In a letter of finding, the Indiana Department of Revenue concluded that a pharmacy benefit management provider was required to include in its sales factor receipts from prescription drugs sold to Indiana customers. The taxpayer contracted with insurance companies, retail pharmacies and drug manufacturers to provide health benefit plans and beneficiaries access to discounted prescription medicine. The taxpayer argued that it did not sell drugs to customers, since it had no ownership interest in the drugs but instead, provided services which, under Indiana’s “costs of performance” rule, must be sourced outside the state. Rejecting this argument, the Department concluded that the taxpayer failed to meet its burden to show it was a service provider. Instead, the Department affirmed the auditor’s findings that the taxpayer’s receipts were derived from the sale of tangible personal property.