The Indiana Dept. of Revenue has issued an information bulletin that expands the definition of “property” for the sales tax exemption on R&D property. Previously, property exempt from sales tax did not include consumables, hand-powered tools or property with a useful life of less than one year. The old exemption expired June 30, 2013 and was replaced with a new provision that expands the definition of exempt property to include consumables, hand-powered tools and items with a life less than one year. The provision that the property must not have been previously used in Indiana for any purposes and be acquired by the purchaser specifically for R&D uses, is unchanged.
The definition of “qualifying activities” also remained unchanged, and includes “any activities devoted directly to the experimental or laboratory research and development for new products, new uses of existing products, or improving or testing existing products.”
Purchaser must complete an exemption form, and can apply for a refund from IDR if they erroneously paid sales tax on qualifying property.
To find out how you may benefit from this exemption, contact Alerding CPA Group at (317)569-4181 or visit our website: alerdingcpagroup.com. Alerding CPA Group is an Indianapolis-based public accounting firm.