Bill Text: IN SB0250 | 2010 | Regular Session | Amended
Bill Title: State and local taxes.
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Engrossed - Dead) 2010-02-15 - Amendment 1 (Crawford), prevailed; Voice Vote [SB0250 Detail]
Download: Indiana-2010-SB0250-Amended.html
Citations Affected: IC 6-2.5.
Synopsis: Streamlined sales and use tax agreement. Makes changes in
the gross retail and use tax laws to conform to the requirements of the
Streamlined Sales and Use Tax Agreement. Provides that gross retail
income does not include telecommunications nonrecurring charges.
Defines telecommunications nonrecurring charges as amounts billed
for installation, connection, change, or initiation of a
telecommunications service. Defines a computer software maintenance
contract as a contract that obligates a person to provide a customer with
future updates or upgrades of computer software. Adds any
electronically transferred product to the list of digital products. Defines
transferred electronically as not being transferred using tangible
storage media. Eliminates the tax rate brackets. Restates the rounding
rule without change. Provides that the sale of a digital code that may be
used to later obtain a product transferred electronically is taxed the
same as the product. Exempts the sale or rental of mobility enhancing
equipment from the gross retail tax if the sale or rental is prescribed by
a person licensed to issue the prescription. Provides that dietary
supplements are not food under the gross retail tax. Provides that a
certified service provider or a seller using a certified automated system
that obtains a taxability matrix from the department is not liable for
sales or use tax collection errors that result from relying on the
taxability matrix.
Effective: July 1, 2010.
January 11, 2010, read first time and referred to Committee on Tax and Fiscal Policy.
January 19, 2010, reported favorably _ Do Pass.
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
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
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
(1) the seller's cost of the property sold;
(2) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;
(3) charges by the seller for any services necessary to complete the sale, other than delivery and installation charges;
(4) delivery charges; or
(5) consideration received by the seller from a third party if:
(A) the seller actually receives consideration from a party other than the purchaser and the consideration is directly
related to a price reduction or discount on the sale;
(B) the seller has an obligation to pass the price reduction or
discount through to the purchaser;
(C) the amount of the consideration attributable to the sale is
fixed and determinable by the seller at the time of the sale of
the item to the purchaser; and
(D) the price reduction or discount is identified as a third party
price reduction or discount on the invoice received by the
purchaser or on a coupon, certificate, or other documentation
presented by the purchaser.
For purposes of subdivision (4), delivery charges are charges by the
seller for preparation and delivery of the property to a location
designated by the purchaser of property, including but not limited to
transportation, shipping, postage, handling, crating, and packing.
(b) "Gross retail income" does not include that part of the gross
receipts attributable to:
(1) the value of any tangible personal property received in a like
kind exchange in the retail transaction, if the value of the property
given in exchange is separately stated on the invoice, bill of sale,
or similar document given to the purchaser;
(2) the receipts received in a retail transaction which constitute
interest, finance charges, or insurance premiums on either a
promissory note or an installment sales contract;
(3) discounts, including cash, terms, or coupons that are not
reimbursed by a third party that are allowed by a seller and taken
by a purchaser on a sale;
(4) interest, financing, and carrying charges from credit extended
on the sale of personal property if the amount is separately stated
on the invoice, bill of sale, or similar document given to the
purchaser;
(5) any taxes legally imposed directly on the consumer that are
separately stated on the invoice, bill of sale, or similar document
given to the purchaser; or
(6) installation charges that are separately stated on the invoice,
bill of sale, or similar document given to the purchaser; or
(7) telecommunications nonrecurring charges.
(c) A public utility's or a power subsidiary's gross retail income
includes all gross retail income received by the public utility or power
subsidiary, including any minimum charge, flat charge, membership
fee, or any other form of charge or billing.
[EFFECTIVE JULY 1, 2010]: Sec. 14.5. "Computer software
maintenance contract" means a contract that obligates a person to
provide a customer with future updates or upgrades of computer
software.
(1) digital audio works;
(2) digital audiovisual works;
(3) digital books; or
(4) products.
the state gross retail tax is seven percent (7%) of that gross retail
income.
(b) If the tax computed under subsection (a) carried to the third
decimal place results in a fraction of one-half cent ($0.005) or more,
the numeral in the third decimal place being greater than four (4),
the amount of the tax shall be rounded to the next additional cent.
(b) A person is a retail merchant making a retail transaction when the person:
(1) electronically transfers specified digital products to an end user; and
(2) grants to the end user the right of permanent use of the specified digital products that is not conditioned upon continued payment by the purchaser.
(c) The sale of a digital code that may be used to obtain a product transferred electronically shall be taxed in the same manner as the product transferred electronically. As used in this subsection, a digital code means a method that permits a purchaser to obtain at a later date a product transferred electronically.
(b) Rentals of durable medical equipment, mobility enhancing equipment, and other medical supplies and devices are exempt from
the state gross retail tax, if the rentals are prescribed by a person
licensed to issue the prescription.
(c) Sales of hearing aids are exempt from the state gross retail tax
if the hearing aids are fitted or dispensed by a person licensed or
registered for that purpose. In addition, sales of hearing aid parts,
attachments, or accessories are exempt from the state gross retail tax.
For purposes of this subsection, a hearing aid is a device which is worn
on the body and which is designed to aid, improve, or correct defective
human hearing.
(d) Sales of colostomy bags, ileostomy bags, and the medical
equipment, supplies, and devices used in conjunction with those bags
are exempt from the state gross retail tax.
(e) Sales of equipment and devices used to administer insulin are
exempt from the state gross retail tax.
(f) Sales of equipment and devices used to monitor blood glucose
level, including blood glucose meters and measuring strips, lancets,
and other similar diabetic supplies, are exempt from the state gross
retail tax, regardless of whether the equipment and devices are
prescribed.
(b) For purposes of this section, the term "food and food ingredients for human consumption" includes the following items if sold without eating utensils provided by the seller:
(1) Food sold by a seller whose proper primary NAICS classification is manufacturing in sector 311, except subsector 3118 (bakeries).
(2) Food sold in an unheated state by weight or volume as a single item.
(3) Bakery items, including bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, and tortillas.
(c) Except as otherwise provided by subsection (b), for purposes of this section, the term "food and food ingredients for human consumption" does not include:
(1) candy;
(2) alcoholic beverages;
(3) soft drinks;
(4) food sold through a vending machine;
(5) food sold in a heated state or heated by the seller;
(6) two (2) or more food ingredients mixed or combined by the seller for sale as a single item (other than food that is only cut, repackaged, or pasteurized by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the federal Food and Drug Administration in chapter 3, subpart 3-401.11 of its Food Code so as to prevent food borne illnesses);
(7) food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws (for purposes of this subdivision, a plate does not include a container or packaging used to transport the food);
(8) tobacco; or
(9) dietary supplements.
(b) A person that provides a certified automated system is responsible for the proper functioning of that system and is liable to the state for underpayments of tax attributable to errors in the functioning of the certified automated system. A seller that uses a certified automated system remains responsible and is liable to the state for reporting and remitting tax.
(c) A seller that has a proprietary system for determining the amount of tax due on transactions and has signed an agreement establishing a performance standard for that system is liable for the failure of the
system to meet the performance standard.
(d) A certified service provider or a seller using a certified
automated system that obtains a certification or taxability matrix from
the department is not liable for sales or use tax collection errors that
result from reliance on the department's certification or taxability
matrix. If the department determines that an item or transaction is
incorrectly classified as to the taxability of the item or transaction, the
department shall notify the certified service provider or the seller using
a certified automated system of the incorrect classification. The
certified service provider or the seller using a certified automated
system must revise the incorrect classification within ten (10) days
after receiving notice of the determination from the department. If the
classification error is not corrected within ten (10) days after receiving
the department's notice, the certified service provider or the seller using
a certified automated system is liable for failure to collect the correct
amount of sales or use tax due and owing.
(e) If at least thirty (30) days are not provided between the
enactment of a statute changing the rate set forth in IC 6-2.5-2-2 and
the effective date of the rate change, the department shall relieve the
seller of liability for failing to collect tax at the new rate if:
(1) the seller collected the tax at the immediately preceding
effective rate; and
(2) the seller's failure to collect at the current rate does not extend
beyond thirty (30) days after the effective date of the rate change.
A seller is not eligible for the relief provided for in this subsection if
the seller fraudulently fails to collect at the current rate or solicits
purchases based on the immediately preceding effective rate.
(f) The department shall allow any monetary allowances that are
provided by the member states to sellers or certified service providers
in exchange for collecting the sales and use taxes as provided in article
VI of the agreement.
