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ATTORNEY FOR PETITIONER: STEVEN P. MEYER BALL EGGLESTON PC Lafayette, IN

ATTORNEYS FOR RESPONDENT: STEVE CARTER ATTORNEY GENERAL OF INDIANA ANDREW W. SWAIN SPECIAL COUNSEL, TAX SECTION JENNIFER E. GAUGER DEPUTY ATTORNEY GENERAL Indianapolis, IN ______________________________________________________________________

IN THE INDIANA TAX COURT
) LAFAYETTE SQUARE AMOCO, INC., ) ) Petitioner, ) ) v. ) Cause No. 49T10-0510-TA-83 ) INDIANA DEPARTMENT OF ) STATE REVENUE, ) ) Respondent. ) ) ______________________________________________________________________ ON APPEAL FROM A FINAL DETERMINATION OF THE INDIANA DEPARTMENT OF STATE REVENUE FOR PUBLICATION May 24, 2007 FISHER, J. Lafayette Square Amoco, Inc. (LSA) appeals the final determination of the Indiana Department of State Revenue (Department) assessing it with gross retail tax (sales tax) liability on income received from oil changes performed during the 1999, 2000, and 2001 tax years (years at issue). The issues for the Court to decide are (1) whether the Department properly assessed sales tax on materials LSA used in oil changes performed during the years at issue, and (2) whether the Department properly

denied LSA's request to waive the 10% negligence penalty imposed on its sales tax liability. FACTS AND PROCEDURAL HISTORY LSA operates a gas station in Lafayette, Indiana. During the years at issue, LSA also provided general automotive service work, which included brake and muffler repair, tune-ups, radiator fills, wiper replacements, and oil changes. In 2002, the Department conducted an audit of LSA for the tax years at issue. After completing the audit, on October 29, 2002, the Department issued proposed assessments of sales tax against LSA because it determined that LSA had not charged sales tax on oil changes performed during the years at issue and, therefore, had not remitted the correct amount of sales tax to the Department. Consequently, the Department's assessments also included a ten percent (10%) negligence penalty and interest. 1 In a letter dated December 11, 2002, LSA's President, Mr. John O'Grady, protested the assessments, claiming that LSA did charge sales tax on both the materials and labor on oil changes it performed. On September 15, 2005, after an administrative hearing, the Department issued a Letter of Findings (LOF) denying LSA's protest. On October 12, 2005, LSA initiated an original tax appeal. The Court conducted a trial on October 2, 2006, and then heard the parties' oral arguments on February 16, 2007. Additional facts will be supplied as necessary.

ANALYSIS AND OPINION Other taxes and charges were also included in the proposed assessments; however, those charges are not at issue before this Court.
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Standard of Review This Court reviews final determinations of the Department de novo. IND. CODE ANN.

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