Welcome to DOR's Tax Talk Blog
Tax Talk is a weekly blog published each Wednesday by the Indiana Department of Revenue (DOR) that discusses tax tips, DOR programs, and helpful information for tax preparers. During tax season blogs are posted on both Mondays and Wednesdays.
Most Recent Blog Posts
Purchasing for Non-Profits - Sales Tax Exemptions
November 14, 2018
Now is one of the busiest times of the year for many organizations and their volunteers. Craft bazaars, bake sales, pageants, and projects keep many Hoosiers busy shopping for supplies and last-minute items. Before you head to the store, make sure you understand Indiana’s rules on sales and use tax for non-profit organizations.
A non-profit organization is not automatically exempt from Indiana’s sales or use tax. An eligible organization must first register for a sales and use tax exemption by filing form NP-20A. Also, not all items purchased for or by an eligible non-profit organization are exempt from sales and use tax. The items purchased must be used to conduct the organization’s regular charitable activities and paid for or reimbursed directly by the organization. A purchase made on behalf of the organization that is reimbursed by a third party does not qualify as a tax-exempt purchase.
An ST-105 Indiana General Sales Tax Exemption Certificate form tells the store or vendor that it is fine not to charge the purchaser sales tax. The vendor must use the form to verify that purchaser is a representative of a qualified, sales tax-exempt nonprofit and keep a copy to show the Indiana Department of Revenue (DOR) if audited.
- should be signed by a responsible business representative – a board trustee, a secretary/treasurer or (in some cases) a pastor/minister.
- should be updated periodically as circumstances, staff or other details change.
- can be issued to a vendor on a “blanket” basis (there is a checkbox on the form) for vendors from whom you purchase regularly. In these cases, you would not need to provide the form repeatedly.
- should be accurately completed when provided to the vendor as it is the vendor’s responsibility to grant sales tax exemptions only to those who present qualified completed exemption certificates.
To learn more, read Information Bulletin #10 which contains detailed information on sales tax for nonprofit organizations. Organizations with questions regarding sales tax exemption can call DOR at (317) 233-4015 for assistance.
Trick or Tax, Is Halloween Candy Taxable?
October 31, 2017
Imagine, it is Halloween night you are passing out candy, trick or treating, or buying candy at the store to enjoy. There is something DOR wants you to remember: most candy does have Indiana state sales tax.
Generally, the sale of food and food ingredients for human consumption is exempt from Indiana sales tax. Food is defined as substances sold for ingestion or chewing by humans that are consumed for their taste or nutritional value. This does not, however, include tobacco, alcoholic beverages, candy, dietary supplements or soft drinks. So, how exactly is candy defined?
Candy is defined as preparations of sugar, honey or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops or pieces. So, most candy is subject to Indiana sales tax.
On the flip side, an item containing flour is not considered candy and is exempt from Indiana sales tax. Also, items that are not bars, drops or pieces are also exempt from Indiana sales tax.
You may be asking yourself, which items are usually considered candy, but contain flour and are not subject to Indiana sales tax?
DOR has a few items listed for you:
- Kit-Kat Bars
- Nestle Crunch Bars
- Twix Bars
Just remember, while some items commonly considered candies are not taxable, many candy items are taxable. Be sure to pay attention to the candy items which may or may not be taxable during the Halloween season! For more information about sales tax on food in Indiana, please refer to Information Bulletin #29.