CHAPTER 6. RETURNS, REMITTANCES, AND REFUNDS
IC 6-2.5-6
Chapter 6. Returns, Remittances, and Refunds
IC 6-2.5-6-1
Returns; reporting period; electronic funds transfer
Sec. 1. (a) Except as otherwise provided in this section, eachperson liable for collecting the state gross retail or use tax shall filea return for each calendar month and pay the state gross retail anduse taxes that the person collects during that month. A person shallfile the person's return for a particular month with the departmentand make the person's tax payment for that month to the departmentnot more than thirty (30) days after the end of that month, if thatperson's average monthly liability for collections of state gross retailand use taxes under this section as determined by the department forthe preceding calendar year did not exceed one thousand dollars($1,000). If a person's average monthly liability for collections ofstate gross retail and use taxes under this section as determined bythe department for the preceding calendar year exceeded onethousand dollars ($1,000), that person shall file the person's returnfor a particular month and make the person's tax payment for thatmonth to the department not more than twenty (20) days after the endof that month.
(b) If a person files a combined sales and withholding tax reportand either this section or IC 6-3-4-8.1 requires sales or withholdingtax reports to be filed and remittances to be made within twenty (20)days after the end of each month, then the person shall file thecombined report and remit the sales and withholding taxes duewithin twenty (20) days after the end of each month.
(c) Instead of the twelve (12) monthly reporting periods requiredby subsection (a), the department may permit a person to divide ayear into a different number of reporting periods. The return andpayment for each reporting period is due not more than twenty (20)days after the end of the period.
(d) Instead of the reporting periods required under subsection (a),the department may permit a retail merchant to report and pay themerchant's state gross retail and use taxes for a period covering acalendar year, if the retail merchant's state gross retail and use taxliability in the previous calendar year does not exceed one thousanddollars ($1,000). A retail merchant using a reporting period allowedunder this subsection must file the merchant's return and pay themerchant's tax for a reporting period not later than the last day of themonth immediately following the close of that reporting period.
(e) If a retail merchant reports the merchant's adjusted grossincome tax, or the tax the merchant pays in place of the adjustedgross income tax, over a fiscal year not corresponding to the calendaryear, the merchant may, without prior departmental approval, reportand pay the merchant's state gross retail and use taxes over themerchant's fiscal year that corresponds to the calendar year themerchant is permitted to use under subsection (d). However, thedepartment may, at any time, require the retail merchant to stop using
the fiscal reporting period.
(f) If a retail merchant files a combined sales and withholding taxreport, the reporting period for the combined report is the shortestperiod required under:
(1) this section;
(2) IC 6-3-4-8; or
(3) IC 6-3-4-8.1.
(g) If the department determines that a person's:
(1) estimated monthly gross retail and use tax liability for thecurrent year; or
(2) average monthly gross retail and use tax liability for thepreceding year;
exceeds five thousand dollars ($5,000), the person shall pay themonthly gross retail and use taxes due by electronic funds transfer(as defined in IC 4-8.1-2-7) or by delivering in person or byovernight courier a payment by cashier's check, certified check, ormoney order to the department. The transfer or payment shall bemade on or before the date the tax is due.
(h) A person that registers as a retail merchant after December 31,2009, shall report and remit state gross retail and use taxes throughthe department's online tax filing program. This subsection does notapply to a retail merchant that was a registered retail merchant beforeJanuary 1, 2010, but adds an additional place of business inaccordance with IC 6-2.5-8-1(e) after December 31, 2009.
(i) A person:
(1) who has voluntarily registered as a seller under theStreamlined Sales and Use Tax Agreement;
(2) who is not a Model 1, Model 2, or Model 3 seller (asdefined in the Streamlined Sales and Use Tax Agreement); and
(3) whose liability for collections of state gross retail and usetaxes under this section for the preceding calendar year asdetermined by the department does not exceed one thousanddollars ($1,000);
is not required to file a monthly gross retail and use tax return.
As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1982,P.L.49, SEC.1; P.L.70-1986, SEC.1; P.L.92-1987, SEC.2;P.L.63-1988, SEC.3; P.L.28-1997, SEC.11; P.L.185-2001, SEC.2;P.L.177-2002, SEC.10; P.L.192-2002(ss), SEC.58; P.L.153-2006,SEC.5; P.L.211-2007, SEC.17; P.L.131-2008, SEC.10;P.L.182-2009(ss), SEC.180.
IC 6-2.5-6-2
Accounting for tax receipts; option to use accrual basis
Sec. 2. A retail merchant may, without prior departmentalapproval, report and pay his state gross retail and use taxes on anaccrual basis, if he uses the accrual basis to pay and report theadjusted gross income tax or the tax imposed on him in place of theadjusted gross income tax. The department may, at any time, requirethe retail merchant to stop using the accrual basis.
As added by Acts 1980, P.L.52, SEC.1. Amended by
P.L.192-2002(ss), SEC.59.
IC 6-2.5-6-3
Consolidated filing
Sec. 3. If a retail merchant, wholesaler, or manufacturer holdsmultiple certificates under IC 6-2.5-8 in order to make retailtransactions at more than one (1) store or location, the retailmerchant may apply for departmental permission to file aconsolidated state gross retail and use tax return for all those storesand locations. If the department allows the consolidated filing, theretail merchant, wholesaler, or manufacturer must keep sufficientrecords to allow the department to determine the separate state grossretail and use tax liability for each store or location and to show anyinformation that the department requires on the consolidated return.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-6-4
Periodic deposits of collections during reporting period
Sec. 4. If the department feels that a retail merchant is notproperly collecting, reporting, or paying the state gross retail and usetaxes, the department may require him to make periodic deposits ofhis collections during his reporting period and to file aninformational return with those deposits.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-6-5
Final return and payment
Sec. 5. When a retail merchant stops doing a kind of business forwhich he must file returns under this chapter, he shall file a finalstate gross retail and use tax return with the department for that partof his business and pay the state gross retail and use taxes collected.The final return and payment are due no later than one (1) monthafter the date the business stops.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-6-6
Coordination with gross income tax
Sec. 6. When possible, the department shall coordinate thereporting and payment of the state gross retail and use taxes with thereporting and payment of the gross income tax.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-6-7
Retail merchant; calculation of tax liability
Sec. 7. Except as otherwise provided in IC 6-2.5-7 or in thischapter, a retail merchant shall pay to the department, for a particularreporting period, an amount equal to the product of:
(1) seven percent (7%); multiplied by
(2) the retail merchant's total gross retail income from taxabletransactions made during the reporting period.The amount determined under this section is the retail merchant'sstate gross retail and use tax liability regardless of the amount of taxthe retail merchant actually collects.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.2-1982(ss),SEC.3; P.L.192-2002(ss), SEC.60; P.L.146-2008, SEC.311.
IC 6-2.5-6-8
Tax liability; income exclusion ratio
Sec. 8. (a) For purposes of determining the amount of state grossretail and use taxes which a retail merchant must remit under section7 of this chapter, the retail merchant may exclude from the retailmerchant's gross retail income from retail transactions made duringa particular reporting period, an amount equal to the product of:
(1) the amount of that gross retail income; multiplied by
(2) the retail merchant's "income exclusion ratio" for the taxyear which contains the reporting period.
(b) A retail merchant's "income exclusion ratio" for a particulartax year equals a fraction, the numerator of which is the retailmerchant's estimated total gross retail income for the tax year fromunitary retail transactions which produce gross retail income of lessthan eight cents ($0.08) each, and the denominator of which is theretail merchant's estimated total gross retail income for the tax yearfrom all retail transactions.
(c) In order to minimize a retail merchant's recordkeepingrequirements, the department shall prescribe a procedure fordetermining the retail merchant's income exclusion ratio for a taxyear, based on a period of time, not to exceed fifteen (15)consecutive days, during the first quarter of the retail merchant's taxyear. However, the period of time may be changed if the change isrequested by the retail merchant because of the retail merchant'speculiar accounting procedures or marketing factors. In addition, ifa retail merchant has multiple sales locations or diverse types ofsales, the department shall permit the retail merchant to determinethe ratio on the basis of a representative sampling of the locationsand types of sales.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.2-1982(ss),SEC.4; P.L.192-2002(ss), SEC.61; P.L.146-2008, SEC.312.
IC 6-2.5-6-9 Version a
Uncollectible receivables; deduction
Note: This version of section amended by P.L.162-2006, SEC.23.See also following version of this section amended by P.L.184-2006,SEC.2.
Sec. 9. (a) In determining the amount of state gross retail and usetaxes which a retail merchant must remit under section 7 of thischapter, the retail merchant shall, subject to subsections (c) and (d),deduct from the retail merchant's gross retail income from retailtransactions made during a particular reporting period, an amountequal to the retail merchant's receivables which:
(1) resulted from retail transactions in which the retail merchant
did not collect the state gross retail or use tax from thepurchaser;
(2) resulted from retail transactions on which the retailmerchant has previously paid the state gross retail or use taxliability to the department; and
(3) were written off as an uncollectible debt for federal taxpurposes under Section 166 of the Internal Revenue Codeduring the particular reporting period.
(b) If a retail merchant deducts a receivable under subsection (a)and subsequently collects all or part of that receivable, then the retailmerchant shall, subject to subsection (d)(6), include the amountcollected as part of the retail merchant's gross retail income fromretail transactions for the particular reporting period in which theretail merchant makes the collection.
(c) This subsection applies only to retail transactions occurringafter December 31, 2006. As used in this subsection, "affiliatedgroup" means any combination of the following:
(1) An affiliated group within the meaning provided in Section1504 of the Internal Revenue Code, except that the ownershippercentage in Section 1504(a)(2) of the Internal Revenue Codeshall be determined using fifty percent (50%) instead of eightypercent (80%).
(2) Two (2) or more partnerships (as defined in IC 6-3-1-19),including limited liability companies and limited liabilitypartnerships, that have the same degree of mutual ownership asan affiliated group described in subdivision (1), as determinedunder the rules adopted by the department.
The right to a deduction under this section is not assignable to anindividual or entity that is not part of the same affiliated group as theassignor.
(d) The following provisions apply to a deduction for a receivabletreated as uncollectible debt under subsection (a):
(1) The deduction does not include interest.
(2) The amount of the deduction shall be determined in themanner provided by Section 166 of the Internal Revenue Codefor 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 thepossession 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 periodduring which the receivable is written off as uncollectible in theclaimant's books and records and is eligible to be deducted forfederal income tax purposes. For purposes of this subdivision,a claimant who is not required to file federal income tax returnsmay deduct an uncollectible receivable on a return filed for theperiod in which the receivable is written off as uncollectible inthe claimant's books and records and would be eligible for a bad
debt deduction for federal income tax purposes if the claimantwere required to file a federal income tax return.
(4) If the amount of uncollectible receivables claimed as adeduction by a retail merchant for a particular reporting periodexceeds the amount of the retail merchant's taxable sales forthat reporting period, the retail merchant may file a refundclaim under IC 6-8.1-9. However, the deadline for the refundclaim shall be measured from the due date of the return for thereporting period on which the deduction for the uncollectiblereceivables could first be claimed.
(5) If a retail merchant's filing responsibilities have beenassumed by a certified service provider (as defined inIC 6-2.5-11-2), the certified service provider may claim, onbehalf of the retail merchant, any deduction or refund foruncollectible receivables provided by this section. The certifiedservice provider must credit or refund the full amount of anydeduction or refund received to the retail merchant.
(6) For purposes of reporting a payment received on apreviously claimed uncollectible receivable, any paymentsmade on a debt or account shall be applied first proportionallyto the taxable price of the property and the state gross retail taxor use tax thereon, and secondly to interest, service charges, andany other charges.
(7) A retail merchant claiming a deduction for an uncollectiblereceivable may allocate that receivable among the states that aremembers of the streamlined sales and use tax agreement if thebooks and records of the retail merchant support that allocation.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.257-2003,SEC.30; P.L.81-2004, SEC.7; P.L.162-2006, SEC.23.
IC 6-2.5-6-9 Version b
Uncollectible receivables; deduction
Note: This version of section amended by P.L.184-2006, SEC.2.See also preceding version of this section amended by P.L.162-2006,SEC.23.
Sec. 9. (a) In determining the amount of state gross retail and usetaxes which a retail merchant must remit under section 7 of thischapter, the retail merchant shall, subject to subsections (c) and (d),deduct from the retail merchant's gross retail income from retailtransactions made during a particular reporting period, an amountequal to the retail merchant's receivables which:
(1) resulted from retail transactions in which the retail merchantdid not collect the state gross retail or use tax from thepurchaser;
(2) resulted from retail transactions on which the retailmerchant has previously paid the state gross retail or use taxliability to the department; and
(3) were written off as an uncollectible debt for federal taxpurposes under Section 166 of the Internal Revenue Codeduring the particular reporting period. (b) If a retail merchant deducts a receivable under subsection (a)and subsequently collects all or part of that receivable, then the retailmerchant shall, subject to subsection (d)(6), include the amountcollected as part of the retail merchant's gross retail income fromretail transactions for the particular reporting period in which theretail merchant makes the collection.
(c) This subsection applies only to retail transactions occurringafter June 30, 2007. As used in this subsection, "affiliated group"means any combination of the following:
(1) An affiliated group within the meaning provided in Section1504 of the Internal Revenue Code (except that the ownershippercentage in Section 1504(a)(2) of the Internal Revenue Codeshall be determined using fifty percent (50%) instead of eightypercent (80%)) or a relationship described in Section267(b)(11) of the Internal Revenue Code.
(2) Two (2) or more partnerships (as defined in IC 6-3-1-19),including limited liability companies and limited liabilitypartnerships, that have the same degree of mutual ownership asan affiliated group described in subdivision (1), as determinedunder the rules adopted by the department.
The right to a deduction under this section is not assignable to anindividual or entity that is not part of the same affiliated group as theassignor.
(d) The following provisions apply to a deduction for a receivabletreated as uncollectible debt under subsection (a):
(1) The deduction does not include interest.
(2) The amount of the deduction shall be determined in themanner provided by Section 166 of the Internal Revenue Codefor 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 thepossession 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 periodduring which the receivable is written off as uncollectible in theclaimant's books and records and is eligible to be deducted forfederal income tax purposes. For purposes of this subdivision,a claimant who is not required to file federal income tax returnsmay deduct an uncollectible receivable on a return filed for theperiod in which the receivable is written off as uncollectible inthe claimant's books and records and would be eligible for a baddebt deduction for federal income tax purposes if the claimantwere required to file a federal income tax return.
(4) If the amount of uncollectible receivables claimed as adeduction by a retail merchant for a particular reporting periodexceeds the amount of the retail merchant's taxable sales forthat reporting period, the retail merchant may file a refundclaim under IC 6-8.1-9. However, the deadline for the refund
claim shall be measured from the due date of the return for thereporting period on which the deduction for the uncollectiblereceivables could first be claimed.
(5) If a retail merchant's filing responsibilities have beenassumed by a certified service provider (as defined inIC 6-2.5-11-2), the certified service provider may claim, onbehalf of the retail merchant, any deduction or refund foruncollectible receivables provided by this section. The certifiedservice provider must credit or refund the full amount of anydeduction or refund received to the retail merchant.
(6) For purposes of reporting a payment received on apreviously claimed uncollectible receivable, any paymentsmade on a debt or account shall be applied first proportionallyto the taxable price of the property and the state gross retail taxor use tax thereon, and secondly to interest, service charges, andany other charges.
(7) A retail merchant claiming a deduction for an uncollectiblereceivable may allocate that receivable among the states that aremembers of the streamlined sales and use tax agreement if thebooks and records of the retail merchant support that allocation.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.257-2003,SEC.30; P.L.81-2004, SEC.7; P.L.184-2006, SEC.2.
IC 6-2.5-6-10
Tax liability; merchant's collection allowance
Sec. 10. (a) In order to compensate retail merchants for collectingand timely remitting the state gross retail tax and the state use tax,every retail merchant, except a retail merchant referred to insubsection (c), is entitled to deduct and retain from the amount ofthose taxes otherwise required to be remitted under IC 6-2.5-7-5 orunder this chapter, if timely remitted, a retail merchant's collectionallowance.
(b) The allowance equals a percentage of the retail merchant'sstate gross retail and use tax liability accrued during a calendar year,specified as follows:
(1) Seventy-three hundredths percent (0.73%), if the retailmerchant's state gross retail and use tax liability accrued duringthe state fiscal year ending on June 30 of the immediatelypreceding calendar year did not exceed sixty thousand dollars($60,000).
(2) Fifty-three hundredths percent (0.53%), if the retailmerchant's state gross retail and use tax liability accrued duringthe state fiscal year ending on June 30 of the immediatelypreceding calendar year:
(A) was greater than sixty thousand dollars ($60,000); and
(B) did not exceed six hundred thousand dollars ($600,000).
(3) Twenty-six hundredths percent (0.26%), if the retailmerchant's state gross retail and use tax liability accrued duringthe state fiscal year ending on June 30 of the immediatelypreceding calendar year was greater than six hundred thousand
dollars ($600,000).
(c) A retail merchant described in IC 6-2.5-4-5 or IC 6-2.5-4-6 isnot entitled to the allowance provided by this section.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.71-1993,SEC.10; P.L.28-1997, SEC.12; P.L.192-2002(ss), SEC.62;P.L.211-2007, SEC.18; P.L.146-2008, SEC.313.
IC 6-2.5-6-11
Heating assistance program; deduction
Sec. 11. A retail merchant who extends assistance to a heatingassistance program administered under IC 4-4-33 may deduct fromthe retail merchant's state gross retail and use tax payment an amountequal to all or part of the aggregate assistance extended by the retailmerchant to a heating assistance program administered underIC 4-4-33 during the reporting period for which the state gross retailand use tax payment is made.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.43-1983,SEC.2; P.L.41-1987, SEC.5; P.L.2-1992, SEC.67; P.L.181-2006,SEC.43.
IC 6-2.5-6-12
Security for payment of tax collected
Sec. 12. (a) Whenever the department feels it necessary to insurethe payment of the state gross retail or use taxes, the department mayrequire a retail merchant to post security for that payment in anyamount not to exceed twice the department's estimate of the retailmerchant's quarterly state gross retail and use tax liability.
(b) If necessary to recover any tax, interest, or penalty which theretail merchant owes under this article, the department may sell thesecurity. If the security is in the form of a bearer bond which isissued by a governmental unit and which has a prevailing marketprice, the department may sell the security at a private sale for notless than that market price. If the security is in any other form, thedepartment shall sell it at a public auction.
(c) Before the department may sell a retail merchant's security, thedepartment shall give the retail merchant notice of the time, place,and date of the sale. The department shall send the notice by certifiedmail to the retail merchant's most recent address according to thedepartment's records.
(d) If the proceeds of the security sale exceed the tax, interest, andpenalties owing, the department shall refund the remainder to theretail merchant.
As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-6-13
Refund; grounds
Sec. 13. A person is entitled to a refund from the department if:
(1) a retail merchant erroneously or illegally collects state grossretail or use taxes under this article from the person;
(2) the retail merchant remits the taxes to the department; (3) the retail merchant does not refund the taxes to the person;and
(4) the person properly applies for the refund under the refundprovisions contained in IC 6-8.1-9.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.19-1986,SEC.11; P.L.269-2003, SEC.3; P.L.1-2003, SEC.32; P.L.97-2004,SEC.26.
IC 6-2.5-6-14
Repealed
(Repealed by P.L.97-2004, SEC.133.)
IC 6-2.5-6-14.1
Retail merchant's refund of gross retail or use taxes
Sec. 14.1. Notwithstanding the refund provisions of this article asincorporated from the gross income tax law (IC 6-2.1, repealed), aretail merchant is not entitled to a refund of state gross retail or usetaxes unless the retail merchant refunds those taxes to the personfrom whom they were collected.
As added by P.L.97-2004, SEC.27.
IC 6-2.5-6-14.2
List of retail merchants selling tobacco products
Sec. 14.2. (a) The department shall annually compile a list ofretail merchants that sell tobacco products. The list must include thefollowing information:
(1) On a county by county basis:
(A) the name of each retail merchant that sells tobaccoproducts in the county; and
(B) the business address of each location in the county atwhich a retail merchant sells tobacco products.
(2) The name and business address of each retail merchant thathas begun to sell tobacco products since the previous report wascompiled.
(3) The name and business address of each retail merchant thathas ceased to sell tobacco products since the previous reportwas compiled.
(b) The department shall deliver each list prepared under thissection to:
(1) the division of mental health and addiction; and
(2) the alcohol and tobacco commission.
(c) A retail merchant that sells tobacco products shall provide thedepartment with the information required for the preparation of thelist under this section.
(d) The department shall prescribe a form to be used in collectinginformation under this section from retail merchants that sell tobaccoproducts. A form prescribed under this subsection may be a modifiedversion of an existing form.
As added by P.L.97-2004, SEC.28.
IC 6-2.5-6-15
Repealed
(Repealed by P.L.81-2004, SEC.59.)
IC 6-2.5-6-16
Refund for research and development equipment
Sec. 16. (a) As used in this section, "research and developmentequipment" has the meaning set forth in IC 6-2.5-5-40.
(b) A person is entitled to a refund equal to fifty percent (50%) ofthe gross retail tax paid by the person under this article in a retailtransaction occurring after June 30, 2005, and before July 1, 2007,to acquire research and development equipment.
(c) To receive the refund provided by this section, a person mustclaim the refund under IC 6-8.1-9 in the manner prescribed by thedepartment.
As added by P.L.193-2005, SEC.11.
IC 6-2.5-6-17
Payment of gross retail tax for consignment sales
Sec. 17. (a) A retail merchant that is a consignee in a retailtransaction shall collect and remit the state gross retail tax on thegross retail income received in a consignment sale.
(b) The retail merchant shall provide the consignor purchaser aninvoice that shows that the state gross retail tax was paid to the retailmerchant with a clear notation on the invoice that the item was aconsignment sale by the retail merchant on behalf of (insert the nameof the seller) to (insert the name of the purchaser).
As added by P.L.85-2009, SEC.1.