The Indiana Department of Revenue found that a dealership’s sale of optional warranty contracts were subject to tax because the contracts were billed as a single price for the service, labor, and parts provided under the contract. Since the dealership did not separate the cost of the service from the cost of the cost of the tires and wheels that would be provided in the event of a repair, the Department’s decision to impose sales tax on the warranties is reasonable and within its statutory authority.
Further, the taxpayer was found to owe use tax on purchases of “online database subscriptions” and “credit reports”. Although the reports were delivered electronically, the taxpayer purchased the reports on a per-unit cost qualifying the reports as taxable “goods”. However, a portion of invoices that appear to be for an electronic storage service cost are exempt because the service cost was separately-stated from the charge for monthly reports. (Letter of Findings No. 09-0797, Indiana Department of Revenue, March 24, 2010)