Citations Affected: IC 6-2.5-2.5.
Synopsis: Reduction of state gross retail and use tax rate. Reduces the
state gross retail and use tax rate from 7% to 6% effective January 1,
2011, if the joint resolution adopted by the 115th general assembly that
proposes a constitutional amendment on property tax matters is not
agreed to by the 116th general assembly before November 3, 2010.
Makes corresponding changes.
Effective: July 1, 2010.
January 5, 2010, read first time and referred to Committee on Tax and Fiscal Policy.
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
3 of this chapter, the retail merchant may exclude from the retail
merchant's gross retail income from retail transactions made
during a particular reporting period an amount equal to the
product of:
(1) the amount of that gross retail income; multiplied by
(2) the retail merchant's income exclusion ratio for the tax
year that contains the reporting period.
(b) A retail merchant's income exclusion ratio for a particular
tax year equals a fraction, the numerator of which is the retail
merchant's estimated total gross retail income for the tax year
from unitary retail transactions that produce gross retail income
of less than nine cents ($0.09) each, and the denominator of which
is the retail merchant's estimated total gross retail income for the
tax year from all retail transactions.
(c) To minimize a retail merchant's record keeping
requirements, the department shall prescribe a procedure for
determining the retail merchant's income exclusion ratio for a tax
year based on a period, not to exceed fifteen (15) consecutive days,
during the first quarter of the retail merchant's tax year. However,
the period may be changed if the change is requested by the retail
merchant because of the retail merchant's peculiar accounting
procedures or marketing factors. In addition, if a retail merchant
has multiple sales locations or diverse types of sales, the
department shall permit the retail merchant to determine the ratio
on the basis of a representative sampling of the locations and types
of sales.
Sec. 5. (a) 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 this chapter,
if timely remitted, a retail merchant's collection allowance.
(b) The allowance equals a percentage of the retail merchant's
state gross retail and use tax liability accrued during a 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) Six-tenths percent (0.6%), 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 sixty thousand dollars ($60,000); and
(B) did not exceed six hundred thousand dollars ($600,000).
(3) Three-tenths percent (0.3%), 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 was greater than 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.
Sec. 6. (a) The definitions set forth in IC 6-2.5-7-1 apply
throughout this section and section 7 of this chapter.
(b) With respect to the sale of gasoline that is dispensed from a
metered pump, a retail merchant shall collect, for each unit of
gasoline sold, state gross retail tax in an amount equal to the
product, rounded to the nearest one-tenth of one cent ($0.001), of:
(1) the price per unit before the addition of state and federal
taxes; multiplied by
(2) six percent (6%).
The retail merchant shall collect the state gross retail tax
prescribed in this section even if the transaction is exempt from
taxation under IC 6-2.5-5.
(c) With respect to the sale of special fuel or kerosene that is
dispensed from a metered pump, unless the purchaser provides an
exemption certificate in accordance with IC 6-2.5-8-8, a retail
merchant shall collect, for each unit of special fuel or kerosene
sold, state gross retail tax in an amount equal to the product,
rounded to the nearest one-tenth of one cent ($0.001), of:
(1) the price per unit before the addition of state and federal
taxes; multiplied by
(2) six percent (6%).
Unless an exemption certificate is provided, the retail merchant
shall collect the state gross retail tax prescribed in this section even
if the transaction is exempt from taxation under IC 6-2.5-5.
Sec. 7. (a) Each retail merchant who dispenses gasoline or
special fuel from a metered pump shall, in the manner prescribed
in IC 6-2.5-6, report to the department the following information:
(1) The total number of gallons of gasoline sold from the
metered pump during the period covered by the report.
(2) The total amount of money received by the retail merchant
from the sale of gasoline described in subdivision (1) during
the period covered by the report.
(3) The part of the amount described in subdivision (2) that
represents state and federal taxes imposed under this article,
IC 6-6-1.1, or Section 4081 of the Internal Revenue Code.
(4) The total number of gallons of special fuel sold by the
retail merchant from a metered pump during the period
covered by the report.
(5) The total amount of money received by the retail merchant
from the sale of special fuel during the period covered by the
report.
(6) The part of the amount described in subdivision (5) that
represents state and federal taxes imposed under this article,
IC 6-6-2.5, or Section 4041 of the Internal Revenue Code.
(7) The total number of gallons of E85 sold by the retail
merchant from a metered pump during the period covered by
the report.
(b) Concurrently with filing the report, the retail merchant shall
remit the state gross retail tax in an amount that equals five and
sixty-six hundredths percent (5.66%) of the gross receipts,
including state gross retail taxes but excluding Indiana and federal
gasoline and special fuel taxes, received by the retail merchant
from the sale of the gasoline and special fuel that is covered by the
report and on which the retail merchant was required to collect
state gross retail tax. The retail merchant shall remit that amount
regardless of the amount of state gross retail tax that the merchant
has actually collected under this chapter. However, the retail
merchant is entitled to deduct and retain the amounts prescribed
in subsection (c), section 5 of this chapter, and IC 6-2.5-6-11.
(c) A retail merchant is entitled to deduct from the amount of
state gross retail tax required to be remitted under subsection (b)
the amount determined under STEP THREE of the following
formula:
STEP ONE: Determine:
(A) the sum of the prepayment amounts made during the
period covered by the retail merchant's report; minus
(B) the sum of prepayment amounts collected by the retail
merchant, in the merchant's capacity as a qualified
distributor, during the period covered by the retail
merchant's report.
STEP TWO: Subject to subsection (d), for reporting periods
ending before July 1, 2020, determine the product of:
(A) eighteen cents ($0.18); multiplied by
delivery of the property or services constituting selling at retail is
made after that date to the purchaser or to the place of delivery
designated by the purchaser. However, a transaction shall be
considered as having occurred before January 1, 2011, to the
extent that the agreement of the parties to the transaction is
entered into before January 1, 2011, and payment for the property
or services furnished in the transaction is made before January 1,
2011, notwithstanding the delivery of the property or services after
December 31, 2010.
(b) With respect to a transaction constituting the furnishing of
public utility, telephone, or cable television services and
commodities, only transactions for which the charges are collected
on original statements and billings dated after December 31, 2010,
shall be considered as having occurred after December 31, 2010.