Recent Developments in Indiana Taxation - I.U. School of Law ...

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1134 INDIANA LAW REVIEW [Vol. 40:1103 Indiana retail merchants will now have to renew their merchant’s certificate 313 every two years instead of holding a perpetual certificate. The DOR must renew certificates within 30 days after expiration at no charge if the retail merchant has filed all Indiana Sales and Use Tax returns and paid all taxes. 314 However, the DOR may not renew the certificate of a merchant who has failed 315 to remit Sales and Use Taxes. The statute provides that the DOR must notify a delinquent retail merchant that it will not renew the merchant’s certificate at 316 least 60 days prior to the certificate’s expiration date. Certificates originally 317 issued before December 1, 2006, expired on December 31, 2006. Certificates originally issued after November 30, 2006, and before January 1, 2007, will 318 expire on December 31, 2008. However, the DOR may delay the expiration date for existing certificates for up to one year to cope more effectively with the increased workload. 319 The GA added a deduction from Indiana sales tax for the retail sale of E85 fuel. The deduction is equivalent to $0.10 per gallon of E85 sold during 320 reporting periods from July 1, 2006, and July 1, 2008. The maximum aggregate deduction for all merchants claiming the deduction for sales of E85 is 321 $2 million. If the DOR determines that the amount of deductions allowed will exceed the cap, the DOR is required to publish in the Indiana Register a notice that the deduction is terminated after the date specified in the notice and that no additional deductions will be granted for transactions occurring after the date in the notice. 322 For transactions occurring after January 1, 2007, an entity may not assign its 323 sales tax remittance deduction to a non-affiliated entity. The statute generally § 1 (West)). 313. Id. § 6-2.5-8-1(f) (as amended by 2006 Ind. Legis. Serv. P.L. 111-2006 (S.E.A. 362) § 1 (West)); see also id. § 6-2.5-8-5 (as amended by 2006 Ind. Legis. Serv. P.L. 111-2006 (S.E.A. 362) § 1 (West)). 314. Id. § 6-2.5-8-1(f) (as amended by 2006 Ind. Legis. Serv. P.L. 111-2006 (S.E.A. 362) § 1 (West)). 315. Id. § 6-2.5-8-1(g) (as amended by 2006 Ind. Legis. Serv. P.L. 111-2006 (S.E.A. 362) § 1 (West)). 316. Id. 317. 2006 Ind. Legis. Serv. P.L. 111-2006 (S.E.A. 362) § 12 (West). 318. Id. 319. Id. 320. IND. CODE § 6-2.5-7-5(5)(c) (2006) (as amended by 2006 Ind. Legis. Serv. P.L. 122-2006 (S.E.A. 353) § 3 (West)). 321. Id. § 6-2.5-7-5(5)(d) (as amended by 2006 Ind. Legis. Serv. P.L. 122-2006 (S.E.A. 353) § 3 (West)). 322. Id. 323. Id. § 6-2.5-6-9(c) (as amended by 2006 Ind. Legis. Serv. P.L. 162-2006 (H.E.A. 1001) § 23 (West) and 2006 Ind. Legis. Serv. P.L. 184-2006 (H.E.A. 1327) § 2 (West)).
2007] TAX LAW 1135 324 325 uses the IRS definition of related taxpayers and an affiliated group except 326 that it changes the required percentage of control from 80% to 50%. The exception also applies to two or more partnerships that have the same degree of ownership as the affiliated group. 327 The motion picture industry is entitled to an exemption from sales tax for purchases of tangible personal property that the purchaser will directly use in the production of a motion picture in Indiana as long as the purchase occurs between 328 January l, 2007, and December 31, 2008. Qualifying motion picture productions include feature length films, short features, independent or studio productions, documentaries, and television programs but do not include obscene 329 motion pictures or television coverage of news or athletic events. Pre- production, production and post-production activities qualify for the exemption, but personnel transportation, food and beverage service, lodging, and packaging materials do not qualify. 330 The GA imposed a new excise tax called the Indiana utility services use tax on retail consumption of utility services in Indiana that are billed after June 30, 331 2006. This tax complements the existing utility receipts. The utility services 332 use tax is imposed at the same rate as the utility receipts tax —currently 333 1.4%. The person who consumes the utility services in Indiana is responsible 334 for the utility services use tax, although sellers of such services may register with the DOR to collect and remit the taxes on behalf of the consumers. 335 Utility services are exempt from the utility services use tax if they were subject 336 to the utility services receipt tax. In addition, the utility services use tax is not imposed on the portion of the transaction that was excluded, exempt, or subject 337 to a deduction from the utility services receipt tax. A taxpayer may take a 324. I.R.C. § 267(b)(11) (2000). 325. Id. § 1504. 326. IND. CODE § 6-2.5-6-9(c) (2006). 327. Id. 328. Id. § 6-2.5-5-41 (as added by 2006 Ind. Legis. Serv. P.L. 137-2006 (H.E.A. 1380) § 3 (West)). 329. Id. 330. Id. 331. Id. § 6-2.3-5.5-1 (as added by 2006 Ind. Legis. Serv. P.L. 162-2006 (H.E.A. 1001) § 19 (West)). 332. Id. § 6-2.3-5.5-3 (as added by 2006 Ind. Legis. Serv. P.L. 162-2006 (H.E.A. 1001) § 19 (West)). 333. Id. § 6-2.3-2-2. 334. Id. § 6-2.3-5.5-6 (as added by 2006 Ind. Legis. Serv. P.L. 162-2006 (H.E.A. 1001) § 19 (West)). 335. Id. § 6-2.3-5.5-8 (as added by 2006 Ind. Legis. Serv. P.L. 162-2006 (H.E.A. 1001) § 19 (West)). 336. Id. § 6-2.3-5.5-4 (as added by 2006 Ind. Legis. Serv. P.L. 162-2006 (H.E.A. 1001) § 19 (West)). 337. Id.
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Page 9 and 10: 2007] TAX LAW 1111 I.C. § 6-1.1-12
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Page 23 and 24: 2007] TAX LAW 1125 219 sale or tran
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