Indiana Tax Changes - January 2025
Indiana Corporate Income Tax—Indiana requires taxpayer to exclude income from finished goods sales.
A foreign taxpayer protected from federal income tax based on a treaty must exclude income from its finished goods sales in determining Indiana adjusted gross income. The application of the treaty with the taxpayer's federal taxable income results in the taxpayer not including its profit/loss from its finished goods sales on its federal corporate income tax return, and so Indiana also excludes the profit/loss from the finished goods sales from adjusted gross income. However, income from the taxpayer's ownership in a toll manufacturing arrangement is required to be included in the taxpayer's federal taxable income, so the taxpayer must include its share of that income in its Indiana adjusted gross income. This also affects the taxpayer's apportionment. Because the taxpayer can exclude the federal taxable income from finished goods transactions, but its share of toll manufacturing income is required to be included as part federal taxable income, the taxpayer may not include any of its own receipts in its apportionment numerator or denominator. However, the taxpayer is required to include its share of Toll Manufacturer's receipts for apportionment purposes. (Indiana Revenue Ruling No. CCP 21024-02, 01/03/2025.)
Indiana Sales and Use Tax Rates—Indiana sets gasoline use tax rate for February 2025.
The gasoline use tax rate for the period February 1, 2025, through February 28, 2025, is 17.0¢ per gallon. Using the retail price of gasoline for the period from December 16, 2024, to January 15, 2025, the Indiana Department of Revenue determined that the statewide average retail price per gallon of gasoline is $2.4291. The statewide retail price per gallon of gasoline is multiplied by the state retail tax rate, 7%, and rounded to the nearest $0.001. The gasoline use tax rate for the period January 1, 2025, through January 31, 2025, is 16.5¢ per gallon. (Indiana Departmental Notice No. 2, 02/01/2025.)
Indiana Sales & Use Taxes—Indiana rules video game company's online offerings not taxable.
The Indiana Department of Revenue ruled that an out-of-state video game company's sales of monthly online subscriptions, access to in-game items, and virtual currency are not subject to sales tax. The taxpayer's sales are not considered tangible personal property and do not meet the definition of specified digital products. (Indiana Revenue Ruling No. RST 2024-04, 01/07/2025.)
Indiana Sales & Use Taxes—Indiana sets gasoline use tax rate for February 2025.
The gasoline use tax rate for the period February 1, 2025, through February 28, 2025, is 17.0¢ per gallon. Using the retail price of gasoline for the period from December 16, 2024, to January 15, 2025, the Indiana Department of Revenue determined that the statewide average retail price per gallon of gasoline is $2.4291. The statewide retail price per gallon of gasoline is multiplied by the state retail tax rate, 7%, and rounded to the nearest $0.001. The gasoline use tax rate for the period January 1, 2025, through January 31, 2025, is 16.5¢ per gallon. (Indiana Departmental Notice No. 2, 02/01/2025.)