Bill Text: IN SB0608 | 2013 | Regular Session | Enrolled
Bill Title: State sales and use tax.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2013-05-13 - Public Law 265 [SB0608 Detail]
Download: Indiana-2013-SB0608-Enrolled.html
Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is
being amended, the text of the existing provision will appear in this style type, additions
will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that
adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles
conflicts between statutes enacted by the 2012 Regular Session of the General Assembly.
AN ACT to amend the Indiana Code concerning taxation.
Be it enacted by the General Assembly of the State of Indiana:
(1) the seller's cost of the property sold;
(2) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;
(3) charges by the seller for any services necessary to complete the sale, other than delivery and installation charges;
(4) delivery charges; or
(5) consideration received by the seller from a third party if:
(A) the seller actually receives consideration from a party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale;
(B) the seller has an obligation to pass the price reduction or discount through to the purchaser;
(C) the amount of the consideration attributable to the sale is fixed and determinable by the seller at the time of the sale of the item to the purchaser; and
(D) the price reduction or discount is identified as a third party price reduction or discount on the invoice received by the purchaser or on a coupon, certificate, or other documentation presented by the purchaser.
For purposes of subdivision (4), delivery charges are charges by the seller for preparation and delivery of the property to a location designated by the purchaser of property, including but not limited to transportation, shipping, postage charges that are not separately stated on the invoice, bill of sale, or similar document, handling, crating, and packing. Delivery charges do not include postage charges that are separately stated on the invoice, bill of sale, or similar document.
(b) "Gross retail income" does not include that part of the gross receipts attributable to:
(1) the value of any tangible personal property received in a like kind exchange in the retail transaction, if the value of the property given in exchange is separately stated on the invoice, bill of sale, or similar document given to the purchaser;
(2) the receipts received in a retail transaction which constitute interest, finance charges, or insurance premiums on either a promissory note or an installment sales contract;
(3) discounts, including cash, terms, or coupons that are not reimbursed by a third party that are allowed by a seller and taken by a purchaser on a sale;
(4) interest, financing, and carrying charges from credit extended on the sale of personal property if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser;
(5) any taxes legally imposed directly on the consumer that are separately stated on the invoice, bill of sale, or similar document given to the purchaser;
(6) installation charges that are separately stated on the invoice, bill of sale, or similar document given to the purchaser;
(7) telecommunications nonrecurring charges; or
(8) postage charges that are separately stated on the invoice, bill of sale, or similar document.
(c) A public utility's or a power subsidiary's gross retail income includes all gross retail income received by the public utility or power
subsidiary, including any minimum charge, flat charge, membership
fee, or any other form of charge or billing.
SECTION 2. IC 6-2.5-1-7.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2013]: Sec. 7.5. "Postage charges", for purposes of this article,
mean amounts that:
(1) are for the purchase price of stamps or similar charges for
mail or parcel delivery through the United States mail,
without any additional amounts added to the actual price; and
(2) are incurred by a seller on behalf of its customers or
purchasers.
Postage charges do not include any charges for mail or parcel
delivery by any means other than through United States mail.
SECTION 3. IC 6-2.5-1-10.7 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 10.7. "Advertising and
promotional direct mail" means printed material that is direct
mail, the primary purpose of which is to attract public attention to
a product, person, business, or organization, or to attempt to sell,
popularize, or secure financial support for a product, person,
business, or organization. As used in this section, "product" means
tangible personal property, a product transferred electronically, or
a service.
SECTION 4. IC 6-2.5-1-22.2 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 22.2. "Other direct mail" means
any direct mail that is not advertising and promotional direct mail,
regardless of whether advertising and promotional direct mail is
included in the same mailing. The term includes the following:
(1) Transactional direct mail that contains personal
information specific to the addressee, including invoices, bills,
statements of account, or payroll advices.
(2) Any legally required mailings, including privacy notices,
tax reports, and stockholder reports.
(3) Other nonpromotional direct mail delivered to existing or
former shareholders, customers, employees, or agents,
including newsletters and informational pieces.
The term does not include the development of billing information
or the provision of any data processing service that is more than
incidental.
SECTION 5. IC 6-2.5-5-18, AS AMENDED BY P.L.84-2011,
SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2013]: Sec. 18. (a) Sales or rentals of durable medical
equipment, mobility enhancing equipment, prosthetic devices, artificial
limbs, orthopedic devices, dental prosthetic devices, eyeglasses,
contact lenses, and other medical supplies and devices are exempt from
the state gross retail tax, if the sales or rentals are prescribed by a
person licensed to issue the prescription.
(b) Sales of hearing aids are exempt from the state gross retail tax
if the hearing aids are fitted or dispensed by a person licensed or
registered for that purpose. In addition, sales of hearing aid parts,
attachments, or accessories are exempt from the state gross retail tax.
For purposes of this subsection, a hearing aid is a device which is worn
on the body and which is designed to aid, improve, or correct defective
human hearing.
(c) Sales of colostomy bags, ileostomy bags, and the medical
equipment, supplies, and devices used in conjunction with those bags
are exempt from the state gross retail tax.
(d) Sales of equipment and devices used to administer insulin are
exempt from the state gross retail tax.
(e) Sales of equipment and devices used to monitor blood glucose
level, including blood glucose meters and measuring strips, lancets,
and other similar diabetic supplies, are exempt from the state gross
retail tax, regardless of whether the equipment and devices are
prescribed.
SECTION 6. IC 6-2.5-5-19.5, AS AMENDED BY
P.L.182-2009(ss), SECTION 179, IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 19.5. (a) For purposes
of this section, "drug sample" means a legend drug (as defined by
IC 16-18-2-199) or a drug composed wholly or partly of insulin or an
insulin analog that is furnished without charge.
(b) For purposes of this section, "blood glucose monitoring device"
supply" means blood glucose meters and measuring strips, lancets, and
other similar diabetic supplies furnished with or without charge.
(b) (c) Transactions involving the following are exempt from the
state gross retail tax:
(1) A drug sample, the packaging and literature for a drug sample,
a blood glucose monitoring device, supply, and the packaging
and literature for a blood glucose monitoring device. supply.
(2) Tangible personal property that will be used as a drug sample
or a blood glucose monitoring device supply or that will be
processed, manufactured, or incorporated into:
(A) a drug sample or a blood glucose monitoring
(B) the packaging or literature for a drug sample or a blood glucose monitoring
SECTION 7. IC 6-2.5-13-1, AS AMENDED BY P.L.182-2009(ss), SECTION 185, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 1. (a) As used in this section, the terms "receive" and "receipt" mean:
(1) taking possession of tangible personal property;
(2) making first use of services; or
(3) taking possession or making first use of digital goods;
whichever comes first. The terms "receive" and "receipt" do not include possession by a shipping company on behalf of the purchaser.
(b) This section:
(1) applies regardless of the characterization of a product as tangible personal property, a digital good, or a service;
(2) applies only to the determination of a seller's obligation to pay or collect and remit a sales or use tax with respect to the seller's retail sale of a product; and
(3) does not affect the obligation of a purchaser or lessee to remit tax on the use of the product to the taxing jurisdictions of that use.
(c) This section does not apply to sales or use taxes levied on the following:
(1) The retail sale or transfer of watercraft, modular homes, manufactured homes, or mobile homes. These items must be sourced according to the requirements of this article.
(2) The retail sale, excluding lease or rental, of motor vehicles, trailers, semitrailers, or aircraft that do not qualify as transportation equipment, as defined in subsection (g). The retail sale of these items shall be sourced according to the requirements of this article, and the lease or rental of these items must be sourced according to subsection (f).
(3) Telecommunications services, ancillary services, and Internet access service shall be sourced in accordance with IC 6-2.5-12.
(4) Direct mail, which shall be sourced in accordance with section 3 of this chapter.
(d) The retail sale, excluding lease or rental, of a product shall be sourced as follows:
(1) When the product is received by the purchaser at a business location of the seller, the sale is sourced to that business location.
(2) When the product is not received by the purchaser at a
business location of the seller, the sale is sourced to the location
where receipt by the purchaser (or the purchaser's donee,
designated as such by the purchaser) occurs, including the
location indicated by instructions for delivery to the purchaser (or
donee), known to the seller.
(3) When subdivisions (1) and (2) do not apply, the sale is
sourced to the location indicated by an address for the purchaser
that is available from the business records of the seller that are
maintained in the ordinary course of the seller's business when
use of this address does not constitute bad faith.
(4) When subdivisions (1), (2), and (3) do not apply, the sale is
sourced to the location indicated by an address for the purchaser
obtained during the consummation of the sale, including the
address of a purchaser's payment instrument, if no other address
is available, when use of this address does not constitute bad
faith.
(5) When none of the previous rules of subdivision (1), (2), (3),
or (4) apply, including the circumstance in which the seller is
without sufficient information to apply the previous rules, then the
location will be determined by the address from which tangible
personal property was shipped, from which the digital good or the
computer software delivered electronically was first available for
transmission by the seller, or from which the service was provided
(disregarding for these purposes any location that merely provided
the digital transfer of the product sold).
(e) The lease or rental of tangible personal property, other than
property identified in subsection (f) or (g), shall be sourced as follows:
(1) For a lease or rental that requires recurring periodic payments,
the first periodic payment is sourced the same as a retail sale in
accordance with the provisions of subsection (d). Periodic
payments made subsequent to the first payment are sourced to the
primary property location for each period covered by the payment.
The primary property location shall be as indicated by an address
for the property provided by the lessee that is available to the
lessor from its records maintained in the ordinary course of
business, when use of this address does not constitute bad faith.
The property location shall not be altered by intermittent use at
different locations, such as use of business property that
accompanies employees on business trips and service calls.
(2) For a lease or rental that does not require recurring periodic
payments, the payment is sourced the same as a retail sale in
accordance with the provisions of subsection (d).
This subsection does not affect the imposition or computation of sales
or use tax on leases or rentals based on a lump sum or an accelerated
basis, or on the acquisition of property for lease.
(f) The lease or rental of motor vehicles, trailers, semitrailers, or
aircraft that do not qualify as transportation equipment, as defined in
subsection (g), shall be sourced as follows:
(1) For a lease or rental that requires recurring periodic payments,
each periodic payment is sourced to the primary property location.
The primary property location shall be as indicated by an address
for the property provided by the lessee that is available to the
lessor from its records maintained in the ordinary course of
business, when use of this address does not constitute bad faith.
This location shall not be altered by intermittent use at different
locations.
(2) For a lease or rental that does not require recurring periodic
payments, the payment is sourced the same as a retail sale in
accordance with the provisions of subsection (d).
This subsection does not affect the imposition or computation of sales
or use tax on leases or rentals based on a lump sum or accelerated
basis, or on the acquisition of property for lease.
(g) The retail sale, including lease or rental, of transportation
equipment shall be sourced the same as a retail sale in accordance with
the provisions of subsection (d), notwithstanding the exclusion of lease
or rental in subsection (d). As used in this subsection, "transportation
equipment" means any of the following:
(1) Locomotives and railcars that are used for the carriage of
persons or property in interstate commerce.
(2) Trucks and truck-tractors with a gross vehicle weight rating
(GVWR) of ten thousand one (10,001) pounds or greater, trailers,
semitrailers, or passenger buses that are:
(A) registered through the International Registration Plan; and
(B) operated under authority of a carrier authorized and
certificated by the U.S. Department of Transportation or
another federal authority to engage in the carriage of persons
or property in interstate commerce.
(3) Aircraft that are operated by air carriers authorized and
certificated by the U.S. Department of Transportation or another
federal or a foreign authority to engage in the carriage of persons
or property in interstate or foreign commerce.
(4) Containers designed for use on and component parts attached
or secured on the items set forth in subdivisions (1) through (3).
(h) Notwithstanding subsection (d), a retail sale of floral products
in which a florist or floral business:
(1) takes a floral order from a purchaser; and
(2) transmits the floral order by telegraph, telephone, or other
means of communication to another florist or floral business for
delivery;
is sourced to the location of the florist or floral business that originally
takes the floral order from the purchaser.
SECTION 8. IC 6-2.5-13-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2013]: Sec. 3. (a) Notwithstanding
section 1 of this chapter, a purchaser of advertising and promotional
direct mail that is not a holder of a direct pay permit shall may provide
to the seller in conjunction with the purchase: either:
(1) a direct mail form;
(2) a certificate of exemption claiming "direct mail" (or
another written statement approved, authorized, or accepted
by the department); or
(3) information to show the jurisdictions to which the advertising
and promotional direct mail is delivered to recipients.
(b) Upon receipt of If the purchaser provides the direct mail form
referred to in subsection (a)(1), or a certificate or statement
referred to in subsection (a)(2), in the absence of bad faith, the
seller is relieved of all obligations to collect, pay, or remit the
applicable tax and on any transaction involving advertising and
promotional direct mail to which the direct mail form, certificate,
or statement applies. The purchaser shall source the sale to the
jurisdictions to which the advertising and promotional direct mail
is to be delivered to the recipients and is obligated to pay or remit the
applicable tax on a direct pay basis. A direct mail form remains in
effect for all future sales of direct mail by the seller to the purchaser
until it is revoked in writing.
(c) Upon receipt of information from If the purchaser provides the
information referred to in subsection (a)(3) showing the jurisdictions
to which the advertising and promotional direct mail is delivered to
recipients, the seller shall source the sale to the jurisdictions to
which the advertising and promotional direct mail is to be
delivered and collect the tax according to the delivery information
provided by the purchaser. In the absence of bad faith, the seller is
relieved of any further obligation to collect tax on any transaction
where the seller has sourced the sale and collected tax under the
delivery information provided by the purchaser.
(d) If the purchaser of advertising and promotional direct mail
does not have a direct pay permit and does not provide the seller with
either a direct mail form referred to in subsection (a)(1), a certificate
or statement referred to in subsection (a)(2), or delivery information
as required by referred to in subsection (a), (a)(3), the sale shall be
sourced and the seller shall collect the tax according to section 1(d)(5)
of this chapter. Nothing in this subsection limits a purchaser's
obligation for sales or use tax to any state to which the advertising and
promotional direct mail is delivered. The state to which the
advertising and promotional direct mail is delivered may disallow
a credit for tax paid to this state on sales sourced under this
subsection.
(e) Except as provided in this section, sales of other direct mail
are sourced in accordance with section 1(d)(3) of this chapter. A
purchaser of other direct mail may provide the seller with either:
(1) a direct mail form; or
(2) a certificate of exemption claiming "direct mail" (or
another written statement approved, authorized, or accepted
by the department).
(f) If the purchaser provides the direct mail form referred to in
subsection (e)(1) or a certificate or statement referred to in
subsection (e)(2), the seller, in the absence of bad faith, is relieved
of all obligations to collect, pay, or remit any tax on any
transaction involving other direct mail to which the direct mail
form, certificate, or statement applies. Notwithstanding subsection
(e), such a sale shall be sourced to the jurisdictions to which the
other direct mail is to be delivered to the recipients, and the
purchaser shall report and pay the applicable tax due.
(e) (g) If a purchaser of direct mail provides the seller with
documentation of direct pay authority, the purchaser shall not be
required to provide a direct mail form, a certificate or statement, or
delivery information to the seller.
(h) A direct mail form remains in effect for all future sales of
direct mail by the seller to the purchaser until it is revoked in
writing.
(i) This section applies to a transaction characterized as the sale
of services only if the service is an integral part of the production
and distribution of printed material that is direct mail.
(j) This section does not apply to any transaction that includes
the development of billing information or the provision of any data
processing service that is more than incidental, regardless of whether advertising and promotional direct mail is included in the same mailing.
President of the Senate
President Pro Tempore
Speaker of the House of Representatives
Governor of the State of Indiana
Date:
Time:
SEA 608
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