Indiana Sales and Use Tax Flashcards
Sales Tax
Tax on all retail transactions occurring within Indiana on the purchase or rental of tangible personal property, accommodations, public utility service, and other services
Use Tax
Tax on the storage, use, or consumption of tangible personal property in Indiana if the property was acquired in a retail transaction that occurred outside of Indiana, but that would have been taxable if such transaction occurred within Indiana
Tax Rate
A transaction that is subject to either the sales tax or use tax is taxed at a rate of 7% of the gross retail income received by the seller in the transaction
Selling at Wholesale
Selling at wholesale occurs when a person sells tangible personal property to a person who purchases the property in order to resell it
Wholesale sale is generally EXEMPT FROM TAX
Casual Sales
A sale that is outside of the ordinary course of the seller’s business is a “casual sale,” and is generally NOT SUBJECT TO TAXATION
Service Charges
The sale of a service, such as legal services or automobile repair services would NOT require collection of sales tax
Production Equipment Exemption
If the person acquiring the property acquires it for direct use in the direction production, manufacture, fabrication, assembly, extraction, processing, or finishing of tangible personal property, the transaction is EXEMPT from sales and use tax
Consumption Exemption
If the person acquiring the property or taxable service acquires it for direct consumption as a material to be used in direct production of other tangible personal property, the transaction is EXEMPT from sales and use tax
Food Processing Exemption
If the person acquiring the property acquires it for direct use in the direct production of food and food ingredients or commodities for sale and the person is occupationally engaged in the production of food and food ingredients or commodities sold for human or animal consumption, the transaction is EXEMPT from sales and use tax
Food for Human Consumption Exemption
In general, the sale of food for human consumption is EXEMPT from sales and use tax in Indiana
Does not include: candy, alcoholic beverages, soft drinks, food sold through a vending machine, restaurant meals, take-out food, and tobacco.
Prescription Drugs Exemption
Sale of prescription drugs sold by a registered pharmacist is exempt from sales and use tax in Indiana
Non-Profit Organizations Exemption
The purchase of tangible personal property or taxable services by a non-profit, tax-exempt purchaser is exempt from sales and use tax if the property will be used to carry on the exempt purpose of the purchaser or to raise money for the exempt purpose
