Introduced Version






SENATE BILL No. 500

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 5-22-16-4; IC 6-2.3-6-1; IC 6-2.5; IC 6-3; IC 6-4.1-10-1; IC 6-5.5-6-3; IC 6-6-1.1-502; IC 6-7-1-17; IC 6-8.1.

Synopsis: Tax procedure and administration changes. Restricts a sales tax exemption available under current law for an electric utility that purchases distribution equipment or transmission equipment. Restricts a sales tax exemption available under current law for a hotel or a restaurant that purchases electricity, water, gas, or steam. Restricts a sales tax exemption available under current law for an aircraft lessor that purchases an aircraft for rental or leasing. Provides for a graduated sales and use tax collection allowance for a retail merchant. Specifies conditions under which a professional tax return preparer must file client returns electronically. Decreases various periodic tax liability thresholds at which taxpayers are required to make tax payments by electronic fund transfer from $10,000 to $5,000. Provides that a tax payment made by electronic fund transfer is considered made on the date the taxpayer issues the payment order for the electronic fund transfer. Provides for the accrual of interest at the rate of 6% per annum on inheritance tax refunds that are not processed within 90 days by the department of state revenue. Increases the cigarette stamp discount to distributors from 1.2% to 2.523%. Provides that when a taxpayer claiming a refund requests a hearing on the claim, the department of state revenue must be hold the requested hearing. Repeals a provision of the sales tax statute that requires certain out-of-state merchants making sales to customers in Indiana to register as retail merchants and remit sales and use tax. Repeals an administrative provision that prohibits the department of state revenue from establishing: (1) incentives based on the amount of revenue collected or liability assessed; and (2) production quotas for agents based on the number of cases closed. Makes technical corrections.

Effective: July 1, 2007; January 1, 2008.





Kenley




    January 18, 2007, read first time and referred to Committee on Tax and Fiscal Policy.







Introduced

First Regular Session 115th General Assembly (2007)


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 2006 Regular Session of the General Assembly.

SENATE BILL No. 500



    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 5-22-16-4; (07)IN0500.1.1. -->     SECTION 1. IC 5-22-16-4, AS AMENDED BY P.L.246-2005, SECTION 54, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 4. (a) An offeror that is a foreign corporation must be registered with the secretary of state to do business in Indiana in order to be considered responsible.
    (b) This subsection applies to a purchase of supplies or services tangible personal property for a state agency under a contract entered into or purchase order sent to an offeror (in the absence of a contract) after June 30, 2003, 2007, including a purchase described in IC 5-22-8-2 or IC 5-22-8-3. A state agency may not purchase tangible personal property or services from a person that is delinquent in the payment of amounts due from the person under IC 6-2.5 (gross retail and use tax) unless the person provides a statement from the department of state revenue that the person's delinquent tax liability:
        (1) has been satisfied; or
        (2) has been released under IC 6-8.1-8-2.
    (c) The purchasing agent may award a contract to an offeror pending

the offeror's registration with the secretary of state. If, in the judgment of the purchasing agent, the offeror has not registered within a reasonable period, the purchasing agent shall cancel the contract. An offeror has no cause of action based on the cancellation of a contract under this subsection.

SOURCE: IC 6-2.3-6-1; (07)IN0500.1.2. -->     SECTION 2. IC 6-2.3-6-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2008] : Sec. 1. (a) Except as provided in subsections (c) through (e), a taxpayer shall file utility receipts tax returns with, and pay the taxpayer's utility receipts tax liability to, the department by the due date of the estimated return. A taxpayer who uses a taxable year that ends on December 31 shall file the taxpayer's estimated utility receipts tax returns and pay the tax to the department on or before April 20, June 20, September 20, and December 20 of the taxable year. If a taxpayer uses a taxable year which does not end on December 31, the due dates for filing estimated utility receipts tax returns and paying the tax are on or before the twentieth day of the fourth, sixth, ninth, and twelfth months of the taxpayer's taxable year.
    (b) With each return filed, with each payment by cashier's check, certified check, or money order delivered in person or by overnight courier, and with each electronic funds transfer made, a taxpayer shall pay to the department twenty-five percent (25%) of the estimated or the exact amount of utility receipts tax that is due.
    (c) If a taxpayer's estimated annual utility receipts tax liability does not exceed one thousand dollars ($1,000), the taxpayer is not required to file an estimated utility receipts tax return.
    (d) If the department determines that a taxpayer's:
        (1) estimated quarterly utility receipts tax liability for the current year; or
        (2) average estimated quarterly utility receipts tax liability for the preceding year;
exceeds ten five thousand dollars ($10,000), ($5,000), the taxpayer shall pay the estimated utility receipts 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.
    (e) If a taxpayer's utility receipts tax payment is made by electronic funds transfer, the taxpayer is not required to file an estimated utility receipts tax return.
    (f) The penalty prescribed by IC 6-8.1-10-2.1(b) shall be assessed by the department on taxpayers failing to make payments as required

in subsection (b) or (d). However, a penalty may not be assessed as to any estimated payments of utility receipts tax that equal or exceed:
        (1) twenty percent (20%) of the final tax liability for the taxable year; or
        (2) twenty-five percent (25%) of the final tax liability for the taxpayer's previous taxable year.
In addition, the penalty as to any underpayment of tax on an estimated return shall be assessed only on the difference between the actual amount paid by the taxpayer on the estimated return and twenty-five percent (25%) of the taxpayers's final utility receipts tax liability for the taxable year.

SOURCE: IC 6-2.5-4-14; (07)IN0500.1.3. -->     SECTION 3. IC 6-2.5-4-14 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 14. The department of administration and each purchasing agent for a state educational institution (as defined in IC 20-12-0.5-1) shall provide the department with a list of every person who desires to enter into a contract to sell tangible personal property or services to an agency (as defined in IC 4-13-2-1) or a state educational institution. The department shall notify the department of administration or the purchasing agent of the state educational institution if a person on the list does not have a registered retail merchant certificate or is delinquent in remitting or paying amounts due to the department under this article.
SOURCE: IC 6-2.5-5-3; (07)IN0500.1.4. -->     SECTION 4. IC 6-2.5-5-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 3. (a) For purposes of this section:
        (1) the retreading of tires shall be treated as the processing of tangible personal property; and
        (2) commercial printing shall be treated as the production and manufacture of tangible personal property.
    (b) Except as provided in subsection (c), transactions involving manufacturing machinery, tools, and equipment are exempt from the state gross retail tax if the person acquiring that property acquires it for direct use in the direct production, manufacture, fabrication, assembly, extraction, mining, processing, refining, or finishing of other tangible personal property.
     (c) The exemption provided in subsection (b) does not apply to transactions involving distribution equipment or transmission equipment acquired by a public utility engaged in generating electricity.
SOURCE: IC 6-2.5-5-8; (07)IN0500.1.5. -->     SECTION 5. IC 6-2.5-5-8 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 8. (a) As used in this section, "new motor vehicle" has the meaning set forth in

IC 9-13-2-111.
    (b) Transactions involving tangible personal property other than a new motor vehicle are exempt from the state gross retail tax if the person acquiring the property acquires it for resale, rental, or leasing in the ordinary course of the person's business without changing the form of the property.
    (c) The following transactions involving a new motor vehicle are exempt from the state gross retail tax:
        (1) A transaction in which a person that has a franchise in effect at the time of the transaction for the vehicle trade name, trade or service mark, or related characteristics acquires a new motor vehicle for resale, rental, or leasing in the ordinary course of the person's business.
        (2) A transaction in which a person that is a franchisee appointed by a manufacturer or converter manufacturer licensed under IC 9-23 acquires a new motor vehicle that has at least one (1) trade name, service mark, or related characteristic as a result of modification or further manufacture by the manufacturer or converter manufacturer for resale, rental, or leasing in the ordinary course of the person's business.
        (3) A transaction in which a person acquires a new motor vehicle for rental or leasing in the ordinary course of the person's business.
    (d) The rental or leasing of accommodations to a promoter by a political subdivision (including a capital improvement board) or the state fair commission is not exempt from the state gross retail tax, if the rental or leasing of the property by the promoter is exempt under IC 6-2.5-4-4.
     (e) A transaction in which a person acquires an aircraft for rental or leasing in the ordinary course of the person's business is exempt from the state gross retail tax if the annual amount of the lease revenue is equal to or greater than fifteen percent (15%) of the greater of the original cost or the book value of the aircraft.
     (f) The exemption described in subsection (e) can be rebutted if the person's rental or leasing income is less than fifteen percent (15%) of the original cost or book value of the aircraft.

SOURCE: IC 6-2.5-5-35; (07)IN0500.1.6. -->     SECTION 6. IC 6-2.5-5-35 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 35. (a) Except as provided in subsection (b), transactions involving tangible personal property are exempt from the state gross retail tax if:
        (1) the:
            (A) person acquires the property to facilitate the service or

consumption of food and food ingredients that is not exempted from the state gross retail tax under section 20 of this chapter; and
            (B) property is:
                (i) used, consumed, or removed in the service or consumption of the food and food ingredients; and
                (ii) made unusable for further service or consumption of food and food ingredients after the property's first use for service or consumption of food and food ingredients; or
        (2) the:
            (A) person acquiring the property is engaged in the business of renting or furnishing rooms, lodgings, or accommodations in a commercial hotel, motel, inn, tourist camp, or tourist cabin; and
            (B) the property acquired is:
                (i) used up, removed, or otherwise consumed during the occupation of the rooms, lodgings, or accommodations by a guest; or
                (ii) rendered nonreusable by the property's first use by a guest during the occupation of the rooms, lodgings, or accommodations.
     (b) The exemption provided by subsection (a) does not apply to transactions involving electricity, water, gas, or steam.

SOURCE: IC 6-2.5-6-1; (07)IN0500.1.7. -->     SECTION 7. IC 6-2.5-6-1, AS AMENDED BY P.L.153-2006, SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2008]: Sec. 1. (a) Except as otherwise provided in this section, each person liable for collecting the state gross retail or use tax shall file a return for each calendar month and pay the state gross retail and use taxes that the person collects during that month. A person shall file the person's return for a particular month with the department and make the person's tax payment for that month to the department not more than thirty (30) days after the end of that month, if that person's average monthly liability for collections of state gross retail and use taxes under this section as determined by the department for the preceding calendar year did not exceed one thousand dollars ($1,000). If a person's average monthly liability for collections of state gross retail and use taxes under this section as determined by the department for the preceding calendar year exceeded one thousand dollars ($1,000), that person shall file the person's return for a particular month and make the person's tax payment for that month to the department not more than twenty (20) days after the end of that month.
    (b) If a person files a combined sales and withholding tax report and

either this section or IC 6-3-4-8.1 requires sales or withholding tax reports to be filed and remittances to be made within twenty (20) days after the end of each month, then the person shall file the combined report and remit the sales and withholding taxes due within twenty (20) days after the end of each month.
    (c) Instead of the twelve (12) monthly reporting periods required by subsection (a), the department may permit a person to divide a year into a different number of reporting periods. The return and payment for each reporting period is due not more than twenty (20) days after the 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 five thousand dollars ($10,000), ($5,000), 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.
SOURCE: IC 6-2.5-6-10; (07)IN0500.1.8. -->     SECTION 8. IC 6-2.5-6-10 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 10. (a) In order to compensate retail merchants for collecting and timely remitting the state gross retail tax and the state use tax, every retail merchant, except a retail merchant referred to in subsection (c), is entitled to deduct and retain from the amount of those taxes otherwise required to be remitted under IC 6-2.5-7-5 or under this chapter, if timely remitted, a retail merchant's collection allowance.
    (b) The allowance equals eighty-three hundredths percent (0.83%) a percentage of the retail merchant's state gross retail and use tax liability accrued during a reporting period. calendar year, specified as follows:
        (1) Eighty-three hundredths percent (0.83%), if the retail merchant's state gross retail and use tax liability accrued during the state fiscal year ending on June 30 of the immediately preceding calendar year did not exceed sixty thousand dollars ($60,000).
        (2) Thirty-two hundredths percent (0.32%), if the retail merchant's state gross retail and use tax liability accrued during the state fiscal year ending on June 30 of the immediately preceding calendar year:
            (A) was greater than or equal to sixty thousand dollars
($60,000); and
            (B) did not exceed six hundred thousand dollars ($600,000).
        (3) Thirteen-hundredths percent (0.13%), if the retail merchant's state gross retail and use tax liability
accrued during the state fiscal ending on June 30 of the immediately preceding calendar year was greater than or equal to six hundred thousand dollars ($600,000).
    (c) A retail merchant described in IC 6-2.5-4-5 or IC 6-2.5-4-6 is not entitled to the allowance provided by this section.
SOURCE: IC 6-3-2-20; (07)IN0500.1.9. -->     SECTION 9. IC 6-3-2-20, AS ADDED BY P.L.162-2006, SECTION 26, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 20. (a) The following definitions apply throughout this section:
        (1) "Affiliated group" has the meaning provided in Section 1504 of the Internal Revenue Code, except that the ownership percentage in Section 1504(a)(2) of the Internal Revenue Code shall be determined using fifty percent (50%) instead of eighty percent (80%).
        (2) "Directly related intangible interest expenses" means interest expenses that are paid to, or accrued or incurred as a liability to, a recipient if:
            (A) the amounts represent, in the hands of the recipient, income from making one (1) or more loans; and
            (B) the funds loaned were originally received by the recipient from the payment of intangible expenses by any of the following:
                (i) The taxpayer.
                (ii) A member of the same affiliated group as the taxpayer.
                (iii) A foreign corporation.
        (3) "Foreign corporation" means a corporation that is organized under the laws of a country other than the United States and would be a member of the same affiliated group as the taxpayer if the corporation were organized under the laws of the United States.
        (4) "Intangible expenses" means the following amounts to the extent these amounts are allowed as deductions in determining taxable income under Section 63 of the Internal Revenue Code

before the application of any net operating loss deduction and special deductions for the taxable year:
            (A) Expenses, losses, and costs directly for, related to, or in connection with the acquisition, use, maintenance, management, ownership, sale, exchange, or any other disposition of intangible property.
            (B) Royalty, patent, technical, and copyright fees.
            (C) Licensing fees.
            (D) Other substantially similar expenses and costs.
        (5) "Intangible property" means patents, patent applications, trade names, trademarks, service marks, copyrights, trade secrets, and substantially similar types of intangible assets.
        (6) "Interest expenses" means amounts that are allowed as deductions under Section 163 of the Internal Revenue Code in determining taxable income under Section 63 of the Internal Revenue Code before the application of any net operating loss deductions and special deductions for the taxable year.
        (7) "Makes a disclosure" means a taxpayer provides the following information regarding a transaction with a member of the same affiliated group or a foreign corporation involving an intangible expense and any directly related intangible interest expense with the taxpayer's tax return on the forms prescribed by the department:
            (A) The name of the recipient.
            (B) The state or country of domicile of the recipient.
            (C) The amount paid to the recipient.
            (D) A copy of federal Form 851, Affiliation Schedule, as filed with the taxpayer's federal consolidated tax return.
            (E) The information needed to determine the taxpayer's status under the exceptions listed in subsection (c).
        (8) "Recipient" means:
            (A) a member of the same affiliated group as the taxpayer; or
            (B) a foreign corporation;
        to which is paid an item of income that corresponds to an intangible expense or any directly related intangible interest expense.
        (9) "Unrelated party" means a person that, with respect to the taxpayer, is not a member of the same affiliated group or a foreign corporation.
    (b) Except as provided in subsection (c), in determining its adjusted gross income under IC 6-3-1-3.5(b), a corporation subject to the tax imposed by IC 6-3-2-1 shall add to its taxable income under Section 63

of the Internal Revenue Code:
        (1) intangible expenses; and
        (2) any directly related intangible interest expenses;
paid, accrued, or incurred with one (1) or more members of the same affiliated group or with one (1) or more foreign corporations.
    (c) The addition of intangible expenses or any directly related intangible interest expenses otherwise required in a taxable year under subsection (b) is not required if one (1) or more of the following apply to the taxable year:
        (1) The taxpayer and the recipient are both included in the same consolidated tax return filed under IC 6-3-4-14 or in the same combined return filed under IC 6-3-2-2(q) for the taxable year.
        (2) The taxpayer makes a disclosure and, at the request of the department, can establish by a preponderance of the evidence that:
            (A) the item of income corresponding to the intangible expenses and any directly related intangible interest expenses was included within the recipient's income that is subject to tax in:
                (i) a state or possession of the United States; or
                (ii) a country other than the United States;
            that is the recipient's commercial domicile and that imposes a net income tax, a franchise tax measured, in whole or in part, by net income, or a value added tax;
            (B) the transaction giving rise to the intangible expenses and any directly related intangible interest expenses between the taxpayer and the recipient was made at a commercially reasonable rate and at terms comparable to an arm's length transaction; and
            (C) the transactions giving rise to the intangible expenses and any directly related intangible interest expenses between the taxpayer and the recipient did not have Indiana tax avoidance as a principal purpose.
        (3) The taxpayer makes a disclosure and, at the request of the department, can establish by a preponderance of the evidence that:
            (A) the recipient regularly engages in transactions involving intangible property with one (1) or more unrelated parties on terms substantially similar to those of the subject transaction; and
            (B) the transaction giving rise to the intangible expenses and any directly related intangible interest expenses between the

taxpayer and the recipient did not have Indiana tax avoidance as a principal purpose.
        (4) The taxpayer makes a disclosure and, at the request of the department, can establish by a preponderance of the evidence that:
            (A) the payment was received from a person or entity that is an unrelated party, and on behalf of that unrelated party, paid that amount to the recipient in an arm's length transaction; and
            (B) the transaction giving rise to the intangible expenses and any directly related intangible interest expenses between the taxpayer and the recipient did not have Indiana tax avoidance as a principal purpose.
        (5) The taxpayer makes a disclosure and, at the request of the department, can establish by a preponderance of the evidence that:
            (A) the recipient paid, accrued, or incurred a liability to an unrelated party during the taxable year for an equal or greater amount that was directly for, related to, or in connection with the same intangible property giving rise to the intangible expenses; and
            (B) the transactions giving rise to the intangible expenses and any directly related intangible interest expenses between the taxpayer and the recipient did not have Indiana tax avoidance as a principal purpose.
        (6) The taxpayer makes a disclosure and, at the request of the department, can establish by a preponderance of the evidence that:
            (A) the recipient is engaged in:
                (i) substantial business activities from the acquisition, use, licensing, maintenance, management, ownership, sale, exchange, or any other disposition of intangible property; or
                (ii) other substantial business activities separate and apart from the business activities described in item (i);
            as evidenced by the maintenance of a permanent office space and an adequate number of full-time, experienced employees;
            (B) the transactions giving rise to the intangible expenses and any directly related intangible interest expenses between the taxpayer and the recipient did not have Indiana tax avoidance as a principal purpose; and
            (C) the transactions were made at a commercially reasonable rate and at terms comparable to an arm's length transaction.
        (7) The taxpayer and the department agree, in writing, to the

application or use of an alternative method of allocation or appointment apportionment under section 2(l) or 2(m) of this chapter.
        (8) Upon request by the taxpayer, the department determines that the adjustment otherwise required by this section is unreasonable.
    (d) For purposes of this section, intangible expenses or directly related intangible interest expenses shall be considered to be at a commercially reasonable rate or at terms comparable to an arm's length transaction if the intangible expenses or directly related intangible interest expenses meet the arm's length standards of United States Treasury Regulation 1.482-1(b).
    (e) If intangible expenses or directly related intangible expenses are determined not to be at a commercially reasonable rate or at terms comparable to an arm's length transaction for purposes of this section, the adjustment required by subsection (b) shall be made only to the extent necessary to cause the intangible expenses or directly related intangible interest expenses to be at a commercially reasonable rate and at terms comparable to an arm's length transaction.
    (f) For purposes of this section, transactions giving rise to intangible expenses and any directly related intangible interest expenses between the taxpayer and the recipient shall be considered as having Indiana tax avoidance as the principal purpose if:
        (1) there is not one (1) or more valid business purposes that independently sustain the transaction notwithstanding any tax benefits associated with the transaction; and
        (2) the principal purpose of tax avoidance exceeds any other valid business purpose.

SOURCE: IC 6-3-4-1.5; (07)IN0500.1.10. -->     SECTION 10. IC 6-3-4-1.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 1.5. If a professional preparer files more than one hundred (100) returns in a calendar year for persons described in section 1(1) or 1(2) of this chapter, in the immediately following calendar year the professional preparer shall file returns for persons described in section 1(1) or 1(2) of this chapter in an electronic format specified by the department.
SOURCE: IC 6-3-4-4.1; (07)IN0500.1.11. -->     SECTION 11. IC 6-3-4-4.1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2008]: Sec. 4.1. (a) This section applies to taxable years beginning after December 31, 1993.
    (b) Any individual required by the Internal Revenue Code to file estimated tax returns and to make payments on account of such estimated tax shall file estimated tax returns and make payments of the tax imposed by this article to the department at the time or times and

in the installments as provided by Section 6654 of the Internal Revenue Code. However, in applying Section 6654 of the Internal Revenue Code for the purposes of this article, "estimated tax" means the amount which the individual estimates as the amount of the adjusted gross income tax imposed by this article for the taxable year, minus the amount which the individual estimates as the sum of any credits against the tax provided by IC 6-3-3.
    (c) Every individual who has adjusted gross income subject to the tax imposed by this article and from which tax is not withheld under the requirements of section 8 of this chapter shall make a declaration of estimated tax for the taxable year. However, no such declaration shall be required if the estimated tax can reasonably be expected to be less than four hundred dollars ($400). In the case of an underpayment of the estimated tax as provided in Section 6654 of the Internal Revenue Code, there shall be added to the tax a penalty in an amount prescribed by IC 6-8.1-10-2.1(b).
    (d) Every corporation subject to the adjusted gross income tax liability imposed by this article shall be required to report and pay an estimated tax equal to twenty-five percent (25%) of such corporation's estimated adjusted gross income tax liability for the taxable year. A taxpayer who uses a taxable year that ends on December 31 shall file the taxpayer's estimated adjusted gross income tax returns and pay the tax to the department on or before April 20, June 20, September 20, and December 20 of the taxable year. If a taxpayer uses a taxable year that does not end on December 31, the due dates for filing estimated adjusted gross income tax returns and paying the tax are on or before the twentieth day of the fourth, sixth, ninth, and twelfth months of the taxpayer's taxable year. The department shall prescribe the manner and forms for such reporting and payment.
    (e) The penalty prescribed by IC 6-8.1-10-2.1(b) shall be assessed by the department on corporations failing to make payments as required in subsection (d) or (g). However, no penalty shall be assessed as to any estimated payments of adjusted gross income tax which equal or exceed:
        (1) twenty percent (20%) of the final tax liability for such taxable year; or
        (2) twenty-five percent (25%) of the final tax liability for the taxpayer's previous taxable year.
In addition, the penalty as to any underpayment of tax on an estimated return shall only be assessed on the difference between the actual amount paid by the corporation on such estimated return and twenty-five percent (25%) of the corporation's final adjusted gross

income tax liability for such taxable year.
    (f) The provisions of subsection (d) requiring the reporting and estimated payment of adjusted gross income tax shall be applicable only to corporations having an adjusted gross income tax liability which, after application of the credit allowed by IC 6-3-3-2 (repealed), shall exceed one thousand dollars ($1,000) for its taxable year.
    (g) If the department determines that a corporation's:
        (1) estimated quarterly adjusted gross income tax liability for the current year; or
        (2) average estimated quarterly adjusted gross income tax liability for the preceding year;
exceeds before January 1, 1998, twenty thousand dollars ($20,000), and, after December 31, 1997, ten five thousand dollars ($10,000), ($5,000), after the credit allowed by IC 6-3-3-2 (repealed), the corporation shall pay the estimated adjusted gross income taxes due by electronic funds transfer (as defined in IC 4-8.1-2-7) or by delivering in person or overnight by 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 corporation's adjusted gross income tax payment is made by electronic funds transfer, the corporation is not required to file an estimated adjusted gross income tax return.

SOURCE: IC 6-3-4-8.1; (07)IN0500.1.12. -->     SECTION 12. IC 6-3-4-8.1, AS AMENDED BY P.L.111-2006, SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2008]: Sec. 8.1. (a) Any entity that is required to file a monthly return and make a monthly remittance of taxes under sections 8, 12, 13, and 15 of this chapter shall file those returns and make those remittances twenty (20) days (rather than thirty (30) days) after the end of each month for which those returns and remittances are filed, if that entity's average monthly remittance for the immediately preceding calendar year exceeds one thousand dollars ($1,000).
    (b) The department may require any entity to make the entity's monthly remittance and file the entity's monthly return twenty (20) days (rather than thirty (30) days) after the end of each month for which a return and payment are made if the department estimates that the entity's average monthly payment for the current calendar year will exceed one thousand dollars ($1,000).
    (c) If the department determines that a withholding agent is not withholding, reporting, or remitting an amount of tax in accordance with this chapter, the department may require the withholding agent:
        (1) to make periodic deposits during the reporting period; and
        (2) to file an informational return with each periodic deposit.
    (d) If a person files a combined sales and withholding tax report and either this section or IC 6-2.5-6-1 requires the sales or withholding tax report to be filed and remittances to be made within twenty (20) days after the end of each month, then the person shall file the combined report and remit the sales and withholding taxes due within twenty (20) days after the end of each month.
    (e) If the department determines that an entity's:
        (1) estimated monthly withholding tax remittance for the current year; or
        (2) average monthly withholding tax remittance for the preceding year;
exceeds ten five thousand dollars ($10,000), ($5,000), the entity shall remit the monthly withholding taxes due by electronic fund 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 remittance is due.
    (f) If an entity's withholding tax remittance is made by electronic fund transfer, the entity is not required to file a monthly withholding tax return.
SOURCE: IC 6-4.1-10-1; (07)IN0500.1.13. -->     SECTION 13. IC 6-4.1-10-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 1. (a) A person may file with the department of state revenue a claim for the refund of inheritance or Indiana estate tax which has been erroneously or illegally collected. Except as provided in section 2 of this chapter, the person must file the claim within three (3) years after the tax is paid or within one (1) year after the tax is finally determined, whichever is later.
    (b) The amount of the refund that a person is entitled to receive under this chapter equals the amount of the erroneously or illegally collected tax, plus interest at the rate of six percent (6%) per annum computed from the date the tax was paid to the date it is refunded. calculated as specified in subsection (c).
     (c) If a tax payment that has been erroneously or illegally collected is not refunded within ninety (90) days after the date on which the refund claim is filed with the department of state revenue, interest accrues at the rate of six percent (6%) per annum computed from the date the refund claim is filed until the tax payment is refunded.
SOURCE: IC 6-5.5-6-3; (07)IN0500.1.14. -->     SECTION 14. IC 6-5.5-6-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2008]: Sec. 3. (a) Each taxpayer subject to taxation under this article shall report and pay

quarterly an estimated tax equal to twenty-five percent (25%) of the taxpayer's total estimated tax liability imposed by this article for the taxable year. A taxpayer that uses a taxable year that ends on December 31 shall file the taxpayer's estimated quarterly financial institutions tax return and pay the tax to the department on or before April 20, June 20, September 20, and December 20 of the taxable year, without assessment or notice and demand from the department. If a taxpayer uses a taxable year that does not end on December 31, the due dates for filing the estimated quarterly financial institutions tax return and paying the tax are on or before the twentieth day of the fourth, sixth, ninth, and twelfth months of the taxpayer's taxable year. The department shall prescribe the manner and furnish the forms for reporting and payment.
    (b) Subsection (a) is applicable only to taxpayers having a tax liability imposed under this article that exceeds one thousand dollars ($1,000) for the taxable year.
    (c) If the department determines that a taxpayer's:
        (1) estimated quarterly financial institutions tax liability for the current year; or
        (2) average quarterly financial institutions tax payment for the preceding year;
exceeds ten five thousand dollars ($10,000), ($5,000), the taxpayer shall pay the quarterly financial institutions taxes due by electronic fund 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.
    (d) If a taxpayer's financial institutions tax payment is made by electronic fund transfer, the taxpayer is not required to file a quarterly financial institutions tax return.

SOURCE: IC 6-6-1.1-502; (07)IN0500.1.15. -->     SECTION 15. IC 6-6-1.1-502 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2008]: Sec. 502. (a) Except as provided in subsection (b), at the time of filing each monthly report, each distributor shall pay to the administrator the full amount of tax due under this chapter for the preceding calendar month, computed as follows:
        (1) Enter the total number of invoiced gallons of gasoline received during the preceding calendar month.
        (2) Subtract the number of gallons for which deductions are provided by sections 701 through 705 of this chapter from the number of gallons entered under subdivision (1).
        (3) Subtract the number of gallons reported under section 501(3)

of this chapter.
        (4) Multiply the number of invoiced gallons remaining after making the computation in subdivisions (2) and (3) by the tax rate prescribed by section 201 of this chapter to compute that part of the gasoline tax to be deposited in the highway, road, and street fund under section 802(2) of this chapter or in the motor fuel tax fund under section 802(3) of this chapter.
        (5) Multiply the number of gallons subtracted under subdivision (3) by the tax rate prescribed by section 201 of this chapter to compute that part of the gasoline tax to be deposited in the fish and wildlife fund under section 802(1) of this chapter.
    (b) If the department determines that a distributor's:
        (1) estimated monthly gasoline tax liability for the current year; or
        (2) average monthly gasoline tax liability for the preceding year;
exceeds ten five thousand dollars ($10,000), ($5,000), the distributor shall pay the monthly gasoline taxes due by electronic fund 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.

SOURCE: IC 6-7-1-17; (07)IN0500.1.16. -->     SECTION 16. IC 6-7-1-17 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 17. (a) Distributors who hold certificates and retailers shall be agents of the state in the collection of the taxes imposed by this chapter and the amount of the tax levied, assessed, and imposed by this chapter on cigarettes sold, exchanged, bartered, furnished, given away, or otherwise disposed of by distributors or to retailers. Distributors who hold certificates shall be agents of the department to affix the required stamps and shall be entitled to purchase the stamps from the department at a discount of one and two-tenths two and five hundred twenty-three thousandths percent (1.2%) (2.523%) of the amount of the tax stamps purchased, as compensation for their labor and expense.
    (b) The department may permit distributors who hold certificates and who are admitted to do business in Indiana to pay for revenue stamps within thirty (30) days after the date of purchase. However, the privilege is extended upon the express condition that:
        (1) except as provided in subsection (c), a bond or letter of credit satisfactory to the department, in an amount not less than the sales price of the stamps, is filed with the department; and
        (2) proof of payment is made of all local property, state income, and excise taxes for which any such distributor may be liable. The

bond or letter of credit, conditioned to secure payment for the stamps, shall be executed by the distributor as principal and by a corporation duly authorized to engage in business as a surety company or financial institution in Indiana.
    (c) If a distributor has at least five (5) consecutive years of good credit standing with the state, the distributor shall not be required to post a bond or letter of credit under subsection (b).

SOURCE: IC 6-8.1-6-3; (07)IN0500.1.17. -->     SECTION 17. IC 6-8.1-6-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2008]: Sec. 3. (a) A document, including a form, a return, a payment, or a writing of any type, which must be filed with the department by a prescribed date, is considered filed:
        (1) in cases where it is mailed through the United States mail, on the date displayed on the post office cancellation mark stamped on the document's wrapper;
        (2) in cases where it is delivered to the department in any manner other than through the United States mail, on the date on which the department physically receives the document; or
        (3) in cases where a payment is made by an electronic fund transfer, on the date the taxpayer's bank account is charged. taxpayer issues the payment order for the electronic fund transfer.
    (b) If a document is sent through the United States mail by registered mail, certified mail, or certificate of mailing, then the date of the registration, certification, or certificate, as evidenced by any record authenticated by the United States Post Office, is considered the postmark date.
    (c) If a document is mailed to the department through the United States mail and is physically received after the appropriate due date without a legible correct postmark, the person who mailed the document will be considered to have filed the document on or before the due date if the person can show by reasonable evidence to the department that the document was deposited in the United States mail on or before the due date.
    (d) If a document is mailed to, but not received by, the department, the person who mailed the document will be considered to have filed the document on or before the due date if the person can show by reasonable evidence to the department that the document was deposited in the United States mail on or before the due date and if the person files with the department a duplicate document within thirty (30) days after the date the department sends notice that the document was not received.
SOURCE: IC 6-8.1-9-1; (07)IN0500.1.18. -->     SECTION 18. IC 6-8.1-9-1, AS AMENDED BY P.L.2-2005, SECTION 22, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 1. (a) If a person has paid more tax than the person determines is legally due for a particular taxable period, the person may file a claim for a refund with the department. Except as provided in subsections (f) and (g), in order to obtain the refund, the person must file the claim with the department within three (3) years after the latter of the following:
        (1) The due date of the return.
        (2) The date of payment.
For purposes of this section, the due date for a return filed for the state gross retail or use tax, the gasoline tax, the special fuel tax, the motor carrier fuel tax, the oil inspection fee, or the petroleum severance tax is the end of the calendar year which contains the taxable period for which the return is filed. The claim must set forth the amount of the refund to which the person is entitled and the reasons that the person is entitled to the refund.
    (b) When the department receives a claim for refund, the department shall consider the claim for refund and may shall, if the taxpayer requests, hold a hearing on the claim for refund to obtain and consider additional evidence. After considering the claim and all evidence relevant to the claim, the department shall issue a decision on the claim, stating the part, if any, of the refund allowed and containing a statement of the reasons for any part of the refund that is denied. The department shall mail a copy of the decision to the person who filed the claim. If the department allows the full amount of the refund claim, a warrant for the payment of the claim is sufficient notice of the decision.
    (c) If the person disagrees with any part of the department's decision, the person may appeal the decision, regardless of whether or not he the person protested the tax payment or whether or not the person has accepted a refund. The person must file the appeal with the tax court. The tax court does not have jurisdiction to hear a refund appeal suit, if:
        (1) the appeal is filed more than three (3) years after the date the claim for refund was filed with the department;
        (2) the appeal is filed more than ninety (90) days after the date the department mails the decision of denial to the person; or
        (3) the appeal is filed both before the decision is issued and before the one hundred eighty-first day after the date the person files the claim for refund with the department.
    (d) The tax court shall hear the appeal de novo and without a jury, and after the hearing may order or deny any part of the appealed

refund. The court may assess the court costs in any manner that it feels is equitable. The court may enjoin the collection of any of the listed taxes under IC 33-26-6-2. The court may also allow a refund of taxes, interest, and penalties that have been paid to and collected by the department.
    (e) With respect to the motor vehicle excise tax, this section applies only to penalties and interest paid on assessments of the motor vehicle excise tax. Any other overpayment of the motor vehicle excise tax is subject to IC 6-6-5.
    (f) If a taxpayer's federal income tax liability for a taxable year is modified by the Internal Revenue Service, and the modification would result in a reduction of the tax legally due, the due date by which the taxpayer must file a claim for refund with the department is the later of:
        (1) the date determined under subsection (a); or
        (2) the date that is six (6) months after the date on which the taxpayer is notified of the modification by the Internal Revenue Service.
    (g) If an agreement to extend the assessment time period is entered into under IC 6-8.1-5-2(f), the period during which a person may file a claim for a refund under subsection (a) is extended to the same date to which the assessment time period is extended.

SOURCE: IC 6-8.1-10-1; (07)IN0500.1.19. -->     SECTION 19. IC 6-8.1-10-1, AS AMENDED BY P.L.1-2006, SECTION 147, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 1. (a) If a person fails to file a return for any of the listed taxes, fails to pay the full amount of tax shown on the person's return by the due date for the return or the payment, or incurs a deficiency upon a determination by the department, the person is subject to interest on the nonpayment.
    (b) The interest for a failure described in subsection (a) is the adjusted rate established by the commissioner under subsection (c), from the due date for payment. The interest applies to:
        (1) the full amount of the unpaid tax due if the person failed to file the return;
        (2) the amount of the tax that is not paid, if the person filed the return but failed to pay the full amount of tax shown on the return; or
        (3) the amount of the deficiency.
    (c) The commissioner shall establish an adjusted rate of interest for a failure described in subsection (a) and for an excess tax payment on or before November 1 of each year. For purposes of subsection (b), the adjusted rate of interest shall be the percentage rounded to the nearest whole number that equals two (2) percentage points above the average

investment yield on state money for the state's previous fiscal year, excluding pension fund investments, as published in the auditor of state's comprehensive annual financial report. For purposes of IC 6-8.1-9-2(c), the adjusted rate of interest for an excess tax payment is the percentage rounded to the nearest whole number that equals the average investment yield on state money for the state's previous fiscal year, excluding pension fund investments, as published in the auditor of state's comprehensive annual financial report. determined by the treasurer of state on or before October 1 of each year and reported to the commissioner. The adjusted rates of interest established under this subsection shall take effect on January 1 of the immediately succeeding year.
    (d) For purposes of this section, the filing of a substantially blank or unsigned return does not constitute a return.
    (e) Except as provided by IC 6-8.1-3-17(c) and IC 6-8.1-5-2, the department may not waive the interest imposed under this section.
    (f) Subsections (a) through (c) do not apply to a motor carrier fuel tax return.

SOURCE: IC 6-2.5-8-10; IC 6-8.1-3-2.5; IC 6-8.1-3-2.6.
; (07)IN0500.1.20. -->     SECTION 20. THE FOLLOWING ARE REPEALED [EFFECTIVE JULY 1, 2007]: IC 6-2.5-8-10; IC 6-8.1-3-2.5; IC 6-8.1-3-2.6.
SOURCE: ; (07)IN0500.1.21. -->     SECTION 21. [EFFECTIVE JULY 1, 2007] IC 6-7-1-17, as amended by this act, applies only to cigarette stamps purchased by distributors after June 30, 2007.