Required record keeping for interstate exemption
Sec. 29.5. (a) For purposes of determining under sections 29, 29.3,
30(a), and 30(c) of this chapter the amount and type of personal
property that is shipped or transshipped to an out-of-state destination,
the term "adequate record" includes a designation on a bill of lading,
freight bill, delivery receipt, manifest, packing slip, or an equivalent
document, or a final entry in the records of the taxpayer indicating
that property is held for shipment to an out-of-state destination. Such
a designation for out-of-state shipment is sufficient for purposes of
section 29, 29.3, 30(a), or 30(c) of this chapter even though the
specific out-of-state destination of the property is not included in the
designation and even though the destination of the property is
unknown on the assessment date.
(b) For the purpose of substantiating the amount of his personal
property which is exempt from property taxation under section 29,
29.3, 30(a), or 30(c) of this chapter on the basis that it is being
shipped or transshipped to an out-of-state destination, a taxpayer
shall maintain records that reflect the specific type and amount of
personal property claimed to be exempt so that the taxpayer's taxable
personal property may be distinguished from his exempt personal
property. In lieu of specific identification of the taxpayer's personal
property that is shipped or transshipped to an out-of-state destination,
the taxpayer may elect to establish the value of his exempt personal
property by utilizing an allocation method whereby the exempt
personal property is determined by dividing:
(1) the value of the taxpayer's property shipped from the in-state
warehouse to out-of-state destinations during the twelve (12)
month period ending with the assessment date; by
(2) the total value of all shipments of the taxpayer's property
from the in-state warehouse during the same period of time;
and applying this ratio to the taxpayer's total inventory of personal
property that has been placed in the in-state warehouse, that is in the
in-state warehouse as of the assessment date, and that meets the other
requirements for an exemption under section 29, 29.3, 30(a), or 30(c)
of this chapter. If the taxpayer uses the allocation method, he shall
keep records which adequately establish the validity of the
allocation.
(c) If the taxpayer elects to keep a specific inventory under
subsection (b), he shall maintain additional records which reflect:
(1) an accurate inventory of all personal property stored in an
in-state warehouse; i.e., both inventory destined for points
outside the state and inventory destined for points within the
state;
(2) the date of deposit of the inventory in the in-state
warehouse;
(3) the date of withdrawal of the inventory from the in-state
warehouse; and
(4) the point of ultimate destination of the shipments, if known.
(d) For the purposes of this section, the term "warehouse"
includes a commercial printer's facility.
(e) A taxpayer may use an allocation percentage to claim an
exemption under section 29(b)(2) of this chapter for a part of the
person's personal property if the taxpayer's business records
substantiate that the allocation percentage accurately reflects the part
of the personal property that will:
(1) be used in an operation or a continuous series of operations
to alter the personal property into a new or changed state or
form; and
(2) in its new or changed state or form be:
(A) shipped; or
(B) incorporated into personal property that will be shipped;
to an out-of-state destination.
The percentage may include personal property that is sold to another
processor or manufacturer if the personal property is incorporated
into the personal property of the buyer and that personal property is
shipped out of state.
(Formerly: Acts 1975, P.L.51, SEC.1.) As amended by Acts 1981,
P.L.63, SEC.3; P.L.41-1984, SEC.3; P.L.58-1986, SEC.2;
P.L.46-1996, SEC.2; P.L.192-2002(ss), SEC.31.
Last modified: May 28, 2006