February 28, 2003
HOUSE BILL No. 1599
_____
DIGEST OF HB 1599
(Updated February 27, 2003 8:39 AM - DI 51)
Citations Affected: IC 6-2.5; noncode.
Synopsis: Sales tax exemption for hobby related sales. Provides that an
individual who sells tangible personal property is not liable for
collecting and remitting the state gross retail tax or registering a retail
merchant if the sales: (1) are not made in the course of the person's
regular business; (2) are not conducted during more than 30 days in a
calendar year; and (3) generate less than $1,200 in gross receipts
during a calendar year. Allows a person qualifying for the exemption
to obtain a de minimis seller's certificate from the department of state
revenue. Provides that the issuance of a de minimis seller's certificate
serves as prima facie proof that the person qualifies for the exemption.
Provides that if a person who qualifies for the exemption receives
$1,200 or more in gross receipts during a calendar year, the person
must remit to the department an amount equal to 6% of the total gross
receipts for the calendar year.
Effective: Upon passage; January 1, 2004.
Reske, Dvorak, Austin, Chowning
January 16, 2003, read first time and referred to Committee on Ways and Means.
February 27, 2003, reported _ Do Pass.
February 28, 2003
First Regular Session 113th General Assembly (2003)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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HOUSE BILL No. 1599
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 6-2.5-4-1; (03)HB1599.1.1. -->
SECTION 1.
IC 6-2.5-4-1
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 1. (a) Except as
provided in section 2.5 of this chapter, a person is a retail merchant
making a retail transaction when he engages in selling at retail.
(b) A person is engaged in selling at retail when, in the ordinary
course of his the person's regularly conducted trade or business, he:
the person:
(1) acquires tangible personal property for the purpose of resale;
and
(2) transfers that property to another person for consideration.
(c) For purposes of determining what constitutes selling at retail, it
does not matter whether:
(1) the property is transferred in the same form as when it was
acquired;
(2) the property is transferred alone or in conjunction with other
property or services; or
(3) the property is transferred conditionally or otherwise.
(d) Notwithstanding subsection (b), a person is not selling at retail
if he the person is making a wholesale sale as described in section 2
of this chapter.
(e) The gross retail income received from selling at retail is only
taxable under this article to the extent that the income represents:
(1) the price of the property transferred, without the rendition of
any service; and
(2) except as provided in subsection (g), any bona fide charges
which are made for preparation, fabrication, alteration,
modification, finishing, completion, delivery, or other service
performed in respect to the property transferred before its transfer
and which are separately stated on the transferor's records.
(f) Notwithstanding subsection (e):
(1) in the case of retail sales of gasoline (as defined in
IC 6-6-1.1-103
) and special fuel (as defined in
IC 6-6-2.5-22
), the
gross retail income received from selling at retail is the total sales
price of the gasoline or special fuel minus the part of that price
attributable to tax imposed under
IC 6-6-1.1
,
IC 6-6-2.5
, or
Section 4041(a) or Section 4081 of the Internal Revenue Code;
and
(2) in the case of retail sales of cigarettes (as defined in
IC 6-7-1-2
), the gross retail income received from selling at retail
is the total sales price of the cigarettes including the tax imposed
under
IC 6-7-1.
(g) Gross retail income does not include income that represents
charges for serving or delivering food or beverages furnished, prepared,
or served for consumption at a location, or on equipment, provided by
the retail merchant. However, the exclusion under this subsection only
applies if the charges for the serving or delivery are stated separately
from the price of the food or beverages when the purchaser pays the
charges.
SOURCE: IC 6-2.5-4-2; (03)HB1599.1.2. -->
SECTION 2.
IC 6-2.5-4-2
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 2. (a)
Except as
provided in section 2.5 of this chapter, a person is a retail merchant
making a retail transaction when he is making wholesale sales.
(b) For purposes of this section, a person is making wholesale sales
when he:
(1) sells tangible personal property, other than capital assets or
depreciable property, to a person who purchases the property for
the purpose of reselling it without changing its form;
(2) sells tangible personal property to a person who purchases the
property for direct consumption as a material in the direct
production of other tangible personal property produced by the
person in his business of manufacturing, processing, refining,
repairing, mining, agriculture, or horticulture;
(3) sells tangible personal property to a person who purchases the
property for incorporation as a material or integral part of tangible
personal property produced by the person in his business of
manufacturing, assembling, constructing, refining, or processing;
(4) sells drugs, medical or dental preparations, or other similar
materials to a person who purchases the materials for direct
consumption in professional use by a physician, hospital,
embalmer, funeral director, or tonsorial parlor;
(5) sells tangible personal property to a person who purchases the
property for direct consumption in his business of industrial
cleaning; or
(6) sells tangible personal property to a person who purchases the
property for direct consumption in the person's business in the
direct rendering of public utility service.
(c) Notwithstanding any provision of this article, a person is not
making a retail transaction when he:
(1) acquires tangible personal property owned by another person;
(2) provides industrial processing or servicing, including
enameling or plating, on the property; and
(3) transfers the property back to the owner to be sold by that
owner either in the same form or as a part of other tangible
personal property produced by that owner in his business of
manufacturing, assembling, constructing, refining, or processing.
SOURCE: IC 6-2.5-4-2.5; (03)HB1599.1.3. -->
SECTION 3.
IC 6-2.5-4-2.5
IS ADDED TO THE INDIANA CODE
AS A
NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]:
Sec. 2.5. (a) This section applies to a person if
the following conditions apply:
(1) The person is an individual.
(2) The person engages in activities that:
(A) are described in section 1(b) or 2(b)(1) of this chapter;
and
(B) are not performed in the ordinary course of the
person's regularly conducted trade or business.
Activities described in this subdivision include activities
performed in connection with a hobby or leisure activity.
(3) The person does not engage in the activities described in
subdivision (2) during more than thirty (30) days in a
calendar year.
(4) The activities described in subdivision (2) will generate
gross receipts of less than one thousand two hundred dollars
($1,200) during a calendar year.
(5) The person is not required to obtain a transient merchant
license under
IC 25-37-1.
(b) A person to whom this section applies is not a retail
merchant making a retail transaction and is not required to:
(1) collect and remit the state gross retail tax under
IC 6-2.5-6
; or
(2) apply for a registered retail merchant's certificate under
IC 6-2.5-8-1.
(c) A person to whom this section applies may register with the
department as a seller of property in de minimis transactions as
provided in
IC 6-2.5-8-4.5.
(d) If a person to whom this section applies engages in activities
described in subsection (a) that generate gross receipts of at least
one thousand two hundred dollars ($1,200) during a calendar year,
the person shall:
(1) notify the department, in the manner and on a form
prescribed by the department, of the amount of gross receipts
generated by the activities described in subsection (a) during
the calendar year; and
(2) remit to the department an amount equal to the product
of:
(A) six percent (6%); multiplied by
(B) the total gross receipts generated by the activities
described in subsection (a) during the calendar year.
(e) The department may adopt rules under
IC 4-22-2
to
implement this section and may allow a person required to report
and remit any amount under subsection (d) to do so in conjunction
with the filing of a return under
IC 6-3-4
for the adjusted gross
income tax.
SECTION 4.
IC 6-2.5-8-4.5
IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2004]: Sec. 4.5. (a) A person described
in
IC 6-2.5-4-2.5
may register with the department as a seller of
property in de minimis transactions. A person wishing to register
under this section must file an application, in the manner and on a
form prescribed by the department, listing the following:
(1) The person's name.
(2) The person's residence address.
(3) A description of the tangible personal property to be sold,
including the approximate value of the property to be sold.
(4) The period during the calendar year in which the
transactions will take place.
(5) The location from which the transactions will occur.
(6) Any other information the department requires.
The department may not require the person to file a fee in
connection with the application under this section.
(b) Upon receiving the application, the department may issue a
de minimis seller's certificate containing a serial number and the
name of the person for whom it is issued. The issuance of a
certificate under this section serves as prima facie proof that the
certificate holder is not a retail merchant making a retail
transaction and is not required to:
(1) collect and remit the state gross retail tax under
IC 6-2.5-6
, except as may be required under
IC 6-2.5-4-2.5
(d);
or
(2) apply for a registered retail merchant's certificate under
IC 6-2.5-8-1.
(c) The department may adopt rules under
IC 4-22-2
to
implement this section.
SOURCE: IC 6-2.5-8-5; (03)HB1599.1.5. -->
SECTION 5.
IC 6-2.5-8-5
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 5. A certificate
issued under section 1, 3, or 4 of this chapter is valid so long as the
business or exempt organization is in existence. A certificate issued
under section 4.5 of this chapter is valid unless the certificate is
revoked under section 7(g) of this chapter.
SOURCE: IC 6-2.5-8-7; (03)HB1599.1.6. -->
SECTION 6.
IC 6-2.5-8-7
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 7. (a) The
department may, for good cause, revoke a certificate issued under
section 1, 3, or 4, or 4.5 of this chapter. However, the department must
give the certificate holder at least five (5) days notice before it revokes
the certificate under this subsection.
(b) The department shall revoke a certificate issued under section
1, 3, or 4 of this chapter if, for a period of three (3) years, the certificate
holder fails to:
(1) file the returns required by
IC 6-2.5-6-1
; or
(2) report the collection of any state gross retail or use tax on the
returns filed under
IC 6-2.5-6-1.
However, the department must give the certificate holder at least five
(5) days notice before it revokes the certificate.
(c) The department may, for good cause, revoke a certificate issued
under section 1 of this chapter after at least five (5) days notice to the
certificate holder if:
(1) the certificate holder is subject to an innkeeper's tax under
IC 6-9; and
(2) a board, bureau, or commission established under IC 6-9 files
a written statement with the department.
(d) The statement filed under subsection (c) must state that:
(1) information obtained by the board, bureau, or commission
under
IC 6-8.1-7-1
indicates that the certificate holder has not
complied with IC 6-9; and
(2) the board, bureau, or commission has determined that
significant harm will result to the county from the certificate
holder's failure to comply with IC 6-9.
(e) The department shall revoke or suspend a certificate issued
under section 1 of this chapter after at least five (5) days notice to the
certificate holder if:
(1) the certificate holder owes taxes, penalties, fines, interest, or
costs due under IC 6-1.1 that remain unpaid at least sixty (60)
days after the due date under IC 6-1.1; and
(2) the treasurer of the county to which the taxes are due requests
the department to revoke or suspend the certificate.
(f) The department shall reinstate a certificate suspended under
subsection (e) if the taxes and any penalties due under IC 6-1.1 are paid
or the county treasurer requests the department to reinstate the
certificate because an agreement for the payment of taxes and any
penalties due under IC 6-1.1 has been reached to the satisfaction of the
county treasurer.
(g) The department may, for good cause, revoke a certificate
issued under section 4.5 of this chapter after at least five (5) days
notice to the certificate holder if:
(1) the department determines that the certificate holder no
longer qualifies for the exemption provided by
IC 6-2.5-4-2.5
;
or
(2) the department determines that the certificate holder is
required to file a report with and remit money to the
department under
IC 6-2.5-4-2.5
(d), and the certificate holder
fails to do so in the manner or by the time required by the
department.
SOURCE: ; (03)HB1599.1.7. -->
SECTION 7. [EFFECTIVE JANUARY 1, 2004]
(a)
IC 6-2.5-4-2.5
,
as added by this act, applies to transactions conducted by a person
described in
IC 6-2.5-4-2.5
(a), as added by this act, after December
31, 2003.
(b) A person described in
IC 6-2.5-4-2.5
(a), as added by this act,
may apply to the department of state revenue for a de minimis
seller's certificate under
IC 6-2.5-8-4.5
, as added by this act, after
December 31, 2003, for transactions described in
IC 6-2.5-4-2.5
(a),
as added by this act, conducted by the person in a calendar year
that begins after December 31, 2003.
SOURCE: ; (03)HB1599.1.8. -->
SECTION 8. [EFFECTIVE UPON PASSAGE] (a) As used in this
SECTION, "department" refers to the department of state
revenue.
(b) Notwithstanding
IC 6-2.5-4-2.5
and
IC 6-2.5-8-4.5
, both as
added by this act, the department shall adopt any rules to
implement
IC 6-2.5-4-2.5
or
IC 6-2.5-8-4.5
, both as added by this
act, in the same manner as emergency rules are adopted under
IC 4-22-2-37.1.
Any rules adopted under this SECTION must be
adopted not later than September 1, 2003. A rule adopted under
this SECTION expires on the earlier of:
(1) the date a rule is adopted by the department under
IC 4-22-2-24
through
IC 4-22-2-36
to implement
IC 6-2.5-4-2.5
or
IC 6-2.5-8-4.5
, both as added by this act; or
(2) January 1, 2005.
(c) This SECTION expires January 1, 2005.
SOURCE: ; (03)HB1599.1.9. -->
SECTION 9.
An emergency is declared for this act.
HB 1599_LS 7361/DI 101
Figure
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