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Indiana Law and SST Compliance

  • May 16, 2013 | Gail Cole

 New Indiana law impacts the exemption status of blood glucose monitoring equipment.

Indiana Senate Bill 608 was signed into law on May 11, 2013. The new law deals with several state sales and use tax exemptions and exclusions. It takes effect on July 1, 2013.

Indiana is a member of Streamlined Sales Tax (SST). As such, it must periodically go through a recertification process. States are found to be either in-compliance or out-of-compliance during these reviews, and are given time to rectify any compliance issues found.

In a December 2012 SST Governing Board meeting, Indiana acknowledged it had several "carryovers" from its last review. SB 608 strives to address these.

Exemption for Blood Glucose Monitoring Equipment, Devices

Issue #1: "Indiana exempts blood glucose monitoring equipment without a prescription and all other durable medical equipment requires a prescription."

SB 608 eliminates a section of Indiana code that provides an exemption from the state gross retail tax for "sales of equipment and devices used to monitor blood glucose level… regardless of whether the equipment and devices are prescribed…."

Direct Mail Sourcing Definitions

Issue #2: Indiana has not adopted the new direct mail sourcing definitions and sourcing.

SST "provides separate definitions and sourcing for promotional direct mail and other direct mail. There are different sourcing rules for those." Prior to SB 608 becoming law, Indiana was out-of-compliance with SST over this matter.

SB 608 amends Indiana code and creates "two distinct categories of direct mail [with definitions] in compliance with the Streamlined Sales and Use Tax Agreement."

Read more about the SST sourcing provisions.

Sales Tax Exclusion for Separately Stated Postage

The legislation provides a "sales tax exclusion for postage that is separately stated on the invoice, bill of sale, or similar document." To eliminate any confusion, it defines postage charges as amounts that:

1. "are for the purchase price of stamps or similar charges for mail or parcel delivery through the United States mail, without any additional amounts added to the actual price; and

2. are incurred by a seller on behalf of its customers or purchasers."

Only postage charges that apply to charges incurred by delivery through the United States Postal Service may be excluded. Use FedEx and you're out of luck.

If this exclusion is in response to an SST compliance issue, it is not referenced in SB 608.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.