For Immediate Release
March 19, 2012

Indiana – Legislation Enacts New Exemptions

Indiana – Legislation Enacts New Exemptions

Indiana – Legislation Enacts New Exemptions

Recycling qualifies as manufacturing, electricity exemption statute returns to 36 month, non-returnable wrapping and containers exempt from sales tax.

Recycling

Retroactively effective January 1, 2012, property sales by recycling businesses are exempt under the same general provisions as manufacturing businesses. “Recycling” is defined as the processing of recycling materials and other tangible personal property into a product for sale if the product is predominantly composed of recycling materials. “Recycling” does not include (1) the demolition of improvements to real estate, (2) the processing of tangible personal property primarily for disposal in a licensed solid waste disposal facility rather than for sale, or (3) the collection of recycling materials by licensed motor vehicles.

An exemption also is available for transactions involving recycling materials and other tangible personal property to be consumed in, or to become a part of, the product produced by the processing of recycling materials if the person acquiring the property acquires it for direct use in the direct processing of recycling materials and the person is occupationally engaged in recycling. Further, if a person acquires machinery, tools and equipment for direct use in the direct processing of recycling materials and the person is occupationally engaged in recycling, the acquisition transactions are exempt.

Public Utilities and Power Subsidiaries

Sales of electrical energy, natural or artificial gas, water, steam and steam heat by public utilities and power subsidiaries for use in the following are exempt:

  • processing after December 31, 2012;
  • repairing after December 31, 2012;
  • floriculture after December 31, 2012;
  • arboriculture after December 31, 2012; and
  • recycling, retroactively effective January 1, 2012.

Sales tax refund claims based on the exemptions for electrical energy, natural or artificial gas, water, steam and steam heat may not cover transactions that happen more than 36 months before the date of the refund claim, effective July 1, 2012. Currently, the transactions may not have occurred more than 18 months prior to the refund claim date.

Wrapping Materials and Empty Containers

Sales of wrapping materials and empty containers are exempt from sales tax, effective July 1, 2012, if the person that acquires the materials and containers acquires them for use as nonreturnable packages for selling the contents that the person adds or shipping or delivering tangible personal property. The shipped or delivered property (1) must be owned by another person, (2) must be processed or serviced for the owner, and (3) will be sold by that owner either in the same form or as a part of other property produced by that owner in the owner’s business of manufacturing, assembling, constructing, refining or processing.

If you would like additional information on this topic or have any questions, please contact the taxdesk@thesaltgroup.com

 

Privacy Policy
Arbitration Provision