RDM Sales and Service, which sells items through vending machines and operated at two cafeterias at business locations, was accused of not reporting all vending machine and cafeteria food sales subject to sales tax during the 2006-2008 tax years by the Indiana Department of State Revenue, according to the Indiana Lawyer. RDM filed a protest, which was denied by the DOR in 2009. RDM initiated a tax appeal in 2010; three years later, DOR filed a motion for summary judgment.
On Thursday, the tax court granted summary judgment on DOR’s claim that bottled water and fruit juice, when sold at regular price from vending machines, is indeed subject to sales tax per Indiana Code 6-2.5-5-20(a). However, bottled water and fruit juice dispensed from vending machines for free or at a discounted rate to exempt customers was not subject to sales tax, the tax court ruled.
