IC 6-2.5-5
Chapter 5. Exempt Transactions of Retail Merchant
IC 6-2.5-5-1 Animals, feed, seed, and chemicals
Sec. 1. Transactions involving animals, feed, seed, plants,
fertilizer, insecticides, fungicides, and other tangible personal
property are exempt from the state gross retail tax if:
(1) the person acquiring the property acquires it for his direct
use in the direct production of food and food ingredients or
commodities for sale or for further use in the production of food
and food ingredients or commodities for sale; and
(2) the person acquiring the property is occupationally engaged
in the production of food and food ingredients or commodities
which he sells for human or animal consumption or uses for
further food and food ingredient or commodity production. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.257-2003,
SEC.21.
IC 6-2.5-5-2 Agricultural machinery, tools, and equipment
Sec. 2. (a) Transactions involving agricultural machinery, tools,
and equipment are exempt from the state gross retail tax if the person
acquiring that property acquires it for his direct use in the direct
production, extraction, harvesting, or processing of agricultural
commodities.
(b) Transactions involving agricultural machinery or equipment
are exempt from the state gross retail tax if:
(1) the person acquiring the property acquires it for use in
conjunction with the production of food and food ingredients or
commodities for sale;
(2) the person acquiring the property is occupationally engaged
in the production of food or commodities which he sells for
human or animal consumption or uses for further food and food
ingredients or commodity production; and
(3) the machinery or equipment is designed for use in gathering,
moving, or spreading animal waste. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.80, SEC.1; P.L.257-2003, SEC.22.
IC 6-2.5-5-3 Exemption; acquisition for direct use in direct production
Sec. 3. (a) For purposes of this section:
(1) the retreading of tires shall be treated as the processing of
tangible personal property; and
(2) commercial printing shall be treated as the production and
manufacture of tangible personal property.
(b) Except as provided in subsection (c), transactions involving
manufacturing machinery, tools, and equipment are exempt from the
state gross retail tax if the person acquiring that property acquires it
for direct use in the direct production, manufacture, fabrication,
assembly, extraction, mining, processing, refining, or finishing of
other tangible personal property.
(c) The exemption provided in subsection (b) does not apply to
transactions involving distribution equipment or transmission
equipment acquired by a public utility engaged in generating
electricity. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.76-1985,
SEC.9; P.L.78-1989, SEC.4; P.L.192-2002(ss), SEC.50;
P.L.211-2007, SEC.12.
IC 6-2.5-5-4 Property for use in producing machinery, tools, or equipment
Sec. 4. Transactions involving tangible personal property are
exempt from the state gross retail tax if the person acquiring the
property acquires it for his direct use in the direct production of the
machinery, tools, or equipment described in section 2 or 3 of this
chapter. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-5
Repealed
(Repealed by Acts 1980, P.L.61, SEC.15.)
IC 6-2.5-5-5.1 Exemption; acquisition for direct consumption in direct production
Sec. 5.1. (a) As used in this section, "tangible personal property"
includes electrical energy, natural or artificial gas, water, steam, and
steam heat.
(b) Transactions involving tangible personal property are exempt
from the state gross retail tax if the person acquiring the property
acquires it for direct consumption as a material to be consumed in the
direct production of other tangible personal property in the person's
business of manufacturing, processing, refining, repairing, mining,
agriculture, horticulture, floriculture, or arboriculture. This
exemption includes transactions involving acquisitions of tangible
personal property used in commercial printing. As added by Acts 1981, P.L.63, SEC.6. Amended by P.L.23-1986,
SEC.2; P.L.78-1989, SEC.5; P.L.192-2002(ss), SEC.51.
IC 6-2.5-5-6 Exemption; acquisition for incorporation into product for sale
Sec. 6. Transactions involving tangible personal property are
exempt from the state gross retail tax if the person acquiring the
property acquires it for incorporation as a material part of other
tangible personal property which the purchaser manufactures,
assembles, refines, or processes for sale in his business. This
exemption includes transactions involving acquisitions of tangible
personal property used in commercial printing. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.78-1989,
SEC.6; P.L.192-2002(ss), SEC.52.
IC 6-2.5-5-7 Materials used in construction business, public street, or utility
service
Sec. 7. Transactions involving tangible personal property are
exempt from the state gross retail tax if:
(1) the person acquiring the property is in the construction
business;
(2) the person acquiring the property acquires it for
incorporation as a material or integral part of a public street or
of a public water, sewage, or other utility service;
(3) the public street or public utility service into which the
property is to be incorporated is required under a subdivision
plat, approved and accepted by the appropriate Indiana political
subdivision; and
(4) the public street or public utility is to be publicly maintained
after its completion. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-8 "New motor vehicle"; property acquired for resale, rental, or
leasing in course of business; aircraft
Sec. 8. (a) As used in this section, "new motor vehicle" has the
meaning set forth in IC 9-13-2-111.
(b) Transactions involving tangible personal property other than
a new motor vehicle are exempt from the state gross retail tax if the
person acquiring the property acquires it for resale, rental, or leasing
in the ordinary course of the person's business without changing the
form of the property.
(c) The following transactions involving a new motor vehicle are
exempt from the state gross retail tax:
(1) A transaction in which a person that has a franchise in effect
at the time of the transaction for the vehicle trade name, trade
or service mark, or related characteristics acquires a new motor
vehicle for resale, rental, or leasing in the ordinary course of the
person's business.
(2) A transaction in which a person that is a franchisee
appointed by a manufacturer or converter manufacturer licensed
under IC 9-23 acquires a new motor vehicle that has at least one
(1) trade name, service mark, or related characteristic as a result
of modification or further manufacture by the manufacturer or
converter manufacturer for resale, rental, or leasing in the
ordinary course of the person's business.
(3) A transaction in which a person acquires a new motor
vehicle for rental or leasing in the ordinary course of the
person's business.
(d) The rental or leasing of accommodations to a promoter by a
political subdivision (including a capital improvement board) or the
state fair commission is not exempt from the state gross retail tax, if
the rental or leasing of the property by the promoter is exempt under
IC 6-2.5-4-4.
(e) This subsection applies only to aircraft acquired after June 30,
2008. Except as provided in subsection (h), a transaction in which a
person acquires an aircraft for rental or leasing in the ordinary course
of the person's business is not exempt from the state gross retail tax
unless the person establishes, under guidelines adopted by the
department in the manner provided in IC 4-22-2-37.1 for the
adoption of emergency rules, that the annual amount of the gross
lease revenue derived from leasing or rental of the aircraft, which
may include revenue from related party transactions, is equal to or
greater than seven and five-tenths percent (7.5%) of the:
(1) book value of the aircraft, as published in the Vref Aircraft
Value Reference guide for the aircraft; or
(2) net acquisition price for the aircraft.
If a person acquires an aircraft below the Vref Aircraft Value
Reference guide book value, the person may appeal to the department
for a lower lease or rental threshold equal to the actual acquisition
price paid if the person demonstrates that the transaction was
completed in a commercially reasonable manner based on the
aircraft's age, condition, and equipment. The department may request
the person to submit to the department supporting documents
showing the aircraft is available for general public lease or rental,
copies of business and aircraft insurance policies, and other
documents that assist the department in determining if an aircraft is
exempt from the state gross retail tax.
(f) A person is required to meet the requirements of subsection (e)
until the earlier of the date the aircraft has generated sales tax on
leases or rental income that is equal to the amount of the original
sales tax exemption or the elapse of thirteen (13) years. If the aircraft
is sold by the person before meeting the requirements of this section
and before the sale the aircraft was exempt from gross retail tax
under subsection (e), the sale of the aircraft shall not result in the
assessment or collection of gross retail tax for the period from the
date of acquisition to the date of sale by the person.
(g) The person is required to remit the gross retail tax on taxable
lease and rental transactions no matter how long the aircraft is used
for lease and rental.
(h) This subsection applies only to aircraft acquired after
December 31, 2007. A transaction in which a person acquires an
aircraft to rent or lease the aircraft to another person for predominant
use in public transportation by the other person or by an affiliate of
the other person is exempt from the state gross retail tax. The
department may not require a person to meet the revenue threshold
in subsection (e) with respect to the person's leasing or rental of the
aircraft to receive or maintain the exemption. To maintain the
exemption provided under this subsection, the department may
require the person to submit only annual reports showing that the
aircraft is predominantly used to provide public transportation.
(i) The exemptions allowed under subsections (e) and (h) apply
regardless of the relationship, if any, between the person or lessor
and the lessee or renter of the aircraft. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.93-1987,
SEC.3; P.L.20-1990, SEC.8; P.L.27-2003, SEC.1; P.L.211-2007,
SEC.13; P.L.224-2007, SEC.53; P.L.182-2009(ss), SEC.176.
IC 6-2.5-5-9 Returnable containers; nonreturnable packaging
Sec. 9. (a) As used in this section, "returnable containers" means
containers customarily returned by the buyer of the contents for reuse
as containers.
(b) Sales of returnable containers are exempt from the state gross
retail tax if the transaction constitutes selling at retail as defined in
IC 6-2.5-4-1 and if the returnable containers contain contents.
(c) Sales of returnable containers are exempt from the state gross
retail tax if the containers are transferred empty for the purpose of
refilling.
(d) Sales of wrapping material and empty containers are exempt
from the state gross retail tax if the person acquiring the material or
containers acquires them for use as nonreturnable packages for
selling the contents that he adds. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-10 Electric or steam utilities; production plant or power production
expenses
Sec. 10. Transactions involving tangible personal property are
exempt from the state gross retail tax, if:
(1) the property is classified as production plant or power
production expenses, according to the uniform system of
accounts which was adopted and prescribed for the utility by
the Indiana utility regulatory commission; and
(2) the person acquiring the property is:
(A) a public utility that furnishes or sells electrical energy,
steam, or steam heat in a retail transaction described in
IC 6-2.5-4-5; or
(B) a power subsidiary (as defined in IC 6-2.5-4-5(a)) that
furnishes or sells electrical energy, steam, or steam heat to
a public utility described in clause (A). As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.23-1988,
SEC.8; P.L.71-1993, SEC.6.
IC 6-2.5-5-11 Gas utilities; production or storage plants and expenses
Sec. 11. Transactions involving tangible personal property are
exempt from the state gross retail tax, if:
(1) the property is classified as production plant, storage plant,
production expenses, or underground storage expenses
according to the uniform system of accounts, which was
adopted and prescribed for the utility by the Indiana utility
regulatory commission; and
(2) the person acquiring the property is a public utility that
furnishes or sells natural or artificial gas in a retail transaction
described in IC 6-2.5-4-5. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.23-1988,
SEC.9; P.L.71-1993, SEC.7.
IC 6-2.5-5-12 Water utilities; plants and expenses
Sec. 12. Transactions involving tangible personal property are
exempt from the state gross retail tax if:
(1) the property is classified as source of supply plant and
expenses, the pumping plant and expenses, or water treatment
plant and expenses according to the uniform system of accounts
which was adopted and prescribed for the utility by the Indiana
utility regulatory commission; and
(2) the person acquiring the property is a public utility that
furnishes or sells water in a retail transaction described in
IC 6-2.5-4-5. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.23-1988,
SEC.10; P.L.71-1993, SEC.8; P.L.91-1995, SEC.1; P.L.88-2007,
SEC.1.
IC 6-2.5-5-12.5 Wastewater utilities; plants and expenses
Sec. 12.5. (a) As used in this section, "collection plant and
expenses" includes the following:
(1) Expenditures for collection plant, which include the
following:
(A) Land and land rights.
(B) Structures and improvements.
(C) Power generation equipment.
(D) Collection sewers and special collecting structures.
(E) Receiving wells.
(F) Pumping equipment.
(G) Transportation equipment.
(H) Other collection plant expenditures.
(2) Expenditures for collection expenses, which include the
following:
(A) Operation supervision and engineering.
(B) Purchased power or fuel for power production.
(C) Chemicals.
(D) Materials and supplies.
(E) Maintenance supervision and engineering.
(F) Rental of real property or equipment.
(G) Maintenance of power generation equipment.
(H) Maintenance of structures and improvements.
(I) Maintenance of transportation equipment.
(J) Maintenance of collection plant equipment.
(b) As used in this section, "public utility" means a public utility
(as defined in IC 8-1-2-1(a)) or any person that contracts with a
municipality to operate, manage, or control any plant or equipment
owned by the municipality for the collection, treatment, or
processing of wastewater.
(c) As used in this section, "system pumping plant and expenses"
includes the following:
(1) Expenditures for pumping plant, which include the
following:
(A) Land and land rights.
(B) Structures and improvements.
(C) Boiler plant equipment.
(D) Other power production equipment.
(E) Steam pumping equipment.
(F) Electric pumping equipment.
(G) Diesel pumping equipment.
(H) Hydraulic pumping equipment.
(I) Other pumping equipment.
(2) Expenditures for pumping expenses, which include the
following:
(A) Operation supervision and engineering.
(B) Fuel for power production.
(C) Power production labor and expenses.
(D) Fuel or power purchased for pumping.
(E) Pumping labor and expenses.
(F) Miscellaneous expenses.
(G) Rents.
(H) Maintenance supervision and engineering.
(I) Maintenance of power production equipment.
(J) Maintenance of pumping equipment.
(d) As used in this section, "treatment and disposal plant and
expenses" includes the following:
(1) Expenditures for treatment and disposal plant, which
include the following:
(A) Land and land rights.
(B) Structures and improvements.
(C) Power generation equipment.
(D) Pumping equipment.
(E) Flow measuring devices and installations.
(F) Reuse meters and meter installations.
(G) Reuse transmission and distribution systems.
(H) Treatment and disposal equipment.
(I) Sewers and sewer lines.
(J) Transportation equipment.
(2) Expenditures for treatment and disposal expenses, which
include the following:
(A) Operation supervision and engineering.
(B) Purchased wastewater treatment.
(C) Sludge removal expenses.
(D) Purchased power or fuel for power production.
(E) Chemicals.
(F) Materials and supplies.
(G) Maintenance supervision and engineering.
(H) Rental of real property or equipment.
(I) Maintenance of power generation equipment.
(J) Maintenance of structures and improvements.
(K) Maintenance of transportation equipment.
(L) Maintenance of treatment and disposal plant equipment.
(e) Transactions involving tangible personal property are exempt
from the state gross retail tax if:
(1) the property is classified as collection plant and expenses,
treatment and disposal plant and expenses, or system pumping
plant and expenses; and
(2) the person acquiring the property is a public utility that
collects, treats, or processes wastewater. As added by P.L.88-2007, SEC.2.
IC 6-2.5-5-13 Intrastate telecommunication services; video, Internet access, or
VOIP services; equipment
Sec. 13. Transactions involving tangible personal property are
exempt from the state gross retail tax, if:
(1) the property is:
(A) classified as central office equipment, station equipment
or apparatus, station connection, wiring, or large private
branch exchanges according to the uniform system of
accounts which was adopted and prescribed for the utility by
the Indiana utility regulatory commission;
(B) mobile telecommunications switching office equipment,
radio or microwave transmitting or receiving equipment,
including, without limitation, towers, antennae, and property
that perform a function similar to the function performed by
any of the property described in clause (A); or
(C) a part of a national, regional, or local headend or similar
facility operated by a person furnishing video services, cable
radio services, satellite television or radio services, or
Internet access services; and
(2) the person acquiring the property:
(A) furnishes or sells intrastate telecommunication service
in a retail transaction described in IC 6-2.5-4-6; or
(B) uses the property to furnish:
(i) video services or Internet access services; or
(ii) VOIP services. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.23-1988,
SEC.11; P.L.71-1993, SEC.9; P.L.182-2009(ss), SEC.177.
IC 6-2.5-5-14 Public utilities; acquisitions of personal property
Sec. 14. (a) Transactions involving tangible personal property are
exempt from the state gross retail tax if the person acquiring the
property is:
(1) a municipally owned utility;
(2) a utility owned or operated by a special district; or
(3) a public utility owned or operated by a not-for-profit
corporation incorporated under:
(A) the Indiana General Not for Profit Corporation Act (Acts
1935, Chapter 157, as amended), notwithstanding its repeal;
(B) the Indiana Not-for-Profit Corporation Act of 1971 (IC
23-7-1.1), notwithstanding its repeal; or
(C) IC 23-17.
(b) The term "public utility owned or operated by a not-for-profit
corporation" does not include those public utilities incorporated
under Acts 1935, chapter 157, as amended, and which are owned or
operated by local district rural electric membership corporations. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1980,
P.L.53, SEC.1; P.L.179-1991, SEC.10.
IC 6-2.5-5-15
Repealed
(Repealed by P.L.81-2004, SEC.60.)
IC 6-2.5-5-15.5 Motor vehicles; intrafamilial title transfers
Sec. 15.5. A transaction involving a motor vehicle is exempt from
the state gross retail tax, if:
(1) the transaction consists of changing the motor vehicle title
to add or delete an individual; and
(2) the individual being added or deleted is the spouse, child,
grandparent, parent, or sibling of an owner. As added by P.L.73-1993, SEC.1.
IC 6-2.5-5-16 State or local government acquisitions
Sec. 16. Transactions involving tangible personal property, public
utility commodities, and public utility service are exempt from the
state gross retail tax, if the person acquiring the property,
commodities, or service:
(1) is the state of Indiana, an agency or instrumentality of the
state, a political subdivision of the state, or an agency or
instrumentality of a political subdivision of the state, including
a county solid waste management district or a joint solid waste
management district established under IC 13-21 or IC 13-9.5-2
(before its repeal); and
(2) predominantly uses the property, commodities, or service to
perform its governmental functions. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.25-1991,
SEC.3; P.L.1-1996, SEC.45.
IC 6-2.5-5-16.5 Home energy assistance
Sec. 16.5. (a) The following definitions apply throughout this
section:
(1) "Home energy" means electricity, oil, gas, coal, propane, or
any other fuel for use as the principal source of heating or
cooling in residential dwellings.
(2) "Home energy assistance" means programs administered by
the state to supply home energy through the Low Income Home
Energy Assistance Block Grant under 42 U.S.C. 8261 et seq.
(b) Transactions involving home energy are exempt from the state
gross retail tax if the person acquiring the home energy acquires it
after June 30, 2006, and before July 1, 2009, through home energy
assistance. As added by P.L.162-2006, SEC.22. Amended by P.L.32-2007,
SEC.2.
IC 6-2.5-5-17 Newspapers
Sec. 17. Sales of newspapers are exempt from the state gross retail
tax. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-18 Medical equipment, supplies, and devices
Sec. 18. (a) Sales of durable medical equipment, mobility
enhancing equipment, prosthetic devices, artificial limbs, orthopedic
devices, dental prosthetic devices, eyeglasses, contact lenses, and
other medical supplies and devices are exempt from the state gross
retail tax, if the sales are prescribed by a person licensed to issue the
prescription.
(b) Rentals of durable medical equipment, mobility enhancing
equipment, and other medical supplies and devices are exempt from
the state gross retail tax, if the rentals are prescribed by a person
licensed to issue the prescription.
(c) Sales of hearing aids are exempt from the state gross retail tax
if the hearing aids are fitted or dispensed by a person licensed or
registered for that purpose. In addition, sales of hearing aid parts,
attachments, or accessories are exempt from the state gross retail tax.
For purposes of this subsection, a hearing aid is a device which is
worn on the body and which is designed to aid, improve, or correct
defective human hearing.
(d) Sales of colostomy bags, ileostomy bags, and the medical
equipment, supplies, and devices used in conjunction with those bags
are exempt from the state gross retail tax.
(e) Sales of equipment and devices used to administer insulin are
exempt from the state gross retail tax.
(f) Sales of equipment and devices used to monitor blood glucose
level, including blood glucose meters and measuring strips, lancets,
and other similar diabetic supplies, are exempt from the state gross
retail tax, regardless of whether the equipment and devices are
prescribed. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.257-2003,
IC 6-2.5-5-19 Drugs; insulin; oxygen; blood or blood plasma
Sec. 19. (a) As used in this section, "legend drug" means a drug
as defined in IC 6-2.5-1-17 that is also a legend drug for purposes of
IC 16-18-2-199.
(b) As used in this section, "nonlegend drug" means a drug (as
defined in IC 6-2.5-1-17) that is not a legend drug.
(c) Sales of legend drugs and sales of nonlegend drugs are exempt
from the state gross retail tax if:
(1) a registered pharmacist makes the sale upon the prescription
of a practitioner who is licensed to prescribe, dispense, and
administer those drugs to human beings or animals in the course
of his professional practice; or
(2) the licensed practitioner makes the sales.
(d) Sales of a nonlegend drug are exempt from the state gross
retail tax, if:
(1) the nonlegend drug is dispensed upon an original
prescription or a drug order (as defined in IC 16-42-19-3); and
(2) the ultimate user of the drug is a person confined to a
hospital or health care facility.
(e) Sales of insulin, oxygen, blood, or blood plasma are exempt
from the state gross retail tax, if the purchaser purchases the insulin,
oxygen, blood, or plasma for medical purposes.
(f) Sales of drugs, insulin, oxygen, blood, and blood plasma are
exempt from the state gross retail tax if:
(1) the purchaser is a practitioner licensed to prescribe,
dispense, and administer drugs to human beings or animals; and
(2) the purchaser buys the items for:
(A) direct consumption in his practice; or
(B) resale to a patient that the practitioner is treating, in the
case of sales of legend or nonlegend drugs. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.81, SEC.1; P.L.19-1994, SEC.4; P.L.257-2003, SEC.24.
IC 6-2.5-5-19.5 Drug samples; blood glucose monitoring devices; packaging and
literature
Sec. 19.5. (a) For purposes of this section, "drug sample" means
a legend drug (as defined by IC 16-18-2-199) or a drug composed
wholly or partly of insulin or an insulin analog that is furnished
without charge. For purposes of this section, "blood glucose
monitoring device" means blood glucose meters and measuring
strips, lancets, and other similar diabetic supplies furnished without
charge.
(b) Transactions involving the following are exempt from the state
gross retail tax:
(1) A drug sample, the packaging and literature for a drug
sample, a blood glucose monitoring device, and the packaging
and literature for a blood glucose monitoring device.
(2) Tangible personal property that will be used as a drug
sample or a blood glucose monitoring device or that will be
processed, manufactured, or incorporated into:
(A) a drug sample or a blood glucose monitoring device; or
(B) the packaging or literature for a drug sample or a blood
glucose monitoring device. As added by P.L.61-1997, SEC.1. Amended by P.L.182-2009(ss),
SEC.179.
IC 6-2.5-5-20 "Food and food ingredients for human consumption"
Sec. 20. (a) Sales of food and food ingredients for human
consumption are exempt from the state gross retail tax.
(b) For purposes of this section, the term "food and food
ingredients for human consumption" includes the following items if
sold without eating utensils provided by the seller:
(1) Food sold by a seller whose proper primary NAICS
classification is manufacturing in sector 311, except subsector
3118 (bakeries).
(2) Food sold in an unheated state by weight or volume as a
single item.
(3) Bakery items, including bread, rolls, buns, biscuits, bagels,
croissants, pastries, donuts, danish, cakes, tortes, pies, tarts,
muffins, bars, cookies, and tortillas.
(c) Except as otherwise provided by subsection (b), for purposes
of this section, the term "food and food ingredients for human
consumption" does not include:
(1) candy;
(2) alcoholic beverages;
(3) soft drinks;
(4) food sold through a vending machine;
(5) food sold in a heated state or heated by the seller;
(6) two (2) or more food ingredients mixed or combined by the
seller for sale as a single item (other than food that is only cut,
repackaged, or pasteurized by the seller, and eggs, fish, meat,
poultry, and foods containing these raw animal foods requiring
cooking by the consumer as recommended by the federal Food
and Drug Administration in chapter 3, subpart 3-401.11 of its
Food Code so as to prevent food borne illnesses);
(7) food sold with eating utensils provided by the seller,
including plates, knives, forks, spoons, glasses, cups, napkins,
or straws (for purposes of this subdivision, a plate does not
include a container or packaging used to transport the food);
(8) tobacco; or
(9) dietary supplements. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.86-1989,
SEC.1; P.L.257-2003, SEC.25; P.L.195-2005, SEC.2; P.L.113-2010,
SEC.51. IC 6-2.5-5-21 Exemption; sales of food and food ingredients by nonprofit entities
to confined or hospitalized persons
Sec. 21. (a) For purposes of this section, "private benefit or gain"
does not include reasonable compensation paid to an employee for
work or services actually performed.
(b) Sales of food and food ingredients are exempt from the state
gross retail tax if:
(1) the seller meets the filing requirements under subsection (d)
and is any of the following:
(A) A fraternity, a sorority, or a student cooperative housing
organization that is connected with and under the
supervision of a postsecondary educational institution if no
part of its income is used for the private benefit or gain of
any member, trustee, shareholder, employee, or associate.
(B) Any:
(i) institution;
(ii) trust;
(iii) group;
(iv) united fund;
(v) affiliated agency of a united fund;
(vi) nonprofit corporation;
(vii) cemetery association; or
(viii) organization;
that is organized and operated exclusively for religious,
charitable, scientific, literary, educational, or civic purposes
if no part of its income is used for the private benefit or gain
of any member, trustee, shareholder, employee, or associate.
(C) A group, an organization, or a nonprofit corporation that
is organized and operated for fraternal or social purposes, or
as a business league or association, and not for the private
benefit or gain of any member, trustee, shareholder,
employee, or associate.
(D) A:
(i) hospital licensed by the state department of health;
(ii) shared hospital services organization exempt from
federal income taxation by Section 501(c)(3) or 501(e) of
the Internal Revenue Code;
(iii) labor union;
(iv) church;
(v) monastery;
(vi) convent;
(vii) school that is a part of the Indiana public school
system;
(viii) parochial school regularly maintained by a
recognized religious denomination; or
(ix) trust created for the purpose of paying pensions to
members of a particular profession or business who
created the trust for the purpose of paying pensions to each
other;
if the taxpayer is not organized or operated for private profit
or gain;
(2) the purchaser is a person confined to his home because of
age, sickness, or infirmity;
(3) the seller delivers the food and food ingredients to the
purchaser; and
(4) the delivery is prescribed as medically necessary by a
physician licensed to practice medicine in Indiana.
(c) Sales of food and food ingredients are exempt from the state
gross retail tax if the seller is an organization described in subsection
(b)(1), and the purchaser is a patient in a hospital operated by the
seller.
(d) To obtain the exemption provided by this section, a taxpayer
must file an application for exemption with the department:
(1) before January 1, 2003, under IC 6-2.1-3-19 (repealed); or
(2) not later than one hundred twenty (120) days after the
taxpayer's formation.
In addition, the taxpayer must file an annual report with the
department on or before the fifteenth day of the fifth month
following the close of each taxable year. If a taxpayer fails to file the
report, the department shall notify the taxpayer of the failure. If
within sixty (60) days after receiving such notice the taxpayer does
not provide the report, the taxpayer's exemption shall be canceled.
However, the department may reinstate the taxpayer's exemption if
the taxpayer shows by petition that the failure was due to excusable
neglect. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.77, SEC.2; P.L.192-2002(ss), SEC.53; P.L.257-2003, SEC.26;
P.L.2-2007, SEC.119.
IC 6-2.5-5-21.5 Medically necessary food
Sec. 21.5. Sales of food and food ingredients prescribed as
medically necessary by a physician licensed to practice medicine in
Indiana are exempt from the state gross retail tax if:
(1) a registered pharmacist makes the sale upon the prescription
of a practitioner who is licensed to practice medicine in Indiana;
or
(2) the licensed practitioner makes the sale of the food and food
ingredients described in this section. As added by P.L.19-1994, SEC.5. Amended by P.L.257-2003,
SEC.27.
IC 6-2.5-5-22 Exemption; sales of meals; schools; fraternities; sororities; student
cooperatives
Sec. 22. (a) Sales of school meals are exempt from the state gross
retail tax if:
(1) the seller is a school containing students in any grade, one
(1) through twelve (12);
(2) the purchaser is one (1) of those students or a school
employee; and
(3) the school furnishes the food and food ingredients on its
premises.
(b) Sales of food and food ingredients by not-for-profit colleges
or universities are exempt from the state gross retail tax, if the
purchaser is a student at the college or university.
(c) Sales of meals after December 31, 1976, by a fraternity,
sorority, or student cooperative housing organization described in
section 21(b)(1)(A) of this chapter are exempt from the state gross
retail tax, if the purchaser:
(1) is a member of the fraternity, sorority, or student
cooperative housing organization; and
(2) is enrolled in the college, university, or educational
institution with which the fraternity, sorority, or student
cooperative housing organization is connected and by which it
is supervised. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1980,
P.L.49, SEC.2; Acts 1981, P.L.77, SEC.3; P.L.192-2002(ss), SEC.54;
P.L.257-2003, SEC.28.
IC 6-2.5-5-23 School building materials
Sec. 23. Transactions involving tangible personal property are
exempt from the state gross retail tax, if the person acquiring the
property acquires it for incorporation into a school building which is
being constructed by a lessor corporation in accordance with a lease
executed under IC 20-47-2 or IC 20-47-3. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.2-2006,
SEC.67.
IC 6-2.5-5-24 Exemption; sales to United States government; commercial
printing; receipt or collection of taxes; earnings on United States
bonds; transactions with another state or foreign country
Sec. 24. (a) Transactions are exempt from the state gross retail tax
to the extent that the gross retail income from those transactions is
derived from gross receipts that are:
(1) derived from sales to the United States government, to the
extent the state is prohibited by the Constitution of the United
States from taxing that gross income;
(2) derived from commercial printing that results in printed
materials, excluding the business of photocopying, that are
shipped, mailed, or delivered outside Indiana;
(3) United States or Indiana taxes received or collected as a
collecting agent explicitly designated as a collecting agent for
a tax by statute for the state or the United States;
(4) collections by a retail merchant of a retailer's excise tax
imposed by the United States if:
(A) the tax is imposed solely on the sale at retail of tangible
personal property;
(B) the tax is remitted to the appropriate taxing authority;
and
(C) the retail merchant collects the tax separately as an
addition to the price of the property sold;
(5) collections of a manufacturer's excise tax imposed by the
United States on motor vehicles, motor vehicle bodies and
chassis, parts and accessories for motor vehicles, tires, tubes for
tires, or tread rubber and laminated tires, if the excise tax is
separately stated by the collecting taxpayer as either an addition
to or an inclusion in the price of the property sold; or
(6) amounts represented by an encumbrance of any kind on
tangible personal property received by a retail merchant in
reciprocal exchange for tangible personal property of like kind.
(b) Transactions are exempt from the state gross retail tax to the
extent that the gross retail income from those transactions is derived
from gross receipts that are:
(1) interest or other earnings paid on bonds or other securities
issued by the United States, to the extent the Constitution of the
United States prohibits the taxation of that gross income; or
(2) derived from business conducted in commerce between the
state and either another state or a foreign country, to the extent
the state is prohibited from taxing that gross income by the
Constitution of the United States. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.77, SEC.4; P.L.78-1989, SEC.7; P.L.192-2002(ss), SEC.55.
IC 6-2.5-5-25 Exemption; acquisition for fund raising by nonprofit entity
Sec. 25. (a) Transactions involving tangible personal property or
service are exempt from the state gross retail tax, if the person
acquiring the property or service:
(1) is an organization described in section 21(b)(1) of this
chapter;
(2) primarily uses the property or service to carry on or to raise
money to carry on its not-for-profit purpose; and
(3) is not an organization operated predominantly for social
purposes.
(b) Transactions occurring after December 31, 1976, and
involving tangible personal property or service are exempt from the
state gross retail tax, if the person acquiring the property or service:
(1) is a fraternity, sorority, or student cooperative housing
organization described in section 21(b)(1)(A) of this chapter;
and
(2) uses the property or service to carry on its ordinary and
usual activities and operations as a fraternity, sorority, or
student cooperative housing organization. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1980,
P.L.49, SEC.3; Acts 1981, P.L.77, SEC.5; P.L.192-2002(ss), SEC.56. IC 6-2.5-5-26 Exemption; nonprofit entities; sales for less than 30 days each
year; sale for educational, cultural, or religious purpose; sale for
professional or workforce education improvement purposes
Sec. 26. (a) Sales of tangible personal property are exempt from
the state gross retail tax, if:
(1) the seller is an organization that is described in section
21(b)(1) of this chapter;
(2) the organization makes the sale to make money to carry on
a not-for-profit purpose; and
(3) the organization does not make those sales during more than
thirty (30) days in a calendar year.
(b) Sales of tangible personal property are exempt from the state
gross retail tax, if:
(1) the seller is an organization described in section 21(b)(1) of
this chapter;
(2) the seller is not operated predominantly for social purposes;
(3) the property sold is designed and intended primarily either
for the organization's educational, cultural, or religious
purposes, or for improvement of the work skills or professional
qualifications of the organization's members; and
(4) the property sold is not designed or intended primarily for
use in carrying on a private or proprietary business.
(c) The exemption provided by this section does not apply to an
accredited college or university's sales of books, stationery,
haberdashery, supplies, or other property. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.77, SEC.6; P.L.192-2002(ss), SEC.57.
IC 6-2.5-5-27 Public transportation; acquisitions
Sec. 27. Transactions involving tangible personal property and
services are exempt from the state gross retail tax, if the person
acquiring the property or service directly uses or consumes it in
providing public transportation for persons or property. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-27.5 Rolling stock
Sec. 27.5. (a) For purposes of this section, "rolling stock" means
rail transportation equipment, including locomotives, box cars,
flatbed cars, hopper cars, tank cars, and freight cars of any type or
class.
(b) Transactions involving the following tangible personal
property are exempt from the gross retail tax:
(1) Rolling stock that is purchased or leased by a person.
(2) All spare, replacement, and rebuilding parts or accessories,
components, materials, or supplies, including lubricants and
fuels, for rolling stock described in subdivision (1). As added by P.L.61-1997, SEC.2. IC 6-2.5-5-28
Repealed
(Repealed by P.L.11-1984, SEC.4.)
IC 6-2.5-5-29 Manufactured homes; industrialized residential structures
Sec. 29. (a) As used in this section:
"Manufactured home" means a manufactured home as that term
is defined in 42 U.S.C. 5402(6) as that statute was adopted and in
effect on January 1, 1988.
"Industrialized residential structure" means a structure that is both
an industrialized building system (as defined in IC 22-12-1-14) and
a one (1) or two (2) family private residence.
(b) Sales of manufactured homes or industrialized residential
structures are exempt from the state gross retail tax to the extent that
the gross retail income from the sales is not attributable to the cost
of materials used in manufacturing the manufactured home or
industrialized residential structure.
(c) For purposes of this section, the part of the gross retail income
not attributable to the cost of materials used in manufacturing a
manufactured home or an industrialized residential structure is
thirty-five percent (35%) of the gross retail income derived from the
sale of the manufactured home or industrialized residential structure.
(d) The gross retail income derived from the sale of a preowned
manufactured home is exempt from the state gross retail tax. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.245-1987,
SEC.7; P.L.86-1989, SEC.2.
IC 6-2.5-5-30 Environmental quality compliance; manufacturing, mining, or
agriculture
Sec. 30. Sales of tangible personal property are exempt from the
state gross retail tax if:
(1) the property constitutes, is incorporated into, or is consumed
in the operation of, a device, facility, or structure predominantly
used and acquired for the purpose of complying with any state,
local, or federal environmental quality statutes, regulations, or
standards; and
(2) the person acquiring the property is engaged in the business
of manufacturing, processing, refining, mining, or agriculture.
The portion of the sales price of tangible personal property which is
exempt from state gross retail and use taxes under this section equals
the product of: (A) the total sales price; multiplied by (B) one
hundred percent (100%). As added by Acts 1980, P.L.53, SEC.2. Amended by P.L.28-1997,
SEC.9.
IC 6-2.5-5-31 Free distribution newspaper; related transactions
Sec. 31. (a) As used in this section, "free distribution newspaper"
means any community newspaper, shopping paper, shoppers'
consumer paper, pennysaver, shopping guide, town crier, dollar
stretcher, or other similar publication which:
(1) is distributed to the public on a community-wide basis, free
of charge;
(2) is published at stated intervals of at least once a month;
(3) has continuity as to title and general nature of content from
issue to issue;
(4) does not constitute a book, either singly or when successive
issues are put together;
(5) contains advertisements from numerous unrelated
advertisers in each issue;
(6) contains news of general or community interest, community
notices, or editorial commentary by different authors, in each
issue; and
(7) is not owned by, or under the control of, the owners or
lessees of a shopping center, a merchant's association, or a
business that sells property or services (other than advertising)
whose advertisements for their sales of property or services
constitute the predominant advertising in the publication.
(b) The term "free distribution newspaper" does not include mail
order catalogs or other catalogs, advertising fliers, travel brochures,
house organs, theater programs, telephone directories, restaurant
guides, shopping center advertising sheets, and similar publications.
(c) Transactions involving manufacturing machinery, tools and
equipment, and other tangible personal property are exempt from the
state gross retail tax if the person acquiring that property acquires it
for his direct use, or for his direct consumption as a material to be
consumed, in the direct production or publication of a free
distribution newspaper, or for incorporation as a material part of a
free distribution newspaper published by that person.
(d) Transactions involving a sale of a free distribution newspaper,
or of printing services performed in publishing a free distribution
newspaper, are exempt from the state gross retail tax if the purchaser
is the publisher of the free distribution newspaper. As added by Acts 1981, P.L.80, SEC.2.
IC 6-2.5-5-32
Reserved
IC 6-2.5-5-33
Tangible personal property purchased with food stamps
Sec. 33. Sales of tangible personal property purchased with food
stamps are exempt from the state gross retail tax. As added by P.L.69-1986, SEC.1.
IC 6-2.5-5-34 Sale of lottery tickets; gross retail tax
Sec. 34. Sales of lottery tickets authorized by IC 4-30 are exempt
from the state gross retail tax.
As added by P.L.341-1989(ss), SEC.8.
IC 6-2.5-5-35 Tangible personal property transactions
Sec. 35. (a) Except as provided in subsection (b), transactions
involving tangible personal property are exempt from the state gross
retail tax if:
(1) the:
(A) person acquires the property to facilitate the service or
consumption of food and food ingredients that is not
exempted from the state gross retail tax under section 20 of
this chapter; and
(B) property is:
(i) used, consumed, or removed in the service or
consumption of the food and food ingredients; and
(ii) made unusable for further service or consumption of
food and food ingredients after the property's first use for
service or consumption of food and food ingredients; or
(2) the:
(A) person acquiring the property is engaged in the business
of renting or furnishing rooms, lodgings, or accommodations
in a commercial hotel, motel, inn, tourist camp, or tourist
cabin; and
(B) property acquired is:
(i) used up, removed, or otherwise consumed during the
occupation of the rooms, lodgings, or accommodations by
a guest; or
(ii) rendered nonreusable by the property's first use by a
guest during the occupation of the rooms, lodgings, or
accommod
IC 6-2.5-5
Chapter 5. Exempt Transactions of Retail Merchant
IC 6-2.5-5-1 Animals, feed, seed, and chemicals
Sec. 1. Transactions involving animals, feed, seed, plants,
fertilizer, insecticides, fungicides, and other tangible personal
property are exempt from the state gross retail tax if:
(1) the person acquiring the property acquires it for his direct
use in the direct production of food and food ingredients or
commodities for sale or for further use in the production of food
and food ingredients or commodities for sale; and
(2) the person acquiring the property is occupationally engaged
in the production of food and food ingredients or commodities
which he sells for human or animal consumption or uses for
further food and food ingredient or commodity production. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.257-2003,
SEC.21.
IC 6-2.5-5-2 Agricultural machinery, tools, and equipment
Sec. 2. (a) Transactions involving agricultural machinery, tools,
and equipment are exempt from the state gross retail tax if the person
acquiring that property acquires it for his direct use in the direct
production, extraction, harvesting, or processing of agricultural
commodities.
(b) Transactions involving agricultural machinery or equipment
are exempt from the state gross retail tax if:
(1) the person acquiring the property acquires it for use in
conjunction with the production of food and food ingredients or
commodities for sale;
(2) the person acquiring the property is occupationally engaged
in the production of food or commodities which he sells for
human or animal consumption or uses for further food and food
ingredients or commodity production; and
(3) the machinery or equipment is designed for use in gathering,
moving, or spreading animal waste. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.80, SEC.1; P.L.257-2003, SEC.22.
IC 6-2.5-5-3 Exemption; acquisition for direct use in direct production
Sec. 3. (a) For purposes of this section:
(1) the retreading of tires shall be treated as the processing of
tangible personal property; and
(2) commercial printing shall be treated as the production and
manufacture of tangible personal property.
(b) Except as provided in subsection (c), transactions involving
manufacturing machinery, tools, and equipment are exempt from the
state gross retail tax if the person acquiring that property acquires it
for direct use in the direct production, manufacture, fabrication,
assembly, extraction, mining, processing, refining, or finishing of
other tangible personal property.
(c) The exemption provided in subsection (b) does not apply to
transactions involving distribution equipment or transmission
equipment acquired by a public utility engaged in generating
electricity. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.76-1985,
SEC.9; P.L.78-1989, SEC.4; P.L.192-2002(ss), SEC.50;
P.L.211-2007, SEC.12.
IC 6-2.5-5-4 Property for use in producing machinery, tools, or equipment
Sec. 4. Transactions involving tangible personal property are
exempt from the state gross retail tax if the person acquiring the
property acquires it for his direct use in the direct production of the
machinery, tools, or equipment described in section 2 or 3 of this
chapter. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-5
Repealed
(Repealed by Acts 1980, P.L.61, SEC.15.)
IC 6-2.5-5-5.1 Exemption; acquisition for direct consumption in direct production
Sec. 5.1. (a) As used in this section, "tangible personal property"
includes electrical energy, natural or artificial gas, water, steam, and
steam heat.
(b) Transactions involving tangible personal property are exempt
from the state gross retail tax if the person acquiring the property
acquires it for direct consumption as a material to be consumed in the
direct production of other tangible personal property in the person's
business of manufacturing, processing, refining, repairing, mining,
agriculture, horticulture, floriculture, or arboriculture. This
exemption includes transactions involving acquisitions of tangible
personal property used in commercial printing. As added by Acts 1981, P.L.63, SEC.6. Amended by P.L.23-1986,
SEC.2; P.L.78-1989, SEC.5; P.L.192-2002(ss), SEC.51.
IC 6-2.5-5-6 Exemption; acquisition for incorporation into product for sale
Sec. 6. Transactions involving tangible personal property are
exempt from the state gross retail tax if the person acquiring the
property acquires it for incorporation as a material part of other
tangible personal property which the purchaser manufactures,
assembles, refines, or processes for sale in his business. This
exemption includes transactions involving acquisitions of tangible
personal property used in commercial printing. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.78-1989,
SEC.6; P.L.192-2002(ss), SEC.52.
IC 6-2.5-5-7 Materials used in construction business, public street, or utility
service
Sec. 7. Transactions involving tangible personal property are
exempt from the state gross retail tax if:
(1) the person acquiring the property is in the construction
business;
(2) the person acquiring the property acquires it for
incorporation as a material or integral part of a public street or
of a public water, sewage, or other utility service;
(3) the public street or public utility service into which the
property is to be incorporated is required under a subdivision
plat, approved and accepted by the appropriate Indiana political
subdivision; and
(4) the public street or public utility is to be publicly maintained
after its completion. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-8 "New motor vehicle"; property acquired for resale, rental, or
leasing in course of business; aircraft
Sec. 8. (a) As used in this section, "new motor vehicle" has the
meaning set forth in IC 9-13-2-111.
(b) Transactions involving tangible personal property other than
a new motor vehicle are exempt from the state gross retail tax if the
person acquiring the property acquires it for resale, rental, or leasing
in the ordinary course of the person's business without changing the
form of the property.
(c) The following transactions involving a new motor vehicle are
exempt from the state gross retail tax:
(1) A transaction in which a person that has a franchise in effect
at the time of the transaction for the vehicle trade name, trade
or service mark, or related characteristics acquires a new motor
vehicle for resale, rental, or leasing in the ordinary course of the
person's business.
(2) A transaction in which a person that is a franchisee
appointed by a manufacturer or converter manufacturer licensed
under IC 9-23 acquires a new motor vehicle that has at least one
(1) trade name, service mark, or related characteristic as a result
of modification or further manufacture by the manufacturer or
converter manufacturer for resale, rental, or leasing in the
ordinary course of the person's business.
(3) A transaction in which a person acquires a new motor
vehicle for rental or leasing in the ordinary course of the
person's business.
(d) The rental or leasing of accommodations to a promoter by a
political subdivision (including a capital improvement board) or the
state fair commission is not exempt from the state gross retail tax, if
the rental or leasing of the property by the promoter is exempt under
IC 6-2.5-4-4.
(e) This subsection applies only to aircraft acquired after June 30,
2008. Except as provided in subsection (h), a transaction in which a
person acquires an aircraft for rental or leasing in the ordinary course
of the person's business is not exempt from the state gross retail tax
unless the person establishes, under guidelines adopted by the
department in the manner provided in IC 4-22-2-37.1 for the
adoption of emergency rules, that the annual amount of the gross
lease revenue derived from leasing or rental of the aircraft, which
may include revenue from related party transactions, is equal to or
greater than seven and five-tenths percent (7.5%) of the:
(1) book value of the aircraft, as published in the Vref Aircraft
Value Reference guide for the aircraft; or
(2) net acquisition price for the aircraft.
If a person acquires an aircraft below the Vref Aircraft Value
Reference guide book value, the person may appeal to the department
for a lower lease or rental threshold equal to the actual acquisition
price paid if the person demonstrates that the transaction was
completed in a commercially reasonable manner based on the
aircraft's age, condition, and equipment. The department may request
the person to submit to the department supporting documents
showing the aircraft is available for general public lease or rental,
copies of business and aircraft insurance policies, and other
documents that assist the department in determining if an aircraft is
exempt from the state gross retail tax.
(f) A person is required to meet the requirements of subsection (e)
until the earlier of the date the aircraft has generated sales tax on
leases or rental income that is equal to the amount of the original
sales tax exemption or the elapse of thirteen (13) years. If the aircraft
is sold by the person before meeting the requirements of this section
and before the sale the aircraft was exempt from gross retail tax
under subsection (e), the sale of the aircraft shall not result in the
assessment or collection of gross retail tax for the period from the
date of acquisition to the date of sale by the person.
(g) The person is required to remit the gross retail tax on taxable
lease and rental transactions no matter how long the aircraft is used
for lease and rental.
(h) This subsection applies only to aircraft acquired after
December 31, 2007. A transaction in which a person acquires an
aircraft to rent or lease the aircraft to another person for predominant
use in public transportation by the other person or by an affiliate of
the other person is exempt from the state gross retail tax. The
department may not require a person to meet the revenue threshold
in subsection (e) with respect to the person's leasing or rental of the
aircraft to receive or maintain the exemption. To maintain the
exemption provided under this subsection, the department may
require the person to submit only annual reports showing that the
aircraft is predominantly used to provide public transportation.
(i) The exemptions allowed under subsections (e) and (h) apply
regardless of the relationship, if any, between the person or lessor
and the lessee or renter of the aircraft. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.93-1987,
SEC.3; P.L.20-1990, SEC.8; P.L.27-2003, SEC.1; P.L.211-2007,
SEC.13; P.L.224-2007, SEC.53; P.L.182-2009(ss), SEC.176.
IC 6-2.5-5-9 Returnable containers; nonreturnable packaging
Sec. 9. (a) As used in this section, "returnable containers" means
containers customarily returned by the buyer of the contents for reuse
as containers.
(b) Sales of returnable containers are exempt from the state gross
retail tax if the transaction constitutes selling at retail as defined in
IC 6-2.5-4-1 and if the returnable containers contain contents.
(c) Sales of returnable containers are exempt from the state gross
retail tax if the containers are transferred empty for the purpose of
refilling.
(d) Sales of wrapping material and empty containers are exempt
from the state gross retail tax if the person acquiring the material or
containers acquires them for use as nonreturnable packages for
selling the contents that he adds. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-10 Electric or steam utilities; production plant or power production
expenses
Sec. 10. Transactions involving tangible personal property are
exempt from the state gross retail tax, if:
(1) the property is classified as production plant or power
production expenses, according to the uniform system of
accounts which was adopted and prescribed for the utility by
the Indiana utility regulatory commission; and
(2) the person acquiring the property is:
(A) a public utility that furnishes or sells electrical energy,
steam, or steam heat in a retail transaction described in
IC 6-2.5-4-5; or
(B) a power subsidiary (as defined in IC 6-2.5-4-5(a)) that
furnishes or sells electrical energy, steam, or steam heat to
a public utility described in clause (A). As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.23-1988,
SEC.8; P.L.71-1993, SEC.6.
IC 6-2.5-5-11 Gas utilities; production or storage plants and expenses
Sec. 11. Transactions involving tangible personal property are
exempt from the state gross retail tax, if:
(1) the property is classified as production plant, storage plant,
production expenses, or underground storage expenses
according to the uniform system of accounts, which was
adopted and prescribed for the utility by the Indiana utility
regulatory commission; and
(2) the person acquiring the property is a public utility that
furnishes or sells natural or artificial gas in a retail transaction
described in IC 6-2.5-4-5. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.23-1988,
SEC.9; P.L.71-1993, SEC.7.
IC 6-2.5-5-12 Water utilities; plants and expenses
Sec. 12. Transactions involving tangible personal property are
exempt from the state gross retail tax if:
(1) the property is classified as source of supply plant and
expenses, the pumping plant and expenses, or water treatment
plant and expenses according to the uniform system of accounts
which was adopted and prescribed for the utility by the Indiana
utility regulatory commission; and
(2) the person acquiring the property is a public utility that
furnishes or sells water in a retail transaction described in
IC 6-2.5-4-5. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.23-1988,
SEC.10; P.L.71-1993, SEC.8; P.L.91-1995, SEC.1; P.L.88-2007,
SEC.1.
IC 6-2.5-5-12.5 Wastewater utilities; plants and expenses
Sec. 12.5. (a) As used in this section, "collection plant and
expenses" includes the following:
(1) Expenditures for collection plant, which include the
following:
(A) Land and land rights.
(B) Structures and improvements.
(C) Power generation equipment.
(D) Collection sewers and special collecting structures.
(E) Receiving wells.
(F) Pumping equipment.
(G) Transportation equipment.
(H) Other collection plant expenditures.
(2) Expenditures for collection expenses, which include the
following:
(A) Operation supervision and engineering.
(B) Purchased power or fuel for power production.
(C) Chemicals.
(D) Materials and supplies.
(E) Maintenance supervision and engineering.
(F) Rental of real property or equipment.
(G) Maintenance of power generation equipment.
(H) Maintenance of structures and improvements.
(I) Maintenance of transportation equipment.
(J) Maintenance of collection plant equipment.
(b) As used in this section, "public utility" means a public utility
(as defined in IC 8-1-2-1(a)) or any person that contracts with a
municipality to operate, manage, or control any plant or equipment
owned by the municipality for the collection, treatment, or
processing of wastewater.
(c) As used in this section, "system pumping plant and expenses"
includes the following:
(1) Expenditures for pumping plant, which include the
following:
(A) Land and land rights.
(B) Structures and improvements.
(C) Boiler plant equipment.
(D) Other power production equipment.
(E) Steam pumping equipment.
(F) Electric pumping equipment.
(G) Diesel pumping equipment.
(H) Hydraulic pumping equipment.
(I) Other pumping equipment.
(2) Expenditures for pumping expenses, which include the
following:
(A) Operation supervision and engineering.
(B) Fuel for power production.
(C) Power production labor and expenses.
(D) Fuel or power purchased for pumping.
(E) Pumping labor and expenses.
(F) Miscellaneous expenses.
(G) Rents.
(H) Maintenance supervision and engineering.
(I) Maintenance of power production equipment.
(J) Maintenance of pumping equipment.
(d) As used in this section, "treatment and disposal plant and
expenses" includes the following:
(1) Expenditures for treatment and disposal plant, which
include the following:
(A) Land and land rights.
(B) Structures and improvements.
(C) Power generation equipment.
(D) Pumping equipment.
(E) Flow measuring devices and installations.
(F) Reuse meters and meter installations.
(G) Reuse transmission and distribution systems.
(H) Treatment and disposal equipment.
(I) Sewers and sewer lines.
(J) Transportation equipment.
(2) Expenditures for treatment and disposal expenses, which
include the following:
(A) Operation supervision and engineering.
(B) Purchased wastewater treatment.
(C) Sludge removal expenses.
(D) Purchased power or fuel for power production.
(E) Chemicals.
(F) Materials and supplies.
(G) Maintenance supervision and engineering.
(H) Rental of real property or equipment.
(I) Maintenance of power generation equipment.
(J) Maintenance of structures and improvements.
(K) Maintenance of transportation equipment.
(L) Maintenance of treatment and disposal plant equipment.
(e) Transactions involving tangible personal property are exempt
from the state gross retail tax if:
(1) the property is classified as collection plant and expenses,
treatment and disposal plant and expenses, or system pumping
plant and expenses; and
(2) the person acquiring the property is a public utility that
collects, treats, or processes wastewater. As added by P.L.88-2007, SEC.2.
IC 6-2.5-5-13 Intrastate telecommunication services; video, Internet access, or
VOIP services; equipment
Sec. 13. Transactions involving tangible personal property are
exempt from the state gross retail tax, if:
(1) the property is:
(A) classified as central office equipment, station equipment
or apparatus, station connection, wiring, or large private
branch exchanges according to the uniform system of
accounts which was adopted and prescribed for the utility by
the Indiana utility regulatory commission;
(B) mobile telecommunications switching office equipment,
radio or microwave transmitting or receiving equipment,
including, without limitation, towers, antennae, and property
that perform a function similar to the function performed by
any of the property described in clause (A); or
(C) a part of a national, regional, or local headend or similar
facility operated by a person furnishing video services, cable
radio services, satellite television or radio services, or
Internet access services; and
(2) the person acquiring the property:
(A) furnishes or sells intrastate telecommunication service
in a retail transaction described in IC 6-2.5-4-6; or
(B) uses the property to furnish:
(i) video services or Internet access services; or
(ii) VOIP services. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.23-1988,
SEC.11; P.L.71-1993, SEC.9; P.L.182-2009(ss), SEC.177.
IC 6-2.5-5-14 Public utilities; acquisitions of personal property
Sec. 14. (a) Transactions involving tangible personal property are
exempt from the state gross retail tax if the person acquiring the
property is:
(1) a municipally owned utility;
(2) a utility owned or operated by a special district; or
(3) a public utility owned or operated by a not-for-profit
corporation incorporated under:
(A) the Indiana General Not for Profit Corporation Act (Acts
1935, Chapter 157, as amended), notwithstanding its repeal;
(B) the Indiana Not-for-Profit Corporation Act of 1971 (IC
23-7-1.1), notwithstanding its repeal; or
(C) IC 23-17.
(b) The term "public utility owned or operated by a not-for-profit
corporation" does not include those public utilities incorporated
under Acts 1935, chapter 157, as amended, and which are owned or
operated by local district rural electric membership corporations. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1980,
P.L.53, SEC.1; P.L.179-1991, SEC.10.
IC 6-2.5-5-15
Repealed
(Repealed by P.L.81-2004, SEC.60.)
IC 6-2.5-5-15.5 Motor vehicles; intrafamilial title transfers
Sec. 15.5. A transaction involving a motor vehicle is exempt from
the state gross retail tax, if:
(1) the transaction consists of changing the motor vehicle title
to add or delete an individual; and
(2) the individual being added or deleted is the spouse, child,
grandparent, parent, or sibling of an owner. As added by P.L.73-1993, SEC.1.
IC 6-2.5-5-16 State or local government acquisitions
Sec. 16. Transactions involving tangible personal property, public
utility commodities, and public utility service are exempt from the
state gross retail tax, if the person acquiring the property,
commodities, or service:
(1) is the state of Indiana, an agency or instrumentality of the
state, a political subdivision of the state, or an agency or
instrumentality of a political subdivision of the state, including
a county solid waste management district or a joint solid waste
management district established under IC 13-21 or IC 13-9.5-2
(before its repeal); and
(2) predominantly uses the property, commodities, or service to
perform its governmental functions. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.25-1991,
SEC.3; P.L.1-1996, SEC.45.
IC 6-2.5-5-16.5 Home energy assistance
Sec. 16.5. (a) The following definitions apply throughout this
section:
(1) "Home energy" means electricity, oil, gas, coal, propane, or
any other fuel for use as the principal source of heating or
cooling in residential dwellings.
(2) "Home energy assistance" means programs administered by
the state to supply home energy through the Low Income Home
Energy Assistance Block Grant under 42 U.S.C. 8261 et seq.
(b) Transactions involving home energy are exempt from the state
gross retail tax if the person acquiring the home energy acquires it
after June 30, 2006, and before July 1, 2009, through home energy
assistance. As added by P.L.162-2006, SEC.22. Amended by P.L.32-2007,
SEC.2.
IC 6-2.5-5-17 Newspapers
Sec. 17. Sales of newspapers are exempt from the state gross retail
tax. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-18 Medical equipment, supplies, and devices
Sec. 18. (a) Sales of durable medical equipment, mobility
enhancing equipment, prosthetic devices, artificial limbs, orthopedic
devices, dental prosthetic devices, eyeglasses, contact lenses, and
other medical supplies and devices are exempt from the state gross
retail tax, if the sales are prescribed by a person licensed to issue the
prescription.
(b) Rentals of durable medical equipment, mobility enhancing
equipment, and other medical supplies and devices are exempt from
the state gross retail tax, if the rentals are prescribed by a person
licensed to issue the prescription.
(c) Sales of hearing aids are exempt from the state gross retail tax
if the hearing aids are fitted or dispensed by a person licensed or
registered for that purpose. In addition, sales of hearing aid parts,
attachments, or accessories are exempt from the state gross retail tax.
For purposes of this subsection, a hearing aid is a device which is
worn on the body and which is designed to aid, improve, or correct
defective human hearing.
(d) Sales of colostomy bags, ileostomy bags, and the medical
equipment, supplies, and devices used in conjunction with those bags
are exempt from the state gross retail tax.
(e) Sales of equipment and devices used to administer insulin are
exempt from the state gross retail tax.
(f) Sales of equipment and devices used to monitor blood glucose
level, including blood glucose meters and measuring strips, lancets,
and other similar diabetic supplies, are exempt from the state gross
retail tax, regardless of whether the equipment and devices are
prescribed. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.257-2003,
IC 6-2.5-5-19 Drugs; insulin; oxygen; blood or blood plasma
Sec. 19. (a) As used in this section, "legend drug" means a drug
as defined in IC 6-2.5-1-17 that is also a legend drug for purposes of
IC 16-18-2-199.
(b) As used in this section, "nonlegend drug" means a drug (as
defined in IC 6-2.5-1-17) that is not a legend drug.
(c) Sales of legend drugs and sales of nonlegend drugs are exempt
from the state gross retail tax if:
(1) a registered pharmacist makes the sale upon the prescription
of a practitioner who is licensed to prescribe, dispense, and
administer those drugs to human beings or animals in the course
of his professional practice; or
(2) the licensed practitioner makes the sales.
(d) Sales of a nonlegend drug are exempt from the state gross
retail tax, if:
(1) the nonlegend drug is dispensed upon an original
prescription or a drug order (as defined in IC 16-42-19-3); and
(2) the ultimate user of the drug is a person confined to a
hospital or health care facility.
(e) Sales of insulin, oxygen, blood, or blood plasma are exempt
from the state gross retail tax, if the purchaser purchases the insulin,
oxygen, blood, or plasma for medical purposes.
(f) Sales of drugs, insulin, oxygen, blood, and blood plasma are
exempt from the state gross retail tax if:
(1) the purchaser is a practitioner licensed to prescribe,
dispense, and administer drugs to human beings or animals; and
(2) the purchaser buys the items for:
(A) direct consumption in his practice; or
(B) resale to a patient that the practitioner is treating, in the
case of sales of legend or nonlegend drugs. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.81, SEC.1; P.L.19-1994, SEC.4; P.L.257-2003, SEC.24.
IC 6-2.5-5-19.5 Drug samples; blood glucose monitoring devices; packaging and
literature
Sec. 19.5. (a) For purposes of this section, "drug sample" means
a legend drug (as defined by IC 16-18-2-199) or a drug composed
wholly or partly of insulin or an insulin analog that is furnished
without charge. For purposes of this section, "blood glucose
monitoring device" means blood glucose meters and measuring
strips, lancets, and other similar diabetic supplies furnished without
charge.
(b) Transactions involving the following are exempt from the state
gross retail tax:
(1) A drug sample, the packaging and literature for a drug
sample, a blood glucose monitoring device, and the packaging
and literature for a blood glucose monitoring device.
(2) Tangible personal property that will be used as a drug
sample or a blood glucose monitoring device or that will be
processed, manufactured, or incorporated into:
(A) a drug sample or a blood glucose monitoring device; or
(B) the packaging or literature for a drug sample or a blood
glucose monitoring device. As added by P.L.61-1997, SEC.1. Amended by P.L.182-2009(ss),
SEC.179.
IC 6-2.5-5-20 "Food and food ingredients for human consumption"
Sec. 20. (a) Sales of food and food ingredients for human
consumption are exempt from the state gross retail tax.
(b) For purposes of this section, the term "food and food
ingredients for human consumption" includes the following items if
sold without eating utensils provided by the seller:
(1) Food sold by a seller whose proper primary NAICS
classification is manufacturing in sector 311, except subsector
3118 (bakeries).
(2) Food sold in an unheated state by weight or volume as a
single item.
(3) Bakery items, including bread, rolls, buns, biscuits, bagels,
croissants, pastries, donuts, danish, cakes, tortes, pies, tarts,
muffins, bars, cookies, and tortillas.
(c) Except as otherwise provided by subsection (b), for purposes
of this section, the term "food and food ingredients for human
consumption" does not include:
(1) candy;
(2) alcoholic beverages;
(3) soft drinks;
(4) food sold through a vending machine;
(5) food sold in a heated state or heated by the seller;
(6) two (2) or more food ingredients mixed or combined by the
seller for sale as a single item (other than food that is only cut,
repackaged, or pasteurized by the seller, and eggs, fish, meat,
poultry, and foods containing these raw animal foods requiring
cooking by the consumer as recommended by the federal Food
and Drug Administration in chapter 3, subpart 3-401.11 of its
Food Code so as to prevent food borne illnesses);
(7) food sold with eating utensils provided by the seller,
including plates, knives, forks, spoons, glasses, cups, napkins,
or straws (for purposes of this subdivision, a plate does not
include a container or packaging used to transport the food);
(8) tobacco; or
(9) dietary supplements. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.86-1989,
SEC.1; P.L.257-2003, SEC.25; P.L.195-2005, SEC.2; P.L.113-2010,
SEC.51. IC 6-2.5-5-21 Exemption; sales of food and food ingredients by nonprofit entities
to confined or hospitalized persons
Sec. 21. (a) For purposes of this section, "private benefit or gain"
does not include reasonable compensation paid to an employee for
work or services actually performed.
(b) Sales of food and food ingredients are exempt from the state
gross retail tax if:
(1) the seller meets the filing requirements under subsection (d)
and is any of the following:
(A) A fraternity, a sorority, or a student cooperative housing
organization that is connected with and under the
supervision of a postsecondary educational institution if no
part of its income is used for the private benefit or gain of
any member, trustee, shareholder, employee, or associate.
(B) Any:
(i) institution;
(ii) trust;
(iii) group;
(iv) united fund;
(v) affiliated agency of a united fund;
(vi) nonprofit corporation;
(vii) cemetery association; or
(viii) organization;
that is organized and operated exclusively for religious,
charitable, scientific, literary, educational, or civic purposes
if no part of its income is used for the private benefit or gain
of any member, trustee, shareholder, employee, or associate.
(C) A group, an organization, or a nonprofit corporation that
is organized and operated for fraternal or social purposes, or
as a business league or association, and not for the private
benefit or gain of any member, trustee, shareholder,
employee, or associate.
(D) A:
(i) hospital licensed by the state department of health;
(ii) shared hospital services organization exempt from
federal income taxation by Section 501(c)(3) or 501(e) of
the Internal Revenue Code;
(iii) labor union;
(iv) church;
(v) monastery;
(vi) convent;
(vii) school that is a part of the Indiana public school
system;
(viii) parochial school regularly maintained by a
recognized religious denomination; or
(ix) trust created for the purpose of paying pensions to
members of a particular profession or business who
created the trust for the purpose of paying pensions to each
other;
if the taxpayer is not organized or operated for private profit
or gain;
(2) the purchaser is a person confined to his home because of
age, sickness, or infirmity;
(3) the seller delivers the food and food ingredients to the
purchaser; and
(4) the delivery is prescribed as medically necessary by a
physician licensed to practice medicine in Indiana.
(c) Sales of food and food ingredients are exempt from the state
gross retail tax if the seller is an organization described in subsection
(b)(1), and the purchaser is a patient in a hospital operated by the
seller.
(d) To obtain the exemption provided by this section, a taxpayer
must file an application for exemption with the department:
(1) before January 1, 2003, under IC 6-2.1-3-19 (repealed); or
(2) not later than one hundred twenty (120) days after the
taxpayer's formation.
In addition, the taxpayer must file an annual report with the
department on or before the fifteenth day of the fifth month
following the close of each taxable year. If a taxpayer fails to file the
report, the department shall notify the taxpayer of the failure. If
within sixty (60) days after receiving such notice the taxpayer does
not provide the report, the taxpayer's exemption shall be canceled.
However, the department may reinstate the taxpayer's exemption if
the taxpayer shows by petition that the failure was due to excusable
neglect. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.77, SEC.2; P.L.192-2002(ss), SEC.53; P.L.257-2003, SEC.26;
P.L.2-2007, SEC.119.
IC 6-2.5-5-21.5 Medically necessary food
Sec. 21.5. Sales of food and food ingredients prescribed as
medically necessary by a physician licensed to practice medicine in
Indiana are exempt from the state gross retail tax if:
(1) a registered pharmacist makes the sale upon the prescription
of a practitioner who is licensed to practice medicine in Indiana;
or
(2) the licensed practitioner makes the sale of the food and food
ingredients described in this section. As added by P.L.19-1994, SEC.5. Amended by P.L.257-2003,
SEC.27.
IC 6-2.5-5-22 Exemption; sales of meals; schools; fraternities; sororities; student
cooperatives
Sec. 22. (a) Sales of school meals are exempt from the state gross
retail tax if:
(1) the seller is a school containing students in any grade, one
(1) through twelve (12);
(2) the purchaser is one (1) of those students or a school
employee; and
(3) the school furnishes the food and food ingredients on its
premises.
(b) Sales of food and food ingredients by not-for-profit colleges
or universities are exempt from the state gross retail tax, if the
purchaser is a student at the college or university.
(c) Sales of meals after December 31, 1976, by a fraternity,
sorority, or student cooperative housing organization described in
section 21(b)(1)(A) of this chapter are exempt from the state gross
retail tax, if the purchaser:
(1) is a member of the fraternity, sorority, or student
cooperative housing organization; and
(2) is enrolled in the college, university, or educational
institution with which the fraternity, sorority, or student
cooperative housing organization is connected and by which it
is supervised. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1980,
P.L.49, SEC.2; Acts 1981, P.L.77, SEC.3; P.L.192-2002(ss), SEC.54;
P.L.257-2003, SEC.28.
IC 6-2.5-5-23 School building materials
Sec. 23. Transactions involving tangible personal property are
exempt from the state gross retail tax, if the person acquiring the
property acquires it for incorporation into a school building which is
being constructed by a lessor corporation in accordance with a lease
executed under IC 20-47-2 or IC 20-47-3. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.2-2006,
SEC.67.
IC 6-2.5-5-24 Exemption; sales to United States government; commercial
printing; receipt or collection of taxes; earnings on United States
bonds; transactions with another state or foreign country
Sec. 24. (a) Transactions are exempt from the state gross retail tax
to the extent that the gross retail income from those transactions is
derived from gross receipts that are:
(1) derived from sales to the United States government, to the
extent the state is prohibited by the Constitution of the United
States from taxing that gross income;
(2) derived from commercial printing that results in printed
materials, excluding the business of photocopying, that are
shipped, mailed, or delivered outside Indiana;
(3) United States or Indiana taxes received or collected as a
collecting agent explicitly designated as a collecting agent for
a tax by statute for the state or the United States;
(4) collections by a retail merchant of a retailer's excise tax
imposed by the United States if:
(A) the tax is imposed solely on the sale at retail of tangible
personal property;
(B) the tax is remitted to the appropriate taxing authority;
and
(C) the retail merchant collects the tax separately as an
addition to the price of the property sold;
(5) collections of a manufacturer's excise tax imposed by the
United States on motor vehicles, motor vehicle bodies and
chassis, parts and accessories for motor vehicles, tires, tubes for
tires, or tread rubber and laminated tires, if the excise tax is
separately stated by the collecting taxpayer as either an addition
to or an inclusion in the price of the property sold; or
(6) amounts represented by an encumbrance of any kind on
tangible personal property received by a retail merchant in
reciprocal exchange for tangible personal property of like kind.
(b) Transactions are exempt from the state gross retail tax to the
extent that the gross retail income from those transactions is derived
from gross receipts that are:
(1) interest or other earnings paid on bonds or other securities
issued by the United States, to the extent the Constitution of the
United States prohibits the taxation of that gross income; or
(2) derived from business conducted in commerce between the
state and either another state or a foreign country, to the extent
the state is prohibited from taxing that gross income by the
Constitution of the United States. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.77, SEC.4; P.L.78-1989, SEC.7; P.L.192-2002(ss), SEC.55.
IC 6-2.5-5-25 Exemption; acquisition for fund raising by nonprofit entity
Sec. 25. (a) Transactions involving tangible personal property or
service are exempt from the state gross retail tax, if the person
acquiring the property or service:
(1) is an organization described in section 21(b)(1) of this
chapter;
(2) primarily uses the property or service to carry on or to raise
money to carry on its not-for-profit purpose; and
(3) is not an organization operated predominantly for social
purposes.
(b) Transactions occurring after December 31, 1976, and
involving tangible personal property or service are exempt from the
state gross retail tax, if the person acquiring the property or service:
(1) is a fraternity, sorority, or student cooperative housing
organization described in section 21(b)(1)(A) of this chapter;
and
(2) uses the property or service to carry on its ordinary and
usual activities and operations as a fraternity, sorority, or
student cooperative housing organization. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1980,
P.L.49, SEC.3; Acts 1981, P.L.77, SEC.5; P.L.192-2002(ss), SEC.56. IC 6-2.5-5-26 Exemption; nonprofit entities; sales for less than 30 days each
year; sale for educational, cultural, or religious purpose; sale for
professional or workforce education improvement purposes
Sec. 26. (a) Sales of tangible personal property are exempt from
the state gross retail tax, if:
(1) the seller is an organization that is described in section
21(b)(1) of this chapter;
(2) the organization makes the sale to make money to carry on
a not-for-profit purpose; and
(3) the organization does not make those sales during more than
thirty (30) days in a calendar year.
(b) Sales of tangible personal property are exempt from the state
gross retail tax, if:
(1) the seller is an organization described in section 21(b)(1) of
this chapter;
(2) the seller is not operated predominantly for social purposes;
(3) the property sold is designed and intended primarily either
for the organization's educational, cultural, or religious
purposes, or for improvement of the work skills or professional
qualifications of the organization's members; and
(4) the property sold is not designed or intended primarily for
use in carrying on a private or proprietary business.
(c) The exemption provided by this section does not apply to an
accredited college or university's sales of books, stationery,
haberdashery, supplies, or other property. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.77, SEC.6; P.L.192-2002(ss), SEC.57.
IC 6-2.5-5-27 Public transportation; acquisitions
Sec. 27. Transactions involving tangible personal property and
services are exempt from the state gross retail tax, if the person
acquiring the property or service directly uses or consumes it in
providing public transportation for persons or property. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-27.5 Rolling stock
Sec. 27.5. (a) For purposes of this section, "rolling stock" means
rail transportation equipment, including locomotives, box cars,
flatbed cars, hopper cars, tank cars, and freight cars of any type or
class.
(b) Transactions involving the following tangible personal
property are exempt from the gross retail tax:
(1) Rolling stock that is purchased or leased by a person.
(2) All spare, replacement, and rebuilding parts or accessories,
components, materials, or supplies, including lubricants and
fuels, for rolling stock described in subdivision (1). As added by P.L.61-1997, SEC.2. IC 6-2.5-5-28
Repealed
(Repealed by P.L.11-1984, SEC.4.)
IC 6-2.5-5-29 Manufactured homes; industrialized residential structures
Sec. 29. (a) As used in this section:
"Manufactured home" means a manufactured home as that term
is defined in 42 U.S.C. 5402(6) as that statute was adopted and in
effect on January 1, 1988.
"Industrialized residential structure" means a structure that is both
an industrialized building system (as defined in IC 22-12-1-14) and
a one (1) or two (2) family private residence.
(b) Sales of manufactured homes or industrialized residential
structures are exempt from the state gross retail tax to the extent that
the gross retail income from the sales is not attributable to the cost
of materials used in manufacturing the manufactured home or
industrialized residential structure.
(c) For purposes of this section, the part of the gross retail income
not attributable to the cost of materials used in manufacturing a
manufactured home or an industrialized residential structure is
thirty-five percent (35%) of the gross retail income derived from the
sale of the manufactured home or industrialized residential structure.
(d) The gross retail income derived from the sale of a preowned
manufactured home is exempt from the state gross retail tax. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.245-1987,
SEC.7; P.L.86-1989, SEC.2.
IC 6-2.5-5-30 Environmental quality compliance; manufacturing, mining, or
agriculture
Sec. 30. Sales of tangible personal property are exempt from the
state gross retail tax if:
(1) the property constitutes, is incorporated into, or is consumed
in the operation of, a device, facility, or structure predominantly
used and acquired for the purpose of complying with any state,
local, or federal environmental quality statutes, regulations, or
standards; and
(2) the person acquiring the property is engaged in the business
of manufacturing, processing, refining, mining, or agriculture.
The portion of the sales price of tangible personal property which is
exempt from state gross retail and use taxes under this section equals
the product of: (A) the total sales price; multiplied by (B) one
hundred percent (100%). As added by Acts 1980, P.L.53, SEC.2. Amended by P.L.28-1997,
SEC.9.
IC 6-2.5-5-31 Free distribution newspaper; related transactions
Sec. 31. (a) As used in this section, "free distribution newspaper"
means any community newspaper, shopping paper, shoppers'
consumer paper, pennysaver, shopping guide, town crier, dollar
stretcher, or other similar publication which:
(1) is distributed to the public on a community-wide basis, free
of charge;
(2) is published at stated intervals of at least once a month;
(3) has continuity as to title and general nature of content from
issue to issue;
(4) does not constitute a book, either singly or when successive
issues are put together;
(5) contains advertisements from numerous unrelated
advertisers in each issue;
(6) contains news of general or community interest, community
notices, or editorial commentary by different authors, in each
issue; and
(7) is not owned by, or under the control of, the owners or
lessees of a shopping center, a merchant's association, or a
business that sells property or services (other than advertising)
whose advertisements for their sales of property or services
constitute the predominant advertising in the publication.
(b) The term "free distribution newspaper" does not include mail
order catalogs or other catalogs, advertising fliers, travel brochures,
house organs, theater programs, telephone directories, restaurant
guides, shopping center advertising sheets, and similar publications.
(c) Transactions involving manufacturing machinery, tools and
equipment, and other tangible personal property are exempt from the
state gross retail tax if the person acquiring that property acquires it
for his direct use, or for his direct consumption as a material to be
consumed, in the direct production or publication of a free
distribution newspaper, or for incorporation as a material part of a
free distribution newspaper published by that person.
(d) Transactions involving a sale of a free distribution newspaper,
or of printing services performed in publishing a free distribution
newspaper, are exempt from the state gross retail tax if the purchaser
is the publisher of the free distribution newspaper. As added by Acts 1981, P.L.80, SEC.2.
IC 6-2.5-5-32
Reserved
IC 6-2.5-5-33
Tangible personal property purchased with food stamps
Sec. 33. Sales of tangible personal property purchased with food
stamps are exempt from the state gross retail tax. As added by P.L.69-1986, SEC.1.
IC 6-2.5-5-34 Sale of lottery tickets; gross retail tax
Sec. 34. Sales of lottery tickets authorized by IC 4-30 are exempt
from the state gross retail tax.
As added by P.L.341-1989(ss), SEC.8.
IC 6-2.5-5-35 Tangible personal property transactions
Sec. 35. (a) Except as provided in subsection (b), transactions
involving tangible personal property are exempt from the state gross
retail tax if:
(1) the:
(A) person acquires the property to facilitate the service or
consumption of food and food ingredients that is not
exempted from the state gross retail tax under section 20 of
this chapter; and
(B) property is:
(i) used, consumed, or removed in the service or
consumption of the food and food ingredients; and
(ii) made unusable for further service or consumption of
food and food ingredients after the property's first use for
service or consumption of food and food ingredients; or
(2) the:
(A) person acquiring the property is engaged in the business
of renting or furnishing rooms, lodgings, or accommodations
in a commercial hotel, motel, inn, tourist camp, or tourist
cabin; and
(B) property acquired is:
(i) used up, removed, or otherwise consumed during the
occupation of the rooms, lodgings, or accommodations by
a guest; or
(ii) rendered nonreusable by the property's first use by a
guest during the occupation of the rooms, lodgings, or
accommod
IC 6-2.5-5
Chapter 5. Exempt Transactions of Retail Merchant
IC 6-2.5-5-1 Animals, feed, seed, and chemicals
Sec. 1. Transactions involving animals, feed, seed, plants,
fertilizer, insecticides, fungicides, and other tangible personal
property are exempt from the state gross retail tax if:
(1) the person acquiring the property acquires it for his direct
use in the direct production of food and food ingredients or
commodities for sale or for further use in the production of food
and food ingredients or commodities for sale; and
(2) the person acquiring the property is occupationally engaged
in the production of food and food ingredients or commodities
which he sells for human or animal consumption or uses for
further food and food ingredient or commodity production. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.257-2003,
SEC.21.
IC 6-2.5-5-2 Agricultural machinery, tools, and equipment
Sec. 2. (a) Transactions involving agricultural machinery, tools,
and equipment are exempt from the state gross retail tax if the person
acquiring that property acquires it for his direct use in the direct
production, extraction, harvesting, or processing of agricultural
commodities.
(b) Transactions involving agricultural machinery or equipment
are exempt from the state gross retail tax if:
(1) the person acquiring the property acquires it for use in
conjunction with the production of food and food ingredients or
commodities for sale;
(2) the person acquiring the property is occupationally engaged
in the production of food or commodities which he sells for
human or animal consumption or uses for further food and food
ingredients or commodity production; and
(3) the machinery or equipment is designed for use in gathering,
moving, or spreading animal waste. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.80, SEC.1; P.L.257-2003, SEC.22.
IC 6-2.5-5-3 Exemption; acquisition for direct use in direct production
Sec. 3. (a) For purposes of this section:
(1) the retreading of tires shall be treated as the processing of
tangible personal property; and
(2) commercial printing shall be treated as the production and
manufacture of tangible personal property.
(b) Except as provided in subsection (c), transactions involving
manufacturing machinery, tools, and equipment are exempt from the
state gross retail tax if the person acquiring that property acquires it
for direct use in the direct production, manufacture, fabrication,
assembly, extraction, mining, processing, refining, or finishing of
other tangible personal property.
(c) The exemption provided in subsection (b) does not apply to
transactions involving distribution equipment or transmission
equipment acquired by a public utility engaged in generating
electricity. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.76-1985,
SEC.9; P.L.78-1989, SEC.4; P.L.192-2002(ss), SEC.50;
P.L.211-2007, SEC.12.
IC 6-2.5-5-4 Property for use in producing machinery, tools, or equipment
Sec. 4. Transactions involving tangible personal property are
exempt from the state gross retail tax if the person acquiring the
property acquires it for his direct use in the direct production of the
machinery, tools, or equipment described in section 2 or 3 of this
chapter. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-5
Repealed
(Repealed by Acts 1980, P.L.61, SEC.15.)
IC 6-2.5-5-5.1 Exemption; acquisition for direct consumption in direct production
Sec. 5.1. (a) As used in this section, "tangible personal property"
includes electrical energy, natural or artificial gas, water, steam, and
steam heat.
(b) Transactions involving tangible personal property are exempt
from the state gross retail tax if the person acquiring the property
acquires it for direct consumption as a material to be consumed in the
direct production of other tangible personal property in the person's
business of manufacturing, processing, refining, repairing, mining,
agriculture, horticulture, floriculture, or arboriculture. This
exemption includes transactions involving acquisitions of tangible
personal property used in commercial printing. As added by Acts 1981, P.L.63, SEC.6. Amended by P.L.23-1986,
SEC.2; P.L.78-1989, SEC.5; P.L.192-2002(ss), SEC.51.
IC 6-2.5-5-6 Exemption; acquisition for incorporation into product for sale
Sec. 6. Transactions involving tangible personal property are
exempt from the state gross retail tax if the person acquiring the
property acquires it for incorporation as a material part of other
tangible personal property which the purchaser manufactures,
assembles, refines, or processes for sale in his business. This
exemption includes transactions involving acquisitions of tangible
personal property used in commercial printing. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.78-1989,
SEC.6; P.L.192-2002(ss), SEC.52.
IC 6-2.5-5-7 Materials used in construction business, public street, or utility
service
Sec. 7. Transactions involving tangible personal property are
exempt from the state gross retail tax if:
(1) the person acquiring the property is in the construction
business;
(2) the person acquiring the property acquires it for
incorporation as a material or integral part of a public street or
of a public water, sewage, or other utility service;
(3) the public street or public utility service into which the
property is to be incorporated is required under a subdivision
plat, approved and accepted by the appropriate Indiana political
subdivision; and
(4) the public street or public utility is to be publicly maintained
after its completion. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-8 "New motor vehicle"; property acquired for resale, rental, or
leasing in course of business; aircraft
Sec. 8. (a) As used in this section, "new motor vehicle" has the
meaning set forth in IC 9-13-2-111.
(b) Transactions involving tangible personal property other than
a new motor vehicle are exempt from the state gross retail tax if the
person acquiring the property acquires it for resale, rental, or leasing
in the ordinary course of the person's business without changing the
form of the property.
(c) The following transactions involving a new motor vehicle are
exempt from the state gross retail tax:
(1) A transaction in which a person that has a franchise in effect
at the time of the transaction for the vehicle trade name, trade
or service mark, or related characteristics acquires a new motor
vehicle for resale, rental, or leasing in the ordinary course of the
person's business.
(2) A transaction in which a person that is a franchisee
appointed by a manufacturer or converter manufacturer licensed
under IC 9-23 acquires a new motor vehicle that has at least one
(1) trade name, service mark, or related characteristic as a result
of modification or further manufacture by the manufacturer or
converter manufacturer for resale, rental, or leasing in the
ordinary course of the person's business.
(3) A transaction in which a person acquires a new motor
vehicle for rental or leasing in the ordinary course of the
person's business.
(d) The rental or leasing of accommodations to a promoter by a
political subdivision (including a capital improvement board) or the
state fair commission is not exempt from the state gross retail tax, if
the rental or leasing of the property by the promoter is exempt under
IC 6-2.5-4-4.
(e) This subsection applies only to aircraft acquired after June 30,
2008. Except as provided in subsection (h), a transaction in which a
person acquires an aircraft for rental or leasing in the ordinary course
of the person's business is not exempt from the state gross retail tax
unless the person establishes, under guidelines adopted by the
department in the manner provided in IC 4-22-2-37.1 for the
adoption of emergency rules, that the annual amount of the gross
lease revenue derived from leasing or rental of the aircraft, which
may include revenue from related party transactions, is equal to or
greater than seven and five-tenths percent (7.5%) of the:
(1) book value of the aircraft, as published in the Vref Aircraft
Value Reference guide for the aircraft; or
(2) net acquisition price for the aircraft.
If a person acquires an aircraft below the Vref Aircraft Value
Reference guide book value, the person may appeal to the department
for a lower lease or rental threshold equal to the actual acquisition
price paid if the person demonstrates that the transaction was
completed in a commercially reasonable manner based on the
aircraft's age, condition, and equipment. The department may request
the person to submit to the department supporting documents
showing the aircraft is available for general public lease or rental,
copies of business and aircraft insurance policies, and other
documents that assist the department in determining if an aircraft is
exempt from the state gross retail tax.
(f) A person is required to meet the requirements of subsection (e)
until the earlier of the date the aircraft has generated sales tax on
leases or rental income that is equal to the amount of the original
sales tax exemption or the elapse of thirteen (13) years. If the aircraft
is sold by the person before meeting the requirements of this section
and before the sale the aircraft was exempt from gross retail tax
under subsection (e), the sale of the aircraft shall not result in the
assessment or collection of gross retail tax for the period from the
date of acquisition to the date of sale by the person.
(g) The person is required to remit the gross retail tax on taxable
lease and rental transactions no matter how long the aircraft is used
for lease and rental.
(h) This subsection applies only to aircraft acquired after
December 31, 2007. A transaction in which a person acquires an
aircraft to rent or lease the aircraft to another person for predominant
use in public transportation by the other person or by an affiliate of
the other person is exempt from the state gross retail tax. The
department may not require a person to meet the revenue threshold
in subsection (e) with respect to the person's leasing or rental of the
aircraft to receive or maintain the exemption. To maintain the
exemption provided under this subsection, the department may
require the person to submit only annual reports showing that the
aircraft is predominantly used to provide public transportation.
(i) The exemptions allowed under subsections (e) and (h) apply
regardless of the relationship, if any, between the person or lessor
and the lessee or renter of the aircraft. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.93-1987,
SEC.3; P.L.20-1990, SEC.8; P.L.27-2003, SEC.1; P.L.211-2007,
SEC.13; P.L.224-2007, SEC.53; P.L.182-2009(ss), SEC.176.
IC 6-2.5-5-9 Returnable containers; nonreturnable packaging
Sec. 9. (a) As used in this section, "returnable containers" means
containers customarily returned by the buyer of the contents for reuse
as containers.
(b) Sales of returnable containers are exempt from the state gross
retail tax if the transaction constitutes selling at retail as defined in
IC 6-2.5-4-1 and if the returnable containers contain contents.
(c) Sales of returnable containers are exempt from the state gross
retail tax if the containers are transferred empty for the purpose of
refilling.
(d) Sales of wrapping material and empty containers are exempt
from the state gross retail tax if the person acquiring the material or
containers acquires them for use as nonreturnable packages for
selling the contents that he adds. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-10 Electric or steam utilities; production plant or power production
expenses
Sec. 10. Transactions involving tangible personal property are
exempt from the state gross retail tax, if:
(1) the property is classified as production plant or power
production expenses, according to the uniform system of
accounts which was adopted and prescribed for the utility by
the Indiana utility regulatory commission; and
(2) the person acquiring the property is:
(A) a public utility that furnishes or sells electrical energy,
steam, or steam heat in a retail transaction described in
IC 6-2.5-4-5; or
(B) a power subsidiary (as defined in IC 6-2.5-4-5(a)) that
furnishes or sells electrical energy, steam, or steam heat to
a public utility described in clause (A). As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.23-1988,
SEC.8; P.L.71-1993, SEC.6.
IC 6-2.5-5-11 Gas utilities; production or storage plants and expenses
Sec. 11. Transactions involving tangible personal property are
exempt from the state gross retail tax, if:
(1) the property is classified as production plant, storage plant,
production expenses, or underground storage expenses
according to the uniform system of accounts, which was
adopted and prescribed for the utility by the Indiana utility
regulatory commission; and
(2) the person acquiring the property is a public utility that
furnishes or sells natural or artificial gas in a retail transaction
described in IC 6-2.5-4-5. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.23-1988,
SEC.9; P.L.71-1993, SEC.7.
IC 6-2.5-5-12 Water utilities; plants and expenses
Sec. 12. Transactions involving tangible personal property are
exempt from the state gross retail tax if:
(1) the property is classified as source of supply plant and
expenses, the pumping plant and expenses, or water treatment
plant and expenses according to the uniform system of accounts
which was adopted and prescribed for the utility by the Indiana
utility regulatory commission; and
(2) the person acquiring the property is a public utility that
furnishes or sells water in a retail transaction described in
IC 6-2.5-4-5. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.23-1988,
SEC.10; P.L.71-1993, SEC.8; P.L.91-1995, SEC.1; P.L.88-2007,
SEC.1.
IC 6-2.5-5-12.5 Wastewater utilities; plants and expenses
Sec. 12.5. (a) As used in this section, "collection plant and
expenses" includes the following:
(1) Expenditures for collection plant, which include the
following:
(A) Land and land rights.
(B) Structures and improvements.
(C) Power generation equipment.
(D) Collection sewers and special collecting structures.
(E) Receiving wells.
(F) Pumping equipment.
(G) Transportation equipment.
(H) Other collection plant expenditures.
(2) Expenditures for collection expenses, which include the
following:
(A) Operation supervision and engineering.
(B) Purchased power or fuel for power production.
(C) Chemicals.
(D) Materials and supplies.
(E) Maintenance supervision and engineering.
(F) Rental of real property or equipment.
(G) Maintenance of power generation equipment.
(H) Maintenance of structures and improvements.
(I) Maintenance of transportation equipment.
(J) Maintenance of collection plant equipment.
(b) As used in this section, "public utility" means a public utility
(as defined in IC 8-1-2-1(a)) or any person that contracts with a
municipality to operate, manage, or control any plant or equipment
owned by the municipality for the collection, treatment, or
processing of wastewater.
(c) As used in this section, "system pumping plant and expenses"
includes the following:
(1) Expenditures for pumping plant, which include the
following:
(A) Land and land rights.
(B) Structures and improvements.
(C) Boiler plant equipment.
(D) Other power production equipment.
(E) Steam pumping equipment.
(F) Electric pumping equipment.
(G) Diesel pumping equipment.
(H) Hydraulic pumping equipment.
(I) Other pumping equipment.
(2) Expenditures for pumping expenses, which include the
following:
(A) Operation supervision and engineering.
(B) Fuel for power production.
(C) Power production labor and expenses.
(D) Fuel or power purchased for pumping.
(E) Pumping labor and expenses.
(F) Miscellaneous expenses.
(G) Rents.
(H) Maintenance supervision and engineering.
(I) Maintenance of power production equipment.
(J) Maintenance of pumping equipment.
(d) As used in this section, "treatment and disposal plant and
expenses" includes the following:
(1) Expenditures for treatment and disposal plant, which
include the following:
(A) Land and land rights.
(B) Structures and improvements.
(C) Power generation equipment.
(D) Pumping equipment.
(E) Flow measuring devices and installations.
(F) Reuse meters and meter installations.
(G) Reuse transmission and distribution systems.
(H) Treatment and disposal equipment.
(I) Sewers and sewer lines.
(J) Transportation equipment.
(2) Expenditures for treatment and disposal expenses, which
include the following:
(A) Operation supervision and engineering.
(B) Purchased wastewater treatment.
(C) Sludge removal expenses.
(D) Purchased power or fuel for power production.
(E) Chemicals.
(F) Materials and supplies.
(G) Maintenance supervision and engineering.
(H) Rental of real property or equipment.
(I) Maintenance of power generation equipment.
(J) Maintenance of structures and improvements.
(K) Maintenance of transportation equipment.
(L) Maintenance of treatment and disposal plant equipment.
(e) Transactions involving tangible personal property are exempt
from the state gross retail tax if:
(1) the property is classified as collection plant and expenses,
treatment and disposal plant and expenses, or system pumping
plant and expenses; and
(2) the person acquiring the property is a public utility that
collects, treats, or processes wastewater. As added by P.L.88-2007, SEC.2.
IC 6-2.5-5-13 Intrastate telecommunication services; video, Internet access, or
VOIP services; equipment
Sec. 13. Transactions involving tangible personal property are
exempt from the state gross retail tax, if:
(1) the property is:
(A) classified as central office equipment, station equipment
or apparatus, station connection, wiring, or large private
branch exchanges according to the uniform system of
accounts which was adopted and prescribed for the utility by
the Indiana utility regulatory commission;
(B) mobile telecommunications switching office equipment,
radio or microwave transmitting or receiving equipment,
including, without limitation, towers, antennae, and property
that perform a function similar to the function performed by
any of the property described in clause (A); or
(C) a part of a national, regional, or local headend or similar
facility operated by a person furnishing video services, cable
radio services, satellite television or radio services, or
Internet access services; and
(2) the person acquiring the property:
(A) furnishes or sells intrastate telecommunication service
in a retail transaction described in IC 6-2.5-4-6; or
(B) uses the property to furnish:
(i) video services or Internet access services; or
(ii) VOIP services. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.23-1988,
SEC.11; P.L.71-1993, SEC.9; P.L.182-2009(ss), SEC.177.
IC 6-2.5-5-14 Public utilities; acquisitions of personal property
Sec. 14. (a) Transactions involving tangible personal property are
exempt from the state gross retail tax if the person acquiring the
property is:
(1) a municipally owned utility;
(2) a utility owned or operated by a special district; or
(3) a public utility owned or operated by a not-for-profit
corporation incorporated under:
(A) the Indiana General Not for Profit Corporation Act (Acts
1935, Chapter 157, as amended), notwithstanding its repeal;
(B) the Indiana Not-for-Profit Corporation Act of 1971 (IC
23-7-1.1), notwithstanding its repeal; or
(C) IC 23-17.
(b) The term "public utility owned or operated by a not-for-profit
corporation" does not include those public utilities incorporated
under Acts 1935, chapter 157, as amended, and which are owned or
operated by local district rural electric membership corporations. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1980,
P.L.53, SEC.1; P.L.179-1991, SEC.10.
IC 6-2.5-5-15
Repealed
(Repealed by P.L.81-2004, SEC.60.)
IC 6-2.5-5-15.5 Motor vehicles; intrafamilial title transfers
Sec. 15.5. A transaction involving a motor vehicle is exempt from
the state gross retail tax, if:
(1) the transaction consists of changing the motor vehicle title
to add or delete an individual; and
(2) the individual being added or deleted is the spouse, child,
grandparent, parent, or sibling of an owner. As added by P.L.73-1993, SEC.1.
IC 6-2.5-5-16 State or local government acquisitions
Sec. 16. Transactions involving tangible personal property, public
utility commodities, and public utility service are exempt from the
state gross retail tax, if the person acquiring the property,
commodities, or service:
(1) is the state of Indiana, an agency or instrumentality of the
state, a political subdivision of the state, or an agency or
instrumentality of a political subdivision of the state, including
a county solid waste management district or a joint solid waste
management district established under IC 13-21 or IC 13-9.5-2
(before its repeal); and
(2) predominantly uses the property, commodities, or service to
perform its governmental functions. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.25-1991,
SEC.3; P.L.1-1996, SEC.45.
IC 6-2.5-5-16.5 Home energy assistance
Sec. 16.5. (a) The following definitions apply throughout this
section:
(1) "Home energy" means electricity, oil, gas, coal, propane, or
any other fuel for use as the principal source of heating or
cooling in residential dwellings.
(2) "Home energy assistance" means programs administered by
the state to supply home energy through the Low Income Home
Energy Assistance Block Grant under 42 U.S.C. 8261 et seq.
(b) Transactions involving home energy are exempt from the state
gross retail tax if the person acquiring the home energy acquires it
after June 30, 2006, and before July 1, 2009, through home energy
assistance. As added by P.L.162-2006, SEC.22. Amended by P.L.32-2007,
SEC.2.
IC 6-2.5-5-17 Newspapers
Sec. 17. Sales of newspapers are exempt from the state gross retail
tax. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-18 Medical equipment, supplies, and devices
Sec. 18. (a) Sales of durable medical equipment, mobility
enhancing equipment, prosthetic devices, artificial limbs, orthopedic
devices, dental prosthetic devices, eyeglasses, contact lenses, and
other medical supplies and devices are exempt from the state gross
retail tax, if the sales are prescribed by a person licensed to issue the
prescription.
(b) Rentals of durable medical equipment, mobility enhancing
equipment, and other medical supplies and devices are exempt from
the state gross retail tax, if the rentals are prescribed by a person
licensed to issue the prescription.
(c) Sales of hearing aids are exempt from the state gross retail tax
if the hearing aids are fitted or dispensed by a person licensed or
registered for that purpose. In addition, sales of hearing aid parts,
attachments, or accessories are exempt from the state gross retail tax.
For purposes of this subsection, a hearing aid is a device which is
worn on the body and which is designed to aid, improve, or correct
defective human hearing.
(d) Sales of colostomy bags, ileostomy bags, and the medical
equipment, supplies, and devices used in conjunction with those bags
are exempt from the state gross retail tax.
(e) Sales of equipment and devices used to administer insulin are
exempt from the state gross retail tax.
(f) Sales of equipment and devices used to monitor blood glucose
level, including blood glucose meters and measuring strips, lancets,
and other similar diabetic supplies, are exempt from the state gross
retail tax, regardless of whether the equipment and devices are
prescribed. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.257-2003,
IC 6-2.5-5-19 Drugs; insulin; oxygen; blood or blood plasma
Sec. 19. (a) As used in this section, "legend drug" means a drug
as defined in IC 6-2.5-1-17 that is also a legend drug for purposes of
IC 16-18-2-199.
(b) As used in this section, "nonlegend drug" means a drug (as
defined in IC 6-2.5-1-17) that is not a legend drug.
(c) Sales of legend drugs and sales of nonlegend drugs are exempt
from the state gross retail tax if:
(1) a registered pharmacist makes the sale upon the prescription
of a practitioner who is licensed to prescribe, dispense, and
administer those drugs to human beings or animals in the course
of his professional practice; or
(2) the licensed practitioner makes the sales.
(d) Sales of a nonlegend drug are exempt from the state gross
retail tax, if:
(1) the nonlegend drug is dispensed upon an original
prescription or a drug order (as defined in IC 16-42-19-3); and
(2) the ultimate user of the drug is a person confined to a
hospital or health care facility.
(e) Sales of insulin, oxygen, blood, or blood plasma are exempt
from the state gross retail tax, if the purchaser purchases the insulin,
oxygen, blood, or plasma for medical purposes.
(f) Sales of drugs, insulin, oxygen, blood, and blood plasma are
exempt from the state gross retail tax if:
(1) the purchaser is a practitioner licensed to prescribe,
dispense, and administer drugs to human beings or animals; and
(2) the purchaser buys the items for:
(A) direct consumption in his practice; or
(B) resale to a patient that the practitioner is treating, in the
case of sales of legend or nonlegend drugs. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.81, SEC.1; P.L.19-1994, SEC.4; P.L.257-2003, SEC.24.
IC 6-2.5-5-19.5 Drug samples; blood glucose monitoring devices; packaging and
literature
Sec. 19.5. (a) For purposes of this section, "drug sample" means
a legend drug (as defined by IC 16-18-2-199) or a drug composed
wholly or partly of insulin or an insulin analog that is furnished
without charge. For purposes of this section, "blood glucose
monitoring device" means blood glucose meters and measuring
strips, lancets, and other similar diabetic supplies furnished without
charge.
(b) Transactions involving the following are exempt from the state
gross retail tax:
(1) A drug sample, the packaging and literature for a drug
sample, a blood glucose monitoring device, and the packaging
and literature for a blood glucose monitoring device.
(2) Tangible personal property that will be used as a drug
sample or a blood glucose monitoring device or that will be
processed, manufactured, or incorporated into:
(A) a drug sample or a blood glucose monitoring device; or
(B) the packaging or literature for a drug sample or a blood
glucose monitoring device. As added by P.L.61-1997, SEC.1. Amended by P.L.182-2009(ss),
SEC.179.
IC 6-2.5-5-20 "Food and food ingredients for human consumption"
Sec. 20. (a) Sales of food and food ingredients for human
consumption are exempt from the state gross retail tax.
(b) For purposes of this section, the term "food and food
ingredients for human consumption" includes the following items if
sold without eating utensils provided by the seller:
(1) Food sold by a seller whose proper primary NAICS
classification is manufacturing in sector 311, except subsector
3118 (bakeries).
(2) Food sold in an unheated state by weight or volume as a
single item.
(3) Bakery items, including bread, rolls, buns, biscuits, bagels,
croissants, pastries, donuts, danish, cakes, tortes, pies, tarts,
muffins, bars, cookies, and tortillas.
(c) Except as otherwise provided by subsection (b), for purposes
of this section, the term "food and food ingredients for human
consumption" does not include:
(1) candy;
(2) alcoholic beverages;
(3) soft drinks;
(4) food sold through a vending machine;
(5) food sold in a heated state or heated by the seller;
(6) two (2) or more food ingredients mixed or combined by the
seller for sale as a single item (other than food that is only cut,
repackaged, or pasteurized by the seller, and eggs, fish, meat,
poultry, and foods containing these raw animal foods requiring
cooking by the consumer as recommended by the federal Food
and Drug Administration in chapter 3, subpart 3-401.11 of its
Food Code so as to prevent food borne illnesses);
(7) food sold with eating utensils provided by the seller,
including plates, knives, forks, spoons, glasses, cups, napkins,
or straws (for purposes of this subdivision, a plate does not
include a container or packaging used to transport the food);
(8) tobacco; or
(9) dietary supplements. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.86-1989,
SEC.1; P.L.257-2003, SEC.25; P.L.195-2005, SEC.2; P.L.113-2010,
SEC.51. IC 6-2.5-5-21 Exemption; sales of food and food ingredients by nonprofit entities
to confined or hospitalized persons
Sec. 21. (a) For purposes of this section, "private benefit or gain"
does not include reasonable compensation paid to an employee for
work or services actually performed.
(b) Sales of food and food ingredients are exempt from the state
gross retail tax if:
(1) the seller meets the filing requirements under subsection (d)
and is any of the following:
(A) A fraternity, a sorority, or a student cooperative housing
organization that is connected with and under the
supervision of a postsecondary educational institution if no
part of its income is used for the private benefit or gain of
any member, trustee, shareholder, employee, or associate.
(B) Any:
(i) institution;
(ii) trust;
(iii) group;
(iv) united fund;
(v) affiliated agency of a united fund;
(vi) nonprofit corporation;
(vii) cemetery association; or
(viii) organization;
that is organized and operated exclusively for religious,
charitable, scientific, literary, educational, or civic purposes
if no part of its income is used for the private benefit or gain
of any member, trustee, shareholder, employee, or associate.
(C) A group, an organization, or a nonprofit corporation that
is organized and operated for fraternal or social purposes, or
as a business league or association, and not for the private
benefit or gain of any member, trustee, shareholder,
employee, or associate.
(D) A:
(i) hospital licensed by the state department of health;
(ii) shared hospital services organization exempt from
federal income taxation by Section 501(c)(3) or 501(e) of
the Internal Revenue Code;
(iii) labor union;
(iv) church;
(v) monastery;
(vi) convent;
(vii) school that is a part of the Indiana public school
system;
(viii) parochial school regularly maintained by a
recognized religious denomination; or
(ix) trust created for the purpose of paying pensions to
members of a particular profession or business who
created the trust for the purpose of paying pensions to each
other;
if the taxpayer is not organized or operated for private profit
or gain;
(2) the purchaser is a person confined to his home because of
age, sickness, or infirmity;
(3) the seller delivers the food and food ingredients to the
purchaser; and
(4) the delivery is prescribed as medically necessary by a
physician licensed to practice medicine in Indiana.
(c) Sales of food and food ingredients are exempt from the state
gross retail tax if the seller is an organization described in subsection
(b)(1), and the purchaser is a patient in a hospital operated by the
seller.
(d) To obtain the exemption provided by this section, a taxpayer
must file an application for exemption with the department:
(1) before January 1, 2003, under IC 6-2.1-3-19 (repealed); or
(2) not later than one hundred twenty (120) days after the
taxpayer's formation.
In addition, the taxpayer must file an annual report with the
department on or before the fifteenth day of the fifth month
following the close of each taxable year. If a taxpayer fails to file the
report, the department shall notify the taxpayer of the failure. If
within sixty (60) days after receiving such notice the taxpayer does
not provide the report, the taxpayer's exemption shall be canceled.
However, the department may reinstate the taxpayer's exemption if
the taxpayer shows by petition that the failure was due to excusable
neglect. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.77, SEC.2; P.L.192-2002(ss), SEC.53; P.L.257-2003, SEC.26;
P.L.2-2007, SEC.119.
IC 6-2.5-5-21.5 Medically necessary food
Sec. 21.5. Sales of food and food ingredients prescribed as
medically necessary by a physician licensed to practice medicine in
Indiana are exempt from the state gross retail tax if:
(1) a registered pharmacist makes the sale upon the prescription
of a practitioner who is licensed to practice medicine in Indiana;
or
(2) the licensed practitioner makes the sale of the food and food
ingredients described in this section. As added by P.L.19-1994, SEC.5. Amended by P.L.257-2003,
SEC.27.
IC 6-2.5-5-22 Exemption; sales of meals; schools; fraternities; sororities; student
cooperatives
Sec. 22. (a) Sales of school meals are exempt from the state gross
retail tax if:
(1) the seller is a school containing students in any grade, one
(1) through twelve (12);
(2) the purchaser is one (1) of those students or a school
employee; and
(3) the school furnishes the food and food ingredients on its
premises.
(b) Sales of food and food ingredients by not-for-profit colleges
or universities are exempt from the state gross retail tax, if the
purchaser is a student at the college or university.
(c) Sales of meals after December 31, 1976, by a fraternity,
sorority, or student cooperative housing organization described in
section 21(b)(1)(A) of this chapter are exempt from the state gross
retail tax, if the purchaser:
(1) is a member of the fraternity, sorority, or student
cooperative housing organization; and
(2) is enrolled in the college, university, or educational
institution with which the fraternity, sorority, or student
cooperative housing organization is connected and by which it
is supervised. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1980,
P.L.49, SEC.2; Acts 1981, P.L.77, SEC.3; P.L.192-2002(ss), SEC.54;
P.L.257-2003, SEC.28.
IC 6-2.5-5-23 School building materials
Sec. 23. Transactions involving tangible personal property are
exempt from the state gross retail tax, if the person acquiring the
property acquires it for incorporation into a school building which is
being constructed by a lessor corporation in accordance with a lease
executed under IC 20-47-2 or IC 20-47-3. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.2-2006,
SEC.67.
IC 6-2.5-5-24 Exemption; sales to United States government; commercial
printing; receipt or collection of taxes; earnings on United States
bonds; transactions with another state or foreign country
Sec. 24. (a) Transactions are exempt from the state gross retail tax
to the extent that the gross retail income from those transactions is
derived from gross receipts that are:
(1) derived from sales to the United States government, to the
extent the state is prohibited by the Constitution of the United
States from taxing that gross income;
(2) derived from commercial printing that results in printed
materials, excluding the business of photocopying, that are
shipped, mailed, or delivered outside Indiana;
(3) United States or Indiana taxes received or collected as a
collecting agent explicitly designated as a collecting agent for
a tax by statute for the state or the United States;
(4) collections by a retail merchant of a retailer's excise tax
imposed by the United States if:
(A) the tax is imposed solely on the sale at retail of tangible
personal property;
(B) the tax is remitted to the appropriate taxing authority;
and
(C) the retail merchant collects the tax separately as an
addition to the price of the property sold;
(5) collections of a manufacturer's excise tax imposed by the
United States on motor vehicles, motor vehicle bodies and
chassis, parts and accessories for motor vehicles, tires, tubes for
tires, or tread rubber and laminated tires, if the excise tax is
separately stated by the collecting taxpayer as either an addition
to or an inclusion in the price of the property sold; or
(6) amounts represented by an encumbrance of any kind on
tangible personal property received by a retail merchant in
reciprocal exchange for tangible personal property of like kind.
(b) Transactions are exempt from the state gross retail tax to the
extent that the gross retail income from those transactions is derived
from gross receipts that are:
(1) interest or other earnings paid on bonds or other securities
issued by the United States, to the extent the Constitution of the
United States prohibits the taxation of that gross income; or
(2) derived from business conducted in commerce between the
state and either another state or a foreign country, to the extent
the state is prohibited from taxing that gross income by the
Constitution of the United States. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.77, SEC.4; P.L.78-1989, SEC.7; P.L.192-2002(ss), SEC.55.
IC 6-2.5-5-25 Exemption; acquisition for fund raising by nonprofit entity
Sec. 25. (a) Transactions involving tangible personal property or
service are exempt from the state gross retail tax, if the person
acquiring the property or service:
(1) is an organization described in section 21(b)(1) of this
chapter;
(2) primarily uses the property or service to carry on or to raise
money to carry on its not-for-profit purpose; and
(3) is not an organization operated predominantly for social
purposes.
(b) Transactions occurring after December 31, 1976, and
involving tangible personal property or service are exempt from the
state gross retail tax, if the person acquiring the property or service:
(1) is a fraternity, sorority, or student cooperative housing
organization described in section 21(b)(1)(A) of this chapter;
and
(2) uses the property or service to carry on its ordinary and
usual activities and operations as a fraternity, sorority, or
student cooperative housing organization. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1980,
P.L.49, SEC.3; Acts 1981, P.L.77, SEC.5; P.L.192-2002(ss), SEC.56. IC 6-2.5-5-26 Exemption; nonprofit entities; sales for less than 30 days each
year; sale for educational, cultural, or religious purpose; sale for
professional or workforce education improvement purposes
Sec. 26. (a) Sales of tangible personal property are exempt from
the state gross retail tax, if:
(1) the seller is an organization that is described in section
21(b)(1) of this chapter;
(2) the organization makes the sale to make money to carry on
a not-for-profit purpose; and
(3) the organization does not make those sales during more than
thirty (30) days in a calendar year.
(b) Sales of tangible personal property are exempt from the state
gross retail tax, if:
(1) the seller is an organization described in section 21(b)(1) of
this chapter;
(2) the seller is not operated predominantly for social purposes;
(3) the property sold is designed and intended primarily either
for the organization's educational, cultural, or religious
purposes, or for improvement of the work skills or professional
qualifications of the organization's members; and
(4) the property sold is not designed or intended primarily for
use in carrying on a private or proprietary business.
(c) The exemption provided by this section does not apply to an
accredited college or university's sales of books, stationery,
haberdashery, supplies, or other property. As added by Acts 1980, P.L.52, SEC.1. Amended by Acts 1981,
P.L.77, SEC.6; P.L.192-2002(ss), SEC.57.
IC 6-2.5-5-27 Public transportation; acquisitions
Sec. 27. Transactions involving tangible personal property and
services are exempt from the state gross retail tax, if the person
acquiring the property or service directly uses or consumes it in
providing public transportation for persons or property. As added by Acts 1980, P.L.52, SEC.1.
IC 6-2.5-5-27.5 Rolling stock
Sec. 27.5. (a) For purposes of this section, "rolling stock" means
rail transportation equipment, including locomotives, box cars,
flatbed cars, hopper cars, tank cars, and freight cars of any type or
class.
(b) Transactions involving the following tangible personal
property are exempt from the gross retail tax:
(1) Rolling stock that is purchased or leased by a person.
(2) All spare, replacement, and rebuilding parts or accessories,
components, materials, or supplies, including lubricants and
fuels, for rolling stock described in subdivision (1). As added by P.L.61-1997, SEC.2. IC 6-2.5-5-28
Repealed
(Repealed by P.L.11-1984, SEC.4.)
IC 6-2.5-5-29 Manufactured homes; industrialized residential structures
Sec. 29. (a) As used in this section:
"Manufactured home" means a manufactured home as that term
is defined in 42 U.S.C. 5402(6) as that statute was adopted and in
effect on January 1, 1988.
"Industrialized residential structure" means a structure that is both
an industrialized building system (as defined in IC 22-12-1-14) and
a one (1) or two (2) family private residence.
(b) Sales of manufactured homes or industrialized residential
structures are exempt from the state gross retail tax to the extent that
the gross retail income from the sales is not attributable to the cost
of materials used in manufacturing the manufactured home or
industrialized residential structure.
(c) For purposes of this section, the part of the gross retail income
not attributable to the cost of materials used in manufacturing a
manufactured home or an industrialized residential structure is
thirty-five percent (35%) of the gross retail income derived from the
sale of the manufactured home or industrialized residential structure.
(d) The gross retail income derived from the sale of a preowned
manufactured home is exempt from the state gross retail tax. As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.245-1987,
SEC.7; P.L.86-1989, SEC.2.
IC 6-2.5-5-30 Environmental quality compliance; manufacturing, mining, or
agriculture
Sec. 30. Sales of tangible personal property are exempt from the
state gross retail tax if:
(1) the property constitutes, is incorporated into, or is consumed
in the operation of, a device, facility, or structure predominantly
used and acquired for the purpose of complying with any state,
local, or federal environmental quality statutes, regulations, or
standards; and
(2) the person acquiring the property is engaged in the business
of manufacturing, processing, refining, mining, or agriculture.
The portion of the sales price of tangible personal property which is
exempt from state gross retail and use taxes under this section equals
the product of: (A) the total sales price; multiplied by (B) one
hundred percent (100%). As added by Acts 1980, P.L.53, SEC.2. Amended by P.L.28-1997,
SEC.9.
IC 6-2.5-5-31 Free distribution newspaper; related transactions
Sec. 31. (a) As used in this section, "free distribution newspaper"
means any community newspaper, shopping paper, shoppers'
consumer paper, pennysaver, shopping guide, town crier, dollar
stretcher, or other similar publication which:
(1) is distributed to the public on a community-wide basis, free
of charge;
(2) is published at stated intervals of at least once a month;
(3) has continuity as to title and general nature of content from
issue to issue;
(4) does not constitute a book, either singly or when successive
issues are put together;
(5) contains advertisements from numerous unrelated
advertisers in each issue;
(6) contains news of general or community interest, community
notices, or editorial commentary by different authors, in each
issue; and
(7) is not owned by, or under the control of, the owners or
lessees of a shopping center, a merchant's association, or a
business that sells property or services (other than advertising)
whose advertisements for their sales of property or services
constitute the predominant advertising in the publication.
(b) The term "free distribution newspaper" does not include mail
order catalogs or other catalogs, advertising fliers, travel brochures,
house organs, theater programs, telephone directories, restaurant
guides, shopping center advertising sheets, and similar publications.
(c) Transactions involving manufacturing machinery, tools and
equipment, and other tangible personal property are exempt from the
state gross retail tax if the person acquiring that property acquires it
for his direct use, or for his direct consumption as a material to be
consumed, in the direct production or publication of a free
distribution newspaper, or for incorporation as a material part of a
free distribution newspaper published by that person.
(d) Transactions involving a sale of a free distribution newspaper,
or of printing services performed in publishing a free distribution
newspaper, are exempt from the state gross retail tax if the purchaser
is the publisher of the free distribution newspaper. As added by Acts 1981, P.L.80, SEC.2.
IC 6-2.5-5-32
Reserved
IC 6-2.5-5-33
Tangible personal property purchased with food stamps
Sec. 33. Sales of tangible personal property purchased with food
stamps are exempt from the state gross retail tax. As added by P.L.69-1986, SEC.1.
IC 6-2.5-5-34 Sale of lottery tickets; gross retail tax
Sec. 34. Sales of lottery tickets authorized by IC 4-30 are exempt
from the state gross retail tax.
As added by P.L.341-1989(ss), SEC.8.
IC 6-2.5-5-35 Tangible personal property transactions
Sec. 35. (a) Except as provided in subsection (b), transactions
involving tangible personal property are exempt from the state gross
retail tax if:
(1) the:
(A) person acquires the property to facilitate the service or
consumption of food and food ingredients that is not
exempted from the state gross retail tax under section 20 of
this chapter; and
(B) property is:
(i) used, consumed, or removed in the service or
consumption of the food and food ingredients; and
(ii) made unusable for further service or consumption of
food and food ingredients after the property's first use for
service or consumption of food and food ingredients; or
(2) the:
(A) person acquiring the property is engaged in the business
of renting or furnishing rooms, lodgings, or accommodations
in a commercial hotel, motel, inn, tourist camp, or tourist
cabin; and
(B) property acquired is:
(i) used up, removed, or otherwise consumed during the
occupation of the rooms, lodgings, or accommodations by
a guest; or
(ii) rendered nonreusable by the property's first use by a
guest during the occupation of the rooms, lodgings, or
accommod
