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As of July 1, 2003, numerous changes went into effect for Indiana taxpayers. Among these changes are new delinquency rules, collection requirements, and a new local Indiana admissions tax. An Indiana state agency may not purchase property or services from any person or business that is delinquent in the payment of Indiana sales and use tax. The delinquent taxpayer will be released if a statement is issued from the Department of Revenue indicating that the delinquent tax has been satisfied. In addition, out-of-state businesses that do business with the state must be treated as if they have a place of business in Indiana for purposes of collecting and remitting Indiana sales and use tax. (H.B. 1811, Laws 2003, May 2, 2003.)


The state tax rate in Indiana will increase from 5.00% to 6.00% effective December 1, 2002.


The taxpayer contested that by separately stating their custom framing service from the actual artwork that is produced, the service should be exempt from sales tax. However, under Indiana law this is considered a unitary transaction, which includes all items of personal property and services that are furnished under a single order. Otherwise, sales tax would not be imposed when the services are performed with respect to property after the property is transferred to the purchaser. (Indiana Tax Court, No. 49T10-9801-TA-8, July 15, 2002)



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