A tax refund and sales and use tax exemption for R&D equipment are phased-in over a two-year period.
Taxpayers are entitled to a 50% refund of Indiana sales and use tax paid to purchase research and development equipment on purchases made after June 30, 2005 and before July 1, 2007. Full exemption will be allowed on transactions occurring after June 30, 2007.
Indiana defines research and development equipment as: laboratory equipment, computers, computer software, telecommunications equipment, or testing equipment that has not previously been used in the state and is acquired for “research and development activities” that are devoted directly to experimental or laboratory research and development of new products, new uses for existing products, and/or improving or testing existing products.
The term research and development activities does not include the following:
For determining the amount of the refund or exemption, the following guidelines will be observed. A transaction will be considered as having occurred after June 30, 2005, or June 30, 2007, if the delivery of property or services occurs after those dates. A transaction will be considered as having occurred before July 1, 2005 or July 1, 2007, if the agreement of the parties was entered into before those dates and payment is made before those dates.
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