Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 2.2 - SALES AND USE TAX › Rule 5 - Exempt Transactions of a Retail Merchant › Section 5-61 - Public transportation; acquisitions

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-2.5
Sec. 61.
(a) The
				state gross retail tax shall not apply to the sale and storage or use in this
				state of tangible personal property which is directly used in the rendering of
				public transportation of persons or property.
(b) Definition: Public Transportation. Public
				transportation shall mean and include the movement, transportation, or carrying
				of persons and/or property for consideration by a common carrier, contract
				carrier, household goods carrier, carriers of exempt commodities, and other
				specialized carriers performing public transportation service for compensation
				by highway, rail, air, or water, which carriers operate under authority issued
				by, or are specifically exempt by statute or regulation from economic
				regulation of, the public service commission of Indiana, the Interstate
				Commerce Commission, the aeronautics commission of Indiana, the U.S. Civil
				Aeronautics Board, the U.S. Department of Transportation, or the Federal
				Maritime Commissioner; however, the fact that a company possesses a permit or
				authority issued by the P.S.C.I., I.C.C., etc., does not of itself mean that
				such a company is engaged in public transportation unless it is in fact engaged
				in the transportation of persons or property for consideration as defined
				above.
(c) In order to qualify for
				exemption, the tangible personal property must be reasonably necessary to the
				rendering of public transportation. The tangible personal property must be
				indispensable and essential in directly transporting persons or
				property.
(d) The following is a
				list of items which the department has determined to be necessary to the
				rendering of public transportation:
Roadway machinery and equipment;
Caboose and locomotive supplies such as fuses, lanterns,
				  batteries, and flags;
Tariff publications;
Vehicles used for public transportation;
Communication equipment;
Equipment and items purchased to meet federal
				  requirements;
All replacement parts, repair parts, and materials consumed
				  by exempt equipment;
Tools and equipment used to repair and maintain rolling stock
				  and track;
Vehicles used primary for transportation of track maintenance
				  crews;
Items used for repairs and maintenance of such
				  vehicles;
Items used for production of financial matters, insurance,
				  schedules, routes, and rates;
Items used to provide customer stations, handle baggage, sell
				  tickets;
Items used to keep vehicles clean and safe for the
				  passengers.
Machine shop and truck tools;
Equipment related to the costruction
[sic.]
and operation of terminals;
Directories;
Gas storage facilities;
Caboose and locomotive compliments such as towels, masking
				  tape, powders, cleaners, ice, water coolers, and bottles
[sic.]
water;
Cleaning supplies;
Employee uniforms;
Garage supplies.
(e) The following is a PARTIAL list of items
				which are not directly used or consumed in the rendering of public
				transportation and, therefore, are subject to tax:
Promotional expenses, matches, jackets, and promotional items
				  given away to existing or potential customers, advertising to the public,
				  except the printing of schedules and routes.
Sales expenses, sales telephones, and related computer
				  equipment used exclusively for sales activities such as marketing, sales
				  projection, and costing. Such equipment used to handle actual ticket sales
				  (i.e., at the reservation office) or to organize loads and dispatch trucks is
				  exempt.
Office supplies, furniture, equipment, and related items for
				  sales personnel executives including ground and lawn care, except grading
				  required for the vehicles directly used in the rendering of public
				  transportation.
Heating and air conditioning for separate, off-site executive
				  headquarters is subject to tax.
Heating and air conditioning for reservation area, vehicle
				  maintenance area, or switching yard control buildings is exempt.
(f) Pre- and post-transportation
				activity. The purchase, storage, or use of tangible personal property used for
				activities prior to or subsequent to the rendition of public transportation is
				subject to tax. For purposes of this regulation
[45 IAC 2.2]
,
				transportation means the movement, transporting, or carrying of persons or
				property from one place to another and includes loading and unloading of
				persons or property into or from transportation vehicles.
-EXAMPLES-
(1) Ramps
				used by travelers for boarding and departing from airplanes are exempt because
				the ramps are directly used in rendering public transportation.
(2) Docks possessed by a carrier and used for
				loading and unloading vehicles operated in rendering public transportation are
				exempt.