K and N Welding

13-33

On May 28, 2010, the Department assessed the Taxpayer for unpaid gross receipts tax, penalty and interest for the tax period ending 2006.  The assessment was the result of a limited scope audit conducted by the Department, after a discrepancy was found between what the Taxpayer reported to the Federal government and to the State government.  The Notice of Limited Scope Audit provided a deadline to produce nontaxable transaction certificates (NTTCs) for the period in question.  The Taxpayer was unable to obtain a NTTC during the 60 day period because the seller of the Taxpayer’s services was not in tax compliance.  The Taxpayer eventually received a NTTC but it was executed outside of the 60 day period.  The Taxpayer was an independent contractor.  The company that resold Taxpayer’s services in the ordinary course of their business charged and collected tax.  Had the Taxpayer obtained the NTTC prior to performing the services, or by the deadline given as part of the audit, his receipts would have been deductible.  Taxpayer did not provide any facts to support equitable recoupment.  However, as the Taxpayer did not have the NTTC, his receipts from performing the services were taxable, and the gross receipts tax, penalty and interest were correctly assessed.  The Taxpayer’s protest was denied.