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Changes to Indiana Sales Tax Policy on Maintenance and Warranty Contracts

Posted 8:15 PM by

The Indiana Department of Revenue recently announced significant changes to its sales tax policy regarding sales of optional maintenance and warranty contracts. The policy change was announced via an updated Information Bulletin #2, effective Jan. 1, 2013.

Note: The Department's positions on mandatory maintenance contracts and maintenance contracts related to software have been unchanged by the updated bulletin.

The Department's former policy was to treat optional maintenance and optional warranty contracts the same, imposing tax on the sale of either type of contract when it contained a right to have tangible personal property and there was a reasonable expectation that property would be provided under the contract.

The updated bulletin outlines the following state policies. Read more

About the Author
Tim Cook is the partner-in-charge of Katz, Sapper & Miller's State and Local Tax Group. Tim assists clients with complex business restructurings, negotiates settlements at both the audit and appeals level, and provides tax advocacy services. He also works closely with companies during the site selection process, helping them make data-driven location decisions while fully leveraging economic incentives. Connect with him on LinkedIn.

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