Indiana’s Sales and Use Tax is tax is calculated at a rate of 7 percent. In manufacturing, the following are exempt from the sales tax: raw materials, equipment, power, electricity, and utilities. Wholesale sales, items used directly in production, and sales made in interstate commerce are exempt. In addi¬tion, the purchase of research and development equipment is exempt from the tax.
Indiana has revised the Sales Tax Exemption for Research and Development. Previously only research and development “equipment” was exempt, however now research and development “property” is exempt.
At first glance the revision appears to only be a minor change in wording, but it could result in items such as hand tools and consumable supplies being exempt from tax if used in research and development activities.
IC 6-2.5-5-40
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