This special issue of Tax Dispatch is focused on major changes to Indiana tax law for sales and withholding taxes.
The most significant change is the establishment of an electronic filing and payment mandate for all Indiana sales and withholding taxes effective Jan. 1, 2013.
This edition of Tax Dispatch provides significant information about this change. We hope you find this information helpful.
The Key Changes
This year the Indiana legislature passed a few laws that change the way business taxpayers will be required to file and remit sales and withholding taxes. The changes are as follows:
- Effective July 1, 2012, anyone who is required to file more than 25 W-2, 1099-R, or WH-18 statements must file them electronically
- Effective Jan. 1, 2013, all retail merchants must report and remit sales tax electronically
- Effective Jan. 1, 2013, all withholding agents must report and remit withholding taxes electronically
- Effective Jan. 1, 2013, quarterly withholding filings will be eliminated
Thus, beginning next year, all sales and withholding taxes will have to be remitted via the Department’s INtax application or an electronic funds transfer (EFT). Additionally, businesses will be required to file their sales and withholding electronically, which can include using vendors certified by the Department or the Department’s free INtax application.
The Future Is Electronic Filing
Since 2005 Indiana has offered an electronic filing and payment system for business taxpayers called INtax. The system allows business taxpayers to report and remit sales tax, withholding tax, tire tax, prepaid taxes, wireless prepaid taxes, and others at one site. Payment can be made through INtax or electronic funds transfer (EFT).
Those who are not registered to file and/or pay online currently receive coupons to submit and pay their trust taxes. Early, monthly, 4-week, and seasonal filers receive these coupons every six months. Annual filers receive their coupon once a year.
The 2012 General Assembly passed a law requiring ALL Indiana businesses to report and remit sales tax and withholding electronically. Thus, the distribution of these coupons will change beginning in January 2013.
The Department of Revenue will mail 6-month coupons to all who have not yet registered to file and pay electronically at the end of 2012 as well as those who have received approved exceptions.
However, in mid-2013 the Department will discontinue mailing coupons for sales and withholding. Moreover, the coupons will NOT be available upon request. Thus, taxpayers will need to report and remit electronically or fail to comply with the law.
Taxpayers should register for INtax or begin using a third-party agent before Jan. 1, 2013, rather than risking non-compliance and legal actions.
INtax Is Available to Practitioners, Too
INtax is not only a great tool for business owners themselves, but is also a great tool for practitioners.
According to a recent user survey, most current users had positive feedback about the program:
- 90% of users surveyed said that the instructions for INtax are easy to understand
- 90% of users surveyed said that the INtax website is easy to navigate
- 83% of users surveyed who had viewed the INtax tutorials said that the tutorials were helpful
- 91% of users surveyed said that they were satisfied with INtax
With INtax, a practitioner can file and pay their client’s business taxes; take care of several other record-keeping tasks; and manage several business tax types, including Indiana retail sales, out-of-state sales, prepaid sales, metered pump sales, tire fees, fuel taxes, and withholding taxes, and more.
Here are just a few of the other tasks a practitioner can complete using INtax:
- Correspond with the Department of Revenue online through a confidential, secure inbox
- Register and edit multiple clients
- View and print a current client list
- Schedule payments up to 30 days ahead
- File a return even when no tax is due for that filing period so clients can avoid best information available (BIA) bills
- Make a separate electronic payment for each client or pay multiple client accounts through a bulk payment upload
- View the client’s payment and return history at any time
Although a client is not required to be registered with INtax before a practitioner can add the client, the client still has the option to register for INtax to be able to access his account information, as well as view the activities of the practitioner. Whether the client registers for INtax or not, he is notified that a practitioner is managing his state taxes using INtax.
Reminder: Practitioners are required to have a Power of Attorney on file for you to be able to communicate with the Department regarding a business account. To learn more about the Power of Attorney procedures and download a form, visit www.in.gov/dor/3802.htm.
The Department has already begun mailing letters to business taxpayers, explaining the legislative change and how to register with INtax. In addition to a letter, each business that is not electronically paying and filing its sales and withholding will be receiving an INtax QuickStart Guide. This guide will help new users register for INtax and navigate through the website. To get a PDF copy of the guide, click here.
In addition, the Department’s Customer Contact section is calling taxpayers to inform them of the change and an INtax hotline is available for taxpayers who need help with the registration process (317-232-2337).
To get started using INtax, visit http://www.intax.in.gov/ and register as a “service provider.” To see just how easy INtax is to use, watch the online tutorial for service providers at https://www.intax.in.gov/Web/Tutorial/SPINtaxDefault.htm.
The Department recognizes that not all businesses will be able to comply with the law due to special circumstances. With that in mind, the Department will allow a few exceptions.
The exceptions will include
- Religious beliefs
- Policy of organization that prohibits electronic filing (short-term exception)
- No computer/Internet access (short-term exception)
An official exception form will be available soon for those businesses that feel they qualify for one of the above exceptions.
2013 Trust Tax Deadlines
The following are the trust tax deadlines for each type of filer effective Jan. 1, 2013. Note: New legislation requires that withholding quarterly filings be eliminated.
Sales Tax Threshold Amounts:
Early Filer - If the average monthly sales or use tax liability for the preceding year is more than $1,000.
Monthly Filer - If the sales or use tax liability for the preceding year is less than $1,000. Note: A business is defaulted to monthly filing, unless approval is granted by the Department.
Annual Filer (Calendar Year) - If the retail merchant’s liability for the preceding year is less than $1,000 per month and approval is granted by the Department.
Withholding Threshold Amounts:
Early Filer - If the average monthly withholding tax liability for the preceding year is more than $1,000.
Monthly Filer - If the preceding year’s withholding is less than $1,000. Note: A business is defaulted to monthly filing, unless approval is granted by the Department.
Annual Filer (Calendar Year) - If the preceding year’s withholding is less than $1,000 and approval is granted by the Department.
Filing Frequency Due Dates:
Annual: January 31 of the year following the close of the tax year
Monthly: 30th day of the month following the taxable month
Early Filer: 20th day of the month following the taxable month
Get Connected and Get Critical Updates from the Department
It is important for tax practitioners to know the various ways in which they can contact the Department if they are in need of help or want to receive critical updates from the Department.
When you have a specific question that our website does not answer, you are encouraged to use the online inquiry center to send your questions and concerns directly to our tax professional area. If you have an immediate concern, however, you can contact the Department at (800) 462-6320 (enter 4367) to connect. This number is for the use of tax practitioners only. If a taxpayer would like to contact the Department, he or she can do so at (317) 232-2240.
In addition, the Department offers several other ways for you to learn about important tax updates at your convenience:
For previous editions of the Tax Dispatch, click here.
To better serve Indiana taxpayers, the Indiana Department of Revenue may occasionally inform taxpayers of new services and results of a survey or invite a randomly selected group of taxpayers to participate in a short electronic survey or focus group. Electronic communication and surveys enable the Department to inform you about our services and helps the Department learn how to better serve Hoosier taxpayers.
Electronic surveys and e-mail messages from the Indiana Department of Revenue will never ask for any financial or personal information, and survey responses are always confidential.
If you are asked for personal or financial information (Social Security number, bank account information, etc.), do not reply or click on any links in the e-mail message. Legitimate organizations should never ask for personal information by e-mail.
If you would like to further verify an e-mail you have received by the Indiana Department of Revenue, please call (317) 232-2379.
Remember, the Indiana Department of Revenue will never request personal information by e-mail.