Indiana taxability of coupons, fees, and other basis-modifying components Indiana: Sales Tax Handbook

Indiana:

What is included in Indiana's sales tax basis?

Many times, an otherwise-taxable transaction will include bundled fees like excise taxes, installation fees, or finance charges or be modified with coupons, installment payment plans, etc. One question that will often arise is whether or not a certain payment or fee is included in a transaction's taxable basis.

The taxable basis refers to the portion of an entire transaction that is subject to Indiana's sales tax. This page answers common questions about which common fees are included in the sales tax basis in Indiana, and which are excluded.

Inclusion in Sales Tax Basis

Are coupons and cash discounts included in the Indiana sales tax basis?

What is not included are cash and term discounts and retailers coupons; while manufacturers coupons are included.

Top

Are excise taxes included in the Indiana sales tax basis?

Excise taxes are separate levies added by many states to the price of commodity items such as alcohol, gasoline, etc. What is not included is federal or state taxes collected as agent, federal retailers tax only if imposed solely on sale of personal property and collected by a merchant as a separate item in addition to the price, manufacturers excise tax, and federal and state fuel tax.

Top

How are installment-based sales taxed?

Many businesses offer customers payment plans that allow them to pay the full price for a product over time in installments, often leading to confusion about when and how much sales tax is collected and remitted to Indiana. The state has implemented the following provisions regarding installment sales:

No specific provisions

Top

Are installation charges included in the Indiana sales tax basis?

While the taxation of tangible goods is relatively straightforward, some states consider the installation costs associated with a tangible object (like carpeting, a home or vehicle fixture, etc) to be taxable. Indiana policy states:

Installation charges are generally included in the taxable price of a tangible product.

Note: Must be separately stated

Top

Are finance charges included in the Indiana sales tax basis?

Many businesses offer customers financing on higher-value products, and include financing charges in the overall cost of the item. These finance charges may also be subject to sales taxes. Indiana policy states:

Finance charges are generally included in the taxable price of a tangible product.

Note: Must be separately stated

Top

How can I get reimbursed for sales taxes paid on items that are returned or repossessed?

If a taxable good for which sales tax has been collected is returned or reposessed by the merchant, the state may allow the amount of sales tax collected to be either deducted from the merchant's current sales tax balance or refunded to the merchant by the state. Indiana's policies state that returns and repossessions are:

No specific provisions

Top

How can I get reimbursed for sales taxes paid on bad debts?

If a merchant offers goods to a consumer on credit and the payment for those goods becomes delinquent, the merchant may be eligible to be reimbursed any sales tax they paid to the state on the consumer's behalf when the transaction was made. The method of reimbursement varies state by state.

Tax paid on bad debts can generally be recovered by the merchant as a deduction.



  Back to Indiana Sales Tax Handbook Top
** This Document Provided By SalesTaxHandbook **
Source: http://www.salestaxhandbook.com/indiana/sales-tax-basis