No refund requests submitted so far for Whitestown diners who paid Zionsville tax

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The Indiana Dept. of Revenue is still working to determine what to do with nearly $300,000 in food and beverage taxes charged by several Whitestown restaurants that shouldn’t have collected it.

Nine Whitestown restaurants collected Zionsville’s 1 percent food and beverage tax between 2008 and 2017 which they sent to the state for a lump sum disbursement. Most of the restaurants have Zionsville addresses, which officials believe led to the confusion.

Zionsville will be responsible for covering the amount DOR approves to be refunded to diners. DOR announced the refund process Dec. 1, and as of Dec. 20 no one had requested one. DOR will subtract refund request amounts from Zionsville’s monthly food and beverage tax before disbursement to the town.

Some of the funds aren’t available for refunds because the transactions happened more than three years ago, exceeding the state’s statute of limitations for refund requests. Emily Landis, DOR director of external communications, said the agency can’t reveal the amount of nonrefundable money because “it would be considered personal taxpayer information, which is protected.”

Zionsville Mayor Tim Haak said town officials alerted DOR a couple of years ago that some Zionsville restaurants weren’t charging the town’s the food and beverage tax, so if the town doesn’t have to pay back the rest of the money it might break even.

“There were a lot of businesses that weren’t charging it that should have been,” he said. “We’re not going back and getting that revenue, so we think it could be fairly close to a wash as far as we’re concerned.”

Because the town doesn’t receive an itemized list from DOR, Haak said he does not know how much revenue the town lost from Zionsville restaurants not charging the tax.

Whitestown Town Manager Dax Norton, who alerted DOR to the issue this summer when a diner showed him a receipt with the errant tax, said a precedent could be set by not requiring Zionsville to pay back the taxes in full. He compared the situation to a bank accidentally depositing $1 million in an account, funds that would be required to given back, he said, because it doesn’t belong to the account holder.

“It doesn’t seem like an acceptable conclusion,” he said.

Zionsville had been collecting approximately $350,000 in food and beverages taxes annually to fund town hall loan payments, provide grants and support zWORKS, the Zionsville Chamber of Commerce and Boone EDC.

Diners who paid the food and beverage tax that shouldn’t have been charged can request a refund by filling out a form at in.gov/dor/4036.htm and providing proof of purchase, such as a receipt or copy of a bank statement.


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