Indiana Tax Flashcards
IN Tax
Sales tax
- imposed on retail sales, includes wholesale, within state
- Sale in the ordinary course of business
- Purchaser is liable, seller acts as collection
IN Tax
Exempt from sales/use tax
Food production
- Food processing - animals, feed, seed, agricultural machinery, other per. prop. if:
a. acquired for direct use in prod. of food and food ingredients or commodities for sale
b. person is farmer, occupation to produce food or ingredients or commodities for human or animal consumption.
- Not for goods in general farm maintanence
IN Tax
Use Tax
- Applies to transactions that occur outside of Indiana that would be taxable if they occurred w/n IN, but only if the property is stored, used, or consumed inside IN.
- implicates the commerce clause
a. tax must have nexus: factors - number of salesperson, customers, volume of sales, market share in IN, burden seller puts on Gov entities, advertising
- Due process - jurisdiction - sufficient contacts, directed efforts at state
IN Tax
Casual Sale
- Not in ordinary course of business
- A casual sale is isolated or occasional when both true
a. prop. was originally acquired for the seller’s own use or consumption;
b. sale not in ordinary course of regularly conducted business
IN Tax
Services
- sales and use tax not to sale of services
- Mixed transaction subject unless either:
1. . service charges stated separate from price of goods
2. Prop. charges are de minimis - price not to exceed 10% of K
- prop. must be necessary to rendering the services
- service provider paid sales tax when purchased
IN Tax
Delivery charges
- If title has not passed to buyer when delivery provided
- FOB destination, delivery charges included in the price of taxable sale
IN Tax
Exempt from sales/use tax
Production Equipment
- sale of machinery, tools, equipment, parts
- if for direct use in production, assembly, etc for tangible personal property
- Includes stuff for producing the production equipment
- Stuff consumed for production, including utilities, exempt
- Pollution control stuff, if:
a. incorp. into operation to comply with law
b. for manuf., processing, refining, mining, agriculture
IN Tax
Exempt from sales/use tax
Production Equipment
Double Direct
- Must have immediate link with product being produced
- No direct causal effect required, necessary or integral to production
- Not direct contact w/ product required
- Production starts at first integral step to arrive at finished product.
IN Tax
Exempt from sales/use tax
Food for human consumption sales
- Pharmaceuticals
- Groceries
- Not, candy, soda, booz, restaurant,
- If sold by pharmacist
IN Tax
Income Tax
- IN has tax on AGI of resident and non-residents
- Based upon federal AGI, w/ differences
a. Starts at fed. AGI and adds or subtracts - Individual - Add back state and local taxes
- sub portion of income subject to tax by another state or $2k (less)
- Corp. - add Charitable ded, state and local taxes
- sub - tax exempt income
IN Tax
Income Tax
- IN has tax on AGI of resident and non-residents
- Based upon federal AGI, w/ differences
a. Starts at fed. AGI and adds or subtracts - Individual - Add back state and local taxes
- sub portion of income subject to tax by another state or $2k (less)
- Corp. - add Charitable ded, state and local taxes
- sub - tax exempt income
IN Tax
Income Tax
Residency
a. Time - maintains address and spends more than 183 days is resident
b. Domicile - two homes - factual, factors
1. time spent at residence
2. where auto registered
3. where votes
4. where will is drawn
5. other factors showing where consider home
- Business - Principal place activities directed and managed
IN Tax
Income Tax
Apportionment of IN derived
-
IN Tax
Utilities Receipt Tax
- ## Any business or gov. entity in retail sale of utility services, even if tax exempt from income tax
IN Tax
Inheritance Tax
- Must file one return for a decedent
- Beneficiary deductions
a. surviving spouses and charities exempt
b. Class A - parents, children, lineal ancestors, $100k exemption
c. Class B - brothers, sons/daughter in law, descendants of brother, $500 exemption
d. Class C - aunts, uncles, nephew by marriage, corp. $100 exemption
