IC 6-2.5-11
Chapter 11. Simplified Sales and Use Tax Administration Act
IC 6-2.5-11-1 Short title
Sec. 1. This chapter shall be known as and referred to as the
"simplified sales and use tax administration act". As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-2 Definitions
Sec. 2. As used in this chapter:
(1) "Agreement" means the Streamlined Sales and Use Tax
Agreement.
(2) "Certified automated system" means software certified
jointly by the states that are signatories to the agreement to
calculate the tax imposed by each jurisdiction on a transaction,
to determine the amount of tax to remit to the appropriate state,
and to maintain a record of the transaction.
(3) "Certified service provider" means an agent certified jointly
by the states that are signatories to the agreement to perform all
of the seller's sales tax functions.
(4) "Person" means an individual, a trust, an estate, a fiduciary,
a partnership, a limited liability company, a limited liability
partnership, a corporation, or any other legal entity.
(5) "Sales tax" means the state gross retail tax levied under
IC 6-2.5.
(6) "Seller" means any person making sales, leases, or rentals of
personal property or services.
(7) "State" means any state of the United States and the District
of Columbia.
(8) "Use tax" means the use tax levied under IC 6-2.5. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-3 Findings of general assembly
Sec. 3. The general assembly finds that a simplified sales and use
tax system will reduce and over time eliminate the burden and cost
for all vendors to collect this state's sales and use tax. The general
assembly further finds that this state should participate in multistate
discussions to review, amend, or review and amend the terms of the
agreement to simplify and modernize sales and use tax
administration in order to substantially reduce the burden of tax
compliance for all sellers and all types of commerce. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-4 Delegates to review or amend agreement
Sec. 4. (a) For the purposes of reviewing, amending, or reviewing
and amending the agreement embodying the simplification
requirements set forth in section 7 of this chapter, the state shall
enter into multistate discussions. For purposes of those discussions,
the state shall be represented by four (4) delegates, appointed as
follows:
(1) One (1) member of the house of representatives, appointed
by the speaker of the house of representatives.
(2) One (1) member of the senate, appointed by the president
pro tempore of the senate.
(3) One (1) individual appointed by the governor.
(4) The commissioner of the department of state revenue, who
is an ex officio member.
A delegate appointed under subdivisions (1) through (3) serves at the
pleasure of the officer who appointed that delegate.
(b) Each delegate who is not a state employee is entitled to the
minimum salary per diem provided by IC 4-10-11-2.1(b). The
delegate is also entitled to reimbursement for traveling expenses as
provided under IC 4-13-1-4 and other expenses actually incurred in
connection with the delegate's duties as provided in the state policies
and procedures established by the Indiana department of
administration and approved by the budget agency. Expenses
incurred under this subsection shall be paid out of the funds
appropriated to the department of state revenue.
(c) Each delegate who is a state employee but who is not a
member of the general assembly is entitled to reimbursement for
traveling expenses as provided under IC 4-13-1-4 and other expenses
actually incurred in connection with the delegate's duties as provided
in the state policies and procedures established by the Indiana
department of administration and approved by the budget agency.
(d) Each delegate who is a member of the general assembly is
entitled to receive the per diem, mileage, and travel allowances paid
to members of the general assembly under travel policies established
by the legislative council. Per diem, mileage, and travel allowances
paid under this subsection shall be paid from appropriations made to
the legislative council or the legislative services agency. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-5 Powers of department
Sec. 5. The department may enter into the agreement with one (1)
or more states to simplify and modernize sales and use tax
administration in order to substantially reduce the burden of tax
compliance for all sellers and for all types of commerce. In
furtherance of the agreement, the department may act jointly with
other states that are members of the agreement to establish standards
for certification of certified service providers and certified automated
systems and to establish performance standards for multistate sellers.
The department may take other actions reasonably required to
implement this chapter. Other actions authorized by this section
include, but are not limited to, the adoption of rules and the joint
procurement, with other member states, of goods and services in
furtherance of the cooperative agreement. The department or the
department's designee shall represent the state of Indiana before the
other states that are signatories to the agreement. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-6 Effect on Indiana law
Sec. 6. No provision of the agreement authorized by this chapter
in whole or in part invalidates or amends any provision of the law of
Indiana. Adoption of the agreement by the state of Indiana does not
amend or modify any Indiana law. Implementation of any condition
of the agreement in Indiana, whether adopted before, at, or after
membership of this state in the agreement, must be by the action of
this state. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-7 Requirements in agreement
Sec. 7. The department shall not enter into the agreement unless
the agreement requires each state to abide by the following
requirements:
(1) Simplified State Rate. The agreement must set restrictions
to limit over time the number of state rates.
(2) Uniform Standards. The agreement must establish uniform
standards for the following:
(A) The sourcing of transactions to taxing jurisdictions.
(B) The administration of exempt sales.
(C) Sales and use tax returns and remittances.
(3) Central Registration. The agreement must provide a central
electronic registration system that allows a seller to register to
collect and remit sales and use taxes for all signatory states.
(4) No Nexus Attribution. The agreement must provide that
registration with the central registration system and the
collection of sales and use taxes in the signatory states will not
be used as a factor in determining whether the seller has nexus
with a state for any tax.
(5) Local Sales and Use Taxes. The agreement must provide for
reduction of the burdens of complying with local sales and use
taxes through the following:
(A) Restricting variances between the state and local tax
bases.
(B) Requiring states to administer any sales and use taxes
levied by local jurisdictions within the state so that sellers
collecting and remitting these taxes will not have to register
or file returns with, remit funds to, or be subject to
independent audits from local taxing jurisdictions.
(C) Restricting the frequency of changes in the local sales
and use tax rates and setting effective dates for the
application of local jurisdictional boundary changes to local
sales and use taxes.
(D) Providing notice of changes in local sales and use tax
rates and of changes in the boundaries of local taxing
jurisdictions.
(6) Monetary Allowances. The agreement must outline any
monetary allowances that are to be provided by the states to
sellers or certified service providers. The agreement must allow
for a joint public and private sector study of the compliance
cost on sellers and certified service providers to collect sales
and use taxes for state and local governments under various
levels of complexity to be completed on or before July 1, 2002.
(7) State Compliance. The agreement must require each state to
certify compliance with the terms of the agreement before
joining and to maintain compliance, under the laws of the
member state, with all provisions of the agreement while the
state is a member.
(8) Consumer Privacy. The agreement must require each state
to adopt a uniform policy for certified service providers that
protects the privacy of consumers and maintains the
confidentiality of tax information.
(9) Advisory Councils. The agreement must provide for the
appointment of an advisory council of private sector
representatives and an advisory council of nonmember state
representatives to consult in the administration of the
agreement. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-8 Provisions in agreement
Sec. 8. The agreement authorized by this chapter is an accord
among individual cooperating sovereign states in furtherance of their
governmental functions. The agreement provides a mechanism
among the member states to establish and maintain a cooperative,
simplified system for the application and administration of sales and
use taxes under the duly adopted law of each member state. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-9 State is only intended beneficiary of agreement; no individual
causes of action
Sec. 9. (a) The agreement authorized by this chapter binds and
inures only to the benefit of the state of Indiana and the other
member states. No person, other than a member state, is an intended
beneficiary of the agreement. Any benefit to a person other than a
state is established by the law of the state of Indiana and the other
member states and not by the terms of the agreement.
(b) Consistent with subsection (a), no person shall have any cause
of action or defense under the agreement or by virtue of the state of
Indiana's approval of the agreement. No person may challenge, in any
action brought under any provision of law, any action or inaction by
any department, agency, or other instrumentality of the state of
Indiana, or any political subdivision of the state of Indiana on the
grounds that the action or inaction is inconsistent with the agreement.
(c) No law of Indiana, or the application thereof, may be declared
invalid as to any person or circumstance on the grounds that the
provision or application is inconsistent with the agreement. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-10 Certified services providers; allowances for sellers and certified
service providers under the agreement; relief for failure to collect
tax
Sec. 10. (a) A certified service provider is the agent of a seller,
with whom the certified service provider has contracted, for the
collection and remittance of sales and use taxes. As the seller's agent,
the certified service provider is liable for sales and use tax due each
member state on all sales transactions it processes for the seller
except as set out in this section. A seller that contracts with a
certified service provider is not liable to the state for sales or use tax
due on transactions processed by the certified service provider unless
the seller misrepresented the type of items it sells or committed
fraud. In the absence of probable cause to believe that the seller has
committed fraud or made a material misrepresentation, the seller is
not subject to audit on the transactions processed by the certified
service provider. A seller is subject to audit for transactions not
processed by the certified service provider. The member states acting
jointly may perform a system check of the seller and review the
seller's procedures to determine if the certified service provider's
system is functioning properly and the extent to which the seller's
transactions are being processed by the certified service provider.
(b) A person that provides a certified automated system is
responsible for the proper functioning of that system and is liable to
the state for underpayments of tax attributable to errors in the
functioning of the certified automated system. A seller that uses a
certified automated system remains responsible and is liable to the
state for reporting and remitting tax.
(c) A seller that has a proprietary system for determining the
amount of tax due on transactions and has signed an agreement
establishing a performance standard for that system is liable for the
failure of the system to meet the performance standard.
(d) A certified service provider or a seller using a certified
automated system that obtains a certification or taxability matrix
from the department is not liable for sales or use tax collection errors
that result from reliance on the department's certification or taxability
matrix. If the department determines that an item or transaction is
incorrectly classified as to the taxability of the item or transaction,
the department shall notify the certified service provider or the seller
using a certified automated system of the incorrect classification. The
certified service provider or the seller using a certified automated
system must revise the incorrect classification within ten (10) days
after receiving notice of the determination from the department. If
the classification error is not corrected within ten (10) days after
receiving the department's notice, the certified service provider or the
seller using a certified automated system is liable for failure to
collect the correct amount of sales or use tax due and owing.
(e) If at least thirty (30) days are not provided between the
enactment of a statute changing the rate set forth in IC 6-2.5-2-2 and
the effective date of the rate change, the department shall relieve the
seller of liability for failing to collect tax at the new rate if:
(1) the seller collected the tax at the immediately preceding
effective rate; and
(2) the seller's failure to collect at the current rate does not
extend beyond thirty (30) days after the effective date of the
rate change.
A seller is not eligible for the relief provided for in this subsection if
the seller fraudulently fails to collect at the current rate or solicits
purchases based on the immediately preceding effective rate.
(f) The department shall allow any monetary allowances that are
provided by the member states to sellers or certified service
providers in exchange for collecting the sales and use taxes as
provided in article VI of the agreement. As added by P.L.107-2001, SEC.1. Amended by P.L.195-2005,
SEC.4; P.L.145-2007, SEC.9; P.L.182-2009(ss), SEC.183;
P.L.113-2010, SEC.53.
IC 6-2.5-11-11 Relief from penalties, tax, and interest in certain transactions
involving reliance on data provided by the department
Sec. 11. (a) This section applies only to transactions occurring
after December 31, 2008.
(b) A purchaser is relieved from liability for penalties imposed
under IC 6-8.1-10-2.1 for failure to pay the amount of tax due if any
of the following occurs:
(1) A purchaser's seller or certified service provider relied on
erroneous data provided by the department regarding any of the
following:
(A) Tax rates.
(B) Boundaries.
(C) Taxing jurisdiction assignments.
(D) The taxability matrix.
(2) A purchaser with a direct pay permit relied on erroneous
data provided by the department regarding any of the following:
(A) Tax rates.
(B) Boundaries.
(C) Taxing jurisdiction assignments.
(D) The taxability matrix.
(3) A purchaser relied on erroneous data in the taxability matrix
provided by the department.
(c) The department shall relieve a purchaser from liability for tax
and interest for having failed to pay the correct amount of sales or
use tax in the circumstances described in subsection (b); however,
the relief is limited to tax and interest attributable to the department's
erroneous classification in the taxability matrix of terms:
(1) included as taxable or exempt;
(2) included in the sales price;
(3) excluded from the sales price;
(4) included in a definition; or
(5) excluded from a definition. As added by P.L.145-2007, SEC.10.
IC 6-2.5-11-12 Review of software; limited relief from liability
Sec. 12. (a) The department shall review software submitted to the
governing board for certification as a certified automated system.
The review is to determine that the program adequately classifies
product based exemptions granted under IC 6-2.5-5. Upon
satisfactory completion of the review, the department shall certify to
the governing board the department's acceptance of the
classifications made by the system.
(b) The governing board and the member states are not
responsible for classification of an item or a transaction within the
product based exemptions certified by the department. The relief
from liability provided in this section is not available to a certified
service provider or Model 2 seller that has incorrectly classified an
item or a transaction into a product based exemption certified by the
department. This subsection does not apply to the individual listing
of items or transactions within a product definition approved by the
governing board or the member states.
(c) If the department determines that an item or a transaction is
incorrectly classified as to the taxability of the item or transaction,
the department shall notify the certified service provider or Model 2
seller of the incorrect classification. The certified service provider or
Model 2 seller must revise the classification within ten (10) days
after receiving notice of the determination from the department. If
the classification error is not corrected within ten (10) days after
receiving the department's notice, the certified service provider or
Model 2 seller is liable for failure to collect the correct amount of
sales or use tax due and owing. As added by P.L.145-2007, SEC.11.
IC 6-2.5-11
Chapter 11. Simplified Sales and Use Tax Administration Act
IC 6-2.5-11-1 Short title
Sec. 1. This chapter shall be known as and referred to as the
"simplified sales and use tax administration act". As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-2 Definitions
Sec. 2. As used in this chapter:
(1) "Agreement" means the Streamlined Sales and Use Tax
Agreement.
(2) "Certified automated system" means software certified
jointly by the states that are signatories to the agreement to
calculate the tax imposed by each jurisdiction on a transaction,
to determine the amount of tax to remit to the appropriate state,
and to maintain a record of the transaction.
(3) "Certified service provider" means an agent certified jointly
by the states that are signatories to the agreement to perform all
of the seller's sales tax functions.
(4) "Person" means an individual, a trust, an estate, a fiduciary,
a partnership, a limited liability company, a limited liability
partnership, a corporation, or any other legal entity.
(5) "Sales tax" means the state gross retail tax levied under
IC 6-2.5.
(6) "Seller" means any person making sales, leases, or rentals of
personal property or services.
(7) "State" means any state of the United States and the District
of Columbia.
(8) "Use tax" means the use tax levied under IC 6-2.5. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-3 Findings of general assembly
Sec. 3. The general assembly finds that a simplified sales and use
tax system will reduce and over time eliminate the burden and cost
for all vendors to collect this state's sales and use tax. The general
assembly further finds that this state should participate in multistate
discussions to review, amend, or review and amend the terms of the
agreement to simplify and modernize sales and use tax
administration in order to substantially reduce the burden of tax
compliance for all sellers and all types of commerce. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-4 Delegates to review or amend agreement
Sec. 4. (a) For the purposes of reviewing, amending, or reviewing
and amending the agreement embodying the simplification
requirements set forth in section 7 of this chapter, the state shall
enter into multistate discussions. For purposes of those discussions,
the state shall be represented by four (4) delegates, appointed as
follows:
(1) One (1) member of the house of representatives, appointed
by the speaker of the house of representatives.
(2) One (1) member of the senate, appointed by the president
pro tempore of the senate.
(3) One (1) individual appointed by the governor.
(4) The commissioner of the department of state revenue, who
is an ex officio member.
A delegate appointed under subdivisions (1) through (3) serves at the
pleasure of the officer who appointed that delegate.
(b) Each delegate who is not a state employee is entitled to the
minimum salary per diem provided by IC 4-10-11-2.1(b). The
delegate is also entitled to reimbursement for traveling expenses as
provided under IC 4-13-1-4 and other expenses actually incurred in
connection with the delegate's duties as provided in the state policies
and procedures established by the Indiana department of
administration and approved by the budget agency. Expenses
incurred under this subsection shall be paid out of the funds
appropriated to the department of state revenue.
(c) Each delegate who is a state employee but who is not a
member of the general assembly is entitled to reimbursement for
traveling expenses as provided under IC 4-13-1-4 and other expenses
actually incurred in connection with the delegate's duties as provided
in the state policies and procedures established by the Indiana
department of administration and approved by the budget agency.
(d) Each delegate who is a member of the general assembly is
entitled to receive the per diem, mileage, and travel allowances paid
to members of the general assembly under travel policies established
by the legislative council. Per diem, mileage, and travel allowances
paid under this subsection shall be paid from appropriations made to
the legislative council or the legislative services agency. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-5 Powers of department
Sec. 5. The department may enter into the agreement with one (1)
or more states to simplify and modernize sales and use tax
administration in order to substantially reduce the burden of tax
compliance for all sellers and for all types of commerce. In
furtherance of the agreement, the department may act jointly with
other states that are members of the agreement to establish standards
for certification of certified service providers and certified automated
systems and to establish performance standards for multistate sellers.
The department may take other actions reasonably required to
implement this chapter. Other actions authorized by this section
include, but are not limited to, the adoption of rules and the joint
procurement, with other member states, of goods and services in
furtherance of the cooperative agreement. The department or the
department's designee shall represent the state of Indiana before the
other states that are signatories to the agreement. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-6 Effect on Indiana law
Sec. 6. No provision of the agreement authorized by this chapter
in whole or in part invalidates or amends any provision of the law of
Indiana. Adoption of the agreement by the state of Indiana does not
amend or modify any Indiana law. Implementation of any condition
of the agreement in Indiana, whether adopted before, at, or after
membership of this state in the agreement, must be by the action of
this state. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-7 Requirements in agreement
Sec. 7. The department shall not enter into the agreement unless
the agreement requires each state to abide by the following
requirements:
(1) Simplified State Rate. The agreement must set restrictions
to limit over time the number of state rates.
(2) Uniform Standards. The agreement must establish uniform
standards for the following:
(A) The sourcing of transactions to taxing jurisdictions.
(B) The administration of exempt sales.
(C) Sales and use tax returns and remittances.
(3) Central Registration. The agreement must provide a central
electronic registration system that allows a seller to register to
collect and remit sales and use taxes for all signatory states.
(4) No Nexus Attribution. The agreement must provide that
registration with the central registration system and the
collection of sales and use taxes in the signatory states will not
be used as a factor in determining whether the seller has nexus
with a state for any tax.
(5) Local Sales and Use Taxes. The agreement must provide for
reduction of the burdens of complying with local sales and use
taxes through the following:
(A) Restricting variances between the state and local tax
bases.
(B) Requiring states to administer any sales and use taxes
levied by local jurisdictions within the state so that sellers
collecting and remitting these taxes will not have to register
or file returns with, remit funds to, or be subject to
independent audits from local taxing jurisdictions.
(C) Restricting the frequency of changes in the local sales
and use tax rates and setting effective dates for the
application of local jurisdictional boundary changes to local
sales and use taxes.
(D) Providing notice of changes in local sales and use tax
rates and of changes in the boundaries of local taxing
jurisdictions.
(6) Monetary Allowances. The agreement must outline any
monetary allowances that are to be provided by the states to
sellers or certified service providers. The agreement must allow
for a joint public and private sector study of the compliance
cost on sellers and certified service providers to collect sales
and use taxes for state and local governments under various
levels of complexity to be completed on or before July 1, 2002.
(7) State Compliance. The agreement must require each state to
certify compliance with the terms of the agreement before
joining and to maintain compliance, under the laws of the
member state, with all provisions of the agreement while the
state is a member.
(8) Consumer Privacy. The agreement must require each state
to adopt a uniform policy for certified service providers that
protects the privacy of consumers and maintains the
confidentiality of tax information.
(9) Advisory Councils. The agreement must provide for the
appointment of an advisory council of private sector
representatives and an advisory council of nonmember state
representatives to consult in the administration of the
agreement. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-8 Provisions in agreement
Sec. 8. The agreement authorized by this chapter is an accord
among individual cooperating sovereign states in furtherance of their
governmental functions. The agreement provides a mechanism
among the member states to establish and maintain a cooperative,
simplified system for the application and administration of sales and
use taxes under the duly adopted law of each member state. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-9 State is only intended beneficiary of agreement; no individual
causes of action
Sec. 9. (a) The agreement authorized by this chapter binds and
inures only to the benefit of the state of Indiana and the other
member states. No person, other than a member state, is an intended
beneficiary of the agreement. Any benefit to a person other than a
state is established by the law of the state of Indiana and the other
member states and not by the terms of the agreement.
(b) Consistent with subsection (a), no person shall have any cause
of action or defense under the agreement or by virtue of the state of
Indiana's approval of the agreement. No person may challenge, in any
action brought under any provision of law, any action or inaction by
any department, agency, or other instrumentality of the state of
Indiana, or any political subdivision of the state of Indiana on the
grounds that the action or inaction is inconsistent with the agreement.
(c) No law of Indiana, or the application thereof, may be declared
invalid as to any person or circumstance on the grounds that the
provision or application is inconsistent with the agreement. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-10 Certified services providers; allowances for sellers and certified
service providers under the agreement; relief for failure to collect
tax
Sec. 10. (a) A certified service provider is the agent of a seller,
with whom the certified service provider has contracted, for the
collection and remittance of sales and use taxes. As the seller's agent,
the certified service provider is liable for sales and use tax due each
member state on all sales transactions it processes for the seller
except as set out in this section. A seller that contracts with a
certified service provider is not liable to the state for sales or use tax
due on transactions processed by the certified service provider unless
the seller misrepresented the type of items it sells or committed
fraud. In the absence of probable cause to believe that the seller has
committed fraud or made a material misrepresentation, the seller is
not subject to audit on the transactions processed by the certified
service provider. A seller is subject to audit for transactions not
processed by the certified service provider. The member states acting
jointly may perform a system check of the seller and review the
seller's procedures to determine if the certified service provider's
system is functioning properly and the extent to which the seller's
transactions are being processed by the certified service provider.
(b) A person that provides a certified automated system is
responsible for the proper functioning of that system and is liable to
the state for underpayments of tax attributable to errors in the
functioning of the certified automated system. A seller that uses a
certified automated system remains responsible and is liable to the
state for reporting and remitting tax.
(c) A seller that has a proprietary system for determining the
amount of tax due on transactions and has signed an agreement
establishing a performance standard for that system is liable for the
failure of the system to meet the performance standard.
(d) A certified service provider or a seller using a certified
automated system that obtains a certification or taxability matrix
from the department is not liable for sales or use tax collection errors
that result from reliance on the department's certification or taxability
matrix. If the department determines that an item or transaction is
incorrectly classified as to the taxability of the item or transaction,
the department shall notify the certified service provider or the seller
using a certified automated system of the incorrect classification. The
certified service provider or the seller using a certified automated
system must revise the incorrect classification within ten (10) days
after receiving notice of the determination from the department. If
the classification error is not corrected within ten (10) days after
receiving the department's notice, the certified service provider or the
seller using a certified automated system is liable for failure to
collect the correct amount of sales or use tax due and owing.
(e) If at least thirty (30) days are not provided between the
enactment of a statute changing the rate set forth in IC 6-2.5-2-2 and
the effective date of the rate change, the department shall relieve the
seller of liability for failing to collect tax at the new rate if:
(1) the seller collected the tax at the immediately preceding
effective rate; and
(2) the seller's failure to collect at the current rate does not
extend beyond thirty (30) days after the effective date of the
rate change.
A seller is not eligible for the relief provided for in this subsection if
the seller fraudulently fails to collect at the current rate or solicits
purchases based on the immediately preceding effective rate.
(f) The department shall allow any monetary allowances that are
provided by the member states to sellers or certified service
providers in exchange for collecting the sales and use taxes as
provided in article VI of the agreement. As added by P.L.107-2001, SEC.1. Amended by P.L.195-2005,
SEC.4; P.L.145-2007, SEC.9; P.L.182-2009(ss), SEC.183;
P.L.113-2010, SEC.53.
IC 6-2.5-11-11 Relief from penalties, tax, and interest in certain transactions
involving reliance on data provided by the department
Sec. 11. (a) This section applies only to transactions occurring
after December 31, 2008.
(b) A purchaser is relieved from liability for penalties imposed
under IC 6-8.1-10-2.1 for failure to pay the amount of tax due if any
of the following occurs:
(1) A purchaser's seller or certified service provider relied on
erroneous data provided by the department regarding any of the
following:
(A) Tax rates.
(B) Boundaries.
(C) Taxing jurisdiction assignments.
(D) The taxability matrix.
(2) A purchaser with a direct pay permit relied on erroneous
data provided by the department regarding any of the following:
(A) Tax rates.
(B) Boundaries.
(C) Taxing jurisdiction assignments.
(D) The taxability matrix.
(3) A purchaser relied on erroneous data in the taxability matrix
provided by the department.
(c) The department shall relieve a purchaser from liability for tax
and interest for having failed to pay the correct amount of sales or
use tax in the circumstances described in subsection (b); however,
the relief is limited to tax and interest attributable to the department's
erroneous classification in the taxability matrix of terms:
(1) included as taxable or exempt;
(2) included in the sales price;
(3) excluded from the sales price;
(4) included in a definition; or
(5) excluded from a definition. As added by P.L.145-2007, SEC.10.
IC 6-2.5-11-12 Review of software; limited relief from liability
Sec. 12. (a) The department shall review software submitted to the
governing board for certification as a certified automated system.
The review is to determine that the program adequately classifies
product based exemptions granted under IC 6-2.5-5. Upon
satisfactory completion of the review, the department shall certify to
the governing board the department's acceptance of the
classifications made by the system.
(b) The governing board and the member states are not
responsible for classification of an item or a transaction within the
product based exemptions certified by the department. The relief
from liability provided in this section is not available to a certified
service provider or Model 2 seller that has incorrectly classified an
item or a transaction into a product based exemption certified by the
department. This subsection does not apply to the individual listing
of items or transactions within a product definition approved by the
governing board or the member states.
(c) If the department determines that an item or a transaction is
incorrectly classified as to the taxability of the item or transaction,
the department shall notify the certified service provider or Model 2
seller of the incorrect classification. The certified service provider or
Model 2 seller must revise the classification within ten (10) days
after receiving notice of the determination from the department. If
the classification error is not corrected within ten (10) days after
receiving the department's notice, the certified service provider or
Model 2 seller is liable for failure to collect the correct amount of
sales or use tax due and owing. As added by P.L.145-2007, SEC.11.
IC 6-2.5-11
Chapter 11. Simplified Sales and Use Tax Administration Act
IC 6-2.5-11-1 Short title
Sec. 1. This chapter shall be known as and referred to as the
"simplified sales and use tax administration act". As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-2 Definitions
Sec. 2. As used in this chapter:
(1) "Agreement" means the Streamlined Sales and Use Tax
Agreement.
(2) "Certified automated system" means software certified
jointly by the states that are signatories to the agreement to
calculate the tax imposed by each jurisdiction on a transaction,
to determine the amount of tax to remit to the appropriate state,
and to maintain a record of the transaction.
(3) "Certified service provider" means an agent certified jointly
by the states that are signatories to the agreement to perform all
of the seller's sales tax functions.
(4) "Person" means an individual, a trust, an estate, a fiduciary,
a partnership, a limited liability company, a limited liability
partnership, a corporation, or any other legal entity.
(5) "Sales tax" means the state gross retail tax levied under
IC 6-2.5.
(6) "Seller" means any person making sales, leases, or rentals of
personal property or services.
(7) "State" means any state of the United States and the District
of Columbia.
(8) "Use tax" means the use tax levied under IC 6-2.5. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-3 Findings of general assembly
Sec. 3. The general assembly finds that a simplified sales and use
tax system will reduce and over time eliminate the burden and cost
for all vendors to collect this state's sales and use tax. The general
assembly further finds that this state should participate in multistate
discussions to review, amend, or review and amend the terms of the
agreement to simplify and modernize sales and use tax
administration in order to substantially reduce the burden of tax
compliance for all sellers and all types of commerce. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-4 Delegates to review or amend agreement
Sec. 4. (a) For the purposes of reviewing, amending, or reviewing
and amending the agreement embodying the simplification
requirements set forth in section 7 of this chapter, the state shall
enter into multistate discussions. For purposes of those discussions,
the state shall be represented by four (4) delegates, appointed as
follows:
(1) One (1) member of the house of representatives, appointed
by the speaker of the house of representatives.
(2) One (1) member of the senate, appointed by the president
pro tempore of the senate.
(3) One (1) individual appointed by the governor.
(4) The commissioner of the department of state revenue, who
is an ex officio member.
A delegate appointed under subdivisions (1) through (3) serves at the
pleasure of the officer who appointed that delegate.
(b) Each delegate who is not a state employee is entitled to the
minimum salary per diem provided by IC 4-10-11-2.1(b). The
delegate is also entitled to reimbursement for traveling expenses as
provided under IC 4-13-1-4 and other expenses actually incurred in
connection with the delegate's duties as provided in the state policies
and procedures established by the Indiana department of
administration and approved by the budget agency. Expenses
incurred under this subsection shall be paid out of the funds
appropriated to the department of state revenue.
(c) Each delegate who is a state employee but who is not a
member of the general assembly is entitled to reimbursement for
traveling expenses as provided under IC 4-13-1-4 and other expenses
actually incurred in connection with the delegate's duties as provided
in the state policies and procedures established by the Indiana
department of administration and approved by the budget agency.
(d) Each delegate who is a member of the general assembly is
entitled to receive the per diem, mileage, and travel allowances paid
to members of the general assembly under travel policies established
by the legislative council. Per diem, mileage, and travel allowances
paid under this subsection shall be paid from appropriations made to
the legislative council or the legislative services agency. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-5 Powers of department
Sec. 5. The department may enter into the agreement with one (1)
or more states to simplify and modernize sales and use tax
administration in order to substantially reduce the burden of tax
compliance for all sellers and for all types of commerce. In
furtherance of the agreement, the department may act jointly with
other states that are members of the agreement to establish standards
for certification of certified service providers and certified automated
systems and to establish performance standards for multistate sellers.
The department may take other actions reasonably required to
implement this chapter. Other actions authorized by this section
include, but are not limited to, the adoption of rules and the joint
procurement, with other member states, of goods and services in
furtherance of the cooperative agreement. The department or the
department's designee shall represent the state of Indiana before the
other states that are signatories to the agreement. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-6 Effect on Indiana law
Sec. 6. No provision of the agreement authorized by this chapter
in whole or in part invalidates or amends any provision of the law of
Indiana. Adoption of the agreement by the state of Indiana does not
amend or modify any Indiana law. Implementation of any condition
of the agreement in Indiana, whether adopted before, at, or after
membership of this state in the agreement, must be by the action of
this state. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-7 Requirements in agreement
Sec. 7. The department shall not enter into the agreement unless
the agreement requires each state to abide by the following
requirements:
(1) Simplified State Rate. The agreement must set restrictions
to limit over time the number of state rates.
(2) Uniform Standards. The agreement must establish uniform
standards for the following:
(A) The sourcing of transactions to taxing jurisdictions.
(B) The administration of exempt sales.
(C) Sales and use tax returns and remittances.
(3) Central Registration. The agreement must provide a central
electronic registration system that allows a seller to register to
collect and remit sales and use taxes for all signatory states.
(4) No Nexus Attribution. The agreement must provide that
registration with the central registration system and the
collection of sales and use taxes in the signatory states will not
be used as a factor in determining whether the seller has nexus
with a state for any tax.
(5) Local Sales and Use Taxes. The agreement must provide for
reduction of the burdens of complying with local sales and use
taxes through the following:
(A) Restricting variances between the state and local tax
bases.
(B) Requiring states to administer any sales and use taxes
levied by local jurisdictions within the state so that sellers
collecting and remitting these taxes will not have to register
or file returns with, remit funds to, or be subject to
independent audits from local taxing jurisdictions.
(C) Restricting the frequency of changes in the local sales
and use tax rates and setting effective dates for the
application of local jurisdictional boundary changes to local
sales and use taxes.
(D) Providing notice of changes in local sales and use tax
rates and of changes in the boundaries of local taxing
jurisdictions.
(6) Monetary Allowances. The agreement must outline any
monetary allowances that are to be provided by the states to
sellers or certified service providers. The agreement must allow
for a joint public and private sector study of the compliance
cost on sellers and certified service providers to collect sales
and use taxes for state and local governments under various
levels of complexity to be completed on or before July 1, 2002.
(7) State Compliance. The agreement must require each state to
certify compliance with the terms of the agreement before
joining and to maintain compliance, under the laws of the
member state, with all provisions of the agreement while the
state is a member.
(8) Consumer Privacy. The agreement must require each state
to adopt a uniform policy for certified service providers that
protects the privacy of consumers and maintains the
confidentiality of tax information.
(9) Advisory Councils. The agreement must provide for the
appointment of an advisory council of private sector
representatives and an advisory council of nonmember state
representatives to consult in the administration of the
agreement. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-8 Provisions in agreement
Sec. 8. The agreement authorized by this chapter is an accord
among individual cooperating sovereign states in furtherance of their
governmental functions. The agreement provides a mechanism
among the member states to establish and maintain a cooperative,
simplified system for the application and administration of sales and
use taxes under the duly adopted law of each member state. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-9 State is only intended beneficiary of agreement; no individual
causes of action
Sec. 9. (a) The agreement authorized by this chapter binds and
inures only to the benefit of the state of Indiana and the other
member states. No person, other than a member state, is an intended
beneficiary of the agreement. Any benefit to a person other than a
state is established by the law of the state of Indiana and the other
member states and not by the terms of the agreement.
(b) Consistent with subsection (a), no person shall have any cause
of action or defense under the agreement or by virtue of the state of
Indiana's approval of the agreement. No person may challenge, in any
action brought under any provision of law, any action or inaction by
any department, agency, or other instrumentality of the state of
Indiana, or any political subdivision of the state of Indiana on the
grounds that the action or inaction is inconsistent with the agreement.
(c) No law of Indiana, or the application thereof, may be declared
invalid as to any person or circumstance on the grounds that the
provision or application is inconsistent with the agreement. As added by P.L.107-2001, SEC.1.
IC 6-2.5-11-10 Certified services providers; allowances for sellers and certified
service providers under the agreement; relief for failure to collect
tax
Sec. 10. (a) A certified service provider is the agent of a seller,
with whom the certified service provider has contracted, for the
collection and remittance of sales and use taxes. As the seller's agent,
the certified service provider is liable for sales and use tax due each
member state on all sales transactions it processes for the seller
except as set out in this section. A seller that contracts with a
certified service provider is not liable to the state for sales or use tax
due on transactions processed by the certified service provider unless
the seller misrepresented the type of items it sells or committed
fraud. In the absence of probable cause to believe that the seller has
committed fraud or made a material misrepresentation, the seller is
not subject to audit on the transactions processed by the certified
service provider. A seller is subject to audit for transactions not
processed by the certified service provider. The member states acting
jointly may perform a system check of the seller and review the
seller's procedures to determine if the certified service provider's
system is functioning properly and the extent to which the seller's
transactions are being processed by the certified service provider.
(b) A person that provides a certified automated system is
responsible for the proper functioning of that system and is liable to
the state for underpayments of tax attributable to errors in the
functioning of the certified automated system. A seller that uses a
certified automated system remains responsible and is liable to the
state for reporting and remitting tax.
(c) A seller that has a proprietary system for determining the
amount of tax due on transactions and has signed an agreement
establishing a performance standard for that system is liable for the
failure of the system to meet the performance standard.
(d) A certified service provider or a seller using a certified
automated system that obtains a certification or taxability matrix
from the department is not liable for sales or use tax collection errors
that result from reliance on the department's certification or taxability
matrix. If the department determines that an item or transaction is
incorrectly classified as to the taxability of the item or transaction,
the department shall notify the certified service provider or the seller
using a certified automated system of the incorrect classification. The
certified service provider or the seller using a certified automated
system must revise the incorrect classification within ten (10) days
after receiving notice of the determination from the department. If
the classification error is not corrected within ten (10) days after
receiving the department's notice, the certified service provider or the
seller using a certified automated system is liable for failure to
collect the correct amount of sales or use tax due and owing.
(e) If at least thirty (30) days are not provided between the
enactment of a statute changing the rate set forth in IC 6-2.5-2-2 and
the effective date of the rate change, the department shall relieve the
seller of liability for failing to collect tax at the new rate if:
(1) the seller collected the tax at the immediately preceding
effective rate; and
(2) the seller's failure to collect at the current rate does not
extend beyond thirty (30) days after the effective date of the
rate change.
A seller is not eligible for the relief provided for in this subsection if
the seller fraudulently fails to collect at the current rate or solicits
purchases based on the immediately preceding effective rate.
(f) The department shall allow any monetary allowances that are
provided by the member states to sellers or certified service
providers in exchange for collecting the sales and use taxes as
provided in article VI of the agreement. As added by P.L.107-2001, SEC.1. Amended by P.L.195-2005,
SEC.4; P.L.145-2007, SEC.9; P.L.182-2009(ss), SEC.183;
P.L.113-2010, SEC.53.
IC 6-2.5-11-11 Relief from penalties, tax, and interest in certain transactions
involving reliance on data provided by the department
Sec. 11. (a) This section applies only to transactions occurring
after December 31, 2008.
(b) A purchaser is relieved from liability for penalties imposed
under IC 6-8.1-10-2.1 for failure to pay the amount of tax due if any
of the following occurs:
(1) A purchaser's seller or certified service provider relied on
erroneous data provided by the department regarding any of the
following:
(A) Tax rates.
(B) Boundaries.
(C) Taxing jurisdiction assignments.
(D) The taxability matrix.
(2) A purchaser with a direct pay permit relied on erroneous
data provided by the department regarding any of the following:
(A) Tax rates.
(B) Boundaries.
(C) Taxing jurisdiction assignments.
(D) The taxability matrix.
(3) A purchaser relied on erroneous data in the taxability matrix
provided by the department.
(c) The department shall relieve a purchaser from liability for tax
and interest for having failed to pay the correct amount of sales or
use tax in the circumstances described in subsection (b); however,
the relief is limited to tax and interest attributable to the department's
erroneous classification in the taxability matrix of terms:
(1) included as taxable or exempt;
(2) included in the sales price;
(3) excluded from the sales price;
(4) included in a definition; or
(5) excluded from a definition. As added by P.L.145-2007, SEC.10.
IC 6-2.5-11-12 Review of software; limited relief from liability
Sec. 12. (a) The department shall review software submitted to the
governing board for certification as a certified automated system.
The review is to determine that the program adequately classifies
product based exemptions granted under IC 6-2.5-5. Upon
satisfactory completion of the review, the department shall certify to
the governing board the department's acceptance of the
classifications made by the system.
(b) The governing board and the member states are not
responsible for classification of an item or a transaction within the
product based exemptions certified by the department. The relief
from liability provided in this section is not available to a certified
service provider or Model 2 seller that has incorrectly classified an
item or a transaction into a product based exemption certified by the
department. This subsection does not apply to the individual listing
of items or transactions within a product definition approved by the
governing board or the member states.
(c) If the department determines that an item or a transaction is
incorrectly classified as to the taxability of the item or transaction,
the department shall notify the certified service provider or Model 2
seller of the incorrect classification. The certified service provider or
Model 2 seller must revise the classification within ten (10) days
after receiving notice of the determination from the department. If
the classification error is not corrected within ten (10) days after
receiving the department's notice, the certified service provider or
Model 2 seller is liable for failure to collect the correct amount of
sales or use tax due and owing. As added by P.L.145-2007, SEC.11.
