Introduced Version




Citations Affected: IC 6-2.5-5-38.2.

Synopsis: Sales tax treatment of car purchase discounts. Provides that a rebate or employee discount on the sale of a motor vehicle is not part of the gross retail income received by the seller when determining the sales and use tax amount.

Effective: July 1, 2009.


    January 7, 2009, read first time and referred to Committee on Tax and Fiscal Policy.


First Regular Session 116th General Assembly (2009)

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.
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    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 6-2.5-5-38.2; (09)IN0233.1.1. -->     SECTION 1. IC 6-2.5-5-38.2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 38.2. (a) The value of an owned vehicle is exempt from the Indiana gross retail tax in a vehicle lease transaction if the owned vehicle is exchanged for a like kind vehicle.
     (b) The value of a third party's payment or credit, including an employee discount, on the sale or lease of a motor vehicle is exempt from the gross retail tax if the customer's purchase agreement shows:
        (1) the payment or credit is directly related to a price reduction or discount on the sale or lease;
        (2) the seller has an obligation to pass the price reduction or discount through to the purchaser;
        (3) the amount of the price reduction or discount is fixed and determinable by the seller at the time of the sale or lease to the purchaser; and
        (4) the price reduction or discount is identified as a third

party price reduction or discount.