released guidance that explains Idaho's sales and use tax laws for buy...

Arkansas Does Not Follow Federal Law on Foreign Income

Friday, October 5th, 2018 -The Arkansas Department of Taxation and Finance recently released an opinion that says the state does not conf...