Introduced Version






SENATE BILL No. 182

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-2.5.

Synopsis: Sales tax. Provides an exemption from sales and use tax for research and development equipment and for property and utility services consumed in research and development. (The introduced version of this bill was prepared by the interim study committee on economic development issues.)

Effective: July 1, 2000.





Skillman




    January 10, 2000, read first time and referred to Committee on Finance.







Introduced

Second Regular Session 111th General Assembly (2000)


PRINTING CODE. 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 1999 General Assembly.

SENATE BILL No. 182



    A BILL FOR AN ACT to amend the Indiana Code concerning taxation.

Be it enacted by the General Assembly of the State of Indiana:

    SECTION 1. IC 6-2.5-4-5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2000]: Sec. 5. (a) As used in this section, a "power subsidiary" means a corporation which is owned or controlled by one (1) or more public utilities that furnish or sell electrical energy, natural or artificial gas, water, steam, or steam heat and which produces power exclusively for the use of those public utilities.
    (b) As used in this section, "research and development" means experimental or laboratory research and development for new products, new uses of existing products, or the improvement or testing of existing products, but does not include efficiency surveys, management studies, consumer surveys, economic surveys, advertising or promotion, or research in connection with literary, history, or similar projects.
     (c) A power subsidiary or a person engaged as a public utility is a retail merchant making a retail transaction when the subsidiary or person furnishes or sells electrical energy, natural or artificial gas,

water, steam, or steam heating service to a person for commercial or domestic consumption.
    (c) (d) Notwithstanding subsection (b), (c), a power subsidiary or a person engaged as a public utility is not a retail merchant making a retail transaction when:
        (1) the power subsidiary or person provides, installs, constructs, services, or removes tangible personal property which is used in connection with the furnishing of the services or commodities listed in subsection (b); (c);
        (2) the power subsidiary or person sells the services or commodities listed in subsection (b) (c) to another public utility or power subsidiary described in this section or a person described in section 6 of this chapter; or
        (3) the power subsidiary or person sells the services or commodities listed in subsection (b) (c) to a person for use in manufacturing, mining, production, refining, oil extraction, mineral extraction, irrigation, agriculture, or horticulture, or research and development. However, this exclusion for sales of the services and commodities only applies if the services are consumed as an essential and integral part of an integrated process that produces tangible personal property or that constitutes research and development and those sales are separately metered for the excepted uses listed in this subdivision, or if those sales are not separately metered but are predominately used by the purchaser for the excepted uses listed in this subdivision.
    SECTION 2. IC 6-2.5-5-3.1 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2000]: Sec. 3.1. (a) As used in this section, "research and development" means experimental or laboratory research and development for new products, new uses of existing products, or the improvement or testing of existing products, and includes research and development performed with respect to other persons' products as well as the person's own products. "Research and development" does not include efficiency surveys, management studies, consumer surveys, economic surveys, advertising or promotion, or research in connection with literary, history, or similar projects.
    (b) As used in this section, "research and development equipment" means laboratory equipment, research and development equipment, computers and computer software, telecommunications equipment, or testing equipment.


    (c) Transactions involving research and development equipment are exempt from the state gross retail tax if the person acquiring the property acquires it for direct use in direct research and development.
    SECTION 3. IC 6-2.5-5-5.2 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2000]: Sec. 5.2. (a) As used in this section, "research and development" means experimental or laboratory research and development for new products, new uses of existing products, or the improvement or testing of existing products, and includes research and development performed with respect to other persons' products as well as the person's own product. "Research and development" does not include efficiency surveys, management studies, consumer surveys, economic surveys, advertising or promotion, or research in connection with literary, history, or similar projects.
    (b) As used in this section, "tangible personal property" includes electrical energy, natural or artificial gas, steam, and steam heat.
    (c) Transactions involving tangible personal property are exempt from the state gross retail tax if the person acquiring the property acquires it for direct consumption as a material to be consumed in direct research and development.