Citations Affected: IC 6-2.5; IC 6-9; noncode.
Synopsis: Streamlined sales tax. Adds or amends various sales tax
definitions and exemptions in order to conform to the streamlined sales
and use tax agreement. Establishes specific sourcing rules for
determining the taxing situs of telecommunications services (other than
mobile telecommunications services otherwise covered by current law).
Establishes general sourcing rules for other types of transactions.
Amends the statute concerning bad debt deductions from gross retail
income to conform to the agreement. Amends references to carryout
food in the food and beverage tax statutes to conform to the new sales
tax definitions. Authorizes the department of state revenue to adopt
emergency rules to implement this bill.
Effective: Upon passage; January 1, 2004.
January 21, 2003, read first time and referred to Committee on Finance.
February 17, 2003, amended, reported favorably _ Do Pass.
February 20, 2003, read second time, amended, ordered engrossed.
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
SECTION 1. IC 6-2.5-1-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 5. (a) Except as
provided in subsection (b), "gross retail income" means the total gross
receipts, of any kind or character, received in a retail transaction,
except including cash, credit, property, and services, for which
tangible personal property is sold, leased, or rented, valued in
money, whether received in money or otherwise, without any
deduction for:
(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;
(5) installation charges; or
(6) the value of exempt personal property given to the
purchaser where taxable and exempt personal property have
been bundled together and sold by the seller as a single
product or piece of merchandise.
(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; or
(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; (b)
(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; or
(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.
(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.
SECTION 2. IC 6-2.5-1-11 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 11. "Alcoholic beverages" means
beverages that are suitable for human consumption and contain
one-half of one percent (0.5%) or more of alcohol by volume.
SECTION 3. IC 6-2.5-1-12 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 12. "Candy" means a preparation of
sugar, honey, or other natural or artificial sweeteners in
combination with chocolate, fruits, nuts, or other ingredients or
flavorings in the form of bars, drops, or pieces. The term does not
include any preparation:
(1) containing flour; or
(2) requiring refrigeration.
SECTION 4. IC 6-2.5-1-13 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 13. "Computer" means an electronic
device that accepts information in digital or similar form and
manipulates it for a result based on a sequence of instructions.
SECTION 5. IC 6-2.5-1-14 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 14. "Computer software" means a set of
coded instructions designed to cause a computer or automatic data
processing equipment to perform a task.
SECTION 6. IC 6-2.5-1-15 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 15. "Delivered electronically" means
delivered to the purchaser by means other than tangible storage
media.
SECTION 7. IC 6-2.5-1-16 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 16. "Dietary supplement" means any
product, other than tobacco, that:
(1) is intended to supplement the diet;
(2) contains one (1) or more of the following dietary
ingredients:
(A) a vitamin;
(B) a mineral;
(C) an herb or other botanical;
(D) an amino acid;
(E) a dietary substance for use by humans to supplement
the diet by increasing the total dietary intake; or
(F) a concentrate, a metabolite, a constituent, an extract, or
a combination of any ingredient described in this
subdivision;
(3) is intended for ingestion in tablet, capsule, powder, softgel,
gelcap, or liquid form, or, if not intended for ingestion in such
a form, is not represented as conventional food and is not
represented for use as a sole item of a meal or of the diet; and
(4) is required to be labeled as a dietary supplement,
identifiable by the "Supplemental Facts" box found on the
label and as required under 21 CFR 101.36.
SECTION 8. IC 6-2.5-1-17 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 17. "Drug" means a compound,
substance, or preparation and any component of a compound,
substance, or preparation that is:
(1) recognized in the official United States Pharmacopoeia,
official Homeopathic Pharmacopoeia of the United States, or
official National Formulary, and supplement to any of them;
(2) intended for use in the diagnosis, cure, mitigation,
treatment, or prevention of disease; or
(3) intended to affect the structure or any function of the
body.
The term does not include food and food ingredients, dietary
supplements, or alcoholic beverages.
SECTION 9. IC 6-2.5-1-18 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 18. "Durable medical equipment" means
equipment, including repair and replacement parts for the
equipment, that:
(1) can withstand repeated use;
(2) is primarily and customarily used to serve a medical
purpose;
(3) generally is not useful to a person in the absence of illness
or injury; and
(4) is not worn in or on the body.
The term does not include mobility enhancing equipment.
SECTION 10. IC 6-2.5-1-19 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 19. "Electronic" means relating to
technology having electrical, digital, magnetic, wireless, optical,
electromagnetic, or similar capabilities.
SECTION 11. IC 6-2.5-1-20 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 20. "Food and food ingredients" means
substances, whether in liquid, concentrated, solid, frozen, dried, or
dehydrated form, that are sold for ingestion or chewing by humans
and that are consumed for their taste or nutritional value. The
term does not include alcoholic beverages, candy, dietary
supplements, or soft drinks.
SECTION 12. IC 6-2.5-1-21 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 21. (a) "Lease" or "rental" means any
transfer of possession or control of tangible personal property for
a fixed or indeterminate term for consideration and may include
future options to purchase or extend. "Lease" or "rental" does not
include:
(1) a transfer of possession or control of property under a
security agreement or deferred payment plan that requires
the transfer of title upon completion of the required
payments;
(2) a transfer or possession or control of property under an
agreement that requires the transfer of title upon completion
of required payments and payment of an option price does not
exceed the greater of one hundred dollars ($100) or one
percent (1%) of the total required payments; or
(3) providing tangible personal property along with an
operator for a fixed or indeterminate period, if:
(A) the operator is necessary for the equipment to perform
as designed; and
(B) the operator does more than maintain, inspect, or set
up the tangible personal property.
(b) "Lease" or "rental" includes agreements covering motor
vehicles and trailers in which the amount of consideration may be
increased or decreased by reference to the amount realized upon
sale or disposition of the property as defined in 26 U.S.C.
7701(h)(1).
(c) The definition of "lease" or "rental" set forth in this section
applies throughout this article, regardless of whether a transaction
is characterized as a lease or rental under generally accepted
accounting principles, the Internal Revenue Code, the uniform
commercial code (IC 26-1), or other provisions of federal, state, or
local law.
(d) This section applies only to leases or rentals entered into
after June 30, 2003, and has no retroactive effect on leases or
rentals entered into before July 1, 2003.
SECTION 13. IC 6-2.5-1-22 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 22. "Mobility enhancing equipment"
means equipment, including repair and replacement parts for the
equipment, that:
(1) is primarily and customarily used to provide or increase
the ability to move from one (1) place to another and is
appropriate for use either in a home or a motor vehicle;
(2) is not generally used by persons with normal mobility; and
(3) does not include any motor vehicle or equipment on a
motor vehicle normally provided by a motor vehicle
manufacturer.
The term does not include durable medical equipment.
SECTION 14. IC 6-2.5-1-23 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 23. "Prescription" means an order, a
formula, or a recipe issued in any form of oral, written, electronic,
or other means of transmission by a licensed practitioner
authorized by Indiana law.
SECTION 15. IC 6-2.5-1-24 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 24. Subject to the following provisions,
"prewritten computer software" means computer software,
including prewritten upgrades, that is not designed and developed
by the author or other creator to the specifications of a specific
purchaser:
(1) The combining of two (2) or more prewritten computer
software programs or prewritten parts of the programs does
not cause the combination to be other than prewritten
computer software.
(2) Prewritten computer software includes software designed
and developed by the author or other creator to the
specifications of a specific purchaser when it is sold to a
person other than the purchaser.
(3) If a person modifies or enhances computer software of
which the person is not the author or creator, the person is
considered to be the author or creator only of the person's
modifications or enhancements.
(4) Prewritten computer software or a prewritten part of the
software that is modified or enhanced to any degree, where
the modification or enhancement is designed and developed to
the specifications of a specific purchaser, remains prewritten
computer software. However, where there is a reasonable,
separately stated charge or an invoice or other statement of
the price given to the purchaser for such a modification or
enhancement, the modification or enhancement is not
prewritten computer software.
SECTION 16. IC 6-2.5-1-25 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 25. "Prosthetic device" means a
replacement, corrective, or supportive device, including repair and
replacement parts for the device, worn on or in the body to:
(1) artificially replace a missing part of the body;
(2) prevent or correct physical deformity or malfunction; or
(3) support a weak or deformed part of the body.
SECTION 17. IC 6-2.5-1-26 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 26. "Soft drinks" means nonalcoholic
beverages that contain natural or artificial sweeteners. The term
does not include beverages that contain milk or milk products, soy,
rice, or similar milk substitutes, or greater than fifty percent
(50%) of vegetable or fruit juice by volume.
SECTION 18. IC 6-2.5-1-27 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 27. "Tangible personal property" means
personal property that:
(1) can be seen, weighed, measured, felt, or touched; or
(2) is in any other manner perceptible to the senses.
The term includes electricity, water, gas, steam, and prewritten
computer software.
SECTION 19. IC 6-2.5-4-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 1. (a) A person is
a retail merchant making a retail transaction when he engages in selling
at retail.
(b) A person is engaged in selling at retail when, in the ordinary
course of his regularly conducted trade or business, he:
(1) acquires tangible personal property for the purpose of resale;
and
(2) transfers that property to another person for consideration.
(c) For purposes of determining what constitutes selling at retail, it
does not matter whether:
(1) the property is transferred in the same form as when it was
acquired;
(2) the property is transferred alone or in conjunction with other
property or services; or
(3) the property is transferred conditionally or otherwise.
(d) Notwithstanding subsection (b), a person is not selling at retail
if he is making a wholesale sale as described in section 2 of this
chapter.
(e) The gross retail income received from selling at retail is only
taxable under this article to the extent that the income represents:
(1) the price of the property transferred, without the rendition of
any service; and
(2) except as provided in subsection (g), any bona fide charges
which are made for preparation, fabrication, alteration,
modification, finishing, completion, delivery, or other service
performed in respect to the property transferred before its transfer
and which are separately stated on the transferor's records.
involving animals, feed, seed, plants, fertilizer, insecticides, fungicides,
and other tangible personal property are exempt from the state gross
retail tax if:
(1) the person acquiring the property acquires it for his direct use
in the direct production of food and food ingredients or
commodities for sale or for further use in the production of food
and food ingredients or commodities for sale; and
(2) the person acquiring the property is occupationally engaged in
the production of food and food ingredients or commodities
which he sells for human or animal consumption or uses for
further food and food ingredient or commodity production.
SECTION 22. IC 6-2.5-5-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 2. (a)
Transactions involving agricultural machinery, tools, and equipment
are exempt from the state gross retail tax if the person acquiring that
property acquires it for his direct use in the direct production,
extraction, harvesting, or processing of agricultural commodities.
(b) Transactions involving agricultural machinery or equipment are
exempt from the state gross retail tax if:
(1) the person acquiring the property acquires it for use in
conjunction with the production of food and food ingredients or
commodities for sale;
(2) the person acquiring the property is occupationally engaged in
the production of food or commodities which he sells for human
or animal consumption or uses for further food and food
ingredients or commodity production; and
(3) the machinery or equipment is designed for use in gathering,
moving, or spreading animal waste.
SECTION 23. IC 6-2.5-5-18 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 18. (a) Sales of
durable medical equipment, prosthetic devices, artificial limbs,
orthopedic devices, dental prosthetic devices, eyeglasses, contact
lenses, and other medical equipment supplies and devices are exempt
from the state gross retail tax, if the sales are prescribed by a person
licensed to issue the prescription.
(b) Rentals of durable medical 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.
SECTION 24. IC 6-2.5-5-19 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 19. (a) As used
in this section, "legend drug" has the meaning set forth in means a
drug as defined in IC 6-2.5-1-17 that is also a legend drug for
purposes of IC 16-18-2-199.
(b) As used in this section, "nonlegend drug" means a drug (as
defined in IC 16-18-2-101(a)) IC 6-2.5-1-17) that is not a legend drug.
(c) Sales of legend drugs and sales of nonlegend drugs are exempt
from the state gross retail tax if:
(1) a registered pharmacist makes the sale upon the prescription
of a practitioner who is licensed to prescribe, dispense, and
administer those drugs to human beings or animals in the course
of his professional practice; or
(2) the licensed practitioner makes the sales.
(d) Sales of a nonlegend drug are exempt from the state gross retail
tax, if:
(1) the nonlegend drug is dispensed upon an original prescription
or a drug order (as defined in IC 16-42-19-3); and
(2) the ultimate user of the drug is a person confined to a hospital
or health care facility.
(e) Sales of insulin, oxygen, blood, or blood plasma are exempt from
the state gross retail tax, if the purchaser purchases the insulin, oxygen,
blood, or plasma for medical purposes.
(f) Sales of drugs, insulin, oxygen, blood, and blood plasma are
exempt from the state gross retail tax if:
(1) the purchaser is a practitioner licensed to prescribe, dispense,
and administer drugs to human beings or animals; and
(2) the purchaser buys the items for:
(A) direct consumption in his practice; or
(B) resale to a patient that the practitioner is treating, in the
case of sales of legend or nonlegend drugs.
SECTION 25. IC 6-2.5-5-20 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 20. (a) Sales of
food and food ingredients for human consumption are exempt from
the state gross retail tax.
(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) cereals and cereal products;
(2) milk and milk products, including ice cream;
(3) meat and meat products;
(4) fish and fish products;
(5) eggs and egg products;
(6) vegetables and vegetable products;
(7) fruit and fruit products, including fruit juices;
(8) sugar, sugar substitutes, and sugar products;
(9) coffee and coffee substitutes;
(10) tea, cocoa, and cocoa products;
(11) spices, condiments, extracts, and salt;
(12) oleomargarine; and
(13) natural spring water.
(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; confectionery, and chewing gum;
(2) alcoholic beverages;
(3) cocktail mixes;
(4) (3) soft drinks; sodas, and other similar beverages;
(5) medicines, tonics, vitamins, and other dietary supplements;
(6) water (except natural spring water), mineral water, carbonated
water, and ice;
(7) pet food;
(8) food furnished, prepared, or served for consumption at a
location, or on equipment, provided by the retail merchant;
(9) meals served by a retail merchant off the merchant's premises;
(10) food sold by a retail merchant who ordinarily bags, wraps, or
packages the food for immediate consumption on or near the
merchant's premises, including food sold on a "take out" or "to
go" basis; and
(11) (4) food sold through a vending machine; or by a street
vendor.
(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); or
(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).
SECTION 26. IC 6-2.5-5-21, AS AMENDED BY P.L.192-2002(ss),
SECTION 53, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 21. (a) For purposes of this section, "private
benefit or gain" does not include reasonable compensation paid to an
employee for work or services actually performed.
(b) Sales of food and food ingredients are exempt from the state
gross retail tax if:
(1) the seller meets the filing requirements under subsection (d)
and is any of the following:
(A) A fraternity, a sorority, or a student cooperative housing
organization that is connected with and under the supervision
of a college, a university, or any other educational institution
if no part of its income is used for the private benefit or gain
of any member, trustee, shareholder, employee, or associate.
(B) Any:
(i) institution;
(ii) trust;
(iii) group;
(iv) united fund;
(v) affiliated agency of a united fund;
(vi) nonprofit corporation;
(vii) cemetery association; or
(viii) organization;
that is organized and operated exclusively for religious,
charitable, scientific, literary, educational, or civic purposes if
no part of its income is used for the private benefit or gain of
any member, trustee, shareholder, employee, or associate.
(C) A group, an organization, or a nonprofit corporation that
is organized and operated for fraternal or social purposes, or
as a business league or association, and not for the private
benefit or gain of any member, trustee, shareholder, employee,
or associate.
(D) A:
(i) hospital licensed by the state department of health;
(ii) shared hospital services organization exempt from
federal income taxation by Section 501(c)(3) or 501(e) of
the Internal Revenue Code;
(iii) labor union;
(iv) church;
(v) monastery;
(vi) convent;
(vii) school that is a part of the Indiana public school
system;
(viii) parochial school regularly maintained by a recognized
religious denomination; or
(ix) trust created for the purpose of paying pensions to
members of a particular profession or business who created
the trust for the purpose of paying pensions to each other;
if the taxpayer is not organized or operated for private profit or
gain;
(2) the purchaser is a person confined to his home because of age,
sickness, or infirmity;
(3) the seller delivers the food and food ingredients to the
purchaser; and
(4) the delivery is prescribed as medically necessary by a
physician licensed to practice medicine in Indiana.
(c) Sales of food and food ingredients are exempt from the state
gross retail tax if the seller is an organization described in subsection
(b)(1), and the purchaser is a patient in a hospital operated by the
seller.
(d) To obtain the exemption provided by this section, a taxpayer
must file an application for exemption with the department:
(1) before January 1, 2003, under IC 6-2.1-3-19 (repealed); or
(2) not later than one hundred twenty (120) days after the
taxpayer's formation.
In addition, the taxpayer must file an annual report with the department
on or before the fifteenth day of the fifth month following the close of
each taxable year. If a taxpayer fails to file the report, the department
shall notify the taxpayer of the failure. If within sixty (60) days after
receiving such notice the taxpayer does not provide the report, the
taxpayer's exemption shall be canceled. However, the department may
reinstate the taxpayer's exemption if the taxpayer shows by petition that
the failure was due to excusable neglect.
SECTION 27. IC 6-2.5-5-21.5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 21.5. Sales of
food and food ingredients prescribed as medically necessary by a
physician licensed to practice medicine in Indiana are exempt from the
state gross retail tax if:
(1) a registered pharmacist makes the sale upon the prescription
of a practitioner who is licensed to practice medicine in Indiana;
or
(2) the licensed practitioner makes the sale of the food and food
ingredients described in this section.
SECTION 28. IC 6-2.5-5-22, AS AMENDED BY P.L.192-2002(ss),
SECTION 54, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]: Sec. 22. (a) Sales of school meals are exempt
from the state gross retail tax if:
(1) the seller is a school containing students in any grade, one (1)
through twelve (12);
(2) the purchaser is one (1) of those students or a school
employee; and
(3) the school furnishes the food and food ingredients on its
premises.
(b) Sales of food and food ingredients by not-for-profit colleges or
universities are exempt from the state gross retail tax, if the purchaser
is a student at the college or university.
(c) Sales of meals after December 31, 1976, by a fraternity, sorority,
or student cooperative housing organization described in section
21(b)(1)(A) of this chapter are exempt from the state gross retail tax,
if the purchaser:
(1) is a member of the fraternity, sorority, or student cooperative
housing organization; and
(2) is enrolled in the college, university, or educational institution
with which the fraternity, sorority, or student cooperative housing
organization is connected and by which it is supervised.
SECTION 29. IC 6-2.5-5-35 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 35. Transactions
involving tangible personal property are exempt from the state gross
retail tax if:
(1) the:
which he makes the collection.
(c) The following provisions apply to a deduction for a
receivable treated as uncollectible debt under subsection (a):
(1) The deduction does not include interest.
(2) The amount of the deduction shall be determined in the
manner provided by Section 166 of the Internal Revenue
Code for bad debts but shall be adjusted to exclude:
(A) financing charges or interest;
(B) sales or use taxes charged on the purchase price;
(C) uncollectible amounts on property that remain in the
possession of the seller until the full purchase price is paid;
(D) expenses incurred in attempting to collect any debt;
and
(E) repossessed property.
(3) The deduction shall be claimed on the return for the
period during which the receivable is written off as
uncollectible in the claimant's books and records and is
eligible to be deducted for federal income tax purposes. For
purposes of this subdivision, a claimant who is not required to
file federal income tax returns may deduct an uncollectible
receivable on a return filed for the period in which the
receivable is written off as uncollectible in the claimant's
books and records and would be eligible for a bad debt
deduction for federal income tax purposes if the claimant
were required to file a federal income tax return.
(4) If the amount of uncollectible receivables claimed as a
deduction by a retail merchant for a particular reporting
period exceeds the amount of the retail merchant's taxable
sales for that reporting period, the retail merchant may file a
refund claim under IC 6-8.1-9. However, the deadline for
refund claim shall be measured from the due date of the
return for the reporting period on which the deduction for the
uncollectible receivables could first be claimed.
(5) If a retail merchant's filing responsibilities have been
assumed by a certified service provider (as defined in
IC 6-2.5-11-2), the certified service provider may claim, on
behalf of the retail merchant, any deduction or refund for
uncollectible receivables provided by this section. The
certified service provider must credit or refund the full
amount of any deduction or refund received to the retail
merchant.
(6) For purposes of reporting a payment received on a
previously claimed uncollectible receivable, any payments
made on a debt or account shall be applied first
proportionally to the taxable price of the property and the
state gross retail tax or use tax thereon, and secondly to
interest, service charges, and any other charges.
(7) A retail merchant claiming a deduction for an
uncollectible receivable may allocate that receivable among
the states that are members of the streamlined sales and use
tax agreement if the books and records of the retail merchant
support that allocation.
SECTION 31. IC 6-2.5-12 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]:
Chapter 12. Taxing Situs of Nonmobile Telecommunications
Service
Sec. 1. As used in this chapter, "air to ground radiotelephone
service" means a radio service, as that term is defined in 47 CFR
22.99, in which common carriers are authorized to offer and
provide radio telecommunications service for hire to subscribers
in aircraft.
Sec. 2. As used in this chapter, "call by call basis" means any
method of charging for telecommunications services by which the
price is measured by individual calls.
Sec. 3. As used in this chapter, "communications channel"
means a physical or virtual path of communications over which
signals are transmitted between or among customer channel
termination points.
Sec. 4. As used in this chapter, "customer" means the person or
entity that contracts with the seller of telecommunications services.
If the end user of telecommunications services is not the
contracting party, the end user of the telecommunications service
is the customer of the telecommunication service, but this sentence
only applies for the purpose of sourcing sales of
telecommunications services under this chapter. The term does not
include a reseller of telecommunications service or for mobile
telecommunications service of a serving carrier under an
agreement to serve the customer outside the home service
provider's licensed service area.
Sec. 5. As used in this chapter, "customer channel termination
point" means the location where the customer either inputs or
receives the communications.
Sec. 6. As used in this chapter, "end user" means the person
who uses the telecommunications service. In the case of an entity,
"end user" means the individual who uses the service on behalf of
the entity.
Sec. 7. As used in this chapter, "home service provider" means
the facilities based carrier or reseller with which the customer
contracts for the provision of mobile telecommunications service.
Sec. 8. As used in this chapter, "mobile telecommunications
service" means commercial mobile radio service, as defined in 47
CFR 20.3 as in effect on June 1, 1999.
Sec. 9. As used in this chapter, "place of primary use" means
the street address representative of where the customer's use of the
telecommunications service primarily occurs, which must be the
residential street address or the primary business street address of
the customer. In the case of mobile telecommunications services,
"place of primary use" must be within the licensed service area of
the home service provider.
Sec. 10. As used in this chapter, "post paid calling service"
means the telecommunications service obtained by making a
payment on a call by call basis either through the use of a credit
card or payment mechanism such as a bank card, travel card,
credit card, or debit card, or by charge made to a telephone
number that is not associated with the origination or termination
of the telecommunications service. A post paid calling service
includes a telecommunications service that would be a prepaid
calling service except it is not exclusively a telecommunications
service.
Sec. 11. As used in this chapter, "prepaid calling service" means
the right to access exclusively telecommunications services, which
must be paid for in advance and which enables the origination of
calls using an access number or authorization code, whether
manually or electronically dialed, and that is sold in predetermined
units or dollars of which the number declines with use in a known
amount.
Sec. 12. As used in this chapter, "private communication
service" means a telecommunications service that entitles the
customer to exclusive or priority use of a communications channel
or group of channels between or among termination points,
regardless of the manner in which such channel or channels are
connected, and includes switching capacity, extension lines,
stations, and any other associated services that are provided in
connection with the use of such channel or channels.
Sec. 13. As used in this chapter, "service address" means the
following:
(1) The location of the telecommunications equipment to
which a customer's call is charged and from which the call
originates or terminates, regardless of where the call is billed
or paid.
(2) If the location described in subdivision (1) is not known,
the origination point of the signal of the telecommunications
services first identified by either the seller's
telecommunications system or in information received by the
seller from its service provider, where the system used to
transport such signals is not that of the seller.
(3) If neither of the locations described in subdivision (1) or
(2) is known, the location of the customer's place of primary
use.
Sec. 14. Except for the telecommunications services listed in
section 16 of this chapter, the sale of telecommunications service
sold on a call by call basis shall be sourced to:
(1) each level of taxing jurisdiction where the call originates
and terminates in that jurisdiction; or
(2) each level of taxing jurisdiction where the call either
originates or terminates and in which the service address is
also located.
Sec. 15. Except for the telecommunications services listed in
section 16 of this chapter, a sale of telecommunications services
sold on a basis other than a call by call basis is sourced to the
customer's place of primary use.
Sec. 16. The sale of the following telecommunications services
shall be sourced to each level of taxing jurisdiction as follows:
(1) A sale of mobile telecommunications services, other than
air to ground radiotelephone service and prepaid calling
service, is sourced to the customer's place of primary use as
required by the Mobile Telecommunications Sourcing Act and
IC 6-8.1-15.
(2) A sale of post paid calling service is sourced to the
origination point of the telecommunications signal as first
identified by either:
(A) the seller's telecommunications system; or
(B) information received by the seller from its service
provider, where the system used to transport such signals
is not that of the seller.
(3) A sale of prepaid calling service is sourced in the following
manner:
located entirely within one (1) jurisdiction or level of
jurisdiction is sourced in such jurisdiction in which the
customer channel termination points are located.
(C) Service for segments of a channel between two (2)
customer channel termination points located in different
jurisdictions and which segments of channel are separately
charged is sourced fifty percent (50%) in each level of
jurisdiction in which the customer channel termination
points are located.
(D) Service for segments of a channel located in more than
one (1) jurisdiction or level of jurisdiction and which
segments are not separately billed is sourced in each
jurisdiction based on the percentage determined by
dividing the number of customer channel termination
points in such jurisdiction by the total number of customer
channel termination points.
SECTION 32. IC 6-2.5-13 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2004]:
Chapter 13. General Sourcing Rules
Sec. 1. (a) As used in this section, the terms "receive" and
"receipt" mean:
(1) taking possession of tangible personal property;
(2) making first use of services; or
(3) taking possession or making first use of digital goods;
whichever comes first. The terms "receive" and "receipt" do not
include possession by a shipping company on behalf of the
purchaser.
(b) This section:
(1) applies regardless of the characterization of a product as
tangible personal property, a digital good, or a service;
(2) applies only to the determination of a seller's obligation to
pay or collect and remit a sales or use tax with respect to the
seller's retail sale of a product; and
(3) does not affect the obligation of a purchaser or lessee to
remit tax on the use of the product to the taxing jurisdictions
of that use.
(c) This section does not apply to sales or use taxes levied on the
following:
(1) The retail sale or transfer of watercraft, modular homes,
manufactured homes, or mobile homes. These items must be
sourced according to the requirements of this article.
(2) The retail sale, excluding lease or rental, of motor vehicles,
trailers, semitrailers, or aircraft that do not qualify as
transportation equipment, as defined in subsection (g). The
retail sale of these items shall be sourced according to the
requirements of this article, and the lease or rental of these
items must be sourced according to subsection (f).
(3) Telecommunications services, as set forth in IC 6-2.5-12,
shall be sourced in accordance with IC 6-2.5-12.
(d) The retail sale, excluding lease or rental, of a product shall
be sourced as follows:
(1) When the product is received by the purchaser at a
business location of the seller, the sale is sourced to that
business location.
(2) When the product is not received by the purchaser at a
business location of the seller, the sale is sourced to the
location where receipt by the purchaser (or the purchaser's
donee, designated as such by the purchaser) occurs, including
the location indicated by instructions for delivery to the
purchaser (or donee), known to the seller.
(3) When subdivisions (1) and (2) do not apply, the sale is
sourced to the location indicated by an address for the
purchaser that is available from the business records of the
seller that are maintained in the ordinary course of the seller's
business when use of this address does not constitute bad
faith.
(4) When subdivisions (1), (2), and (3) do not apply, the sale is
sourced to the location indicated by an address for the
purchaser obtained during the consummation of the sale,
including the address of a purchaser's payment instrument, if
no other address is available, when use of this address does
not constitute bad faith.
(5) When none of the previous rules of subdivisions (1), (2),
(3), or (4) apply, including the circumstance in which the
seller is without sufficient information to apply the previous
rules, then the location will be determined by the address
from which tangible personal property was shipped, from
which the digital good or the computer software delivered
electronically was first available for transmission by the
seller, or from which the service was provided (disregarding
for these purposes any location that merely provided the
digital transfer of the product sold).
(e) The lease or rental of tangible personal property, other than
property identified in subsection (f) or (g), shall be sourced as
follows:
(1) For a lease or rental that requires recurring periodic
payments, the first periodic payment is sourced the same as a
retail sale in accordance with the provisions of subsection (d).
Periodic payments made subsequent to the first payment are
sourced to the primary property location for each period
covered by the payment. The primary property location shall
be as indicated by an address for the property provided by the
lessee that is available to the lessor from its records
maintained in the ordinary course of business, when use of
this address does not constitute bad faith. The property
location shall not be altered by intermittent use at different
locations, such as use of business property that accompanies
employees on business trips and service calls.
(2) For a lease or rental that does not require recurring
periodic payments, the payment is sourced the same as a retail
sale in accordance with the provisions of subsection (d).
This subsection does not affect the imposition or computation of
sales or use tax on leases or rentals based on a lump sum or an
accelerated basis, or on the acquisition of property for lease.
(f) The lease or rental of motor vehicles, trailers, semitrailers,
or aircraft that do not qualify as transportation equipment, as
defined in subsection (g), shall be sourced as follows:
(1) For a lease or rental that requires recurring periodic
payments, each periodic payment is sourced to the primary
property location. The primary property location shall be as
indicated by an address for the property provided by the
lessee that is available to the lessor from its records
maintained in the ordinary course of business, when use of
this address does not constitute bad faith. This location shall
not be altered by intermittent use at different locations.
(2) For a lease or rental that does not require recurring
periodic payments, the payment is sourced the same as a retail
sale in accordance with the provisions of subsection (d).
This subsection does not affect the imposition or computation of
sales or use tax on leases or rentals based on a lump sum or
accelerated basis, or on the acquisition of property for lease.
(g) The retail sale, including lease or rental, of transportation
equipment shall be sourced the same as a retail sale in accordance
with the provisions of subsection (d), notwithstanding the exclusion
of lease or rental in subsection (d). As used in this subsection,
"transportation equipment" means any of the following:
(1) Locomotives and railcars that are used for the carriage of
persons or property in interstate commerce.
(2) Trucks and truck-tractors with a gross vehicle weight
rating (GVWR) of ten thousand one (10,001) pounds or
greater, trailers, semitrailers, or passenger buses that are:
(A) registered through the International Registration Plan;
and
(B) operated under authority of a carrier authorized and
certificated by the U.S. Department of Transportation or
another federal authority to engage in the carriage of
persons or property in interstate commerce.
(3) Aircraft that are operated by air carriers authorized and
certificated by the U.S. Department of Transportation or
another federal or a foreign authority to engage in the
carriage of persons or property in interstate or foreign
commerce.
(4) Containers designed for use on and component parts
attached or secured on the items set forth in subdivisions (1)
through (3).
Sec. 2. (a) Notwithstanding section 1 of this chapter, a business
purchaser that:
(1) is not a holder of a direct pay permit; and
(2) knows at the time of its purchase of a digital good,
computer software delivered electronically, or a service that
the digital good, computer software delivered electronically,
or service will be concurrently available for use in more than
one (1) jurisdiction;
shall deliver to the seller in conjunction with its purchase a form
disclosing this fact ("multiple points of use" or "MPU" exemption
form).
(b) Upon receipt of the MPU exemption form, the seller is
relieved of all obligation to collect, pay, or remit the applicable tax
and the purchaser shall be obligated to collect, pay, or remit the
applicable tax on a direct pay basis.
(c) A purchaser delivering the MPU exemption form may use
any reasonable, but consistent and uniform, method of
apportionment that is supported by the purchaser's business
records as they exist at the time of the consummation of the sale.
(d) The MPU exemption form remains in effect for all future
sales by the seller to the purchaser (except as to the subsequent
sale's specific apportionment that is governed by the principle of
subsection (c) and the facts existing at the time of the sale) until it
is revoked in writing.
(e) A holder of a direct pay permit shall not be required to
deliver a MPU exemption form to the seller. A direct pay permit
holder shall follow the provisions of subsection (c) in apportioning
the tax due on a digital good or a service that will be concurrently
available for use in more than one (1) jurisdiction.
Sec. 3. (a) Notwithstanding section 1 of this chapter, a purchaser
of direct mail that is not a holder of a direct pay permit shall
provide to the seller in conjunction with the purchase either a
direct mail form or information to show the jurisdictions to which
the direct mail is delivered to recipients.
(b) Upon receipt of the direct mail form, the seller is relieved of
all obligations to collect, pay, or remit the applicable tax and the
purchaser is obligated to pay or remit the applicable tax on a direct
pay basis. A direct mail form remains in effect for all future sales
of direct mail by the seller to the purchaser until it is revoked in
writing.
(c) Upon receipt of information from the purchaser showing the
jurisdictions to which the direct mail is delivered to recipients, the
seller shall collect the tax according to the delivery information
provided by the purchaser. In the absence of bad faith, the seller is
relieved of any further obligation to collect tax on any transaction
where the seller has collected tax under the delivery information
provided by the purchaser.
(d) If the purchaser of direct mail does not have a direct pay
permit and does not provide the seller with either a direct mail
form or delivery information, as required by subsection (a), the
seller shall collect the tax according to section 1(d)(5) of this
chapter. Nothing in this subsection limits a purchaser's obligation
for sales or use tax to any state to which the direct mail is
delivered.
(e) If a purchaser of direct mail provides the seller with
documentation of direct pay authority, the purchaser shall not be
required to provide a direct mail form or delivery information to
the seller.
SECTION 33. IC 6-9-12-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 3. (a) Subject to
section 4 of this chapter, the tax imposed under this chapter applies to
any transaction in which food or beverage is furnished, prepared, or
served:
(1) for consumption at a location, or on equipment, provided by
a retail merchant;
(2) in a county in which a consolidated first class city is located;
and
(3) by a retail merchant for a consideration.
(b) Transactions described in subsection (a)(1) include, but are not
limited to transactions in which food or beverage is:
(1) served by a retail merchant off his premises;
(2) sold by a retail merchant who ordinarily bags, wraps, or
packages the food or beverage for immediate consumption on or
near the retail merchant's premises, including food or beverage
sold on a "take out" or "to go" basis; or
(3) sold by a street vendor.
(2) food sold in a heated state or heated by a retail merchant;
(3) two (2) or more food ingredients mixed or combined by a
retail merchant 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); or
(4) food sold with eating utensils provided by a retail
merchant, 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).
SECTION 34. IC 6-9-20-4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 4. (a) Except as
provided in subsection (c), a tax imposed under section 3 of this
chapter applies to any transaction in which food or beverage is
furnished, prepared, or served:
(1) for consumption at a location, or on equipment, provided by
a retail merchant;
(2) in the county in which the tax is imposed; and
(3) by a retail merchant for consideration.
(b) Transactions described in subsection (a)(1) include, but are not
limited to, transactions in which food or beverage is:
(1) served by a retail merchant off the merchant's premises;
(2) sold by a retail merchant who ordinarily bags, wraps, or
packages the food or beverage for immediate consumption on or
near the retail merchant's premises, including food or beverage
sold on a "take out" or "to go" basis; or
the federal Food and Drug Administration in chapter 3,
subpart 3-401.11 of its Food Code so as to prevent food borne
illnesses); or
(4) food sold with eating utensils provided by a retail
merchant, 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).
(c) The county food and beverage tax does not apply to the
furnishing, preparing, or serving of any food or beverage in a
transaction that is exempt, or to the extent exempt, from the state gross
retail tax imposed by IC 6-2.5.
SECTION 36. IC 6-9-23-4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 4. (a) Except as
provided in subsection (c), a tax imposed under section 3 of this
chapter applies to any transaction in which food or beverage is
furnished, prepared, or served:
(1) for consumption at a location, or on equipment, provided by
a retail merchant;
(2) in the county in which the tax is imposed; and
(3) by a retail merchant for consideration.
(b) Transactions described in subsection (a)(1) include transactions
in which food or beverage is:
(1) served by a retail merchant off the merchant's premises;
(2) sold by a retail merchant who ordinarily bags, wraps, or
packages the food or beverage for immediate consumption on or
near the retail merchant's premises, including food or beverage
sold on a "take out" or "to go" basis; or
(3) sold by a street vendor.
(2) food sold in a heated state or heated by a retail merchant;
(3) two (2) or more food ingredients mixed or combined by a
retail merchant 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); or
(4) food sold with eating utensils provided by a retail
merchant, 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).
(c) The county food and beverage tax does not apply to the
furnishing, preparing, or serving of any food or beverage in a
transaction that is exempt, or to the extent exempt, from the state gross
retail tax imposed by IC 6-2.5.
SECTION 37. IC 6-9-24-4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 4. (a) Except as
provided in subsection (c), a tax imposed under section 3 of this
chapter applies to any transaction in which food or beverage is
furnished, prepared, or served:
(1) for consumption at a location, or on equipment, provided by
a retail merchant;
(2) in the municipality in which the tax is imposed; and
(3) by a retail merchant for consideration.
(b) Transactions described in subsection (a)(1) include transactions
in which food or beverage is:
(1) served by a retail merchant off the merchant's premises;
(2) sold by a retail merchant who ordinarily bags, wraps, or
packages the food or beverage for immediate consumption on or
near the retail merchant's premises, including food or beverage
sold on a "take out" or "to go" basis; or
(3) sold by a street vendor.
(2) food sold in a heated state or heated by a retail merchant;
(3) two (2) or more food ingredients mixed or combined by a
retail merchant 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); or
(4) food sold with eating utensils provided by a retail
merchant, 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).
(c) The municipal food and beverage tax does not apply to the
furnishing, preparing, or serving of any food or beverage in a
transaction that is exempt, or to the extent exempt, from the state gross
retail tax imposed by IC 6-2.5.
SECTION 38. IC 6-9-25-4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 4. (a) Except as
provided in subsection (c), a tax imposed under section 3 of this
chapter applies to any transaction in which food or beverage is
furnished, prepared, or served:
(1) for consumption at a location, or on equipment, provided by
a retail merchant;
(2) in the county in which the tax is imposed; and
(3) by a retail merchant for consideration.
(b) Transactions described in subsection (a)(1) include transactions
in which food or beverage is:
(1) served by a retail merchant off the merchant's premises;
(2) sold by a retail merchant who ordinarily bags, wraps, or
packages the food or beverage for immediate consumption on or
near the retail merchant's premises, including food or beverage
sold on a "take out" or "to go" basis; or
(3) sold by a street vendor.
(2) food sold in a heated state or heated by a retail merchant;
(3) two (2) or more food ingredients mixed or combined by a
retail merchant 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); or
(4) food sold with eating utensils provided by a retail
merchant, 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).
(c) The county food and beverage tax does not apply to the
furnishing, preparing, or serving of any food or beverage in a
transaction that is exempt, or to the extent exempt, from the state gross
retail tax imposed by IC 6-2.5.
SECTION 39. IC 6-9-26-7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2004]: Sec. 7. Transactions
described in section 6(1) of this chapter include transactions in which
food or beverage is:
(1) served by a retail merchant off the merchant's premises;
(2) sold by a retail merchant who ordinarily bags, wraps, or
packages the food or beverage for immediate consumption on or
near the retail merchant's premises, including food or beverage
sold on a "take out" or "to go" basis; or
merchant, 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).
(c) The town food and beverage tax does not apply to the furnishing,
preparing, or serving of a food or beverage in a transaction that is
exempt, or to the extent the transaction is exempt, from the state gross
retail tax imposed by IC 6-2.5.
SECTION 41. IC 6-9-33-4, AS ADDED BY P.L.8-2000, SECTION
3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY
1, 2004]: Sec. 4. (a) Except as provided in subsection (c), a tax
imposed under section 3 of this chapter applies to any transaction in
which food or beverage is furnished, prepared, or served:
(1) for consumption at a location, or on equipment, provided by
a retail merchant;
(2) in the county in which the tax is imposed; and
(3) by a retail merchant for consideration.
(b) Transactions described in subsection (a)(1) include transactions
in which food or beverage is:
(1) served by a retail merchant off the merchant's premises;
(2) sold by a retail merchant who ordinarily bags, wraps, or
packages the food or beverage for immediate consumption on or
near the retail merchant's premises, including food or beverage
sold on a "take out" or "to go" basis; or
(3) sold by a street vendor.
(2) food sold in a heated state or heated by a retail merchant;
(3) two (2) or more food ingredients mixed or combined by a
retail merchant 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); or
(4) food sold with eating utensils provided by a retail
merchant, 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).
(c) The county supplemental food and beverage tax does not apply
to the furnishing, preparing, or serving of any food or beverage in a
transaction that is exempt, or to the extent exempt, from the state gross
retail tax imposed by IC 6-2.5.
SECTION 42. [EFFECTIVE UPON PASSAGE] (a) The
department of state revenue shall adopt the initial rules and
prescribe the initial forms to implement this act before December
1, 2004. The department of state revenue may adopt the initial
rules required under this SECTION in the same manner that
emergency rules are adopted under IC 4-22-2-37.1. A rule adopted
under this SECTION expires on the earlier of the following:
(1) The date that the rule is superseded, amended, or repealed
by a permanent rule adopted under IC 4-22-2 or another rule
adopted under this SECTION.
(2) July 1, 2005.
(b) This SECTION expires July 1, 2005.
SECTION 43. An emergency is declared for this act.