Citations Affected: IC 6-2.5.
Synopsis: Various sales and use tax changes. Specifies that tobacco
products are not food and food ingredients. Defines the terms "direct
mail" and "bundled transaction". Provides that a person is a retail
merchant making a retail transaction when the person sells tangible
personal property as part of a bundled transaction. Provides that a
person who: (1) voluntarily registers as a seller under the streamlined
sales and use tax agreement; (2) is not a model 1, model 2, or model 3
seller (as defined under the streamlined sales and use tax agreement);
and (3) had a liability for collection of state gross retail and use tax for
the preceding calendar year that did not exceed $1,000; is not required
to file a monthly state gross retail and use tax return. Provides that a
transaction in which a florist that takes a floral order from a purchaser
and transmits the floral order to another florist for delivery is sourced
to the location of the florist who originally took the floral order from
the purchaser.
Effective: Upon passage; July 1, 2006.
January 9, 2006, read first time and referred to Committee on Tax and Fiscal Policy.
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
end of the period.
(d) Instead of the reporting periods required under subsection (a),
the department may permit a retail merchant to report and pay the
merchant's state gross retail and use taxes for a period covering:
(1) a calendar year, if the retail merchant's average monthly state
gross retail and use tax liability in the previous calendar year does
not exceed ten dollars ($10);
(2) a calendar half year, if the retail merchant's average monthly
state gross retail and use tax liability in the previous calendar year
does not exceed twenty-five dollars ($25); or
(3) a calendar quarter, if the retail merchant's average monthly
state gross retail and use tax liability in the previous calendar year
does not exceed seventy-five dollars ($75).
A retail merchant using a reporting period allowed under this
subsection must file the merchant's return and pay the merchant's tax
for a reporting period not later than the last day of the month
immediately following the close of that reporting period.
(e) If a retail merchant reports the merchant's adjusted gross income
tax, or the tax the merchant pays in place of the adjusted gross income
tax, over a fiscal year or fiscal quarter not corresponding to the
calendar year or calendar quarter, the merchant may, without prior
departmental approval, report and pay the merchant's state gross retail
and use taxes over the merchant's fiscal period that corresponds to the
calendar period the merchant is permitted to use under subsection (d).
However, the department may, at any time, require the retail merchant
to stop using the fiscal reporting period.
(f) If a retail merchant files a combined sales and withholding tax
report, the reporting period for the combined report is the shortest
period required under:
(1) this section;
(2) IC 6-3-4-8; or
(3) IC 6-3-4-8.1.
(g) If the department determines that a person's:
(1) estimated monthly gross retail and use tax liability for the
current year; or
(2) average monthly gross retail and use tax liability for the
preceding year;
exceeds ten thousand dollars ($10,000), the person shall pay the
monthly gross retail and use taxes due by electronic funds transfer (as
defined in IC 4-8.1-2-7) or by delivering in person or by overnight
courier a payment by cashier's check, certified check, or money order
to the department. The transfer or payment shall be made on or before
the date the tax is due.
(h) If a person's gross retail and use tax payment is made by
electronic funds transfer, the taxpayer is not required to file a monthly
gross retail and use tax return. However, the person shall file a
quarterly gross retail and use tax return before the twentieth day after
the end of each calendar quarter.
(i) A person:
(1) who has voluntarily registered as a seller under the
Streamlined Sales and Use Tax Agreement;
(2) who is not a Model 1, Model 2, or Model 3 seller (as
defined in the Streamlined Sales and Use Tax Agreement);
and
(3) whose liability for collections of state gross retail and use
taxes under this section for the preceding calendar year as
determined by the department does not exceed one thousand
dollars ($1,000);
is not required to file a monthly gross retail and use tax return.
of this article, and the lease or rental of these items must be
sourced according to subsection (f).
(3) Telecommunications services, as set forth in IC 6-2.5-12, shall
be sourced in accordance with IC 6-2.5-12.
(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) This subsection applies to retail sales of floral products that
occur before January 1, 2008. 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.