Used Car Dealer's Purchases of Gasoline Taxable in Indiana

Thursday, January 2nd, 2014


The Indiana Department of Revenue ("Department") recently issued a Letter of Findings that held that a car dealer's purchases of gasoline were taxable.

The taxpayer sold new and used cars, and bought gasoline for use in its used cars. Indiana generally taxes sales of tangible personal property such as gasoline. Sales for resale, however, are not subject to tax. The taxpayer purchased the gasoline in bulk without paying sales tax at the time of purchase or remitting use tax to the Department. When it sold the used vehicles, the taxpayer did not charge separately for the gasoline. Instead, the taxpayer allocated $50 of gasoline to each used car and included the $50 amount in the selling price of the vehicle. The taxpayer argued that its gasoline purchases were exempt purchases for resale because the taxpayer's customers paid sales tax on the gasoline when they paid tax on the total purchase price charged for the used vehicle.

The Department held that the gasoline purchases were subject to tax. To prove that the purchase of an item is for resale, a taxpayer must show that it received itemized consideration for that item. The gasoline purchases did not qualify as purchases for resale because the taxpayer did not receive itemized consideration for the gasoline; there was neither a separate charge for the gasoline, nor separate bargaining for the gasoline. Therefore, the taxpayer was not reselling the gasoline and could not claim the resale exemption.

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.

Economic Nexus in Washington

Monday, August 13th, 2018 -Effective October 1, 2018, certain out-of-state businesses will be required to collect and pay Washington sale...

Economic Nexus in Michigan

Thursday, August 9th, 2018 -Effective October 1, 2018, certain out-of-state sellers will be required to collect and pay Michigan sales or ...

Georgia Suspends Tax on Jet Fuel

Wednesday, August 8th, 2018 -Effective August 1, 2018, Georgia no longer collects state level sales and use tax on jet fuel. Georgia tax...

Employment Services Contracts for Permanent Employees Not...

Monday, August 6th, 2018 -The Ohio Board of Tax Appeals recently addressed whether contracts entered into by an employment services agen...

Alarm Systems and Monitoring Not Taxable in Missouri

Wednesday, August 1st, 2018 -The Missouri Department of Revenue recently released a ruling determining that (1) security, fire, tornado, an...

Economic Nexus in Utah

Wednesday, August 1st, 2018 -Effective January 1, 2019, certain out-of-state sellers will be required to collect and pay Utah sales or use ...