Tax liability; income exclusion ratio
Sec. 8. (a) For purposes of determining the amount of state gross
retail and use taxes which he must remit under section 7 of this
chapter, a retail merchant may exclude from his gross retail income
from retail transactions made during a particular reporting period, an
amount equal to the product of:
(1) the amount of that gross retail income; multiplied by
(2) the retail merchant's "income exclusion ratio" for the tax
year which contains the reporting period.
(b) A retail merchant's "income exclusion ratio" for a particular
tax year equals a fraction, the numerator of which is the retail
merchant's estimated total gross retail income for the tax year from
unitary retail transactions which produce gross retail income of less
than nine cents ($0.09) each, and the denominator of which is the
retail merchant's estimated total gross retail income for the tax year
from all retail transactions.
(c) In order to minimize a retail merchant's recordkeeping
requirements, the department shall prescribe a procedure for
determining the retail merchant's income exclusion ratio for a tax
year, based on a period of time, not to exceed fifteen (15)
consecutive days, during the first quarter of the retail merchant's tax
year. However, the period of time may be changed if the change is
requested by the retail merchant because of his peculiar accounting
procedures or marketing factors. In addition, if a retail merchant has
multiple sales locations or diverse types of sales, the department
shall permit the retail merchant to determine the ratio on the basis of
a representative sampling of the locations and types of sales.
As added by Acts 1980, P.L.52, SEC.1. Amended by P.L.2-1982(ss),
SEC.4; P.L.192-2002(ss), SEC.61.
Last modified: May 28, 2006