CHAPTER 4. RETAIL TRANSACTIONS OF RETAIL MERCHANT
IC 6-2.5-4
Chapter 4. Retail Transactions of Retail Merchant
IC 6-2.5-4-1
Selling at retail
Sec. 1. (a) A person is a retail merchant making a retailtransaction when he engages in selling at retail.
(b) A person is engaged in selling at retail when, in the ordinarycourse of his regularly conducted trade or business, he:
(1) acquires tangible personal property for the purpose ofresale; 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 wasacquired;
(2) the property is transferred alone or in conjunction with otherproperty or services; or
(3) the property is transferred conditionally or otherwise.
(d) Notwithstanding subsection (b), a person is not selling at retailif he is making a wholesale sale as described in section 2 of thischapter.
(e) The gross retail income received from selling at retail is onlytaxable under this article to the extent that the income represents:
(1) the price of the property transferred, without the renditionof any service; and
(2) except as provided in subsection (g), any bona fide chargeswhich are made for preparation, fabrication, alteration,modification, finishing, completion, delivery, or other serviceperformed in respect to the property transferred before itstransfer and which are separately stated on the transferor'srecords.
For purposes of this subsection, a transfer is considered to haveoccurred after delivery of the property to the purchaser.
(f) Notwithstanding subsection (e):
(1) in the case of retail sales of gasoline (as defined inIC 6-6-1.1-103) and special fuel (as defined in IC 6-6-2.5-22),the gross retail income received from selling at retail is the totalsales price of the gasoline or special fuel minus the part of thatprice attributable to tax imposed under IC 6-6-1.1, IC 6-6-2.5,or Section 4041(a) or Section 4081 of the Internal RevenueCode; and
(2) in the case of retail sales of cigarettes (as defined inIC 6-7-1-2), the gross retail income received from selling atretail is the total sales price of the cigarettes including the taximposed under IC 6-7-1.
(g) Gross retail income does not include income that representscharges for serving or delivering food and food ingredientsfurnished, prepared, or served for consumption at a location, or onequipment, provided by the retail merchant. However, the exclusion
under this subsection only applies if the charges for the serving ordelivery are stated separately from the price of the food and foodingredients when the purchaser pays the charges.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.2-1987,SEC.14; P.L.6-1987, SEC.5; P.L.277-1993(ss), SEC.40;P.L.257-2003, SEC.19; P.L.81-2004, SEC.5.
IC 6-2.5-4-2
Wholesale sales; nonretail transactions
Sec. 2. (a) A person is a retail merchant making a retailtransaction when he is making wholesale sales.
(b) For purposes of this section, a person is making wholesalesales when he:
(1) sells tangible personal property, other than capital assets ordepreciable property, to a person who purchases the propertyfor the purpose of reselling it without changing its form;
(2) sells tangible personal property to a person who purchasesthe property for direct consumption as a material in the directproduction of other tangible personal property produced by theperson in his business of manufacturing, processing, refining,repairing, mining, agriculture, or horticulture;
(3) sells tangible personal property to a person who purchasesthe property for incorporation as a material or integral part oftangible personal property produced by the person in hisbusiness of manufacturing, assembling, constructing, refining,or processing;
(4) sells drugs, medical or dental preparations, or other similarmaterials to a person who purchases the materials for directconsumption in professional use by a physician, hospital,embalmer, funeral director, or tonsorial parlor;
(5) sells tangible personal property to a person who purchasesthe property for direct consumption in his business of industrialcleaning; or
(6) sells tangible personal property to a person who purchasesthe property for direct consumption in the person's business inthe direct rendering of public utility service.
(c) Notwithstanding any provision of this article, a person is notmaking a retail transaction when he:
(1) acquires tangible personal property owned by anotherperson;
(2) provides industrial processing or servicing, includingenameling or plating, on the property; and
(3) transfers the property back to the owner to be sold by thatowner either in the same form or as a part of other tangiblepersonal property produced by that owner in his business ofmanufacturing, assembling, constructing, refining, orprocessing.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.246-1985,SEC.9.
IC 6-2.5-4-3
Water softening and conditioning business
Sec. 3. (a) A person is a retail merchant making a retailtransaction when he regularly and occupationally engages in thebusiness of softening and conditioning water.
(b) For purposes of this section, the business of softening andconditioning water includes the exchange of water softening andconditioning tanks in the ordinary course of the business, but doesnot include the preparatory plumbing and work necessary for the firstinstallation of tanks.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-4-4
Renting or furnishing rooms, lodgings, or other accommodations
Sec. 4. (a) A person is a retail merchant making a retailtransaction when the person rents or furnishes rooms, lodgings, orother accommodations, such as booths, display spaces, banquetfacilities, and cubicles or spaces used for adult relaxation, massage,modeling, dancing, or other entertainment to another person:
(1) if those rooms, lodgings, or accommodations are rented orfurnished for periods of less than thirty (30) days; and
(2) if the rooms, lodgings, and accommodations are located ina hotel, motel, inn, tourist camp, tourist cabin, gymnasium, hall,coliseum, or other place, where rooms, lodgings, oraccommodations are regularly furnished for consideration.
(b) Each rental or furnishing by a retail merchant under subsection(a) is a separate unitary transaction regardless of whetherconsideration is paid to an independent contractor or directly to theretail merchant.
(c) For purposes of this section, "consideration" includes amembership fee charged to a customer.
(d) Notwithstanding subsection (a), a person is not a retailmerchant making a retail transaction if:
(1) the person is a promoter that rents a booth or display spaceto an exhibitor; and
(2) the booth or display space is located in a facility that:
(A) is described in subsection (a)(2); and
(B) is operated by a political subdivision (including a capitalimprovement board established under IC 36-10-8 orIC 36-10-9) or the state fair commission.
This subsection does not exempt from the state gross retail tax therenting of accommodations by a political subdivision or the state faircommission to a promoter or an exhibitor.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.93-1987,SEC.1; P.L.85-1989, SEC.1; P.L.20-1990, SEC.7.
IC 6-2.5-4-4.5
Repealed
(Repealed by P.L.81-2004, SEC.59.)
IC 6-2.5-4-5
Power subsidiaries of public utilities
Sec. 5. (a) As used in this section, a "power subsidiary" means acorporation which is owned or controlled by one (1) or more publicutilities that furnish or sell electrical energy, natural or artificial gas,water, steam, or steam heat and which produces power exclusivelyfor the use of those public utilities.
(b) A power subsidiary or a person engaged as a public utility isa retail merchant making a retail transaction when the subsidiary orperson furnishes or sells electrical energy, natural or artificial gas,water, steam, or steam heating service to a person for commercial ordomestic consumption.
(c) Notwithstanding subsection (b), a power subsidiary or aperson engaged as a public utility is not a retail merchant making aretail transaction in any of the following transactions:
(1) The power subsidiary or person provides, installs,constructs, services, or removes tangible personal propertywhich is used in connection with the furnishing of the servicesor commodities listed in subsection (b).
(2) The power subsidiary or person sells the services orcommodities listed in subsection (b) to another public utility orpower subsidiary described in this section or a person describedin section 6 of this chapter.
(3) The power subsidiary or person sells the services orcommodities listed in subsection (b) to a person for use inmanufacturing, mining, production, refining, oil extraction,mineral extraction, irrigation, agriculture, or horticulture.However, this exclusion for sales of the services andcommodities only applies if the services are consumed as anessential and integral part of an integrated process that producestangible personal property and those sales are separatelymetered for the excepted uses listed in this subdivision, or ifthose sales are not separately metered but are predominatelyused by the purchaser for the excepted uses listed in thissubdivision.
(4) The power subsidiary or person sells the services orcommodities listed in subsection (b) and all the followingconditions are satisfied:
(A) The services or commodities are sold to a business thatafter June 30, 2004:
(i) relocates all or part of its operations to a facility; or
(ii) expands all or part of its operations in a facility;
located in a military base (as defined in IC 36-7-30-1(c)), amilitary base reuse area established under IC 36-7-30, thepart of an economic development area established underIC 36-7-14.5-12.5 that is or formerly was a military base (asdefined in IC 36-7-30-1(c)), a military base recovery sitedesignated under IC 6-3.1-11.5, or a qualified military baseenhancement area established under IC 36-7-34.
(B) The business uses the services or commodities in the
facility described in clause (A) not later than five (5) yearsafter the operations that are relocated to the facility orexpanded in the facility commence.
(C) The sales of the services or commodities are separatelymetered for use by the relocated or expanded operations.
(D) In the case of a business that uses the services orcommodities in a qualified military base enhancement areaestablished under IC 36-7-34-4(1), the business must satisfyat least one (1) of the following criteria:
(i) The business is a participant in the technology transferprogram conducted by the qualified military base (asdefined in IC 36-7-34-3).
(ii) The business is a United States Department of Defensecontractor.
(iii) The business and the qualified military base have amutually beneficial relationship evidenced by amemorandum of understanding between the business andthe United States Department of Defense.
(E) In the case of a business that uses the services orcommodities in a qualified military base enhancement areaestablished under IC 36-7-34-4(2), the business must satisfyat least one (1) of the following criteria:
(i) The business is a participant in the technology transferprogram conducted by the qualified military base (asdefined in IC 36-7-34-3).
(ii) The business and the qualified military base have amutually beneficial relationship evidenced by amemorandum of understanding between the business andthe qualified military base (as defined in IC 36-7-34-3).
However, this subdivision does not apply to a business thatsubstantially reduces or ceases its operations at another locationin Indiana in order to relocate its operations in an area describedin this subdivision, unless the department determines that thebusiness had existing operations in the area described in thissubdivision and that the operations relocated to the area are anexpansion of the business's operations in the area.
(5) The power subsidiary or person sells services orcommodities that:
(A) are referred to in subsection (b); and
(B) qualify as home energy (as defined in IC 6-2.5-5-16.5);
to a person who acquires the services or commodities after June30, 2006, and before July 1, 2009, through home energyassistance (as defined in IC 6-2.5-5-16.5).
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.48-1984,SEC.1; P.L.71-1993, SEC.4; P.L.81-2004, SEC.19; P.L.190-2005,SEC.1; P.L.203-2005, SEC.3; P.L.162-2006, SEC.21; P.L.180-2006,SEC.3; P.L.1-2007, SEC.51; P.L.32-2007, SEC.1.
IC 6-2.5-4-6
Taxation of telecommunication services; aggregation of taxable
and nontaxable services on customer bills
Sec. 6. (a) A person is a retail merchant making a retailtransaction when the person:
(1) furnishes or sells an intrastate telecommunication service;and
(2) receives gross retail income from billings or statementsrendered to customers.
(b) Notwithstanding subsection (a), a person is not a retailmerchant making a retail transaction when:
(1) the person furnishes or sells telecommunication services toanother person described in this section or in section 5 of thischapter;
(2) the person furnishes telecommunications services to anotherperson who is providing prepaid calling services or prepaidwireless calling services in a retail transaction to customers whoaccess the services through the use of an access or authorizationnumber or card as described in section 13 of this chapter;
(3) the person furnishes intrastate mobile telecommunicationsservice (as defined in IC 6-8.1-15-7) to a customer with a placeof primary use that is not located in Indiana (as determinedunder IC 6-8.1-15); or
(4) the person furnishes or sells value added nonvoice dataservices in a retail transaction to a customer.
(c) Subject to IC 6-2.5-12 and IC 6-8.1-15, and notwithstandingsubsections (a) and (b), if charges for telecommunication services,ancillary services, Internet access, audio services, or video servicesthat are not taxable under this article are aggregated with and notseparately stated from charges subject to taxation under this article,the charges for nontaxable telecommunication services, ancillaryservices, Internet access, audio services, or video services are subjectto taxation unless the service provider can reasonably identify thecharges not subject to the tax from the service provider's books andrecords kept in the regular course of business.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.71-1993,SEC.5; P.L.8-1996, SEC.3; P.L.8-1998, SEC.1; P.L.104-2002,SEC.1; P.L.5-2004, SEC.1; P.L.145-2007, SEC.7.
IC 6-2.5-4-7
Repealed
(Repealed by P.L.71-1993, SEC.28.)
IC 6-2.5-4-8
Governmental entities; private or proprietary activities
Sec. 8. An Indiana governmental entity, agency, instrumentality,or political subdivision (including a state college or university) is aretail merchant making a retail transaction when it performs privateor proprietary activities that would constitute retail transactionsunder this article if those activities were performed by a retailmerchant. However, this section does not apply to a politicalsubdivision that performs an activity that is related to an annual
festival, carnival, fair, or similar event.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.93-1987,SEC.2.
IC 6-2.5-4-9
Sale of property to be added to structures or facilities; exemption
Sec. 9. (a) A person is a retail merchant making a retailtransaction when the person sells tangible personal property which:
(1) is to be added to a structure or facility by the purchaser; and
(2) after its addition to the structure or facility, would becomea part of the real estate on which the structure or facility islocated.
(b) Notwithstanding subsection (a), a transaction described insubsection (a) is not a retail transaction, if the ultimate purchaser orrecipient of the property to be added to the structure or facility wouldbe exempt from the state gross retail and use taxes if that purchaseror recipient had directly purchased the property from the supplier foraddition to the structure or facility.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-4-10
Rental or leasing of personal property; sale of property rented orleased in course of business; exclusion
Sec. 10. (a) A person, other than a public utility, is a retailmerchant making a retail transaction when he rents or leases tangiblepersonal property to another person other than for subrent orsublease.
(b) A person is a retail merchant making a retail transaction whenthe person sells any tangible personal property which has been rentedor leased in the regular course of the person's rental or leasingbusiness.
(c) Notwithstanding subsection (a), a person is not a retailmerchant making a retail transaction when the person rents or leasesmotion picture film, audio tape, or video tape to another person.However, this exclusion only applies if:
(1) the person who pays to rent or lease the film chargesadmission to those who view the film; or
(2) the person who pays to rent or lease the film or tapebroadcasts the film or tape for home viewing or listening.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.257-2003,SEC.20.
IC 6-2.5-4-11
Cable television service; satellite television or radio service
Sec. 11. (a) A person is a retail merchant making a retailtransaction when the person furnishes cable television or radioservice or satellite television or radio service that terminates inIndiana.
(b) Notwithstanding subsection (a), a person is not a retailmerchant making a retail transaction when the person provides,
installs, constructs, services, or removes tangible personal propertywhich is used in connection with the furnishing of cable televisionor radio service or satellite television or radio service.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.81-2004,SEC.6; P.L.2-2005, SEC.20.
IC 6-2.5-4-12
Auction sales; exceptions
Sec. 12. (a) A person is a retail merchant making a retailtransaction when he sells tangible personal property at auction.
(b) Notwithstanding subsection (a), a person is not a retailmerchant making a retail transaction when:
(1) he makes isolated or occasional sales of tangible personalproperty at auction;
(2) the sales occur on the premises of the owner of the tangiblepersonal property; and
(3) the owner of the tangible personal property did notoriginally acquire that property for resale.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-4-13
Definition of retail merchant making retail transaction
Sec. 13. A person is a retail merchant making a retail transactionwhen a person sells:
(1) a prepaid telephone calling card at retail;
(2) a prepaid telephone authorization number at retail;
(3) the reauthorization of a prepaid telephone calling card; or
(4) the reauthorization of a prepaid telephone authorizationnumber.
As added by P.L.8-1998, SEC.2.
IC 6-2.5-4-14
Notice; proposed public vendors; identification of delinquenttaxpayers
Sec. 14. The department of administration and each purchasingagent for a state educational institution shall provide the departmentwith a list of every person who desires to enter into a contract to selltangible personal property to an agency (as defined in IC 4-13-2-1)or a state educational institution. The department shall notify thedepartment of administration or the purchasing agent of the stateeducational institution if a person on the list does not have aregistered retail merchant certificate or is delinquent in remitting orpaying amounts due to the department under this article.
As added by P.L.254-2003, SEC.4. Amended by P.L.2-2007,SEC.118; P.L.211-2007, SEC.11.
IC 6-2.5-4-15
Bundled transactions
Sec. 15. (a) This section applies to retail transactions occurringafter December 31, 2007. (b) A person is a retail merchant making a retail transaction whenthe person sells tangible personal property as part of a bundledtransaction.
As added by P.L.153-2006, SEC.4.
IC 6-2.5-4-16
Repealed
(Repealed by P.L.1-2009, SEC.174.)
IC 6-2.5-4-16.2
Aircraft leasing or renting and flight instruction services
Sec. 16.2. (a) This section applies to transactions occurring afterJune 30, 2008.
(b) A person is a retail merchant making a retail transaction whenthe person:
(1) leases or rents an aircraft to another person; and
(2) provides flight instruction services to the lessee or renterduring the term of the lease or rental.
(c) The amount of the gross retail income attributable to a retailtransaction described in subsection (b) is the amount charged by theretail merchant for the lease or rental of the aircraft used inconjunction with the flight instruction services provided to the lesseeor renter.
As added by P.L.1-2009, SEC.47.
IC 6-2.5-4-16.4
Specified digital products
Sec. 16.4. (a) As used in this section, "end user" does not includea person who receives by contract a product transferredelectronically for further commercial broadcast, rebroadcast,transmission, retransmission, licensing, relicensing, distribution,redistribution, or exhibition of the product, in whole or in part, toanother person or persons.
(b) A person is a retail merchant making a retail transaction whenthe person:
(1) electronically transfers specified digital products to an enduser; and
(2) grants to the end user the right of permanent use of thespecified digital products that is not conditioned upon continuedpayment by the purchaser.
(c) The sale of a digital code that may be used to obtain a producttransferred electronically shall be taxed in the same manner as theproduct transferred electronically. As used in this subsection, adigital code means a method that permits a purchaser to obtain at alater date a product transferred electronically.
As added by P.L.1-2009, SEC.48. Amended by P.L.113-2010,SEC.48.
IC 6-2.5-4-17
Computer software maintenance contracts Sec. 17. A person is a retail merchant making a retail transactionwhen the person enters into a computer software maintenancecontract to provide future updates or upgrades to computer software.
As added by P.L.113-2010, SEC.49.