Diamond G Home Center

07-18

The Taxpayer operates a retail business selling building materials, hardware, and homeware.  During the period at issue, the Taxpayer erroneously accepted Type 9 Nontaxable Transaction Certificates (NTTCs) from non-profit and government entities for the purchase of construction materials and accepted Type 6 NTTCs from contractors purchasing tools and supplies.  Following an audit, the Department assessed the Taxpayer for gross receipts tax on these sales and compensating tax on certain items the Taxpayer had purchased out of state.  The Taxpayer protested, arguing that it was entitled to rely on the NTTCs its customers provided, even when the deduction claimed did not apply to the transaction. The Taxpayer also maintained that it paid tax on all of its out-of-state purchases and compensating tax was not due.  Held:  Sellers are not entitled to accept NTTCs that do not apply to the items being sold.  With regard to compensating tax, the Taxpayer provided evidence that tax was paid on some of the items purchased out of state and its protest was granted as to these items.  The protest on the balance of the assessment was denied.