CHAPTER 1. DEFINITIONS
IC 6-2.5
ARTICLE 2.5. STATE GROSS RETAIL AND USETAXES
IC 6-2.5-1
Chapter 1. Definitions
IC 6-2.5-1-1
"Unitary transaction"
Sec. 1. (a) Except as provided in subsection (b), "unitarytransaction" includes all items of personal property and serviceswhich are furnished under a single order or agreement and for whicha total combined charge or price is calculated.
(b) "Unitary transaction" as it applies to the furnishing of publicutility commodities or services means the public utility commoditiesand services which are invoiced in a single bill or statement forpayment by the consumer.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-1-2
"Retail transaction" and "retail unitary transaction"
Sec. 2. (a) "Retail transaction" means a transaction of a retailmerchant that constitutes selling at retail as described in IC 6-2.5-4-1,that constitutes making a wholesale sale as described in IC 6-2.5-4-2,or that is described in any other section of IC 6-2.5-4.
(b) "Retail unitary transaction" means a unitary transaction that isalso a retail transaction.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-1-3
"Person"
Sec. 3. "Person" includes an individual, assignee, receiver,commissioner, fiduciary, trustee, executor, administrator, institution,national bank, bank, consignee, firm, partnership, joint venture, pool,syndicate, bureau, association, cooperative association, society, club,fraternity, sorority, lodge, corporation, limited liability company,Indiana political subdivision engaged in private or proprietaryactivities, estate, trust, or any group or combination acting as a unit.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.8-1993,SEC.82.
IC 6-2.5-1-4
"Department"
Sec. 4. "Department" means the Indiana department of staterevenue.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-1-5
"Gross retail income"
Sec. 5. (a) Except as provided in subsection (b), "gross retail
income" means the total amount of consideration, including cash,credit, property, and services, for which tangible personal propertyis sold, leased, or rented, valued in money, whether received inmoney 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 imposedon the seller, and any other expense of the seller;
(3) charges by the seller for any services necessary to completethe sale, other than delivery and installation charges;
(4) delivery charges; or
(5) consideration received by the seller from a third party if:
(A) the seller actually receives consideration from a partyother than the purchaser and the consideration is directlyrelated to a price reduction or discount on the sale;
(B) the seller has an obligation to pass the price reduction ordiscount through to the purchaser;
(C) the amount of the consideration attributable to the saleis fixed and determinable by the seller at the time of the saleof the item to the purchaser; and
(D) the price reduction or discount is identified as a thirdparty price reduction or discount on the invoice received bythe purchaser or on a coupon, certificate, or otherdocumentation presented by the purchaser.
For purposes of subdivision (4), delivery charges are charges by theseller for preparation and delivery of the property to a locationdesignated by the purchaser of property, including but not limited totransportation, shipping, postage, handling, crating, and packing.
(b) "Gross retail income" does not include that part of the grossreceipts attributable to:
(1) the value of any tangible personal property received in a likekind exchange in the retail transaction, if the value of theproperty given in exchange is separately stated on the invoice,bill of sale, or similar document given to the purchaser;
(2) the receipts received in a retail transaction which constituteinterest, finance charges, or insurance premiums on either apromissory note or an installment sales contract;
(3) discounts, including cash, terms, or coupons that are notreimbursed by a third party that are allowed by a seller andtaken by a purchaser on a sale;
(4) interest, financing, and carrying charges from creditextended on the sale of personal property if the amount isseparately stated on the invoice, bill of sale, or similardocument given to the purchaser;
(5) any taxes legally imposed directly on the consumer that areseparately stated on the invoice, bill of sale, or similardocument given to the purchaser;
(6) installation charges that are separately stated on the invoice,bill of sale, or similar document given to the purchaser; or
(7) telecommunications nonrecurring charges. (c) A public utility's or a power subsidiary's gross retail incomeincludes all gross retail income received by the public utility orpower subsidiary, including any minimum charge, flat charge,membership fee, or any other form of charge or billing.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.257-2003,SEC.1; P.L.81-2004, SEC.2; P.L.182-2009(ss), SEC.174;P.L.113-2010, SEC.43.
IC 6-2.5-1-6
"Like kind exchange"
Sec. 6. (a) "Like kind exchange" means the reciprocal exchangeof personal property between two (2) persons, when:
(1) the property exchanged is of the same kind or character,regardless of grade or quality; and
(2) the persons exchanging the property both own the propertyprior to the exchange.
(b) A "like kind exchange" may be a part of a transactioninvolving additional consideration other than the exchangedproperty.
(c) Notwithstanding subsection (a), a "like kind exchange" doesnot occur when:
(1) the transaction involves more than two (2) persons; or
(2) one (1) party to the transaction, through agreement ornegotiation with the second party, acquires personal propertyfor the primary purpose of exchanging that property for likekind property held by the second party.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-1-7
Repealed
(Repealed by P.L.2-1987, SEC.53.)
IC 6-2.5-1-8
"Retail merchant"
Sec. 8. "Retail merchant" means a person who is described as aretail merchant in IC 6-2.5-4 or who is required to hold a retailmerchant's certificate under IC 6-2.5-8.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-1-9
"Tax year" or "taxable year"
Sec. 9. "Tax year" or "taxable year" means either the calendaryear or the taxpayer's fiscal year if and when permission is obtainedfrom the department to use the taxpayer's fiscal year in lieu of thecalendar year.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-1-10
"Commercial printing"
Sec. 10. "Commercial printing" means a process or an activity, or
both, that is related to the production of printed materials for others,including the following:
(1) Receiving, processing, moving, storing, and transmitting,either physically or electronically, copy elements and images tobe reproduced.
(2) Plate making or cylinder making.
(3) Applying ink by one (1) or more processes, such as printingby letter press, lithography, gravure, screen, or digital means.
(4) Casemaking and binding.
(5) Assembling, packaging, and distributing printed materials.
The term does not include the business of photocopying.
As added by P.L.192-2002(ss), SEC.48.
IC 6-2.5-1-11
"Alcoholic beverages"
Sec. 11. "Alcoholic beverages" means beverages that are suitablefor human consumption and contain one-half of one percent (0.5%)or more of alcohol by volume.
As added by P.L.257-2003, SEC.2.
IC 6-2.5-1-11.3
"Ancillary services"
Sec. 11.3. "Ancillary services" means services that are associatedwith or incidental to the provision of telecommunication services,including the following:
(1) Detailed telecommunications billing.
(2) Directory assistance.
(3) Vertical services.
(4) Voice mail services.
As added by P.L.145-2007, SEC.1.
IC 6-2.5-1-11.5
"Bundled transaction"
Sec. 11.5. (a) This section applies to retail transactions occurringafter December 31, 2007.
(b) "Bundled transaction" means a retail sale of two (2) or moreproducts, except real property and services to real property, that are:
(1) distinct;
(2) identifiable; and
(3) sold for one (1) nonitemized price.
(c) The term does not include a retail sale in which the sales priceof a product varies, or is negotiable, based on other products that thepurchaser selects for inclusion in the transaction.
(d) The term does not include a retail sale that:
(1) is comprised of:
(A) a service that is the true object of the transaction; and
(B) tangible personal property that:
(i) is essential to the use of the service; and
(ii) is provided exclusively in connection with the service;
(2) includes both taxable and nontaxable products in which: (A) the seller's purchase price; or
(B) the sales price;
of the taxable products does not exceed ten percent (10%) ofthe total purchase price or the total sales price of the bundledproducts; or
(3) includes both exempt tangible personal property and taxabletangible personal property:
(A) any of which is classified as:
(i) food and food ingredients;
(ii) drugs;
(iii) durable medical equipment;
(iv) mobility enhancing equipment;
(v) over-the-counter drugs;
(vi) prosthetic devices; or
(vii) medical supplies; and
(B) for which:
(i) the seller's purchase price; or
(ii) the sales price;
of the taxable tangible personal property is fifty percent(50%) or less of the total purchase price or the total salesprice of the bundled tangible personal property.
The determination under clause (B) must be made on the basisof either individual item purchase prices or individual item saleprices.
As added by P.L.153-2006, SEC.1.
IC 6-2.5-1-12
"Candy"
Sec. 12. "Candy" means a preparation of sugar, honey, or othernatural or artificial sweeteners in combination with chocolate, fruits,nuts, or other ingredients or flavorings in the form of bars, drops, orpieces. The term does not include any preparation:
(1) containing flour; or
(2) requiring refrigeration.
As added by P.L.257-2003, SEC.3.
IC 6-2.5-1-13
"Computer"
Sec. 13. "Computer" means an electronic device that acceptsinformation in digital or similar form and manipulates it for a resultbased on a sequence of instructions.
As added by P.L.257-2003, SEC.4.
IC 6-2.5-1-14
"Computer software"
Sec. 14. "Computer software" means a set of coded instructionsdesigned to cause a computer or automatic data processingequipment to perform a task.
As added by P.L.257-2003, SEC.5.
IC 6-2.5-1-14.5
"Computer software"
Sec. 14.5. "Computer software maintenance contract" means acontract that obligates a person to provide a customer with futureupdates or upgrades of computer software.
As added by P.L.113-2010, SEC.44.
IC 6-2.5-1-15
"Delivered electronically"
Sec. 15. "Delivered electronically" means delivered to thepurchaser by means other than tangible storage media.
As added by P.L.257-2003, SEC.6.
IC 6-2.5-1-16
"Dietary supplement"
Sec. 16. "Dietary supplement" means any product, other thantobacco, that:
(1) is intended to supplement the diet;
(2) contains one (1) or more of the following dietaryingredients:
(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 thediet by increasing the total dietary intake; or
(F) a concentrate, a metabolite, a constituent, an extract, ora combination of any ingredient described in thissubdivision;
(3) is intended for ingestion in tablet, capsule, powder, softgel,gelcap, or liquid form, or, if not intended for ingestion in sucha form, is not represented as conventional food and is notrepresented 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 labeland as required under 21 CFR 101.36.
As added by P.L.257-2003, SEC.7.
IC 6-2.5-1-16.2
"Digital audio works"
Sec. 16.2. (a) "Digital audio works" means works that result fromthe fixation of a series of musical, spoken, or other sounds, includingringtones.
(b) As used in this section, "ringtones" means digitized sound filesthat:
(1) are downloaded onto a device; and
(2) may be used to alert the customer with respect to acommunication.
As added by P.L.19-2008, SEC.1.
IC 6-2.5-1-16.3
"Digital audiovisual works"
Sec. 16.3. "Digital audiovisual works" means a series of relatedimages that, when shown in succession, impart an impression ofmotion, together with accompanying sounds, if any.
As added by P.L.19-2008, SEC.2.
IC 6-2.5-1-16.4
"Digital books"
Sec. 16.4. "Digital books" means works that are generallyrecognized in the ordinary and usual sense as books.
As added by P.L.19-2008, SEC.3.
IC 6-2.5-1-16.5
"Direct mail"
Sec. 16.5. (a) "Direct mail" means printed material delivered byUnited States mail or another delivery service to:
(1) a mass audience; or
(2) addresses on a mailing list:
(A) provided by a purchaser; or
(B) specified at the direction of a purchaser;
if the cost of the item is not billed directly to the recipient.
(b) The term includes tangible personal property that thepurchaser supplies directly or indirectly to the direct mail seller forinclusion in the package containing the printed material.
(c) The term does not include multiple items of printed materialdelivered to a single address.
As added by P.L.153-2006, SEC.2.
IC 6-2.5-1-17
"Drug"
Sec. 17. "Drug" means a compound, substance, or preparation andany component of a compound, substance, or preparation that is:
(1) recognized in the official United States Pharmacopoeia,official Homeopathic Pharmacopoeia of the United States, orofficial 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, dietarysupplements, or alcoholic beverages.
As added by P.L.257-2003, SEC.8.
IC 6-2.5-1-18
"Durable medical equipment"
Sec. 18. (a) "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 medicalpurpose; (3) generally is not useful to a person in the absence of illnessor injury; and
(4) is not worn in or on the body.
The term does not include mobility enhancing equipment.
(b) As used in this section, "repair and replacement parts"includes all components or attachments used in conjunction withdurable medical equipment.
As added by P.L.257-2003, SEC.9. Amended by P.L.19-2008, SEC.4.
IC 6-2.5-1-19
"Electronic"
Sec. 19. "Electronic" means relating to technology havingelectrical, digital, magnetic, wireless, optical, electromagnetic, orsimilar capabilities.
As added by P.L.257-2003, SEC.10.
IC 6-2.5-1-20
"Food and food ingredients"
Sec. 20. "Food and food ingredients" means substances, whetherin liquid, concentrated, solid, frozen, dried, or dehydrated form, thatare sold for ingestion or chewing by humans and that are consumedfor their taste or nutritional value. The term does not includealcoholic beverages, candy, dietary supplements, tobacco products,or soft drinks.
As added by P.L.257-2003, SEC.11. Amended by P.L.153-2006,SEC.3.
IC 6-2.5-1-20.3
"Intrastate telecommunications service"
Sec. 20.3. "Intrastate telecommunications service" means atelecommunications service that originates in a particular state,territory, or possession of the United States and terminates in thatsame state, territory, or possession.
As added by P.L.145-2007, SEC.2.
IC 6-2.5-1-21
"Lease" or "rental"
Sec. 21. (a) "Lease" or "rental" means any transfer of possessionor control of tangible personal property for a fixed or indeterminateterm for consideration and may include future options to purchase orextend. "Lease" or "rental" does not include:
(1) a transfer of possession or control of property under asecurity agreement or deferred payment plan that requires thetransfer of title upon completion of the required payments;
(2) a transfer of possession or control of property under anagreement that requires the transfer of title upon completion ofrequired payments and payment of an option price that does notexceed 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 performas designed; and
(B) the operator does more than maintain, inspect, or set upthe tangible personal property.
(b) "Lease" or "rental" includes agreements covering motorvehicles and trailers in which the amount of consideration may beincreased or decreased by reference to the amount realized upon saleor 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 sectionapplies throughout this article, regardless of whether a transaction ischaracterized as a lease or rental under generally acceptedaccounting principles, the Internal Revenue Code, the uniformcommercial code (IC 26-1), or other provisions of federal, state, orlocal law.
(d) This section applies only to leases or rentals entered into afterJune 30, 2003, and has no retroactive effect on leases or rentalsentered into before July 1, 2003.
As added by P.L.257-2003, SEC.12. Amended by P.L.97-2004,SEC.25.
IC 6-2.5-1-22
"Mobility enhancing equipment"
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 theability to move from one (1) place to another and is appropriatefor 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 motorvehicle normally provided by a motor vehicle manufacturer.
The term does not include durable medical equipment.
As added by P.L.257-2003, SEC.13.
IC 6-2.5-1-22.3
"Prepaid calling service"
Sec. 22.3. "Prepaid calling service" has the meaning set forth inIC 6-2.5-12-11.
As added by P.L.145-2007, SEC.3.
IC 6-2.5-1-22.4
"Prepaid wireless calling service"
Sec. 22.4. "Prepaid wireless calling service" means atelecommunications service that:
(1) provides the right to use mobile wireless service as well asother nontelecommunications services, including:
(A) the download of digital products deliveredelectronically; and
(B) content and ancillary services;
(2) must be paid for in advance; and (3) is sold in predetermined units or dollars of which thenumber declines with use in a known amount.
As added by P.L.145-2007, SEC.4.
IC 6-2.5-1-23
"Prescription"
Sec. 23. "Prescription" means an order, a formula, or a recipeissued in any form of oral, written, electronic, or other means oftransmission by a licensed practitioner authorized by Indiana law.
As added by P.L.257-2003, SEC.14.
IC 6-2.5-1-24
"Prewritten computer software"
Sec. 24. Subject to the following provisions, "prewritten computersoftware" means computer software, including prewritten upgrades,that is not designed and developed by the author or other creator tothe specifications of a specific purchaser:
(1) The combining of two (2) or more prewritten computersoftware programs or prewritten parts of the programs does notcause the combination to be other than prewritten computersoftware.
(2) Prewritten computer software includes software designedand developed by the author or other creator to thespecifications of a specific purchaser when it is sold to a personother than the purchaser.
(3) If a person modifies or enhances computer software ofwhich the person is not the author or creator, the person isconsidered to be the author or creator only of the person'smodifications or enhancements.
(4) Prewritten computer software or a prewritten part of thesoftware that is modified or enhanced to any degree, where themodification or enhancement is designed and developed to thespecifications of a specific purchaser, remains prewrittencomputer software. However, where there is a reasonable,separately stated charge or an invoice or other statement of theprice given to the purchaser for such a modification orenhancement, the modification or enhancement is not prewrittencomputer software.
As added by P.L.257-2003, SEC.15.
IC 6-2.5-1-25
"Prosthetic device"
Sec. 25. "Prosthetic device" means a replacement, corrective, orsupportive device, including repair and replacement parts for thedevice, 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.
As added by P.L.257-2003, SEC.16.
IC 6-2.5-1-26
"Soft drinks"
Sec. 26. "Soft drinks" means nonalcoholic beverages that containnatural or artificial sweeteners. The term does not include beveragesthat contain milk or milk products, soy, rice, or similar milksubstitutes, or greater than fifty percent (50%) of vegetable or fruitjuice by volume.
As added by P.L.257-2003, SEC.17.
IC 6-2.5-1-26.5
"Specified digital products"
Sec. 26.5. "Specified digital products" means electronicallytransferred:
(1) digital audio works;
(2) digital audiovisual works; or
(3) digital books.
As added by P.L.19-2008, SEC.5.
IC 6-2.5-1-27
"Tangible personal property"
Sec. 27. "Tangible personal property" means personal propertythat:
(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 prewrittencomputer software.
As added by P.L.257-2003, SEC.18.
IC 6-2.5-1-27.2
"Telecommunications nonrecurring charges"
Sec. 27.2. "Telecommunications nonrecurring charges" means anamount billed for installation, connection, change, or initiation of atelecommunications service received by a customer.
As added by P.L.113-2010, SEC.45.
IC 6-2.5-1-27.5
"Telecommunication services"
Sec. 27.5. (a) "Telecommunication services" means electronictransmission, conveyance, or routing of voice, data, audio, video, orany other information or signals to a point, or between or amongpoints.
(b) The term includes a transmission, conveyance, or routing inwhich computer processing applications are used to act on the form,code, or protocol of the content for purposes of transmission,conveyance, or routing regardless of whether the service:
(1) is referred to as voice over Internet protocol services; or
(2) is classified by the Federal Communications Commission asenhanced or value added.
(c) The term does not include the following:
(1) Data processing and information services that allow data to
be generated, acquired, stored, processed, or retrieved anddelivered by an electronic transmission to a purchaser whoseprimary purpose for the underlying transaction is the processeddata or information.
(2) Installation or maintenance of wiring or equipment on acustomer's premises.
(3) Tangible personal property.
(4) Advertising, including but not limited to directoryadvertising.
(5) Billing and collection services provided to third parties.
(6) Internet access service.
(7) Radio and television audio and video programming services,regardless of the medium, including the furnishing oftransmission, conveyance, and routing of the services by theprogramming service provider. Radio and television audio andvideo programming services include cable service as defined in47 U.S.C. 522(6) and audio and video programming servicesdelivered by commercial mobile radio service providers, asdefined in 47 CFR 20.3.
(8) Ancillary services.
(9) Digital products delivered electronically, including thefollowing:
(A) Software.
(B) Music.
(C) Video.
(D) Reading materials.
(E) Ring tones.
As added by P.L.145-2007, SEC.5.
IC 6-2.5-1-28
"Tobacco"
Sec. 28. "Tobacco" means cigarettes, cigars, chewing or pipetobacco, or any other item that contains tobacco.
As added by P.L.195-2005, SEC.1.
IC 6-2.5-1-28.5
"Transferred electronically"
Sec. 28.5. "Transferred electronically" means obtained by apurchaser by means other than tangible storage media.
As added by P.L.113-2010, SEC.46.
IC 6-2.5-1-29
"Value added nonvoice data service"
Sec. 29. "Value added nonvoice data service" means a service thatotherwise meets the definition of telecommunications services inwhich computer processing applications are used to act on the form,content, code, or protocol of the information or data primarily for apurpose other than transmission, conveyance, or routing.
As added by P.L.145-2007, SEC.6.