indiana legislative update

2014 Edition  |  Table of Contents
 

Sales and Use Tax
By Donna L. Niesen, CPA

Affected Code Section: Ind. Code § 6-2.5-2-2 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 161
Explanation: Permits a seller to round sales tax on an item basis or invoice basis. Restricts a seller from using an item basis to circumvent tax that would be imposed if an invoice basis were used.
 

Affected Code Section: Ind. Code § 6-2.5-2-3 (addition)
Effective Date: July 1, 2014
Enacted By: Senate Bill 367
Explanation: Provides that motor vehicles purchased in Indiana with the intent to be transported outside of Indiana within the first 30 days and titled in another state or country will be taxed at the rate of that state or country. Excludes any local sales tax rates from the rate charged. In order to receive the other state or country’s rate, an affidavit prescribed by the Indiana Department of State Revenue must be completed. Permits the Department of State Revenue to audit affidavits and make proposed assessments for amounts of unpaid tax due.
Application Note: This will impact Indiana motor vehicle dealers making a sale of a vehicle to an out-of-state resident after July 1, 2014. Since other state’s base rates (not including local rates) are generally lower than Indiana’s 7% rate, transactions covered by this change will generally see a lower rate charged. Of course, in those limited cases where the other state rate is higher, the higher rate will be charged. 
 

Affected Code Section: Ind. Code § 6-2.5-5-19.5 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 161
Explanation: Limits the sales tax exemption for blood glucose monitoring supplies to situations where the supply is provided without charge. Removes blood glucose monitoring meters from the sales tax exemption for blood glucose monitoring supplies. Adds a separate exemption for blood glucose meters and associated packaging and literature if it is furnished without charge by a diabetic supply distributor. Defines a “diabetic supply distributor” as a person that primarily sells blood glucose meters for resale and not for retail sale.
 

Affected Code Section: Ind. Code § 6-2.5-5-46 (amendment)
Effective Date: July 1, 2014
Enacted By: Senate Bill 367
Explanation: Broadens the exemption for aircraft repair or maintenance to include transactions in which the retail merchant leased a facility at a public use airport, meets the airport owner’s minimum standards for an aircraft maintenance facility, and the work is performed by a mechanic who is certified by the FAA. Directs the owner of the public use airport to annually provide the Department of State Revenue with the names of retail merchants meeting this definition.
 

Affected Code Section: Ind. Code § 6-2.5-5-49.5 (addition)
Effective Date: Upon passage
Enacted By: Senate Bill 1
Explanation: Provides a sales tax credit for bulk propane dealers equal to the tax collected from Jan. 1, 2014, to March 31, 2014, in excess of the sales tax that would have been collected had the cost been $2.50 per gallon during the same time. Directs that dealers receiving this credit are to pass on the credit to each customer buying propane during this time on the next invoice to the customer. Provides a collection allowance of 1% to compensate the merchant for administering the credits.

 

Connect with Donna 
Donna L. Niesen is a partner in Katz, Sapper & Miller’s State and Local Tax Practice. She has been with the firm since 2005. Donna provides a wide variety of tax consulting services in the areas of multistate sales and income taxes, business incentives, controversy services, and other state taxes.