Common carrier entitled to more tax exemptions

A Wabash-based company that relocates oversized factory machinery won a partial victory in the Indiana Tax Court Tuesday. Judge Martha Wentworth ordered the Indiana State Department of Revenue to reassess the company’s tax obligations after finding some property should be considered exempt.

 Wendt LLC provides its relocation services within a transportation process that includes four operational phases – project planning, pre-transport preparations, transportation and reassembly. Wendt sought to recover the sales and use tax remitted on purchases made during the 2001 to 2004 tax years, claiming they were exempt. The revenue department denied Wendt’s claims, finding most of the purchases were partially or fully taxable.

In analyzing whether Wendt’s property is necessary and integral to its integrated public transportation process, which allows it to qualify for the exemption, Wentworth partially affirmed the revenue department. The tax judge agreed that property used in preparing estimates for potential customers is not necessary and integral to Wendt’s public transportation process, nor are the reassembly services as they are a convenience for its customers. She also agreed that property used for lawn care is not entitled to the public transportation sales and use tax exemption.

Wentworth found that property used to plan transportation routes, obtain permits, and disassemble, load and secure the machinery onto trucks for transport are necessary and integral to Wendt’s public transportation process, as well as the property used to transport and escort the machinery.

Warehouse storage and transportation of machinery to third-party locations for repair services also fall within the scope of public transportation, she concluded in Wendt, LLP v. Indiana Department of State Revenue, 02T10-0701-TA-2.

Wendt was able to show that it predominately uses the tangible property at issue in providing public transportation, so Wentworth ordered the department of revenue to make the necessary determinations regarding the tax exemption in accordance with this opinion.