Tax Talk

Tax Talk is a weekly blog published each Wednesday by the Indiana Department of Revenue (DOR) that discusses tax tips, DOR programs, and helpful information for tax preparers. During tax season blogs are posted on both Mondays and Wednesdays.

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Indiana Race Day Taxes

May 23, 2018

Just as tax season begins winding down for the Indiana Department of Revenue (DOR), the city of Indianapolis is just revving up. For racecar fans around the world, May 1 kicks off the countdown to the Indianapolis 500 race! One of the most highly anticipated motor sporting events in the world, the Indianapolis 500 draws crowds of about 300,000 people each year. This is why DOR is proud to play a role in helping the Indianapolis Motor Speedway ensure professional racers and race-day vendors are in compliance with Indiana’s tax laws during the event.

The Indianapolis Motor Speedway and surrounding areas are designated as a motorsports investment district (MID) for the purpose of financing capital investments at The Indianapolis Motor Speedway. Because of this, the Indianapolis Motor Speedway is subject to unique filing requirements. These requirements apply to Hoosier and out-of-state professional racecar drivers and vendors who profit from the race.

All retail vendors that sell commemorative t-shirts, Indy 500 souvenirs, or other items within the MID must report their retail sales and income attributable to the motorsports racing activities to DOR. They use the Form MID to report the amount of sales made within the MID and the amount of withholding on salaries or wages paid to employees or contractors for work performed within the MID.

The professional racers we love to support aren’t exempt from paying income taxes, either. In fact, professional racing organizations are required to report any compensation paid to race team members or contractors who render services for a professional race team. The Form IMS-1 is used for this process.

Indiana tax requirements also apply to out-of-state professional racers who are not Indiana residents but receive income from participating in the Indianapolis 500. Effective Jan. 1, 2015, any racer who gains income from a race hosted in Indiana is required to withhold 3.3 percent and report it to DOR during the same time period in which their compensation was paid to them.

That’s how it works! Long after the Indy 500 race is over and the stands have cleared, DOR remains busy, working with race-day vendors and racers to ensure they report their earnings correctly.

For more information about motorsports tax requirements, visit our Motorsports Tax Guidance website or call us at 317-234-8614.

How to Open and Close a Business

May 16, 2018

Opening a Business

Did you know that Indiana has almost half a million small businesses? When opening a new business in Indiana, it’s important to determine whether you need to register your business with the Indiana Department of Revenue (DOR).

You will need to register your business if you:

  • Will be selling products or tangible items
  • Have employees
  • Sell food and beverages
  • Rent accommodations for less than 30 days
  • Rent motor vehicles
  • Sell tires
  • Sell fireworks
  • Sell prepaid wireless cards

To register your business with DOR, start at INBiz website. INBiz is a cooperative effort among several state agencies to provide a one-stop source for business owners.

DOR understands that business owners are experts in their trade but don’t necessarily have an interest in, or extensive knowledge of, taxes. To help businesses start strong, DOR offers a number of online resources by business type.

Closing a Business

If you close your business, you’ll need to close your business tax accounts with the DOR. To do so, complete a Business Tax Closure Request (BC-100). You must complete a BC-100 for each location to be closed.

To verify the business closure, you must include one or more of the following:

  • Minutes of the final board of directors meeting
  • Records of bank accounts closed
  • Articles of dissolution
  • Notarized statement of dissolution from an officer of the business
  • Final utility bills
  • Proof of dissolution filed with the Internal Revenue Service
  • Books and records
  • Other pertinent information

Business owners who cannot provide the documentation above can submit a notarized BC-100.

Completed forms and documentation should be faxed to 317-232-1021 or mailed to:

Indiana Department of Revenue
Tax Administration Processing
P.O. Box 6197
Indianapolis, IN 46206-6197

If you need assistance opening or closing a business, please contact the DOR at 317-233-4015, Monday through Friday, 8 a.m. – 4:30 p.m. EST.