Tax Alert

Indiana Sales and Use Tax Exemptions Expanded

(May 24, 2013)


Legislation recently signed by Indiana Gov. Mike Pence expands sales and use tax exemptions for research activities and changes sales tax treatment of aviation-related items.

Research Activities
The legislation expands the sales tax exemption for research and development to include any tangible personal property acquired after June 30, 2013, including consumable supplies, used for research and development. Previously, the exemption was limited to laboratory equipment, computers, computer software, telecommunications equipment, and testing equipment.

The legislation also clarifies that the exemption is available for taxpayers conducting research on behalf of the ultimate manufacturer.

Aviation
Effective July 1, 2013, the legislation expands the current sales tax exemption for items related to aircraft repair, maintenance, refurbishment, remodeling, or remanufacturing to include all aircraft, regardless of size or use. Previously, the exemption was only available for foreign-registered aircraft weighing more than 5,000 pounds or those used in public transportation.

The law also expands the existing exemption for purchases of aviation fuel by a common carrier for use in public transportation. Aviation fuel is no longer subject to sales tax regardless of use and is instead subject to a new aviation excise tax at $0.10 per gallon beginning July 1, 2013. Aviation fuel used by common carriers is exempt from the new excise tax.


 

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Brian Myers
317.208.2478
brian.myers@crowehorwath.com

Mike Gamboa
630.574.1853
michael.gamboa@crowerhorwath.com  

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