Nonprofit Changes You Need to Know About
Nonprofit customers with open and active accounts and a sales tax-exempt checkbox marked in the Indiana Tax System (ITS) received a letter in early November 2022 detailing upcoming changes to sales tax requirements and annual report filings.
- Beginning Jan. 1, 2023, exemption certificates (Form NP-1) will no longer be mailed. Nonprofit customers should no longer use Form ST-105 as the option for nonprofits will be removed. With this change, nonprofit customers will need to go through INTIME to request Form NP-1 as a replacement for Form ST-105. (Previously issued ST-105s will remain valid.) Nonprofit customers who are not registered will need to create an INTIME account to access their exemption certificates. See instructions on creating an INTIME logon.
- Other changes affecting nonprofits include the revised filing frequency from annual to every five years. This law requires nonprofits to file their 2021 Form NP-20 (Nonprofit Organization’s Annual Report) in 2022 to qualify for the new filing frequency. Your letter from DOR specifies your next report filing due date based on your Federal Employer Identification Number (FEIN). This also applies to fiscal year filers whose tax years end before Aug. 1, 2022. New nonprofit customers will need to file Form NP-20R by May 15 every fifth year.
Note: You will not need to file Form NP-20 in 2023 for the 2022 calendar year. Fiscal year filers who file Form NP-20 for a fiscal year ending after July 31, 2022, will not need to file an NP-20 during the 2023 calendar year. Additionally, Form NP-20 is being revised to Form NP-20R.
- Effective July 1, 2022, nonprofits must collect state gross retail sales tax after exceeding $20,000 in sales during a calendar year. This includes sales made by all units operating under the organization’s registration with DOR.
If your out-of-state organization is hosting a conference, seminar, or educational event within our state, you can request temporary sales tax exemption status for the duration of your visit. Form NP-20T, Nonprofit Application for Temporary Sales Tax Exemption, will be published on our website in December 2022.
2022 General Assembly Special Session Update
Several tax relief proposals under consideration during the 2022 General Assembly Special Session were not enacted into law. These include provisions in Senate Bill #3, such as a six-month sales tax holiday on residential utility and telecom bills and a reduction in the gasoline excise tax rate and special fuel excise tax rate.
- The additional Automatic Taxpayer Refund passed and was set at $200 per eligible taxpayer.
- The sales tax exemption for children’s diapers becomes effective on September 1, 2022.
2022 Legislative Synopsis for General Session Available
The 2022 Legislative Synopsis includes legislation passed by the General Session of the 2022 Indiana General Assembly. To find laws contained in Indiana Code, acquire more information about recently passed legislation, or to read the bills in their entirety, visit the Indiana General Assembly's website.
Repeal of Utility Services Use Tax and Utility Receipts Tax
Indiana repealed Utility Services Use and Utility Receipts taxes effective July 1, 2022. Although these laws are repealed, you must still file any past-due returns and pay taxes due to DOR.
If you are subject to Utility Services Use Tax, you need to file a final Form USU-103 by August 1, 2022, for the tax period ending June 30, 2022. You must file Form USU-103 even when no tax is due, unless your Indiana tax account has been closed properly. The Indiana Department of Revenue (DOR) will continue to accept payments for all filing periods prior to June 30, 2022.
If you are subject to Utility Receipts Tax, the 2022 tax year will be your last filing period. You will still file your return and owe this tax for periods collected from January 1 – June 30, 2022. You must file Form URT-1, Indiana Utility Receipts Tax Return, for tax year 2022, on or before April 18, 2023 or, for fiscal filers, the 15th day of the 4th month after the end of the taxable year that includes June 30, 2022. Instructions on completing Form URT-1 will be updated to reflect the repeal of this law. Do not file the 2022 URT-1 on a 2021 or previous tax form. 2022 URT-1 forms will be available later this year.
You do not need to file and pay estimated payments for any quarters that begin after June 30, 2022. DOR will issue refunds as necessary to customers who made estimated payments and overpaid the amount of tax owed for 2022.
Automatic Taxpayer Refunds
DOR continues to coordinate with the Governor’s Office, Auditor of State, and others involved in the process to issue an additional $200 Automatic Taxpayer Refund (ATR). To allow time for refunds to be received, we are now asking Hoosiers to wait until Nov. 1 before calling DOR about their Automatic Taxpayer Refunds. Additional ATR information is available on our website.
The Auditor of State’s Office and Indiana Department of Revenue remind Hoosiers to be mindful of potential scams regarding Automatic Taxpayer Refunds. All refunds will be issued by direct deposit or check. Individuals should ignore any texts, emails or phone calls regarding these refunds, especially messages containing links or requesting personal or financial information such as Social Security or bank account numbers.
Designated Disaster Counties Granted Tax Filing Extensions
Specific counties in Kentucky, Illinois and Tennessee are eligible for filing extensions due to damaging storms in December 2021. Filing and payment due has been extended to May 16, 2022, and includes individual taxes for fourth quarter 2021 estimated tax, first quarter 2022 estimated tax and returns filed in 2022 (for tax year 2021). Returns received after the deadline will be considered late. See more on DOR’s Disaster Relief.
Specific counties in Kentucky, Illinois and Tennessee are eligible for filing extensions due to damaging storms in December 2021. Filing can be extended to May 16, 2022 and includes C-Corp, S-Corp, Financial Institutions and Partnership taxes for fourth quarter 2021 estimated tax, first quarter 2022 estimated tax and returns due Dec. 15, 2021 through April 18, 2022. Entities who would like to utilize this relief program should contact DOR using the secure messaging feature in INTIME at intime.dor.in.gov. Returns received after the deadline will be considered late. See more on DOR’s Disaster Relief.
Update on Unemployment Benefits and Taxes
On April 22, the Indiana General Assembly did not adopt certain provisions of the current Internal Revenue Code and Governor Eric Holcomb signed this into law on April 29. As a result, Indiana taxpayers cannot use the federal unemployment compensation exclusion on their 2020 Indiana individual income tax returns and that income must be added back in. They may, however, still be able to deduct some portion of their unemployment income on their state tax return in accordance with Indiana’s current tax laws. See DOR’s “Unemployment Benefits and Taxes” page for more information and instructions.
Increase in Gasoline License Tax and Special Fuel License Tax
P.L. 218-2017 requires the department to publish the new rates effective July 1, 2022, for the gasoline license tax (IC 6-6-1.1-201) and special fuel license tax (IC 6-6-2.5-28) on the department’s Internet website no later than June 1, 2022. For the period July 1, 2022, to June 30, 2023, the following rates shall be in effect:
- Gasoline license tax: $0.33/gallon
- Special fuel license tax: $0.55/gallon
School Scholarship Tax Credit Update
A School Scholarship Tax Credit is available for individuals or corporations who donate to scholarship-granting organizations (SGOs).
See more information and subscribe to email updates for the School Scholarship Tax Credit.